- ShopBack offers a cashback rewards program for online shoppers.
- Consumers can earn up to 30% cashback rewards when shopping at ShopBack merchant partners.
- Purchases at partners are automatically tracked, with cashback credited to your account shortly after.
Founded in 2014, Singapore-based ShopBack gives consumers a way to earn cashback rewards on their purchases with participating retailers. Since its first round of seed funding in 2015, the company has experienced rapid growth, especially in the Southeast Asian market. As of January 2023, the website has over 35 million registered users.
ShopBack partners with hundreds of domestic and international retailers, incentivizing consumers to use its platform.
But is it too good to be true? Can you really get cashback just for shopping through their website? And if you can, how can they make enough money to stay in business? This article explains it all.
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What does ShopBack do?
ShopBack’s main selling point is that users can get up to 30% cashback on purchases, which incentivizes users to buy more and in larger volumes. ShopBack collects a commission from its partners on every sale they refer. Itreturns some of the commission to the consumer, creating that cashback feature.
Its most notable partnerships are with brands in the tech, fashion, health and beauty, children's, food, and travel industries.
The company’s current focus is onboarding more partners that are familiar to consumers. Its long-term goal is to increase transaction volumes made by users.
How does ShopBack work?
ShopBack is a service providing consumers with a way to earn cashback rewards on their purchases. ShopBack is the middleman between the buyer (you) and the store (partner). ShopBack is paid a commission for referring a sale. They pass most of the commission back to the user as cashback and retain a small part to cover their operating costs and generate profit.
It is easy to sign up for and use, with a simple step-by-step process for using the service.
- Sign up for the ShopBack platform and register your account. You need an account to access the service and receive cashback for your purchases. Registering only takes a few minutes, after which you can earn cashback from shopping.
- Download the app from the Google Play Store or Apple App Store. Alternatively, you can use the website or their browser extension.
- Search for your favorite brands. Check what deals are on offer to get the best cashback rewards.
- ShopBack tracks purchases. Cashback is allocated to your account, but updating it can take some time (because of how partners report sales).
Once the balance is reflected in your ShopBack account, you can withdraw it to your nominated bank or PayPal account. To qualify for a withdrawal from ShopBack, you need a minimum balance of $10 in your ShopBack account.
ShopBack works with over 1,500 retail partners, including top international brands. Examples include the following companies.
How ShopBack makes money
ShopBack makes most of its revenue by retaining part of the commission partners pay when ShopBack's users shop with them. They also make money from advertising and sponsorship deals.
The company doesn't disclose its commission per partner, but we expect that figure to be anywhere from 2% to 5%. The amount may vary if the partner wants/needs more volume.
ShopBack doesn't make anything from the consumer. It doesn't charge membership fees and collects no fees for transactions the consumer processes using its cashback system.
That's a great deal for the consumer, but it can add fees to the merchant. However, ShopBack claims that merchants who add the service to their checkout experience a surge in new orders and greater order volumes.
Future growth engine
ShopBack continues to dominate the southeast Asian marketplace. However, the company has plans to expand into the Chinese and Japanese markets as well as Europe and the United States.
Unlike many other fintechs, the company claims it wants to focus on its core business model rather than branch out into different verticals. ShopBack wants to dominate its current market and increase its user base and merchant partners in the coming years.
The bulk of its growth comes through new users and merchant onboarding. Both business functions are vital to its growth, and the C-suite acknowledges this as the company's primary growth focus.
Cashback credit cards complement ShopBack and the cashback website model and are not considered a direct competitor.