The Cashback Funda And How It Works?
Today, internet is full of e-commerce websites and they are fighting with each other to get more and more market share. These websites includes global giants like Amazon and domestic companies like Paytm. There are number of strategies used by these companies to attract more and more customers so that a big loyal customer base could be created. No cost EMI, Bank offers, special price and add ons are some of the few strategies implemented by these companies to attract more customers. But the best strategy which has given these companies most of their customer base is Cashback offers. Now lets see how this cashback offers work.
With virtual e-commerce markets comes the virtual bank like paytm, PhonePe and Airtel money which provides a virtual wallet to its users. Let us take an example of PhonePe. PhonePe started its operations in 2015 and it was acquired by flipkart in May, 2016. We usually see “PhonePe” cashback offers on flipkart. But question is that how these companies are still making profit after giving cashback to millions of customers. And answer to this question is that these companies are usually backed by some giant companies and their only aim is to grab as much as customer market share as they can even if they are running on loss. Moreover, these companies also want to eliminate the small players in the same segment so that they can grab their customer base too.
Same is the scenario with PhonePe. PhonePe is backed by flipkart and that’s why it is able to give cashback to million of its customers.
Moreover, such kind of offers also helps to create a loyal customer base which in return is beneficial for the company.
Paytm is also backed by big giant company Alibaba that’s why they are able to give such attractive cashback offers to lure customers.
These companies like paytm and PhonePe also generate revenues by promoting seller products on their apps and web pages which helps them in generating revenues to create offers like cashback. These virtual wallets can help a company achieving new heights.
Even the big giants like Amazon has also come up with the same wallet service called as Amazon pay. Amazon pay is also a wallet service which gives number of offers to its customers. The main aim of these companies is to create more and more customer base that’s why company like Amazon has came up with same virtual wallet model in India.
These cashback offers are also offered by the banks especially on their credit card service. Here, the scenario is same. All they want is to create more and more loyal market share.
These cashback offers has a big market in itself that some of the e-platforms like coupandunia and ebate are completely dedicated towards this. These platforms like coupandunia helps users to find new offers and in return it generate profits by driving customer traffic towards particular stores and gets commission on that.
So, this is how these all cashback offers work and generates revenue to these companies.