In the retail world, Rakuten (formerly known as Ebates) is considered one of the pioneers of online shopping and cashback services, driving a 15.5% increase in retail revenue. year-on-year to reach 1.68 trillion yen ($14.5 billion) in 2021.
Other popular cash back platforms such as TopCashBack, Swagbucks, and Shopback have sprung up in recent years as e-commerce becomes mainstream, attracting millions of users hungry for rewards and discounts on their online purchases. .
But while merchants in developed regions have embraced the service and the opportunities it creates for their businesses, the cashback business model remains a relatively new concept in regions like the Middle East and North Africa ( MENA).
“When we introduced this concept [in Egypt]it was something completely new and it was quite difficult to get traders to understand the value they could get out of it,” Ezz Fayek, co-founder and CEO of WaffarX, told PYMNTS in an interview.
Fayek says his platform, launched in 2018, is the first-ever cashback shopping service in the region. Over time, it has turned everyday transactions into savings for customers while helping to deepen customer loyalty for the growing number of brands using the service.
“[Once we convince] merchants to shift some of their spending from third parties like Facebook and Google to the customer, their average order value increases, retention rate is higher, and even acquisition is cheaper,” he explained.
Today, the Cairo-based company, which has 300 merchant partners and more than one million members in its network, aims to become the “Ebates” of the MENA region – a goal it has moved closer to accomplishment with the recent appointment of former Ebates CEO Kevin Johnson as Chairman of WaffarX.
As Fayek said, “Kevin joining us is a huge endorsement of what we’ve achieved and to have someone who understands the [cash back] the industry sees the value in what we do – it’s huge.
Roadmap for the future
Due to the novelty of the concept, Fayek said awareness was key early on to educate and reassure customers about the safety of the service.
“The first impression was ‘it’s too good to be true, nobody’s giving away free money,'” he said of the customer feedback they received at the time. “We had to put in a lot of effort and collect lots of testimonials to prove to people that there were no surprises and that they would get their money back.”
Now that more and more customers understand the offer, the demand for the service has increased, with users constantly looking for better deals. The bigger the business grows, the more it can get higher payouts from merchants for customers and, in turn, help merchants increase foot traffic and increase sales – “a win-win situation for everyone “.
Business growth has also led to new players entering the space and vying for market share, which Fayek says has helped raise awareness and open the cash back industry to new customers, as well. only to attract the attention of potential investors. who now consider the estate worthy of their capital.
Going forward, he said WaffarX will continue to build on the success he has achieved over the past four years, working on a roadmap that Johnson helped create in his new role as chairman of the society.
“For us, Kevin is someone from the future,” Fayek said. “He has already seen [everything there is to see]. It’s as if someone from the future gives us ideas and information [on what to expect].”
This, he said, will equip WaffarX to face whatever challenges lie ahead.
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