The entrepreneurial bug which was present during his engineering college days became a full fledged passion after graduation for Ravitej Yadalam, who realised that the unlimited potential in the e-commerce sector can be the platform to create a niche business with the door always open to expand.
Pennyful, an online business focused on cashbacks, coupons and deals for shoppers was the business founded by Yadalam, now aged 28, with core focus being on attractive incentives to the consumers while driving traffic to the e-commerce websites.
The journey into cashbacks did not start in India for Yadalam as the first venture was focused on US in 2011 as the market there was more mature and attuned to online shopping. However, the entire operations was driven out of India. “We entered into tie-ups with large established brands, largely electronics and realised that a buyer will come back if I pass back the money,” Yadalam said. Pennyful partnered with over 2,000 stores and had access to over 40,000 products. It gets a commission from the e-commerce site for every successful sale.
Later, Yadalam saw similar potential in India and Pennyful.in was officially launched in November, 2012 focused largely on coupons and cashbacks.
Today, it has alliances with over 500 online partners in India which include the major players like Flipkart, Amazon, Snapdeal. The plans are to take the number of such partners to over 1,000 by the end of this year.
The key for Pennyful was to drive the online shoppers to the various e-commerce websites. This has been largely done through digital route using the tools of search, social and e-mail. It also creates a win:win situation for e-commerce sites. “There is no cost to store as they pay us only when actual customer goes to them. It is cost-effective, risk free and scalable for them,” he said.
The key for Pennyful in driving the online consumer traffic largely rests on three platforms: technology, product
offering and rates. “We are helping consumers save money and store to acquire customers,” Yadalam said.
All this for Pennyful has been largely done organically without the use of mass media to drive the traffic. According to Yadalam there are seven kinds of online buyers with the top of heap
being the ones who are very sure what they want to buy while those in the bottom do window shopping. “Our essential idea is to get a customer who is window shopping and convert them into actual shopper. We have a large database of relevant offers and our technology matches the customer with right product,” Yadalam said.
Pennyful also did try this business model with the offline players also with focus on retail and healthcare segment. However, it had to discontinue in February, 2015 due certain challenges.
In terms of the traffic being generated by Pennyful, Yadalam did not disclose the numbers but said over 60% of it comes from tier 2 and 3 cities revealing the scope of their operations.
As far as the future plans are concerned, Pennyful will look at a strategic investor and also on how to partner with the offline merchants. It also recently launched its mobile app and has already witnessed around 10% of the transactions through the mobile handset.
Yadalam believes the competition in the market still remain intense but there is no clear leader. There is expectation that this segment may see certain consolidation in the next one year. “Our aim is to be a one-stop-shop for savings,” he said.