Delhi-based social commerce startup Saverr.com - which initially started as a loyalty services company CashItBack - may be on to something big going by what Mark Zuckerberg said way back in 2010. "If I had to guess, social commerce is next to blow up," the Facebook founder noted at that time.
Social media is yet to drive significant sales on e-commerce sites, but going by the trend, commerce is going to get more social in the coming years. Which is why CashItBack pivoted from cashback and discount coupon model to one that harnesses the power of social media, helping customers make actual savings while they transact from e-commerce sites.
Saverr wants to be a destination site offering an aggregation of merchants rather than products, and helping customers save money with each and every e-purchase while merchants can use the platform to offer coupons & cashback, as well as rewards â€“ all at one place via an easy-to-manage dashboard.
"CashItBack represented the business model we wanted to pursue initially (that of paying some cash back to the people who purchased from our partner e-commerce players). But we pivoted to a larger offering when we gained more market insight. Saverr is a better representation of our business model today," says Ankush Johar, founder and MD of Loyalty Commerce Pvt Ltd, which owns Saverr. (Loyalty Commerce was a Techcircle Fastrack company, more on that here).
Saverr connects e-commerce players and consumers, and offers special cashbacks and incentives for every transaction done on the site. The concept essentially focuses on helping its users save money while shopping and enabling its e-com partners to grow as they tap into their buyers.
"Since our users can recommend other users, this helps create a wide network that benefits all. For instance, A can invite his friend B and B can invite his friend C. Now every time C makes a purchase on our site, he gets his part of the cashback from the transaction while B and A also get a component of the cashback â€“ for every purchase made from any merchant who is a partner of Saverr," explains Johar. "Let's say Saverr gets Rs 300 per transaction from the merchant for generating a sale. We will share Rs 150 cashback with C, Rs 50 with B and A will get Rs 25," he adds.
As part of the re-branding, the site has introduced another new feature. Now one can use a coupon code to get a minimum discount of Rs 300 on every purchase, as well as some amount of cashback, depending on the price of the product.
"Social and commerce are the two key reasons why we are here today," says Johar. "And we see a clear opportunity to make a big difference in this space. We are starting with online sales and will take it to the high street subsequently, judiciously."
Fuelling savings & revenues
Social commerce and the ability to leverage customers' social contacts form Saverr's DNA, claims Johar. "If you buy something, you get a cashback. If your friends buy something, still you get paid as mentioned earlier. Now anyone can leverage our platform to unlock the earning potential by recommending merchants and products."
According to Johar, word-of-mouth promotion works well for his company. "Our offering is twofold â€“ a consumer interface and a merchant platform. Till date, customers have come up with word-of-mouth stories for the love of the brand/product/merchant. Now our platform will let them monetise such efforts for the first time," he says.
Saverr, which has 75 e-commerce players on board including industry biggies like Flipkart, MakeMyTrip, Yatra, Pepperfry and Homeshop18, among others, allows customers to register for free and shop online from those merchants. But most importantly, buyers are entitled to 6-80 per cent cashback, depending on the product price. The money gets accumulated in the cashback account of a user and he/she can request for a cash return via cheque, which takes a minimum of 15 days. The money can also be redeemed via mobile and DTH recharges. The minimum threshold amount for such redemption is Rs 500.
What Saverr is offering is a PaaS (Platform-as-a-Service) model that the merchants can leverage to enhance their sales. Moreover, any consumer-facing brand (be it media houses, ISPs or banks) with its own database can leverage this platform as a loyalty tool where users get hard cash or mobile/DTH recharge, instead of points. Such a loyalty and rewards also has the potential to generate significant revenue.
While discussing the business model, Johar points out four clear opportunities: Saverr is a savings destination for consumers for all their online purchases; a social commerce destination to help people monetise their social clout and word-of-mouth marketing; a loyalty and rewards platform for e-commerce stores and a white-label loyalty platform for any consumer-facing brand entity.
"Our merchants pay us for bringing them transacting customers who are encouraged to socially recommend those merchants and/or products and benefit from a well-defined incentives framework. This helps the company and the partner merchants grow exponentially," he says.
Who else is treading this space?
Predictably, Saverr is not the only company that leverages the fast-growing e-commerce and social commerce segments. Ebates, its counterpart in the US, rakes in $60-80 million in revenues each year on the back of $600-$900 million in transactions. So far, the US firm has facilitated $90 million in savings to its 10 million members, according to a TechCrunch report.
With social commerce picking up fast (revenues for the social commerce market are expected to reach $30 billion by 2015), one can expect tough competition in India as well, "Of course, there is competition, but only for one part of our overall offering "the coupon sites. We are not undermining it," says Johar. However, the market is ripe enough for his PaaS offering and consumer-facing proposition, and more innovations are in the pipeline.
"I can't give you a lot of details until we launch that, but it essentially involves aggregating the entire long-tail of our competition," he tells Techcircle.in. "We will bring them in as partners on a revenue-share model and we will be their platform and service provider. That will free up their time to market their sites and they won't have to focus on coupons/deals or site maintenance," he adds.
A big market out there but funding yet to arrive
Saverr is not yet backed by an institutional investor. "We have gone past the incubation stage and are now ready to take the platform to the next level. This is a volume game and the space is wide open for us to take the pole position and emerge as a market leader," notes Johar.
He strongly believes that this business can scale well and it is, perhaps, a better investment than putting money into traditional e-commerce properties, which are now facing challenges in terms of strategy, logistics and e-payment. That is why he is looking for a strategic investment which would bring in more than just plain capital. He is also keen to bring on board strategic investors who can bring in clear, demonstrable advantages in helping it scale. "But so long as everything is getting into shape, we will be very busy building a large base of online buyers across India and we will be poised to become 'market makers' in a very short span of time," adds Johar.
So where is the money? The amount of money the e-commerce stores spend on marketing and acquiring new customers makes the size large enough to go after a startup like Saverr. Add to that Saverr's loyalty platform and the number looks even bigger. "And I am not adding the high street opportunity to this yet," he points out.
Saverr also claims that it has all the key e-com players as partners â€“ either directly or through channel partnerships. "We are growing on that front every single day. With the merchants in place now, we are now focusing on growing the user base. We need to reach out to as many people as possible for the model to work."
The company is now profitable, although Johar has not shared revenue details with us. Nor does he want to discuss the team size. "We are fairly lean because we focus more on productivity and less on headcount. We are very process-driven with a fairly high level of automation," he says.
Lean, mean and innovative to the core â€“ will that be the bottom line for Saverr in the time to come?
(Edited by Sanghamitra Mandal)