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ShopBack began out 9 years in the past in 2014 because the brainchild of former Zalora executives Henry Chan and Joel Leong. The cashback rewards firm recorded solely three transactions a day when it first began, but it surely has since grown to turn into certainly one of Singapore’s rising startups.
Last December, ShopBack raised a complete of US$160 million in its Series F funding and thus far, it has managed to increase its presence throughout Asia Pacific, together with Australia and most not too long ago, Hong Kong.
But how did the corporate make it this far? At ShopBack’s flagship retailers summit, SPARK 2023, held final Thursday (July 6), Henry, Joel, and different key ShopBack executives shared the secrets and techniques behind the startup’s hovering success.
The potential of affiliate internet marketing in Southeast Asia
ShopBack is a cashback rewards platform that enables its customers to obtain a small share of their purchases on the platform, which is paid for by retailers.
This is made attainable by means of affiliate internet marketing preparations, the place the retailers pay a charge to ShopBack to drive gross sales and visitors to their web sites.
The idea of affiliate internet marketing on the Internet was conceived of, put into observe, and patented by American entrepreneur William Tobin in 1989. William utilised affiliate internet marketing to promote flowers, and thru this advertising technique, he managed to promote US$8 million {dollars} value of flowers.
Following William’s success, the idea of affiliate internet marketing rapidly unfold by means of the United States and was finally leveraged by e-commerce giants resembling Amazon and LinkShare. By 2013, the affiliate business really made up about 50 per cent of all e-commerce gross sales within the United States.
Today, affiliate internet marketing has grown to a US$20 billion greenback business, with curiosity within the sector rising by nearly 300 per cent from 2017 to 2021 globally. According to Joel, this development will be attributed to 3 predominant causes.
Firstly, affiliate internet marketing will increase [a merchant’s] buyer base. William initially had a restricted buyer base, however the affiliate programme allowed him to increase to a much bigger pool of consumers and thus, he was capable of promote extra flowers.
Next, affiliate internet marketing is [solely] centered on gross sales. It doesn’t drive CPC (cost-per-click), it doesn’t drive CPA (cost-per-action), it doesn’t simply drive impressions, but it surely focuses on what the retailers need, which is gross sales.
Last however not least, the charges for affiliate internet marketing are fastened. Unlike most advertising campaigns, you wouldn’t be left questioning in regards to the gross sales report or the ROI (returns on funding) on the finish of a marketing campaign.
– Joel Leong, co-founder, ShopBack
That mentioned, the business continues to be very a lot centered on the United States, with the nation driving nearly 60 per cent of this development. Seeing how the idea was nonetheless nascent in Southeast Asia, each Henry and Joel, together with their different co-founders, determined to launch ShopBack within the area.
What is driving ShopBack’s success?
But why precisely is ShopBack’s affiliate internet marketing enterprise mannequin working at this time? The purpose behind that is easy — ShopBack brings a win-win perspective for each its two key stakeholders: its prospects, and its retailers.
From a buyer’s perspective, there are a plethora of choices out there — in actual fact, there are near 10,000 retailers for them to buy from, from groceries to journey and trend, all inside a single app. This breadth of choices, coupled with the convenience of use and the rewards granted by the e-commerce platform elevates its customers’ procuring expertise.
After all, procuring, for a lot of, is a deeply private and emotional exercise.
When you store, I’m fairly sure that you’ll undergo a spread of feelings. Sometimes you store once you’re bored, or at different instances, you is also pissed off at your procuring experiences.
But one factor I’m sure ShopBack has achieved constantly properly through the years is to result in this notion — over the previous 9 years, we’ve been within the enterprise of constructing procuring rewarding. We’ve made tens of millions and tens of millions of our consumers really feel nice about their purchases by continually bringing new worth to them.
– Justin Lee, Chief Product Officer, ShopBack
As a outcome, ShopBack is ready to entice all kinds of consumers for its merchant-partners by providing a variety of choices. Notably, retailers are solely billed for gross sales which are efficiently generated by means of ShopBack’s platform.
Extending past on-line to offline
Beyond simply driving on-line visitors and gross sales, ShopBack has been making constant efforts to increase its choices into the offline area since 2020 to remain extra aggressive within the e-commerce area.
The integration of ShopBack’s on-line and offline choices, particularly since its entry into the funds area with ShopBack Pay and ShopBack PayLater final yr, has introduced in additional worth for retailers onboard the e-commerce platform by attracting an excellent wider pool of consumers.
[By bringing ShopBack’s offerings from online to the offline world], we now have helped customers to save lots of throughout a bigger watershed. As for retailers, we permit them to interact with consumers in new methods, in the actual bodily world.
– Henry Chan, CEO and co-founder, ShopBack
One means the corporate does that is by working fascinating offline activations in collaboration with its retailers companions.
“We partnered Booking.com to run an offline activation. It was pretty cool to see queues still forming at our booth despite the event closing at 10pm. Beyond audience engagement, we turned offline shoppers into online customers, driving three times more sales for Booking.com,” he added.
The startup has additionally labored with homegrown manufacturers resembling Love, Bonito, to run omnichannel campaigns. For its newest omnichannel marketing campaign, ShopBack managed to drive S$3 million in gross sales for the clothes model over a interval of simply three months.
Aside from working campaigns, it has additionally launched options that combine its on-line choices into the offline area. For occasion, the platform’s card-link characteristic lets consumers earn cashback offline by utilizing the cardboard linked to their ShopBack app to pay for his or her purchases at ShopBack’s accomplice retailers’ bodily shops.
How ShopBack drives gross sales its regardless of inflation
Beyond this, the homegrown startup additionally acknowledges and addresses the challenges that consumers presently encounter, resembling inflation.
“We know that shoppers today face rising costs due to inflation, tightening [their] budgets due to recession,” famous Henry.
This is why ShopBack runs campaigns which are “right for the time”, resembling its marketing campaign in Australia, “Fight Back with ShopBack, Get Better Bang for your Buck”, which goals to deal with these challenges.
Aside from this, it additionally takes a novel method in the direction of helping its consumers. Rather than emphasising on spending cash, it prioritises showcasing the quantity prospects can save by utilising ShopBack, which helps drives gross sales.
According to Joel, a median person would have saved about S$139 as of at this time, if that they had joined and utilised ShopBack since January 2022. In complete, the startup has given out S$460 million in cashback to its consumers since 2014.
Nevertheless, ShopBack’s core essence stays that of a know-how firm. Therefore, fixed innovation aimed toward offering more and more rewarding experiences for each retailers and consumers lies on the coronary heart of their operations.
Currently, a big emphasis is positioned on personalisation and the implementation of options that successfully captivate their viewers, leveraging the ability of information.
Over the previous 9 years, ShopBack has amassed an enormous quantity of shopper information, specifically from about 40 million of its consumers throughout a number of continents and totally different transaction classes. Through this information, the corporate creates hyper-personalised content material for customers, making certain that the “right content is showed to the right shopper at the right time”.
We construct these [hyperpersonalised] campaigns to search out perception and join with our manufacturers. And in return, we purchase new prospects which are excessive worth and high quality, maximising our return on funding (ROI).
– Jodie Lam, Regional Head of CRM and Product Marketing, ShopBack
Jumping onto the AI bandwagon
In order to leverage this information, ShopBack utilises quite a lot of machine studying fashions and synthetic intelligence (AI) to analyse particulars such because the classes customers are considering, areas that customers are transacting from, in addition to person affinity.
Since ShopBack caused these personalisation adjustments, the startup has seen an elevated quantity of procuring journeys per service provider and an expanded person base.
Our customers are additionally much more engaged. The metrics are monitoring properly, the variety of procuring journeys per person is growing, and the conversion fee on these customers are so growing.
But very importantly, our customers are having fun with this new expertise. Our retailers are additionally seeing much more demand for now, as customers at the moment are seeing provides which are related to them primarily based on their previous interactions.
– Isaac Timothy Tay, VP of Product, ShopBack
Aside from utilising machine studying, the startup can be experimenting AI instruments resembling ChatGPT in its artistic processes. With its person base steadily increasing, these instruments assist the corporate velocity up its processes and content material creation, amongst different use circumstances.
Nonetheless, Jodie Lam, the regional head of CRM and content material advertising at ShopBack, reassures that every one the content material put out by the startup are totally vetted and undergoes high quality management.
“I promise you what you see and read that comes from us, and has not come directly from an AI model,” she asserted.
Becoming the “world’s most rewarding way to shop”
Despite shedding about half of its income in a single day due to COVID-19, ShopBack has come out stronger.
We needed to tide by means of COVID-19, unsure of how lengthy it could final. But now that COVID-19 is behind us, a brand new problem that exists — which is a recession — and it’s prone to final for years to return.
Yet, amidst all these ups and downs, I’m very proud to share that we proceed to develop yr after yr. Last yr, we drove S$5 billion in gross sales.
– Henry Chan, CEO and co-founder, ShopBack
Over the final 12 months, ShopBack has efficiently onboarded a formidable 5,455 new retailers onto its e-commerce platform, accounting for greater than half of its present service provider base.
In addition to this growth, ShopBack has bold plans to increase its presence past the Asia Pacific area within the coming months. According to Alessio Romeni, the managing director of ShopBack, the corporate has made a dedication to enterprise into a brand new market yearly.
This yr, they’ve set its sights on Germany, marking an thrilling step ahead for ShopBack because it expands its world footprint.
While the last word imaginative and prescient for the startup is to turn into the world’s most rewarding method to store, Henry acknowledges that there’s “still much work to be done” earlier than this aim will be absolutely realised. Despite the challenges forward, ShopBack stays undeterred in pursuing its daring imaginative and prescient.
Featured Image Credit: East Ventures
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