E-commerce looks for an exciting H2’16 as festive season kicks in
Snapdeal has allocated more than Rs 200 crore on a 360 degree marketing campaign over the next 60-days
Published - 07-September-2016
With the onset of Ganesh Chaturthi, all eyes are now on how the rest of the festive season will pan out as brands increase their advertising budget to woo customers. The e-commerce sector, which has been grappling with a lot of challenges lately, has witnessed an overall reduced ad spends in the first half of 2016. In fact, according to the revised Pitch Madison numbers, e-commerce ad spends for H1’16 fell by 37 per cent as compared to spends for the same period last year. Their activity for Independence Day has also been tepid this year, with no big marketing blitz seen either on TV, print or on the outdoor medium. However, according to media and brand experts we spoke with, these players, who have been on a tight budget till now, will be opening their purses and will be seen spending in the upcoming festive months.
Snapdeal has been the first to announce their budget for the Diwali month; it has allocated more than Rs 200 crore on a 360 degree marketing campaign over the next 60-days. The campaign intends to drive traffic and increase consumer awareness about its exciting festive season offers hosted by brand partners and lakhs of sellers. On the other hand, the same player as per the AdEx India data for the time period (Jan-Jun 16), had tanked seven spots as compared to last year and had a meagre 3 per cent share in the advertising volume.
Ringing in the festive season
Dinesh Vyas, Associate Vice President - Planning at OMD said, “The usual suspects will make the most out of the festive season, with FMCG and e-commerce jumping into the bandwagon. I strongly feel that there will be a lot of activity from the auto players, with first time car buyers and with the introduction of luxury models, this sector will surely contribute a lot in the upcoming festive months.”
“E-commerce is such a category, which has to keep on advertising, infact they are being forced to. I see, except for Amazon, none of the players are delivering profits and are finding it difficult to cope with the investments as compared to the ROI. I have no doubt on the fact that Amazon will continue to lead the pack with Flipkart and Snapdeal following it. Another trend which we have seen is that e-commerce players have jumped into this long-weekend discounts mode, which was first started by Big Bazaar. We will see more of these things and it will continue right upto December 31. So e-commerce as a category will continue to advertise this festive season, but whether the intensity will be the same, I have my doubts,” he cited.
Echoing optimism, Shashi Sinha, CEO of IPG Mediabrands India said, “Normally festive is the time where durable purchase will happen, everyone advertises and the whole industry goes up. Whether it is in the online or the offline medium, we are hoping and praying that for the sake of the industry an upsurge happens. All the categories like mobiles and the other durables which are usually purchased during the festive month will flourish; e-commerce is just a delivery platform.We are around one month away from the festival time and will surely see an increase in activity from their end.”
Aditya Save, Chief marketing officer, Shaadi.com elaborated, “E-commerce will absolutely spend during Diwali season; I think advertiser’s mirror what consumers do and their spending however, subdued will tend to increase during the festive season. So it is a very natural thing for advertiser to follow that trend and get some buoyancy into the business. For e-commerce, my gut says that it is going to be a little wider than the advertising spends, for e.g. the notion of value or the emotion of discounting has been very badly mistreated in the past year and a half. I already see signs of people trying to correct that and ensuring that consumers see actually something premium, I think that will get enhanced during the festive season. Things like exclusive deals, one off will come to the fore and advertising will more be used for mainly brand recall.”
Talking about recent trends in the e-commerce space, Sudip Ghose, Vice President, Marketing, VIP Industries highlighted, “One thing which I have noticed in the e-commerce space is that the discounts are coming down, which is actually a good thing. Secondly, large products are actually moving, usually in this space, products which are easy to ship moves faster, example, small items like watches, but I have seen that my large luggages are also moving easily, which is very positive. Earlier consumers had this notion of ‘touch and feel’ before purchasing, but now they are not averse to buying things online.”
Current competition scenario
At a time, when these players are struggling to stay in the race, the position of Amazon has been the only constant among them. As per the TAM AdEx India data, it currently commands 18 per cent share in the advertising space and has even topped the list of advertisers for the time frame (Jan-June '16). Flipkart features at the third place with 11 per cent share in the advertising volume. It is currently in the midst of a lot of news after it delayed joining of fresh recruit from IIM-A. Myntra ranks at the fourth place with a 7 per cent share in the advertising volume.
According to revised Pitch Madison report, the e-commerce’s category’s contribution to overall adex fell from 7 per cent in H1’15 to 4 per cent in H1’16. It also highlighted that reduction in e-commerce ad spends could also be a reason why television ad spends have just grown 11 per cent in H1’2016 as opposed to a predicted growth rate of 20 per cent for the year.For more updates, subscribe to exchange4media's WhatsApp Channel- https://bit.ly/2QUdLCK