The Success of Hyperlocal Discovery with MagicPin

The advent of mapping technology with deep-reaching internet facilities has led to a revolution in the discovery of market places. Be it a small cafe, restaurant or a salon parlour, everything is discoverable as we start zooming in. It is a technology that can drive people home. The purpose that was served through hefty advertising is today done through innovative online services like MagicPin. A brainchild of Anshoo Sharma and Brij Bhushan, headquartered in Gurgaon, MagicPin is an offline discovery application.

What started in 2015, is now a product with more than 50 lakhs of the user base. From an outer perspective, offline discovery might appear to be a simple concept. Yet the entrepreneurial genius of Anshoo and Brij was in formalising something that is so conspicuously amiss in the market. Indian retail market in both the segment, online and offline is just short of the trillion mark. Comparison to International markets would still put it amongst the biggest. This market got its division into two, online and offline. While the ecommerce market kept booming, its growth earmarked an independent success. It did not factor in the subsequent growth of the offline market. Despite the fact that, offline market still contributed to about 90 percent of the total market. Nothing less than bewildering how the offline retail market did not get the attention of the technology enabler of its online counterpart.

Bridge the markets

This to Anshoo Sharma, who was a leading investor with Lightspeed India, was a gap that needed to be bridged. He along with Brij founded MagicPin in order to create a platform for hyperlocal discovery. This brings us to this unique term, ‘hyperlocal discovery’ that MagicPin utilised to its perfection. A hyperlocal platform would merge or bridge online and offline markets. The merging of these markets is done to help satisfy the needs of the local businesses. It basically asks the customer to search as per his or her need, a shop, service or service provider in their vicinity. It then gives back results that are localised as per the location. Since these platforms are all dependent on consumers to create data for them, it rewards them or incentivises finding new offline businesses. This way, local retailers can get identified online and can have a fixed customer base.

The Success of Hyperlocal Discovery with MagicPin

Major success of MagicPin was in empowering small retailers or the partners with data that could solve their issues. Issues could be finding specific kinds of customers to target, feedback of quality or most importantly, excess inventory.

MagicPin smartly created its business model around this concept. However, it is their magical recipe behind the success of the hyperlocal discovery that they have garnered. They do not just collect the data of offline retailers. They apply smart algorithmic approaches to that data and also, use big data algorithms to analyse user behaviour. So, their data then becomes a gold mine for all the parties involved. MagicPin to start with, gets highly efficient filtered data of consumer behaviour, their purchase choices, their ratings of services and their likes, dislikes. This helps them target different categories of their users with need-based advertising. They can also offer rewards, discounts which are specialised per the demands of the user. MagicPin uses this data to map the locality better, hence improving their hyperlocal discovery with every new input.

For retailers, MagicPin is a boon. They are the ones on the discovery end. The better services, discounts and application experience MagicPin provides more their chance to get seen. Plus, they get to target customers with like-minded shopping attributes. Or they can always pitch in their ice-cream flavour to a customer who had a scoop, the other night. Since local brands do not get the loyalty customer base other than what they build locally through trust and quality, recurring customers are sparse. MagicPin follows its reward system, where a user can collect MagicPoints, whenever they visit a store and upload their receipts to get these points. Now these points can be only redeemed at MagicPin partner stores. Hence, these stores get recurring footfall. On top of that, every good experience is converted into a visually enriching story by MagicPin. This lets other users also get an idea of what kind of stores are doing well in terms of quality, pricing, hygiene and offers. Which finally comes down to, more discovery and better business. Finally, consumers are no lesser winners either here. They get coupons, rewards through MagicPoints which are redeemable at local shops, as mobile recharges or such other services. They also get to like, comment and interact with other application users. It is like a social media platform for the offline marketplace.

MagicPin is an exemplary model of self-sustenance, A template that is created to run like a mill. In an attempt to exploit the offline retail market, all the major entities of their model from a retailer, consumer to MagicPin itself are being benefited. Data which is gold in today’s valuation is coming to them for no cost. The data is simply verifiable and is much refined as the rating and review do not affect the MagicPoints a user will receive. For personalisation, they go every length possible. Even Wifi signals are used by MagicPin algorithms to quickly point the customer towards the nearest store.

Revenue Model

Merchants and brands use the MagicPin platform and its data to direct their offers to potential customers. These brands, merchants then pay two sets of payment to MagicPin. First, when there is a recurring customer in their store, they pay a recurring fee. Second, is a set commission every time a customer from MagicPin’s platform does some kind of a transaction with the merchant. Anshoo Sharma is often quoted saying that MagicPin is a merchant and brand-led data technology company. The commission that MagicPin charges from merchants per transaction range from 10-12%.

This is not the only way MagicPin earns revenue, they also host advertising on its platform.  A lot of brands are regular advertisers on MagicPin and this helps these merchants and brands to reach out to their customers with an extra push.

As the business model is based on consumer data, the revenue model also tries to leverage it through marketing and advertising.

The interesting point here is that the business model from just the user end would appear to be dependent on the multinational merchants. While in reality, around 70% revenue is coming from small retailers. This makes the whole model even more sustainable as the future of the offline retailers remains very well tied with MagicPin’s support. Hence, the potential to exploit the small retail sector even when the partnerships with big chains drop down is huge.

Big leaders of the market

It is not that MagicPin was the first to think of hyperlocal discovery concept. There were early attempts to cash in on the same as well. The list can even go as far back as Foursquare. However, MagicPin’s door to door tie ups with retailers was unprecedented. Their model was the easiest to follow for local stores. These stores are often not run by people who understand complex technology. An easy application that just scans your location is all they wanted. Today, per the official website, the user base is a mega number of five million who have by now accumulated five million-plus experiences. In terms of merchants, it is also a leading figure with more than a lakh merchants already onboard.


A trillion-dollar market, that the Indian retail market will soon be, a concept like the hyperlocal discovery of MagicPin is bound to succeed if executed well.

The Success of Hyperlocal Discovery with MagicPin

In terms of funding, their seeding was done in 2015, with a $3 Million. Today, it is in round D of funding with the latest money rolling in from Samsung Venture Investment Corporation (SVIC).  Their expansion is rapidly being carried out to all major cities in India. They are already well established in 12 cities of India. The revenue per different reports is around $3 million. The growth has been 7x faster in one year and Anshoo Sharma expects companies Gross Merchandise Value (GMV) to reach $5 Billion. The business is not doing just well in terms of actual finances. Its digital presence gives it the real edge from its competitors.

Strong digital footprint

MagicPin’s significant digital foothold when it comes to application, website and social media gives a cogent argument for its upper hand on the competitors. In 2020, this is one thing that any kind of concept cannot fall short in. Not a single business idea can make its mark without the power of the digital world in respect to marketing, networking, logistics. MagicPin has taken care of all three with optima. Let’s start with the application. MagicPin app on the Google Play store has more than 5 million downloads. Such a huge number does not come without feedback, there are 75 thousand and more reviews of the application. The application has an average rating of 4 stars. The application, from the interface’s perspective, looks just like a social media platform. It is highly interactive, users can connect, share and like each other’s posts. The whole MagicPin unit is amalgamated in this user-friendly approach.

If this wasn’t enough, they have now gone a step ahead with the introduction of augmented reality in the application. MagicPin app calls its virtual sponsored objects as quests. ‘Quests’ are hidden Pizzas, Burgers, or items that a user can search in his or her surroundings using the phone camera. Once you find a quest successfully, you can simply redeem it from inside the store.

The competition that MagicPin faces cannot be discounted at all. There are many applications-based platforms that are trying to exploit offline discovery models. However, many factors play in the hands of MagicPin. Heavy network of retailers. A loyal user base that is more than 5 million in number. Media coverage of MagicPin’s activities. Their business model has kicked in efficiently. However, after some good rounds in recent years, MagicPin’s competition has swelled, there is Nearbuy, Gifts on Air and MyDala.

The nearest competitor in terms of offline discovery would be Nearbuy. Rest are following the coupon and voucher gifting route. Gifts on air has a tremendous plan that is working well against MagicPin and other competitors. They are exacting the full amount back to the consumer with a hundred percent gift voucher. Users are already starting to like the ‘no condition’ format of Gifts on Air. Such heavy discounting from local providers can bring some tough fights to MagicPin. In niche categories, like dining out, the company Dine-Out is doing better than MagicPin in terms of their partnerships and offerings.

Idea meant to succeed

The MagicPin’s success is not really magical in terms of its trajectory, Anshoo and Brij’s eye on the market did the Eagle’s work. This is what an entrepreneur needs to do. Search for something that is untapped. That is out in the open but still is not being executed well. Thousands of retailers were earlier being contacted by likes of Walmart and wholesale providers too. Some other platforms like MagicPin were also trying to bring the retailers onboard. All these efforts did not fruit in onboarding on a bigger scale. MagicPin tried to bring in technology and mix the ongoing fashion of social connectivity in the idea. They added a fun factor to discovery.

Next, the chain referral system is unique. In this, the MagicPin platform ensures that users on their discovery of a good local service provider do share about the service on the platform. It gives them the opportunity to be mouth publicised. Which for small retailers, merchants are unlikely. A good post will eventually get likes from other users and there comes a general sense of gratification with it. MagicPin made sure they are always more than a retail offline discovery application. They rather went with the idea of 360 utilization of a full-fledged app. This way, either from user data or from their backend data, the app would also show events, concerts, fests, interesting people within the locality. This proved to be a game changer in keeping MagicPin’s services in competitive mode with its direct rivals. More so, when its competitors are aiming for one or two services from the same MagicPin ala-carte of offerings.

Major success of MagicPin was in empowering small retailers or the partners with data that could solve their issues. Issues could be finding specific kinds of customers to target, feedback of quality or most importantly, excess inventory. When the retailers go off the peak hours, there is excess of stored items left with them. MagicPin with its command over the advertising and rewarding space can direct customers in that specific time. So, the retailers can easily clear inventory even when a normal market condition won’t facilitate it.

Lastly, when the vision of the nation is shifting more towards an inclusive India. A self-reliant nation’s idea could only be dreamt with its small retailers being a part of its growth. They need customers to recognise their services and not to only depend on the online market. So, a trillion-dollar market, that the Indian retail market will soon be, a concept like hyperlocal discovery of MagicPin is bound to succeed if executed well. However, such ideas need great leadership at the right time. MagicPin has always had it.

Anshoo Sharma and Brij Bhushan are the founders of MagicPin. Both are IIM graduates. Anshoo is an experienced professional in the field of business with his major responsibilities being consultancy and investment. He was a senior member of the Lightspeed’s (investment firm) India team. Brij is a long-time entrepreneur now from his days with Nexus, a venture capital firm, where he was the vice president. He has closely worked with several start-ups for a long time now.

MagicPin’s success is a throttling one. It shuttled from a simple hyperlocal discovery app to an application with lakhs of downloads and more than one lakh merchants on board. Their pace of growth is combined with smart decisions to improve app interface, to change the usage of their data to let merchants target even finer sample space for consumers. The way ahead for MagicPin is as per their founders, in connecting the retailers with the online world. That makes MagicPin the house of all retailers but this time with online discovery as well. Something like Amazon, though less sophisticated.

For more such interesting stories, follow our Inspire section.


Suresh Chouksey
Suresh Chouksey
Suresh was former staff at Dutch Uncles, he writes on entrepreneurship, start-ups, business life cycle and small businesses.

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