Based around a cashback model, Singapore-based e-commerce cashback venture Shopback is already offering discounts for more than 300 online stores since its launch in 2014. Following on the raising of a $500,000 pre-seed round led by Accel-X in April 2014, prior to product launch, its continued traction has led to its latest funding round.
Functioning as an affiliate marketer receiving a commission for every sale generated on various ecommerce sites, Shopback subsequently passes a portion of this income to shoppers. More recently, it claims to have generated in excess of 10,000 orders per month, with claimed traffic of 10,000 daily active users. Given that it receives commissions on every order, the estimation for its revenue is places it in the tens of thousand of dollars.
Henry Chan, Shopback’s co-founder, whose professional background includes stints at Zalora, Singpost eCommerce and Human Network Labs, explained: “We were all working in ecommerce and saw that the cashback concept was very established in the US and UK, but nobody was creating such a service for Southeast Asia.”
The latest entrant amidst a boom in the e-commerce space, Shopback is one of the many firms that have entered the space in Southeast Asia. The likes of Lazada and Zamora are backed by Rocket Internet, which has invested hundreds of millions into its e-commerce ventures in the region. More recently, Rocket led Series A funding for Indonesian firm Bridestory.
Following the same strategy as Rocket Internet, it’s about capitalising on the opportunities presented by the surge of capital being invested in e-commerce money and the rising consumer appetite for online shopping, driven by a growing middle class and surging smartphone proliferation, followed up with excellence in execution.
Cloning familiar business models and introducing them into new markets, followed by adapting them to local conditions and developing a competitive advantage in the shortest time possible – are the typical actions of Rocket Internet and its alumnus, of which Chan is a member. Its not an innovative strategy by any measure, but its one that works.