e-Commerce growth gravitating towards India’s tier cities

Guest Column: Shankar Shinde, Chief Commerce Officer, VMLY&R India, analyses the factors that will be key in the expansion of the country’s e-Commerce business

e4m by exchange4media Staff
Published: Feb 6, 2023 8:49 AM  | 6 min read
VMLY&R India

The pandemic changed the way we Indians shop, with research showing more than half i.e. 53% of the consumers from non-metros now prefer online shopping, and 80% of Indian consumers prefer to shop from their smartphones. This shift means that the first time a consumer discovers or interacts with a brand it is almost certainly online.

India’s direct-to-consumer e-commerce market is expected to reach $100 billion-plus by 2025, a 32-times growth over 2023.

The focus will shift from Tier 1 cities to Tier 2 and Tier 3 cities with online shopping going deeper – it still has a lot of juice left. eCommerce growth is primarily going to be led by shoppers from Tier 2 and Tier 3 cities. This will be with continued online migration of key categories, including fashion and grocery.

Vernacular Voice searches, Social Commerce, Direct-to-Consumer brands, Conversational Commerce and Digital payments will play a pivotal role in e-Commerce growth.

Voice will be stronger in vernacular

To facilitate growth beyond metros, many e-commerce companies have enabled voice-based shopping, providing language options to make ‘Bharat’ shop online with as much ease as their metro and urban counterparts.

Video content, voice search, and localization will take precedence in 2023 and beyond. Localization through the use of vernacular and visual content will be the key to winning over customers in Bharat, beyond the metro. The adoption of languages will be beyond English and Hindi to Tamil, Telugu, Malayalam, Kannada, Bangla, and Marathi.

1. Social Commerce

Social media users in India are expected to grow to around 448 million in 2023. A direct beneficiary of this rapid rise of social media users of course is social commerce. Social commerce or buy-sell via social media has been steadily gaining popularity in India.

• Building a brand around communities: Social commerce is not like any other sales where buy-sell is more transactional. Social commerce is developed around building a community – a dedicated base of followers or ‘fans’ who admire the brand, comment and talk about it, and even share and promote them. Because social commerce mostly uses influence marketing, a strong base of the community is built around a brand within a span of time.

• Authentic feedback: Because the products are present on social media and there is a community connect, the feedback system is strong and usually authentic. Social commerce also leads to a much more engaged shopping.

• Growing along: Artificial Intelligence-driven sales are here to stay. As social commerce grows, industries that are directly linked with it including logistics, warehousing, and other sales channels of storage and delivery too will continue to grow.

2. D2C

The Indian D2C industry continues to grow, buoyed by rising awareness and consumers’ willingness to experiment. Projected to grow by 21 per cent, the D2C industry size in 2023 is all set to cross the $66 billion mark.

• Bharat - A focus is on fashion brands: According to reports that looked at sales over the 2022 Diwali season in India, Tier 2 and Tier 3 cities are the main driving forces behind these purchases, accounting for 64 per cent of all consumers who made transactions. During this phase, almost 125 million customers placed orders across platforms, helped by Tier 2 cities, and growth was driven by fashion in these markets. One of every five orders placed here was for ethnic wear like a Kurti or saree. Meesho’s recent sales saw nearly 60 percent of sales coming from Tier IV cities. Demand from ‘Bharat’ will only rise and D2C brands will play an important role in fulfilling this demand

• Marketplaces - Attract International Brands: The beauty and personal care sector saw a declining trend in 2022, with the market contracting by almost 11 percent year over year as a result of lower expenditure after the pandemic. However, online stores like Nykaa attracted at least 30 foreign brands to India, which currently accounts for 15-20 percent of its total income. At least 60 percent of sales were recorded from Tier 2 and Tier 3 cities in the beauty and personal care market

• In 2023, the BPC segment is expected to grow to $27 billion, D2C brands can plan ahead and benefit from this surge

• Bargaining Tools – Increase Engagement and Conversion: Shoppers love to bargain. Earlier, it was possible only when selling offline, but with the latest tools, you can let your shoppers bargain online too! Kari by Kriti uses this selling technique efficiently. Brands are also adopting gamification tools to increase engagement and sales. Tools like a discount spin wheel can be used to surprise users with an instant discount and further improve sales

3. Conversational Commerce

Conversational commerce is about using messaging apps and platforms to connect with customers and promote products and services. It’s big on convenience because it’s about reaching shoppers on their favored communication platforms, this will be via:

• Live chat: Live Chat Service allows brands to reach and help customers while they browse the retailer’s website. By using live chat apps, customer support agents will assist multiple customers simultaneously, offering highly personalized advice and support

• Messaging apps: Instant messaging platforms like WhatsApp and Messenger are a kind of live chat, except they don’t have to take place on your website. By allowing users to share rich content formats like videos and gifs, they make for more natural, engaging conversations

• Chatbots: A piece of software used to answer consumers’ questions via text-based messages, typically through on-site chat portals. Capable of handling multiple consumers at once, 24/7

• Voice assistants: Tools like Alexa and Google Assistant will be leveraged to provide consumers with immediate answers or direct them to your website

Whatever platform you use, the benefits to customers are clear. After all, wouldn’t you rather wait a few minutes for a reply on WhatsApp than spend 10 minutes listening to hold music?

4. Digital Wallets

• Rise in adoption of QR codes: QR code payment users are expected to grow beyond 2.2 billion in the next two-three years. Cash was leading in-store payment up until 2021, at around 38 percent of value, digital wallets were at 25 percent, and credit/debit cards were at 18 percent. This equation will change with the mass adoption of QR codes at the point of sales

• Buy now pay later: The Buy Now Pay Later (BNPL) financing option has been a win-win at both ends. Buyers can purchase expensive items without breaking the bank while brands can count on higher conversions by asking for lower initial payments. As per the industry report, the growth of BNPL payments is expected at a CAGR of 28.9% during 2021-28.

(The views expressed here are solely those of the authors and do not in any way represent the views of exchange4media.com)

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Aparshakti Khurana solves dressing dilemma with Siyaram

The influencer-led campaign for the clothing brand is targeted at young adults

By exchange4media Staff | Mar 30, 2023 12:12 PM   |   2 min read

Aparshakti Khurana

Siyaram’s has recently launched its first influencer-led campaign with youth icon Aparshakti Khurana. The campaign was conceptualized to persuasively promote the brand's classy and in-style range among young adults who prefer to look their best anytime they attend a special occasion.

To portray it effectively, the brand adopted an interesting marketing route by 1st launching a teaser on the brand’s social media platform ‘Aparshakti is in a dilemma’ to instill curiosity about the news. Followed by the influencer video that captured the actor at his film set in an all-decked-up attire of Siyaram after completing a shoot for his cousin’s wedding as instructed by his mother. The video beautifully captures its communication about how the actor trusts Siyaram’s when it comes to looking "The Best" at any wedding or event.

Prashant Awasthi, General Manager Marketing, Siyaram Silk Mills Ltd, said, “Curiosity marketing has the potential to entice untapped audience segments in today's world. Similarly, our intent with this influencer-led campaign was to tap into the younger segment of our TG and persuade customers to learn more about our range and offerings. With this campaign, we aim to convey our message to the youth, by roping in Aparshakti Khurana as his synergy blends well with our brand. With this inquisitive marketing approach, we were able to launch the campaign in style and with an interesting angle.”

Aparshakti Khurana, Actor, said, “Siyaram’s is not a new brand for my closet, it has been my partner for multiple events and celebrations before. Collaborating with the brand for its first-ever influencer-led campaign was a great pleasure. It is a delight to see Indian-origin brands like Siyaram’s marking their presence felt global and excelling in the fashion industry with utmost dedication.”

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Games24x7 curates lineup of IPL fan engagement campaigns for My11Circle in cricket season

The company has brought out three campaigns: 'Bade Se Bada’, ‘Locker Room Stories’, and ‘Out of the Park’

By exchange4media Staff | Mar 30, 2023 11:43 AM   |   3 min read

My11Circle
Games24x7 is bringing a new mystery to this IPL season with an exciting new campaign for its fantasy sports platform, My11Circle. The leading fantasy cricket platform and official title sponsor of IPL franchise Lucknow Super Giants (LSG) has unveiled an exciting lineup of fan engagement campaigns for the upcoming cricket season. With campaigns like ‘Bade Se Bada’, ‘Locker Room Stories’, and ‘Out of the Park’, My11Circle aims to provide fans with a unique and entertaining experience throughout the season.
 
Commenting on the campaign, Saroj Panigrahi, Senior Vice-President, My11Circle, said, “At My11Circle, we have always kept the user at the centre. Our campaigns are based on the insights which we draw from our users and that’s the reason they resonate extremely well with our audience. We are positive that the new campaigns will strike a chord with our players and elevate their engagement on the platform.”
 
Bade se bada:
 
The campaign features a series of films with My11Circle’s brand ambassadors Sourav Ganguly, Arshdeep Singh, Mohammed Siraj, Ruturaj Gaikwad, and Shubman Gill donning the roles of larger-than-life figures that symbolize My11Circle offering for this season and promises a visual treat. In a unique twist, while the campaign announces the second prize worth INR 1 crore, it leaves fans guessing on what will be the first prize.
 
 
The Campaign has been created by The Script Room along with the award-winning director Vasan Bala. commenting on the association, Ayyappan Raj, Co-Founder, The Script Room live said, “It was great working with the My11Circle team in creating another exciting IPL campaign. The collaboration resulted in an interesting concept - promote the second prize, thereby creating intrigue and excitement towards the first prize. We’ve built upon our very successful campaign “The Giants” and taken it a step further with the idea of “bade se bada” for a creative visualization. Vasan Bala has done a fantastic job!”
 
The Campaign will go live on Star Sports and Jio cinema on 31st March, coupled with a pre-burst on Youtube supported by performance campaigns across multiple digital platforms.
 
Locker Room Stories 
 
Locker Room Stories offers fans a chance to get up close and personal with their favorite cricketers as they share personal anecdotes and superstitions from the locker room. The video series features cricket stars - Sourav Ganguly, Shubhman Gill, Arshdeep Singh, Mohammed Siraj and Ruturaj Gaikwad sharing personal anecdotes, superstitions, first-time experiences from the locker rooms of the Indian cricket team, among many other exciting facts.
 
Out of the Park
 
Out of the Park is the third in the series of video that captures various facets of the players like Sourav Ganguly, Shubhman Gill, Arshdeep Singh, Mohammed Siraj and Ruturaj Gaikwad, from their favorite sweets to their role models, and everything fun on the pitch.
 
With these engagement campaigns, My11Circle aims to reinforce its commitment to rewarding the passion, skill, and knowledge of Indian cricket enthusiasts and players.

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‘Sugar Cosmetics to double its marketing budget in FY24’

Suchit Sikaria, Chief Business Officer, Sugar Cosmetics, spoke to e4m on the brand’s digital marketing strategy, banking on fintech and more

By Kanchan Srivastava | Mar 30, 2023 8:48 AM   |   3 min read

Suchit Sikaria

D2C beauty brand SUGAR Cosmetics reported a 70 per cent growth in FY22 sales. In the current fiscal, it has logged in over 90 per cent growth. And to continue this momentum, the brand has planned to double its marketing budget in FY24, CBO Suchit Sikaria said in an exclusive chat with e4m.

“Our expectations are to see the revenue grow two-fold in FY24. We aspire for 70-90% growth in the next fiscal. To achieve that, our overall marketing budget may go double in the coming fiscal year,” Sikaria said.

As per media reports, Sugar posted Rs 222 crore of operating revenue during the fiscal year ending March 2022, a nearly 75% increase compared to FY21.

Digital AdEx share

Fintech occupies 10 per cent of Sugar’s digital AdEx, said Sikaria. “The AdEx on fintech should go up in the future in terms of percentage as this platform is more controllable and dynamic and this cost is pretty comparable to other platforms (Google and Meta),” he noted.

As per Sikaria, the brand’s biggest advantage is that it spends on marketing on fintech platforms and that no one channel has the ability to scale up and return consistently.

“Each platform has a threshold. You have to leverage all platforms according to your needs and changing consumer dynamics. Marketing is primarily a balancing act.”
Asked how much the company spends on Google, Meta and other platforms, Sikaria said: “I may not be able to share the numbers, but proportion wise Google and Meta get about 40 and 40 per cent shares in digital AdEx, respectively. Fintech platforms get 10 per cent of the company’s digital AdEx, the rest 10 per cent is spent on other channels.” The company spends a sizable amount of AdEx on telecom operators and its own eCommerce channel as well, he added.

All three platforms deliver almost similar ROIs, he further said.

On fintech apps, the company’s marketing strategy revolves around discounts, coupons and prizes. “We recently launched two jackpots on PayTm. Over 70 per cent of the participants in the jackpots were new customers. Surprisingly, some of the winners of our make-up kits were men,” he quipped.

Asked how the company is utilizing the fintech platform's data for personalization, Sakaria explained, “We try to understand our consumers based on their transaction data on fintech apps. Then the offers are launched based on consumer cohorts and their demographic profiles.”

TV for overall branding

Sharing insights on being an omnichannel brand with a presence in traditional and modern trade, he said: “We have our own retail stores and an eCommerce channel as well. A sizable portion of our marketing budget goes to TV, mainly to represent the brand overall, not for D2C revenue.”

“As long as you get the ROI, you continue to invest in advertising and promotion. Instead of long-term investments, we have planned to spend in phases by figuring out what works and what does not for our products,” Sikaria explains.

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Akasa Air partners with WebEngage to enhance customer engagement

WebEngage will help Akasa Air engage with customers via personalised communication across multiple channels

By exchange4media Staff | Mar 29, 2023 2:20 PM   |   1 min read

Akasa

WebEngage has announced that it has partnered with India’s newest and most dependable airline, Akasa Air. In line with its strategy to build a tech-first and customer-centric organisation, Akasa Air has deployed WebEngage’s marketing automation platform to enhance its customer engagement strategy.

WebEngage will collaborate with Akasa Air to deliver unparalleled customer engagement across its web and mobile channels with relevant, personalized and contextual communication.

Commenting on the partnership, Belson Coutinho, Co-Founder and Chief Marketing & Experience Officer, Akasa Air, said, “We are pleased to partner with WebEngage and leverage its cutting-edge marketing automation platform to build brand loyalty, increase customer engagement and drive conversions with one-on-one communication. Akasa is hyper-focused on customer centricity, and the platform will enable us to leverage real-time analytics to connect with users on a channel of their choice.”

Avlesh Singh, Co-founder & CEO, WebEngage, said, “Akasa Air has a unique approach towards its customers which stems from the brand’s values and a customer-centric approach. WebEngage’s retention platform will facilitate Akasa Air to replicate its on-ground and inflight experience across all its digital touchpoints through our smart, data-driven and fully automated retention platform. We believe that Akasa Air is here to transform customer experience for the airline sector and we are delighted to be their partners in this journey.”

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Sachin Tendulkar, Anil Kumble & Yuvraj Singh are squad goals in Spinny's newest

The cricketing greats have come together for Spinny's IPL campaign

By exchange4media Staff | Mar 29, 2023 2:03 PM   |   1 min read

DCH

Have you seen Sachin Tendulkar’s latest Goa pictures that took us back to 2001 when the movie “Dil Chahta Hai” was released? The master blaster took to Instagram to share an epic picture with Anil Kumble and Yuvraj Singh in Goa and wrote "Our Dil Chahta Hai moment in Goa! Who do you think is Akash, Sameer, and Sid?". The post took no time to go viral online and saw many brands and celebrities guessing if it was for an IPL campaign, a vacation, or something else.

While it went viral, the curiosity amongst netizens about the pictures was decoded by Spinny sharing a post where Sachin is calling out to Yuvraj and Anil Kumble. While the full details are yet to unravel, it looks like Spinny has brewed something up with the trio on their throwback to “Dil Chahta Hai” moments.

View this post on Instagram

A post shared by Spinny (@myspinny)

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A post shared by Anil Kumble (@anil.kumble)

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Samantha Ruth Prabhu invests in superfood brand ‘Nourish You’

The brand is backed by Zerodha’s Nikhil Kamath, Darwinboxs’ Rohit Chennamaneni, among others

By exchange4media Staff | Mar 29, 2023 1:59 PM   |   3 min read

Nourish You

Nourish You, India’s maiden brand to get quinoa and chia to the country and consequently, the first homegrown superfood start-up, has announced that actor Samantha Ruth Prabhu has invested in the company.

As the first to retail homegrown quinoa and chia seeds in India, Nourish You continues to lead in promoting locally-sourced and sustainable superfoods. Samantha Ruth Prabhu's investment comes as part of Nourish You's seed funding round, which had earlier attracted pedigreed investors, including Y Janardhana Rao of Triumph Group; Rohit Chennamaneni, Co-founder, Darwinbox; Nikhil Kamath, Co-founder, Zerodha; Abhijeet Pai, Co-Founder, Gruhas Proptech; Abhinay Bollineni, CEO, KIMS Hospitals, among others.

Speaking on her investment in Nourish You, Samantha Ruth Prabhu said, "Investing in Nourish You was a natural progression since I have been consuming their products for a while. I was impressed by their story of bringing superfoods like Quinoa and Chia to India, growing them locally, and their product roadmap of millet based clean-label vegan superfoods. I believe that Nourish You can create value while making a positive impact on the health of consumers as well as the planet. I'm excited to partake in their innovative and sustainable approach to business."

In addition to her investment, Samantha has also launched Nourish You's first plant-based, vegan, and lactose-free milk alternative - Millet Mlk. The new product marks the company's foray into the alternative dairy category, and is an outcome of two years of research on innovative millet-based products undertaken by Nourish You. The United Nations had declared 2023 as the International Year of Millets and Nourish You is well-positioned to support the Government of India’s vision to make India a global hub of millets.

“We welcome Samantha to the Nourish You family; her thoughts on ancient foods are well aligned with ours. Her investment in the company is a testament to the products we have developed so far and the success we have achieved. We believe this partnership with Samantha will help us strengthen our position in the market as we unfold India’s superfood growth story.” said Krishna Reddy, Co-founder, Nourish You.

On introducing Nourish You’s Millet Mlk, Sowmya Reddy, Co-founder, Nourish You further added “I have been lactose intolerant since birth, and always saw my mother struggle to find non-dairy alternatives that were nutritious, delicious, and of good quality.  This inspired me to join the development of Millet Mlk at Nourish You. The difficulties and challenges in finding dairy-free alternatives are significant even today and Nourish You’s Millet Mlk fills these gaps. The product is Nourish You’s commitment and answer to consumers like myself; it is nutritionally rich, tastes great, and 100% pure goodness.”

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Experts share insights on consumer trends, rise of e-commerce at HiveMinds e-com Conclave

Industry heads came together to discuss the e-commerce ecosystem in India, evolving consumer behaviour and more

By exchange4media Staff | Mar 29, 2023 1:28 PM   |   4 min read

HiveMinds

The next phase of e-commerce growth will come through personalisation, demand from Tier 2 and Tier 3 cities and the intelligent use of 1st party data. At the recently concluded HiveMinds E-commerce Conclave 2023, industry leaders from the e-commerce ecosystem in India came together to discuss what the consumers are looking for and how brands can deliver. The title sponsor of the event was Rocketium while the media partner was exchange4media Group (e4m).

In the panel on the ‘Importance of Data AI and tools in marketplaces’, Sripath Hariharan of Nivea India insisted that consumer trends cannot be overlooked. “In India, we will soon see the trends that are already prevalent in the global markets. Marketers should use the tools and Data AI to build campaigns and products for what tomorrow’s consumers will need”, he said.

Rocketium’s Karan Rao expressed that the consumers are now overloaded with information, so messages don’t register. He said the only way to get the message across is to personalise it and make it relevant for that user. He further added that data gives you the gift of time to study the trends and predict what will happen in the future.

In the other highly engaging debate on ‘Getting into the Mind of the Consumer’, Pooja Sahgal of Raymond Consumer Care said online marketplaces are a big brand-building opportunity. She opined that an integrated marketing strategy that intends to educate and engage a customer will go a long way in creating demand and fandom for online brands.

Rajeev Kohli, an e-commerce & marketing expert, mentioned how e-commerce platforms are now so important for fashion and beauty brands that marketers plan exclusive product launches exclusively for these platforms. “E-commerce can no longer be considered merely a platform to sell discounted products but rather a platform for learning about the future consumer”, Kohli said.

Abhishek Agrawal of Plum Goodness said that while the access and scalability of e-commerce marketplaces offer extended reach for a brand’s needs, for any brand, whether new or legacy, access to first-party data is paramount. It gives an insight into consumer and product feedback. Therefore, in his view, all CPG brands should focus primarily on their D2C website and m-sites. Brands’ digital assets are not only for selling but also for connecting with their users.

While discussing the impact of mega sales on e-commerce platforms on the panel ‘How to Get the Best Mileage from Online Sales’, CMOs of the leading appliance brands discussed the merits of launching innovative products during sale events.

Wonderchef’s Amit Tilekar pointed out that the data consumption per user has increased from 1GB per month per user to 13GB per month per user. “Continually exploring marketplaces is now a standard part of the user journey in buying appliances, so for brands heavily dependent on inventory planning, it makes sense to launch new products at least 45-60 days before sale events and observe consumer acceptance of products and cost. This way, such brands can better plan their inventory, sales targets, and marketing spends to maximise the impact during sale events”, Tilekar added.

However, e-commerce sales are not the answer to all scaling problems. Anand Dubey of Indkal Technologies noted that traffic on online platforms is significant during the festive season, and consumer intent to buy is even higher. Hence, the discovery-to-purchase journey becomes very short. He recommends that brands should invest during festive sales on e-commerce to convert users and build brand salience. He also reiterated the importance of inventory management: if a brand launches a new product during sales, predicting the demand and planning inventory becomes challenging.

Startup founders, marketing heads, and platform ad sales teams attended the event en masse. All delegates felt that the discussions, though very useful, were just conversation starters. There is a need for the industry to hold such debates more frequently to bring all stakeholders together to discuss and define the future of e-commerce in India.

 

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