Brands like Flipkart, Myntra, H&M, and Starbucks give loyalty points to their customers in hopes of creating a loyal customer base. And, given India’s rising disposable income, companies are tweaking their loyalty programmes to boost adoption among local consumers.
Swiggy, for instance, launched a cheaper version of its existing loyalty programme last October. According to a report from IIFL Securities, the foodtech company gained marginal market share compared to Zomato in 1HCY23, potentially due to the aggressive pricing of its revamped programme and higher promotions.
However, loyalty programmes are a tricky business as customers expect personalised experience.
To make these programmes work for both customers and brands, Abhay Mishra, Abhay Tandon (CBO), and Anuj Kumar (CTO) launched Monet, an AI-driven interoperable loyalty ecosystem built on blockchain.
“Globally, of all the people who are loyalty programme members, 87% of them are not able to use more than 15% of the loyalty points that are given to them which is a huge waste for the consumers as per market research reports,” explains Tandon.
“Either they forget that they have loyalty points or loyalty points expire and sometimes they don’t even know they have loyalty points. Or sometimes it could also happen that you want to shop, but you don’t want to shop from the same place,” says Tandon, adding that the US alone has a $100B annual spend on loyalty programmes.
Started in October 2022, Bengaluru-based Monet was initially a blockchain-based hiring referral platform.
However, the founders moved from hiring to the loyalty-based rewards segment after witnessing a larger and more pertinent problem in the loyalty market.
“So we are still in the rewards ecosystem, but we have migrated strategically from referral-based rewards to loyalty-based rewards,” says Mishra.
The product
Monet has developed an application similar to Cred in that consumers can see their loyalty points across platforms in a single interface. Also, users can swap their loyalty points from one company to another. However, as a safeguard to the brand’s interest, users can’t swap competitors. For instance, users cannot use Starbucks points in Chai Point.
Additionally, brands and consumers get AI-driven recommendations, like consumer cohort patterns across industries which are helpful for various brands.
The product is in the beta phase and will be launched in August.
“Our product is going to be released by the end of August but what we have done is we have started talking to brands and getting them waitlisted on our platform. We have already done LOI’s with about 20+ brands. By the time of product launch, we will have 200 brands waiting for the launch,” says Tandon.
The pivot
Monet earlier had a referral-based reward model and the application was built on blockchain.
“Typically, when you put it on a blockchain, you use a smart contract. They’re similar to legal contracts, but they’re automated by code,” says Mishra.
In the hiring referral model, Monet would onboard users—super connectors, who are well-connected in the ecosystem in their respective domains. These super connectors then refer candidates from their domains depending on job descriptions.
This model was similar to any referral model, with blockchain being the only differentiator. This means if the referral given by the super-connector goes through and the company likes the candidate’s profile, the candidate gets shortlisted and hired subsequently, then the company will make the payment via the escrow account.
As everything is on a blockchain, payments were secure and quick, claims the founder.
However, the founders realised that the hiring space was crowded. While exploring the reward mechanism, they realised that the loyalty-based rewards market offers more opportunities and has bigger problems than referral-based rewards.
Monet made the pivot in January this year. In the last month of operating on its previous business model of hiring, they had generated a revenue of $20,000 in December.
The company had 64 clients in the hiring space including 3one4 Capital, Assiduus Global, Rippling, Wakefit, Loco, ClassPlus, Bureau, Plumber, Verloop, and Yourstory.
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Market opportunities and monetisation
The loyalty market in India is expected to grow to $5.37 billion in 2024, according to a report by ResearchAndMarkets.com. It states that the loyalty market in India will increase from $4.79 billion in 2023 to reach $8.02 billion by 2028.
Reasons for the growth include rising income levels and consumption.
Monet’s business model is B2B2C (business-to-business-to-consumer) where brands will pay up to 5% on their existing CAC for new user acquisition and customers will pay a small percentage (1-2%) of the loyalty swap volume.
With a team of eight full-time employees and two consultants, Monet competes with Payback, TwidPay and a few other global loyalty platforms.
The startup raised an angel round of $300,000 from various strategic angel investors across 2023 and 2024.
On future plans, Tandon says, “Our loyalty application ecosystem will likely expand to 500+ brands and over one million transactions by the end of 2024. There would also be synergistic product expansion towards payments and loyalty integrations.”
Edited by Affirunisa Kankudti
