India
has witnessed a rapid increase in the number of startups in the last 5 years.
The country is now home to the 2nd largest number of startups in the world
after the USA. In this era of new ideas and new business propositions, a unique
startup, “Magicpin App” was founded in the year 2015 by two young IIM graduates
who give rewards and coupons to its users for posting selfies in this app.
You
must be wondering how this business makes money if it gives discounts and
cashback to its users for only uploading selfies?
Here’s the answer! Let’s start by
understanding the business model of Magicpin that would give better insights
and the strategy behind such an unusual startup.
Business Model of Magicpin
Anshoo
Sharma and Brij Bhushan founded ‘Magicpin’ in the year 2015 headquartered in
Gurugram, Haryana in India. The sole idea was to give rewards such as
discounts, cashback, coupons, and other rewards to the consumers using its
platform for discovering local retail businesses such as restaurants, fashion
stores, grocery, and other business outlets in the nearby areas. This would
help in strengthening the retail business when online shopping (E-commerce) is
growing rapidly.
‘Magicpin’
has tie-ups with the retail stores and local merchants who pay “processing and
transaction fee” which is the main source of revenue for this startup. Magicpin
provides a platform for these local merchants to engage with their customers
and provide personalized marketing.
For instance, you are a consumer visiting a nearby grocery shop. After making the payment, you first check if the shop is a participating merchant on the Magicpin App. Once confirmed, take a selfie at the same outlet and a copy of the bill invoice. This selfie-and-bill invoice should be uploaded on the Magicpin app. Once, the location intelligence technology validates the transaction, the customer can earn “Magicpin Points”. These Magicpin points can be used for availing discounts at the Magicpin partnered retail outlets. Thus, with the implementation of technology in the offline retail sector, Magicpin has truly transformed the local business by operating in 12 Indian cities as of August 2021.
Long road ahead for the success of Magicpin
This
tech startup was in news recently when Deepinder Goyal, CEO of India’s largest
food-tech startup Zomato, joined the board of Magicpin as an independent
director. According to August 2021 reports, Magicpin was valued at $165 million
after raising funds from Oyo’s founder Ritesh Agarwal. Though a unique business
idea, Magicpin is yet to taste success and has to re-innovate its strategies to
sustain the competition from well-established companies like Nearbuy, The Blue
Book, CashKaro.com, and other rival companies.
Magicpin definitely has associations with a
few top names in the industry. However, in my opinion, it has not gained enough
popularity due to inefficient marketing techniques. To increase awareness about
the Magicpin app, Magicpin can use aggressive advertisements to make the
consumers aware of its one-stop app to avail of amazing offers. Moreover, the
company has to develop a way to gain the trust of the local merchants and rope in more stores to use Magicpin for more personalized marketing. Nevertheless,
we have to agree Magicpin has an unusual business proposition and for the
Indian economy to grow, such startups and ideas are required to boost the local
businesses and retail stores.
Our
country has witnessed a lot of startups, but it is an undeniable fact that such
startups also require “magic” to be able to sustain themselves in the market. It would be
interesting to watch if Magicpin will be able to create that “magic” and “pin”
its company to the top in the near future.
Until
then, keep creating magic with your unique strategies!
About the Writer
Sanjana Nahata
Pursuing PGDM at IMT, Hyderabad
An
ambitious and result-oriented person, keen on self-learning finance and
financial management puts forward her opinion on Magicpin.
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