Magicpin’s platform lights up the dark offline retail space with data backed discovery and marketing
By Srinath Srinivasan
In today’s digital world, The chances for a business to be discovered by consumers is much higher if it is listed online. This is a serious problem for offline businesses, especially the smaller ones in any neighbourhood. For platforms which provide discovery, the usual route is to incentivise the retailers to be on their platforms and offer high continuous discounts to consumers, which in most cases end in cash burn or wafer-thin margins. In order to avoid this, Delhi-based magicpin, founded by Anshoo Sharma and Brij Bhushan, uses crowdsourced data of all kinds and makes discovery more efficient.
“The name ‘magicpin’ comes from the fact that we only ask users to pin a location on the map and we will show the magic around that location; magic in terms of people, places, rewards and much more,” explains Sharma, talking about how the magicpin app works. “What differentiates us from the rest of the platforms is that we are a performance marketing platform for offline retailers. We don’t stop at discovery, we make sure we deliver the revenue to the merchants,” he adds.
How magicpin completes the discovery-conversion loop is based on three elements —rewarding users ubiquitously, leading with engagements with the user before and after a purchase and finally, making the whole programme merchant-centric, which does away with disgruntled retailers who would pull out of the platform with time. Being digital enables marketing to be hyperlocal, targeting even the smallest of the retailers in any given locality.
With over $30 million investment since its inception in 2015, magicpin has grown from covering retailers in Sector 29, Gurugram to 3000 other localities in India, making its business in every region profitable. “If we are giving a Rs 100 business to a partner, we get 8-10% of that. With 3-5% going in managing the operations and our network, the rest is our net contributing margin. We scaled this unit economics positive model across the country,” explains Sharma. Currently, there are 200,000 partner retailers and over a million retailers listed on the platforms by users as they keep visiting places.
The app which looks more or less like a social media platform, is heavily populated with user generated content coming from nearly 5 million users with an average of 8 transactions and 30 sessions a month. The content consists of photos and videos of the place, people, the bills of purchases, restaurant menus and much more. The average size of each transaction is Rs 1,000 and the user spending via the platform has a run rate of $0.5 billion today. Sharma says that this will be $2 billion in the next 12 months and the business on the whole is growing at the rate of 8x as of this year.
With this rich collection of data and strong machine learning and artificial intelligence algorithms at the backend, Sharma and team know exactly when to connect whom, when to upsell, cross-sell and most importantly, make the shopping experience hyper-personal. “We even use Wi-Fi signal patterns to know where our users are standing. We then target them with relevant retailer and product details that are available nearby,” says Sharma.
To make the user experience fun, there are augmented and mixed reality features—a user can find sponsored virtual objects at partner shops which can be acquired by physically negotiating the places and then redeemed as points. This has led to over 100,000 transactions a day on the app and is linked to a leaderboard across the country. Today, via a partnership with Samsung, by simply pointing the phone’s camera to a direction/ object, the device pulls out details of the entity from magicpin database.
Sharma aims to make the business the flagship database for local retail which could be plugged into any demand platform. The platform has also a huge base of influencers who are rewarded by partner retailers depending on their popularity.