A major player on the Russian e-commerce scene suddenly emerged in late May: a cash-back e-commerce platform called Clickandpay.ru that claims to have raised $60 million to finance just the first stages of its development.
After a few months operating in test mode, the site has already enrolled more than 50 e-shops, including such market leaders as Ozon.ru, Lamoda.ru and Sapato.ru, with a total offer in excess of 100,000 items, said Commercial Director Levon Danilyants in an exchange with East-West Digital News.
Clickandpay.ru also displays offers from 15 daily deal sites – totalling about 800 daily coupons – plus 145 restaurants; five major tour operators covering all countries and directions; and 120 providers from categories ranging from Internet and pay TV access providers to telecommunication services, utilities and others.
The marketplace does not bill merchants to display their offers in its catalog, but takes a fee on each transaction. The commission usually varies from 10% to 30% – depending on product category, market segment, and marginality – of which Clickandpay.ru offers one third to the customer. Thus if the commission amounts to 10%, the client will get 3% cash back.
“And this cash back is real money – not bonus points – which can be spent on the site or transferred to bank or e-currency accounts,” Danilyants explains.
In addition, the site plans to offer purchase on credit next summer in partnership with Tinkoff Credit System, a Russian bank specializing in consumer credit with a strong online presence.
A first mover with deep pockets
Clickandpay sets itself the goal of occupying no less than 10% of the Russian e-commerce market in three years – which could translate into a turnover of some $2 billion in 2015, based on EWDN’s forecasts of the Russian online retail market size.
The future will determine if such an ambitious goal can be attained so quickly. In 2011, the revenue of Overstock.com, the NASDAQ-listed US cashback giant that served as a model for Clickandpay.ru, reached no more than $1.05 billion.
But Clickandpay.ru may indeed have a chance to assert itself as a leader of tomorrow’s Russian e-commerce market.
The online marketplace concept was introduced long ago in Russia, as exemplified by Yandex.Market, Molotok.ru and Wikimart.ru. But Clickandpay is the first online player to experiment with cash-back.
Clickandpay announced that it raised $60 million in its first round – a near-record amount in Russian e-commerce, surpassed only by market leader Ozon.ru last year with its $100 million round of financing. The funds were provided by Russian businessman Igor Grossman and undisclosed US sources.
Clickandpay could also be served by strong execution, as witnessed by its brilliant user interface and extensive catalog.
Danilyants’s strategy consists of aggregating different traffic flows and directing them from one offer category to another. “For example,” he explains, “we have a large traffic of people searching for coupons to whom we can offer special deals from classic retailers; those purchasing physical goods can be offered food court services; and so on.”
In addition to traditional online and offline promotion, Clickandpay uses SMS as a socializing tool. The startup is also preparing social apps for Facebook and Vkontakte as well as iPhone and Android versions for mobile access.
- RUSSIAN E-COMMERCE REPORT 2012 – The total volume of Russian online retail reached 310 billion rubles, a little more than $10 billion, in 2011, up 25% from the previous year. EWDN’s research study of Russian e-commerce, which includes a review of online marketplaces, is available. To receive free insights or to order the full version, please contact us at [email protected].
