US online cashback website to open regional HQ here

ONLINE cashback website Ebates.com, based in the United States and owned by Performance Marketing Brands, is the latest to venture into the Asian market.

Ebates will open its regional headquarters in Singapore by the end of the year. It has already acquired a similar company in China and plans to expand into South Korea,

Said David Teng, the company's general manager for Asia: "We're always on the lookout for business partnership that will provide more value for shoppers in the region."

Appealing to shoppers: Websites like Ebates earn a commission for
providing links to e-stores like Amazon or hotels such as
the InterContinental chain. - PHOTO: AFP

Ebates wants to capitalise on the popularity of online shopping in Singapore, where more than 94 per cent of Singaporeans spend online, according to a recent survey.

The company is looking at "tens of millions in gross revenue" from Asia this year, according to Mr Teng.

The move into the Asian market comes as many merchants in the US do not ship to Singapore or accept internationally issued credit cards.

Ebates is inking a deal with HopShopGo, the three-year-old tie-up between PayPal and comGateway, which ships purchases from the United States for a fee.

While Ebates' operations in Singapore will initially focus on online purchases from the US, regional marketing specialist Sng Yan Yuan said that "eventually we'll have a localised site with localised offerings" such as cashback from local merchants.

It is also in talks with several local banks to tap their existing credit card rebate schemes to woo new customers.

In Singapore, shopping rebates are commonly associated with credit cards such as Standard Chartered Bank's Manhattan World MasterCard and the United Overseas Bank's One Card.

Websites like Ebates earn a small marketing commission for providing links to e-stores like Amazon and big brands like Sephora, Victoria's Secret, Macy's, or even hotels such as the InterContinental chain and airlines like Emirates.

Cashback websites then split this commission with customers who go through them to make purchases.

Other online retailers may use rebates specific to their own websites as a way to create a dedicated pool of repeat customers.

E-marketplace Qoo10, which hails from South Korea and has an office in Singapore, has made a name for itself through its innovative, multi-tiered system of issuing rebates to reel in customers.

Qoo10 users earn "Qpoints" amounting to one per cent of their purchase price. A $5 purchase, for instance, would garner shoppers five Qpoints.

These Qpoints can then be converted to a cashback sum at the exchange rate of 100 Qpoints to $1.

Qoo10 director Cho Hyun Wook said that Qoo10 can effectively leverage on this system to influence consumer behaviour.

"On a day when we need high revenue, we'll give out free $10 coupons that can only be used when a purchase of over $100 in one order is made," he said. "When we need high transactions, we give out many $1 coupons.

Online clothing stores and blogshops, which are mainstays of the online shopping scene in Singapore, are also riding the rebate wave.

Popular fashion retailer Dressabelle, which entered the market in 2007 and recently saw Fatfish Internet buy a 15 per cent stake, offers a dollar back for every $20 spent, with customers earning additional credit for social media promotions on Facebook and Twitter.

Chief executive officer Jeremy Khoo told BT that the site's rebate system "is a key driver in our sales and marketing strategy", which creates brand loyalty and keeps up to 48 per cent of customers returning to the site to make more purchases.

Even far less established players are catching on to this trend.

Less than a year old, The Hopping Rabbit blogshop offers a rebate scheme similar to Dressabelle's. Owner Shirley Lim said that the profit margin is not high, but this practice encourages greater sales volume.

According to Desmond Tan, OCBC Bank's head of group lifestyle financing, rebates "help in long-term customer retention and forge deeper customer engagement".

OCBC already offers rebates at brick-and-mortar stores. However, the bank has its sights trained on the digital realm as well.

In 2011, it rolled out its FRANK by OCBC credit card, which gives cardholders a 6 per cent rebate for online purchases with a minimum monthly spend of $500, compared to 0.5 per cent for traditional purchases.

While rebates still have limited take-up with Singapore consumers, cards like FRANK by OCBC and e-retailers like Qoo10 and Dressabelle are raising awareness of such options.

Getting paid to shop online is no longer a pipe dream, and the entry of new players like Ebates will be worth keeping an eye on.

Source: Business Times 19th August 2013

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US online cashback website to open regional HQ here

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