The hyper-local discovery start-up tracks consumer behaviour via user-generated content and offers loyalty points which can be redeemed at its partner merchants
While the flagship discount sales of e-commerce powerhouses Amazon and Flipkart this week hog the limelight, a number of offline stores are also offering deals and discounts in the run-up to the festive season. And online start-ups such as Magicpin, Mydala, Cashkaro, Crownit and Nearbuy are helping customers discover these deals in the offline retail space. One such hyper-local discovery start-up is Magicpin which started operations in August 2015 to fetch information from all offline channels that are relevant to the customer. “We are driving discovery that is leading to commerce for offline businesses by using user-generated content and our rewards programme,” Anshoo Sharma, CEO and co-founder, Magicpin says. Magicpin operates via a back-end platform that reads bill invoices that the uploaded by the customer. It logs the amount spent and the items consumed which help the system track the shopping pattern of the user. The bills works as validation for the user who can post content across categories such as food & beverage, fashion, grocery, etc. With a user base of 1 million and target audience in the age bracket of 18-30 years, Magicpin works on user-generated content to build engagement and combines it with reward points which can be redeemed against offers from artner merchants.
Magicpin creates segments based on where the users are spending and provides them data that is relevant to their purchase pattern. “This helps us track where the transaction happened and where money is changing hands and we are able to validate that without being present at the point of sale. We have got artificial intelligence based learning system with multiple machine learning layers on it which help us extract as to what was consumed and then trace patterns in the consumption habits,” Sharma said. “We can give data to brands and retailers which will be relevant to their business such as market share, attachment rate, customer service, etc,” Sharma says.
Sharma accepts that it is difficult to build a scalable model solely around discounts and companies doing so end up burning money. For revenue generation, the company charges a commission from the merchant for each transaction. Sharma pegged the rate of commission between 10-12%. In August, the company garnered business worth `30 crore for its merchants. Advertising and marketing is another source of revenue as the company can leverage its consumer data and provide advertising and promotion to merchants that help the latter reach out to customers better.
Currently, the company has 200,000 merchants listed on its platform and 3,000 merchants who have signed up for its advertising and marketing services. The company works with larger retailers such as McDonalds, Hard Rock Cafe, KFC, Beer Cafe, Keventers and Subway contributing 25% of the total business while remaining 75% comes from the long-tail of smaller merchants. F&B garners the largest share of business for the company at 60%, followed by fashion and beauty. With existing operations in Delhi, Mumbai and Bengaluru Magicpin recently expanded to Hyderabad, Pune, Chennai, Jaipur and Chandigarh. Going forward, instead of expanding to more cities, Magicpin will focus on going deeper into the existing markets.