The Indian e-commerce sector is booming, and along with it, the competition is heating up too. Earlier, it was not unusual for e-commerce players to spend a few years concentrating on cementing their set-up before investing in increasing their reach and creating a brand image. The new breed of players show more aggression when it comes to their marketing strategies and the idiot box seems to be at the top of their priority list.
Consider the case of Flipkart, which started operations in 2007, but it wasn’t until 2011 when it first explored the TV domain. Contrast this with Gurgaon-based Shopuli.com, not even two years old and having already chalked out around Rs 30-40 lakh for TV and print campaigns. The campaigns are slated to start in the second half of the year. “Non-digital media help in building the brand image. We have tied up with Amagi to provide contextual ads. We have also bought some inventory with channels such as Times Now and Zoom. Our focus will be to concentrate on specific regions,” informed Shopuli.com’s Founder Priyesh Jain, though he agrees that digital marketing is more targeted and helps in reaching a more relevant audience.
For most Indian e-commerce players, TV is a strategic investment that helps in creating brand awareness and publicises new features and services. The most obvious benefit is of course that it helps them to reach out to potential customers among the non-internet savvy, something digital marketing would not be able to do. The best example is Flipkart, known for its popular ‘No kidding, No worries’ and ‘Shopping KaNaya Address’ TV campaigns. It was among the first players to use non-digital media, especially television, for its promotions. Other players such as travel site Yatra.com, which is promoted by Salman Khan, have also been successful in crossing the digital divide and create a strong brand identity.
“Television, in India has always played a key role in building reach or awareness. Since most e-commerce players are in their early years of evolution, it is only intuitive to use television as a strategic means to reach out to relevant target audience,” explained Shoumyan Biswas, Senior Director Brand Building, Flipkart.com. However, he does caution that with e-commerce space getting filled up with new players, it has become important for companies to start exploring new mediums.
Another player that decided to utilise TV as a mass medium right from the start is fashion and lifestyle player Jabong.com. Having started operations in 2012, it rolled out its first TV campaign in March 2012 and continued with regular campaigns through 2013. Praveen Sinha, Co-Founder of Jabong.com credits the TV campaign for the extraordinary growth the company has seen of the past two years. “It (TV campaign) helped us to scale up. I don’t think we would be the second largest fashion brand in India if we had not launched out TV campaign back then,” he said.
The thing to remember here is that digital campaigns still remain the backbone of most e-commerce players. However, where marketing spends might have been 100 per cent on the digital side earlier, increasingly e-retailers are earmarking as high as 50-60 per cent of their marketing budgets on non-digital campaigns; with TV being the most popular choice. For example, online eyewear retailer Lenskart.com, which started operations in 2010, currently splits its marketing budget approximately 50-50 per cent between digital and TV.
Peyush Bansal, Co-Founder, Lenskart shared that they will get even more aggressive with TV campaigns as a $5-6 million marketing budget has been set aside for 2014, with the bulk of it seemingly allocated for TV advertising. When asked why the company is focusing on TV, Bansal said, “Revenue growth is a function of spend, so if you increase your spend, your revenue might increase, but this is a short-term view. Even digital (digital marketing) is not a long-term solution. It does not build brand trustworthiness or reach. We use offline medium (TV and OOH) mainly to build this trust and stability.”
However, he did advise that e-commerce players need to be careful before investing in TV campaigns. According to him, only brands that have a unique proposition would ideally benefit from spending on TV campaigns. “If you belong to a category which has no clear leader, the investment might be risky because you might not get immediate transactional revenue and might end up burning a lot of money,” Bansal added.
“E-commerce players must ensure they have a strong back-end and delivery mechanism before they start spending money on multi-media marketing. If you cannot keep your promises, it just creates a bad customer experience,” expressed Jabong.com’s Sinha.
According to an Assocham report released earlier this month, India’s e-commerce market reached $8.5 billion in 2012 and rose 88 per cent to touch $16 billion in 2013. The survey estimates the country’s e-commerce market to reach $56 billion by 2023, driven by rising online retail. With such high expectations from the relatively nascent e-commerce industry, it is no wonder that e-retailers are trying to cement their position right now before the sector gets cluttered with too many players.