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What makes coupon website Mydala click?

Starting as a local couponing platform five years ago, Mydala has now been touted as one of the strongest players in the online coupons / discount marketing industry. This was highlighted in a recent report by Motilal Oswal Securities, which said that Mydala was on top of its competition such as GroupOn and Coupon Duniya.

It is estimated that deals sites contribute 10-15 per cent of e-commerce traffic in India. Mydala sells more than 150,000 coupons daily. Info Edge of naukri.com is an early investor in the platform.

In conversation with Arjun Basu, Co-Founder and CFO, and Anisha Singh, Founder and CEO, we learn more about what led the platform to rise.

Anisha Singh

Anisha Singh

The focus of Mydala when it started has been more than just coupons. Ms Singh says, “For us Mydala has always been a mass game, it was never about focussing on a few cities. The basis of Mydala is that it has been a merchant marketing platform or a Small and Medium Business (SMB) marketing platform driven by offers and promotions. So any merchant who does not have the ability to use a print medium or TVC, can use a structure like Mydala.”

Mass market player
Starting out as a SMB marketing platform, Mydala has kept its focus on non-Tier 1 cities. Mr Basu said, “India has a very large SMB market. There are around 37 million SMBs out of which 76 per cent are in service-based business. So our focus is on pushing traffic from the online world to the offline world. While the entire advertising is focussed on Tier I cities, we see a lot of demand in non-Tier I cities. Our focus is how we can bring value to our users from non-Tier I cities as well as our merchants from non-Tier I cities.”

Arjun Basu

Arjun Basu

SMBs play an important role in Mydala’s strategy as Mr Basu explains, “Our ad network is about merchant marketing. It gives the merchants a platform to promote their product to their target group. Our leads are also trackable. We offer them everyday marketing. We have a high retention of SMBs as almost 80 per cent of our merchants are repeat merchants.”

Talking about the challenges faced, Mr Basu said, “The first two years, SMBs needed to be educated about the platform. But once they understood and saw that it gave them value in terms of custom acquisition, they got on board.”

The couponing network has partnered with over 120,000 merchants across 200 cities. Its offers reach 35 million unique users monthly through the internet, mobile devices, and TV.

Tier-III and IV cities account for 53.5 per cent of the total market share in digital coupons. Tier-II cities account for a further 22.67 per cent of the total national market, while Tier-I cities account for 20 per cent, the Motilal Oswal report said. The focus on non-Tier I cities is the driver of growth for Mydala.

According to websites ranking by Alexa, in India Mydala ranks at 114, while CouponDunia ranks at 169 and GroupOn ranks at 194.
Talking about what makes it stand above the competition, Ms Singh says, “In terms of transactions and city coverage, we are above GroupOn. Our focus is on non-Tier I cities and we are a mass player. GroupOn does very niche high-end deals. We do that too but also basic deals as well like for kirana stores.”

Mr Basu adds, “For us more than 50 per cent of the traffic is from non-Tier 1 cities and 50 per cent of the revenue is from non-Tier 1 cities. We also provide the non-Tier 1 market to the larger organisations as well.”

Paving the mobile route
In 2011, Mydala made a move into mobile as a primary channel of communication and tied up with telecom service providers. It has tie-ups with Vodafone, Idea, and Tata DOCOMO by offering couponing and loyalty services on their network. These coupons are based on the user’s dynamic usage pattern, location, mobile credit/bill, and buying preferences.

Mr Basu explains, “In terms of transactions we are the largest in m-commerce. Our focus has been on the WAP site. We got 13 million page views on our WAP websites. To make the payment procedure easier for the user, we have integrated the payment system with their mobile phone account directly through the USSD channel. All the telcos deals are being run by Mydala through the Unstructured Supplementary Service Data (USSD) channel. About 96 per cent of all phones in India are USSD enabled.”

The verticals driving growth for the platform are FMCG, health and beauty, food, offline shopping and travel.

Talking about the future of couponing platforms, Ms Singh feels location-based marketing would be a game changer for the industry. She says, “Hyperlocal services will be defining the market as people want to know what services are available near them at a given time – be it from a cab, to a restaurant or a salon.”

Talking about future plans for the company, Ms Singh says enthusiastically, “We are looking to ring the bell and become a listed company. That is our target.”

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.