In the world of retail shopping, Rakuten (formerly known as Ebates) is considered one of the pioneers of online cash back shopping and services, generating a 15.5% year-over-year revenue increase to hit 1.68 trillion yen ($14.5 billion) in 2021.
Other popular cash back platforms like TopCashBack, Swagbucks and Shopback have emerged in recent years as eCommerce becomes more widespread, attracting millions of users eager 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 cash-back 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 merchants to understand the value they could unlock from it,” Ezz Fayek, co-founder and CEO of WaffarX, told PYMNTS in an interview.
Fayek claims their platform, launched in 2018, is the first-ever cash-back shopping service in the region. Over time, it has transformed everyday transactions into savings for customers while also helping to deepen customer loyalty for the increasing number of brands that are using the service.
“[Once we convince] merchants to shift part of their expenses from third parties like Facebook and Google to the customer, their average order value increases, the retention rate is higher and even acquisition is cheaper,” he explained.
Today, the Cairo-based company, which counts 300 merchant partners and 1 million-plus members in its network, aims to become the ‘Ebates’ of the MENA region — a goal they’ve drawn closer to achieving 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 having someone who understands the [cash back] industry see the value in what we’re doing — that’s huge.”
Roadmap for the Future
Due to the novelty of the concept, Fayek said raising awareness was critical right from the onset to educate and reassure customers that the service was safe.
“The first impression was that ‘it’s too good to be true, no one is giving free money,’” he said about the customer feedback they received then. “We had to put in a lot of effort and collect many testimonials to prove to people that there was no surprise, and they would be getting their money back.”
Now that more and more customers understand the offering, demand for the service has surged with users constantly searching for better deals. The more the company grows, the more it can secure higher payouts from merchants for customers and, in turn, help merchants boost retail foot traffic and increase sales — “a win-win situation for everyone.”
The growth in business has also led to new players entering the space and competing for market share, which, according to Fayek, has helped to raise awareness and open up the cash back industry to new customers, as well as attract the attention of potential investors who now view the field as worthy of their capital.
Moving forward, he said WaffarX will continue building on the success it has achieved over the past four years, working on a roadmap that Johnson has helped to create in his new role as chairman of the company.
“For us, Kevin is someone that is coming from the future,” Fayek said. “He has already seen [everything there is to see]. It’s like having someone from the future give us insights and information [on what to expect].”
That, he said, will equip WaffarX to face any challenge that lies ahead.
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