SINGAPORE: Snap a picture of your shopping receipt, upload it to an app and you may receive a cash rebate of as much as 5 per cent of your total bill.
It may sound too good to be true, but that is the business model of Indonesian startup Snapcart, which was launched last year. Touted as the first mobile app in Indonesia to have such a concept, the company started off by calculating cashback rewards based on selected products that fall under brands it is working with, but is now gearing up for a shift to offering rebates based on one’s total purchase.
According to the app’s founders, Mr Reynazran Royono and Ms Teresa Condicion, the average cash rewards range from 3.5 per cent to 5 per cent, and users can opt to receive them as top-up values for prepaid phones, online shopping vouchers or cash that is transferred directly their bank accounts.
Apart from attracting shoppers that like a good deal, they said Snapcart also taps into the “second nature” of Asian consumers “who love taking photos with their smartphones”. Since its launch, the startup has had half a million downloads in its home market and boasts of a retention rate that is comparable with popular chat apps.
“Well, we give away money and that’s why our users like us. We have a retention rate of up to 40 per cent after 30 days… a huge number that’s comparable with many chat apps and is quite an achievement I think,” said co-founder and CEO Royono, who was speaking to Channel NewsAsia on the sidelines of the inaugural Millennial 20/20 Summit held in Singapore last week.
“WE’RE MORE THAN JUST A REWARDS APP”
While the startup has made its name as one of the few platforms in the region that offers consumers cash back for their offline purchases, the founders pride themselves on being “more than just a rewards app”.
In fact, Snapcart – a combination of “snap”, which is the verbalised form of “taking a snap”, and “cart” that stands for customer analytics and retail tracking – was founded with an aim to resolve the dearth of real-time insights on offline purchases in Southeast Asia.
According to co-founder and COO Condicion, tracking offline commerce and consumer habits still largely involves “manual and tedious” methods such as door-to-door surveys.
“When I was leading the market research team for the region at Procter & Gamble (P&G), we would take three to four weeks to collect these data by going door to door… by the time it’s collated, three to four months have passed and the data isn’t useful at all in helping me understand how my brands were doing,” explained Ms Condicion.
With the painstakingly-collected data being outdated, they are rarely used by the sales and marketing team, Mr Royono, who started off his career in P&G’s Indonesia sales team, added.
“We felt that frustration during our time in P&G and we thought that it’s time to provide some real-time analytics capability into the offline purchase world, which still makes up 98 per cent of the total purchase in this region,” he said.
However, collecting offline commerce data in a fragmented market such as Indonesia is no walk in the park. “The ideal way is to integrate the point-of-sale systems across all the retailers but, the thing is, that is not going to happen. Systems are fragmented and retailers are secretive when it comes to their own data,” Mr Royono said.
With shopping receipts usually containing a wealth of information about shoppers’ behaviours, the team eventually decided on incentivising shoppers to send in their receipts by offering small cash rewards.
Frustrated by the lack of real-time data on offline purchases, Mr Reynazran Royono and Ms Teresa Condicion decided to address the issue. (Photo: Tang See Kit)
Through the receipts gathered, its team of data scientists then analyses the raw data and turns them into real-time insights about consumer spending and shopping habits for brands.
Said Ms Condicion: “The market research industry is a US$60 billion business and it remains dominated by companies that are still getting data from door-to-door surveys. Our model is to disrupt that and sell our data to brands who are spending millions on these less usable data. We want to help companies learn more about their shoppers and markets in a real-time manner.”
Given the team’s background in the consumer goods industry and firsthand experience of the lack of real-time market research, Mr Royono noted that the startup has had quite a “smooth ride” thus far.
“To be honest, there is no challenge. It’s been kind of a smooth ride (in terms) of support from investors and brands. I think it’s because of our credentials in the industry so it’s easier for us, compared to a fresh university graduate, to talk to brands within our networks and get their support even before we launched.”
NEXT STEP: REGIONAL EXPANSION
Moving forward, Snapcart will continue working on its in-house technology to capture various forms of shopping receipts and has plans to eventually evolve into a “shopping assistant”.
“Now that we know what you typically buy and how much you’ve been spending, we can help you organise your budget, help you recommend a shopping basket and where to go for best deals. These are definitely plans for the future,” said Ms Condicion.
Geographical expansion across Southeast Asia is also on the cards, following its recent move into the Philippines. Other markets that are on the list include Thailand, Malaysia and Vietnam, where information about offline purchases remain scarce.
“We look at markets that have huge gaps when it comes to offline purchase data. Philippines is a market that’s really hard to understand because not all retailers share their data,” Mr Royono explained. “Their biggest retailer, SM Retail, is not sharing its data with the market research agencies so there’s a huge opportunity for us.”
As such, Singapore, which is a smaller market compared to its bigger neighbours and where data is much easily accessed, is not on the priority list when it comes to Snapcart's potential new markets. But the founders have not ruled out a venture into Singapore, citing it as a valuable testbed for other developed markets such as Japan.
“After Southeast Asia, we want to go into other parts of Asia and Singapore will be somewhere we’ll like to learn from before we go into similar developed markets such as Japan and Korea. We think it will involve a very different model and there will be much to learn from,” said Ms Condicion.
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