Inspired by the success of cash-back firms such as Rakuten in the West, ex-Zalora employees Joel Leong and Henry Chan decided to introduce a similar model and fill the market gap in Southeast Asia in 2014.
Their risk for the new model paid off. Today, ShopBack is a successful venture with a presence in countries, including Vietnam, Singapore, Malaysia, Indonesia, the Philippines, Thailand, Taiwan, and Australia.
In a nutshell, ShopBack helps consumers make smarter purchase decisions for items across categories, such as travel bookings, fashion, health and beauty, groceries, and food delivery.
ShopBack recently also entered South Korea by acquiring cash-back platform Ebates amid the COVID-19 turmoil.
With many startups struggling to find the right footing between survival and growth amid the spread of the COVID-19, e27 sat down with ShopBack’s Co-founder Joel Leong for tips on how small and medium enterprises (SMEs) and founders can cope better during the crisis.
Also Read: Afternoon News Roundup: ShopBack acquires Korean rebates platform Ebates
Below are his three golden rules for survival:
1. Be cash conservative
Leong believes that entrepreneurs must be prepared to fight out the uncertainty of the pandemic by being more cash conservative. With the crisis gaining more momentum, one thing is for sure: people are becoming more cash conscious.
As the situation continues to remain dynamic, all costs need to be continuously assessed. Most companies are beginning to see the inefficiencies that they did not notice before COVID-19.
It would be necessary for survival if founders can think about how they can optimise their costs well enough so that the return on investment (ROI) is improved.
“There’s no point on crying over spilt milk,” he said. “It is what it is, and we are unable to control it. However, cost is one-factor that can be controlled. Each company must think about how it can conserve its resources well enough to ride out this wave.”
Leong’s ideas shoot right out of a book on stoicism, which talks about how external influences are usually outside of one’s control but how one responds to it is very much within the control.
“Changes in the market are inevitable, but how we adapt to it can be changed,” he said with optimism.
Also Read: Afternoon News Roundup: Shopback raises US$75M led by Temasek to expand in Asia
2. Don’t give up on growth
One way ShopBack continues to save on costs while still managing to grow, is by listening more intently to customers and identifying key market trends. This helps them determine new revenue streams.
If the market is stagnating at one end, it is also gaining momentum on the other. If travel is stagnating, online shopping is booming.
To recognise where the shifts are happening and maintaining an eagle eye on customer habits is key to growth.
He throws in the example of the SARS pandemic (2002-2004), which compelled many companies to innovate and digitise, while even helping some of them to gain more customers.
“Travel is one sector that has been enormously affected by the lockdown and also one of our key revenue streams. The question we ask ourselves during this scenario is: if people are not spending on travel, what else are they spending on?”
“On the other hand, domestic travel within Taiwan is continuing. So, in that case, we can even look at doing more sales in the region.”
Also Read: What you need to know about digital marketing for the new normal
By asking these questions, the company can understand shopping habits better and target the right market.
One way in which the cash-back company walked the talk was by being able to pinpoint the need for companies to gain more visibility for products and realising the changing ways consumers were interacting with brands and content during the lockdown.
It concluded its first all-digital birthday campaign in celebration of ShopBack Australia’s 2nd birthday recently, which generated ten times more in orders for top-performing brands and managed to award users over AU$600,000 in cash-back.
The campaign featured several Australian influencers and included virtual activities such as Pictionary and an online scavenger hunt.
It added fun elements like clues hidden in YouTube videos, Instagram stories, Facebook groups and more with the attempt to grab the attention of its social media savvy customer base.
3. Increase your visibility… but do it right
As more people are bound to stay at home and maintain social distancing with others, a cascade of cancellations and postponements have impacted major gigs, business opportunities and events and wiped some of them off the calendar.
It is crucial to improve marketing at the same time so that products are more visible to consumers.
“A good question to ask would be, how can I become more visible to customers without compromising too much on costs? If you are paying for clicks, what usually happens is that you must pay for clicks even if the order doesn’t go through. You get nothing, yet you still pay for it,” he added.
It is vital to find the right marketing channels which are more performance-based rather than click-based.
ShopBack operates in a similar way where it aids other sellers using its pay-per-sale model. This is especially imperative during a time when brands are taking a closer look at their spending, and opting for channels that are relevant and necessary.
Also Read: Afternoon News Roundup: ShopBack acquires Korean rebates platform Ebates
Leong holds that it is important for founders to have as much control over marketing and up to them to explore various marketing channels that are performance-driven and figure out what works best.
Every dollar should be utilised in the right way, even if it is for marketing. More time must be invested to think about campaigns and to increase visibility without compromising on costs.
Conclusion
Most companies are striving to remain afloat while others are doing everything they can to keep their doors open post-pandemic. In times like this, it is essential to save money while continuing to innovate, depending on the stage of the company.
Be cautious, be innovative and be relevant, is the strategic founder’s new mantra.
“If you are alive, you can still live to fight another day,” said Leong, quoting Irish novelist Oliver Goldsmith.
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Image Credit: ShopBack
The post Survival vs growth: ShopBack co-founder shares 3 golden rules to withstand the pandemic appeared first on e27.