Pennyful has quickly become a go-to-place for a large number of online shoppers.
Witnessing a growth of 300 per cent year-on-year, Ravitej Yadalam, CEO and Founder, Pennyful, shares his entrepreneurial journey with SMEntrepreneur, reminiscing his fascinating and challenging story from the early college days to the day when his both start-ups Pennyful and MediRupee started garnering tremendous response from customers.
How did the idea of starting Pennyful and MediRupee come to your mind?
The ecommerce space always fascinated me, and I began experimenting with the idea of selling items online in college during 2007-2008. During this period, I used to work with a few vendors to sell their products online. This is when I noticed that customers preferred branded products over unbranded ones. This thought made me move towards the affiliate marketing space. Through affiliate marketing, I was able to tie up with large brands and deliver to customers the products they wanted.
Despite the success, I experienced that customer loyalty is a challenge which needed to be addressed. I asked myself that how can I make my customers choose me over my competition. The answer was to offer my customers something which others would not offer. And I realized that through affiliate marketing, I make an ‘x’ amount of money as commission, and if I shared part of this to my customers as an incentive, I would be able to deliver the best customer shopping experience.
This is how Pennyful was born. Our company was first incorporated in March 2010, post which we officially launched Pennyful.com for the U.S. market in January 2011. We brought the concept to India in November 2011 and extended it to the offline healthcare space as MediRupee.com in March 2013.
What has been the traction on both the platforms?
The traction we have received for Pennyful in India has been tremendous. The feedback our customers have been giving us so far has been overwhelming. Even for MediRupee, which is relatively new, the traction has been very positive. We are the first player to ever bring in such a concept to the Indian healthcare market and the feedback has been great.
What are the biggest challenges so far?
One of the biggest challenges we face in India is that cashback, as a concept, is still relatively new to the market. Hence, educating our customers still remains a priority for us as a cashback company. At times, it seems that receiving your money back is too good to be true, and is often misconstrued as being the same as a discount.
What is the current turnover of Pennyful?
As of now, we have given close to Rs 1 crore back to our customers in the form of cash. This is due to the increasing popularity of the cashback concept, the loyalty of our customers and the hard work the team has put in.
We have been successful in garnering traction not only in the number of users we acquired, but also in the number of partners we work with. In fact, when we compare our growth in terms of our customer base with last year, we saw a 150% increase Y-o-Y, and this is expected by 200% this year.
From a business perspective, we have been seeing a growth of 300% Y-o-Y and we should be breaking even by the end of this year.
What is your view on the future outlook of the e-commerce space in India?
The ecommerce industry is growing at an astonishing rate and this obviously is good news for us. Also, the market is changing as indicated by the number of deals and acquisitions that have been taking place. This means that competition is definitely setting the shape of the market. We seem to be in the era of consolidation and ultimately there is going to be one clear winner: the consumer. Consumer behaviour and feedback drives the market and it will continue to do so.
What is your success mantra in business that you would like to advice to aspiring entrepreneurs?
I think the most important thing is to focus on and connect with the consumer. If you are able to solve a real problem for a consumer, and there are enough such consumers willing to pay for your product or service, everything else will sort itself out. It is deeply empowering when you understand that something you create can genuinely solve a real problem for someone.
How do you manage to engage your users and compel them to come back again?
We are a customer-centric company and our customers are our lifeline. Hence, our focus lies on ensuring we deliver the best to our customers, and customer experience forms an extremely integral part of this philosophy.
In line with this, we wanted to ensure that our customers have access to us wherever they are, even on the move. Keeping this in mind, we recently launched a mobile compatible version of our website.
Also, customer acquisition is obviously important to us and while we encourage our users to share Pennyful with their family and friends, we also want them to be rewarded for doing so. In order to do so, we came up with a Refer-A-Friends policy, where our customer gets 10 per cent of his referrals’ cashback whenever they shop via Pennyful for one whole year.
Most importantly, we want our customers to come back to us, but purely for the customer experience we give them and nothing else. We do not want to force customer loyalty, and keeping this in mind, you will see that there is no minimum cashback withdrawal limit at Pennyful.