Cashback is a form of incentive for buyers where a small cash amount is reimbursed back to the buyer after making a purchase. While the cashback concept is popular in the United States and the European countries, it is still a relatively new means of incentivising online shopping in Asia.
Two cashback rewards platform that have recently made a presence in Asia are ShopBack and Ebates.
ShopBack is a Singapore-based e-commerce cashback platform that rewards users with cashback for shopping online. Shopback, which was launched in August 2014, started at a time where Southeast Asia was experiencing strong investment interests in regional ecommerce sites such as Zalora, Lazada and Tokopedia.
ShopBack was founded by Singaporeans Henry Chan, Bryan Chua, Derrick Goh, Joel Leong, Lai Shanru, and Samantha Soh. In 2015, the company won Gold in the Singapore Infocomm Technology Federation (SiTF) Awards Best Start-up (Growth Stage) category and Silver in the Best Innovative Infocomm Products (Consumers) category.
How Shopback works is that it receives a commission for every transaction directed via ShopBack to its merchant affiliates. ShopBack will then share a portion of the commission received to its users. Users will typically receive cashback of between 1 to 20 percent for their purchase. Some merchants may also provide a flat cashback amount. The company has partnered with over 1000 stores worldwide, including Taobao, Asos, Zalora, Lazada, Uber, Ebay and Paytm.
Cashback will be available in the user’s account within 48 hours after purchase. The cashback may then be redeemed once the order has been validated by the merchant. Users may request for their cash payouts to be transferred via PayPal or participating banks, including Citibank, HSBC and DBS.
Apart from cashback programmes, ShopBack also offers discount coupons and voucher codes that users could use to offset their online shopping purchases.
The company aims to be the leading cashback rewards platform in Asia. Local versions of the platform are available in India, Indonesia, Malaysia, Philippines, Singapore and Taiwan.
ShopBack is currently handling about 1,440 customers daily with more than 10,000 orders monthly. The company has disbursed USD890,000 in cashback over the past year.
Its seed-stage funding round has raised a total of USD1.1 million. Notable investors include Accel-X and East Ventures.
Ebates is a cashback rewards platform based in San Francisco, California. Founded by Alessandro Isolani and Paul Wasserman in 1998, it is touted to be the pioneer and leader of online cashback rewards programmes and is claimed to be is the most popular meta-loyalty program for savvy shoppers around the world.
The company offer services that are similar to ShopBack. Ebates receives a commission from transactions on affiliate sites that were redirected through its platform. Ebates then shares a percentage of the commission received to its members in the form of cashback. Members may earn up to 40% cashback from their purchases. The company has partnered with over 2,000 online retailers including Amazon, eBay, Groupon, Walmart and Priceline.
Users would receive their cashback quarterly via cheque or Paypal. They may also request for the payment to be made to a charity of their choice. Ebates also offers exclusive sales items, promotional codes and more than 10,000 savings coupons that users could use for their purchases.
In 2013, USD2.2 billion worth of purchases were made through Ebates, with 2.2 million active users within the same year. Since its launch, the company have paid over USD325 million in cash to its users.
Ebates is currently available in 5 countries – Canada, China, Singapore, South Korea and the United States. Ebates established its Asian presence in 2013 with the launch of its Asia Pacific headquarters in Singapore. It also launched a Korean version of the platform that same year.
In 2015, Ebates has a membership of 2 million users from Asia which contributed more than USD150 million worth of purchases.
Some of its initial investors include August Capital, Canaan Partners, Foundation Capital and Rembrandt Venture Partners. In 2014, Ebates was acquired by Japan’s ecommerce giant Rakuten for USD1 billion.
Both ShopBack and Ebates are offering almost similar services. What could potentially differentiate them is the variety of merchants available on their platforms. While Ebates cashback merchant affiliates are largely from the United States, ShopBack has partnered with both regional and international merchants to provide a more localized experience for its users.