Will festive season whet ad spend appetite of e-commerce players?

Industry watchers note that the e-tailer festive ad spends may be at the same level as last year, at an annual level the spends may see an overall reduction when compared to last year

e4m by Misbaah Mansuri
Published: Nov 10, 2020 8:23 AM  | 6 min read

The festive season remains the time when e-tailers like Amazon and Flipkart pull out all the stops and go all out with their advertising budgets. However, this year things look different. Rather than slugging it out with each other, these giants have been fighting one common enemy: the Covid-lockdown impact that gripped the country. That said, will e-tailers go on with their big marketing spree this year or rather slow down on advertising this year? Could this festive season be a gamechanger in terms of consumer behaviour and further scaling the business?

Industry watchers note that the e-tailer festive ad spends may be at the same level as last year, at an annual level the spends may see an overall reduction when compared to last year. 

Ashish Bhasin, dentsu Asia Pacific CEO, expects ad spends from the category to be more or less the same when compared to previous years but observes that in terms of the 2020 total advertising market, it is likely to be 15-20% negative growth. “Special occasions and festivals are what build spikes in e-commerce. These sales and offers are very important for e-tailers. There has been a good pickup as Covid has increased digital adoption, which is a good sign for players in this category,” he said.

This year, even players like ShopClues, Paytm Mall announced festive sales to compete with giants like Amazon and Flipkart. 

Senior media expert Anita Nayyar too feels that while the e-tailer ad spends may be at the same level as last year especially in the festive season though at an annual level the spends may see an overall reduction as compared to last year. 

“The online shopping is on a rise given the special situation this year and the providers tend to gain hugely. We have seen most services move to online be it shopping, e-learning or entertainment and the trend will continue to rise. For online services the unprecedented growth will certainly be a game-changer,” Nayyar added.

In terms of sales, e-commerce industry tracker RedSeer Consulting had said that online sales could almost double to $7 billion during this year’s month-long festive season.

Mohit Joshi, CEO – India, Havas Media Group, feels that while the space has started seeing spends from the e-comm majors Amazon and Flipkart, it wouldn't be appropriate to compare them to last year. “There is definitely positivity in the air but it is ‘cautious optimism’ both among the marketers as well as the consumers. This is a unique year and every brand has a very different strategy (compared to last year). We all want the trend to move up and I am hopeful that the festive push will help in that regard,” Joshi said. 

Meanwhile Dinesh Singh Rathore, CEO, Madison Omega believes that the spends will be lesser compared to previous years. “E trailers surely have a huge opportunity as not all customers are venturing out and also not all malls are operational. During Diwali/festivals as is, the tradition people do want to purchase new items and they would do the same this festive season and the e-trailers are poised to benefit the most this festive season. Yes consumer behaviour has been changing since the onset of COVID and lockdowns and in coming days this will only shift in favour of consumers being more comfortable with e-commerce,” he said.

To be sure, given the slower than expected momentum year to date, companies need to pull out all stops to recover their mojo.

As for Amazon India, it has been running the ‘Khushiyon Ka Darwaza’ campaign and has invested in influencer marketing to talk about deals and discounts besides leveraging television, print, radio, outdoor and digital.

About their advertising efforts this year, Amazon India spokesperson said, “These are unprecedented times and COVID-19 has impacted the sense of normalcy for everyone. This Great Indian Festival, our focus remains on providing reliability to customers, ensuring the safety of employees and helping sellers as they get back on their feet. These include more than 650,000 sellers & SMBs including artisans, women entrepreneurs, emerging Indian brands and local store owners from programs like Karigar, Saheli, Launchpad and Local Shops. At the same time, we want to help customers find everything they need – from the latest mobile phone to groceries and get them delivered safely to their homes. Our campaign ‘Khushiyon Ka Darwaza’ symbolizes the joy Amazon’s Great Indian Festival brings in the lives of this entire ecosystem of customers, sellers, delivery associates, brand partners and more. The Great Indian Festival saw the biggest ever opening for the company’s sellers and brand partners this year. “More shoppers and sellers participated in the opening 48 hours of the Great Indian Festival than ever. In the SMB pre-festive lead up & first 48 hours of the Great Indian Festival over 5,000 sellers have clocked sales worth INR 1MM (10 lakh), over 1.1 lakh sellers received orders and 66% of sellers who received an order were from tier II & III cities such as Yadgir in Karnataka, Virudhunagar in Tamil Nadu and Lakhisarai in Bihar”.

 As for Flipkart, it is continuing its strategy to involve Bollywood and sports celebrities in its Big Billion Days campaign which comprises a series of TVCs showcasing celebrities in “double avatars". Virat Kohli, Ranbir Kapoor, Alia Bhat, Amitabh Bachchan and Mahesh Babu are seen promoting offers.

Sujay Kar, Group Director and Lead- Commerce, VMLY&R SEA and India said, “Offline Brands are still not there yet due to Covid, and therefore they will go for a safety-first approach. In this case, Amazon, Flipkart, Gaming and Education portals like Dream 11, Simplilearn, OTTs like Sony LIV, Hotstar, TV and Laptop Brands would continue the upsurge. It won't be a gamechanger, but it could save the overall business scenarios by safeguarding some industries against the ongoing downfall, giving them an opportunity to come back. We might see some Auto brands etc trying to build businesses, but still, they aren't a match for e-tailers.” 

Overall, the Indian e-retail market is primed to reach nearly 300 to 350 million shoppers over the next five years—propelling the online Gross Merchandise Value (GMV) to $100 to 120 billion by 2025.

Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)

For more updates, be socially connected with us on
Instagram, LinkedIn, Twitter, Facebook & Youtube