E-commerce giants eye mobile advertising cos to fuel next level of growth

E-commerce giants eye mobile advertising cos to fuel next level of growth

Author | Abhinn Shreshtha | Monday, Mar 16,2015 8:18 AM

E-commerce giants eye mobile advertising cos to fuel next level of growth

The Indian e-commerce space is looking exciting from an M&A perspective with the likes of Flipkart and Snapdeal snapping up companies across the board. Interestingly, it is not just e-retailers that are getting snapped up but the new prime acquisition targets seem to be mobile ad tech firms.

Flipkart has already stated that it will be looking to buy a number of ad tech firms, especially in the mobile space. Snapdeal has also been looking at some major acquisitions in the mobile space. Media reports suggest that it has made a $300 million approach to Komli Media, something that neither company has still clarified.

A person familiar with the matter said the approach has been made just for Komli’s mobile division. However, he also said that Komli was just one of the mobile advertising companies being looked at  by Snapdeal and other e-commerce players have also expressed interest. In fact, Shopclues.com is also said to be in initial talks with Komli Media, though Shopclues had not replied to our query at the time of filing of this article.

A Snapdeal spokesperson  confirmed that investments will be made in both organic and inorganic growth. “As far as acquisitions are concerned, we will make the necessary investments wherever we see that an inorganic move as this will help us further strengthen the Snapdeal platform in terms of technology, reach or assortment,” the spokesperson further added.

Komli Media said it would not like to comment right now. Flipkart also said that M&A was on the cards. “This year we have large plans for acqui-hires and strategy acquisitions in the technology and mobile space. We are open to any good opportunities that come our way,” said a Flipkart spokesperson.

The company recently acquired mobile ad network AdIQuity for an undisclosed amount. “Given our concentration on mobile, companies that have made a mark in this space will be on our radar,” the spokesperson further added.

The ad tech industry in India is still nascent but it has been gaining traction leading to a number of start-ups. The e-commerce sector is widely seen by analysts as one of the major reasons for the blossoming sector as e-retailers look to widen their scope with better data on consumers along with a way of better targeting consumers on mobile devices. M-commerce services like mobile payment platforms and mobile wallets are also inciting interest. For example, Snapdeal is also said to be interested in FreeCharge, an online coupon provider in what could be the biggest deal in the Indian internet space. When asked whether it was specifically interested in FreeCharge, Snapdeal said it did not respond to speculation.

This acquisitive streak raises the question on the business proposition for ad tech firms. Will they see a shrinking of business opportunities if e-commerce firms, either organically or inorganically, start building technology capabilities internally? Tyroo is a mobile ad network, which recently launched a native ad product specifically targeting e-retailers. Siddharth Puri, CEO, Tyroo said that e-commerce is a “very strong” sector for the company. When quizzed about whether companies like his will be threatened by internalizing of tech capabilities, Puri denied that this was a case.

“Amazon has shown that monteization is an important pillar and a lot of e-commerce companies have tried to do ad sales traditionally. These are very exciting times for us as e-retailers can potentially be both demand and supply partners. It also helps us to reach out to new customers who are taking their first steps towards mobile. Opening up of monetization creates more revenue potential and options for us,” he said.

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