Sports properties draw e-commerce players; Jabong enters the field with NBA tie-up
Sports properties continue to lure e-commerce companies. Amazon, Flipkart, Quikr, GoDaddy have already invested in IPL; Jabong joins the sports bandwagon with NBA tie-up
Published - May 7, 2014 9:13 AM Updated: May 7, 2014 9:13 AM
E-commerce players in India have increased their marketing spends and are gearing towards a dynamic and evolved business environment. Although the spends have diversified destinations, sports as a genre and as a property remains one of the leading interests among major e-commerce players.
Major players like Amazon, Flipkart, Quikr, GoDaddy have already invested in IPL either through sponsorships or through ad spot buying.
Now Jabong India has tied up with National Basketball Association (NBA) to launch an online store in India which will sell NBA merchandise. NBAstore.in will be an NBA branded destination within Jabong.com. The collection of approximately 200 NBA products will include shorts, jerseys and T-shirts for men and women and will be priced between Rs 1,400 to Rs 14,000.
The association as per sources is based on a revenue sharing model. On Jabong’sdecision to associate with NBA over IPL, Praveen Sinha, Co-founder and MD, Jabong India said, “There are no criteria of competition between NBA and IPL for us. There needs to be awareness which needs to be created for other sports apart from cricket. NBA has a global appeal; it can create inspiration for youth. The sport is not very expensive to play and requires low space. Facilitating other sports will not only help us but also encourage the sports ecology in India. Cricket does not require awareness. I am capitalizing on something which can become really big. We think the game has the potential to be represented nationally.”
When asked about the investment Sinha added, “Investment cannot be justified by the quantum but by its ROI. We justified the investment as a strategic fit. The NBA merchandise is fashion merchandise which has more than 200 options. Our audience is fashion-savvy, sports inclined youth which is apt and justify our association.”
E-commerce and sports
As per industry estimates, on an average the marketing budget for most of the e-commerce companies is close to 20 per cent of their revenues. The main objective for these companies to opt for sports properties is to gain traction beyond digital as a medium and make their presence felt among mass media.
As the competition among e-commerce players in India gets intense and everyone is trying to offer something different in terms of products, delivery model or services, the media and mass media properties are witnessing high interest. Brand consultants and media analysts have always perceived the Indian Premier League to be a mass event. Brands advertise in the tournament on various platforms in order to receive substantial branding exposure. Media analysts believe that IPL is now already witnessing association of some e-commerce players. Investing on a property like NBA is likely to carve out a niche for a player like Jabong.
“It’s a cat and dog fight between all the e-commerce players – who screams the most and who has the bigger buck? There’s nothing else to it,”said Anilkumar Sathiraju, AVP & Head South Asia, DDB Mudra Max, speaking in the context of IPL.
Analysts believe that marketing will evolve as the sector evolves in the future. The engagement therefore will be beyond digital and would include marketing mix of radio, TV, print and OOH as well.
The target profile of any sport aligns with that of e-commerce players: the young and tech-savvy audiences which are at ease with online transactions.
The investments laid down by e-commerce companies on sports have varied.As per industry estimates and sources, while Amazon has invested close to Rs 40 crore including on-ground and on-air association with IPL, Flipkart has invested heavily in ad spots which range between Rs 4.75-5 lakh. Quikr bought the title sponsorship for Delhi Daredevils close to Rs 13 crore while also buying ad spots during the tournament. GoDaddy has bought ad spots and Paytm in association with Pepsi has invested close to Rs 5 crore on the tournament. As per estimates, it is likely that on a combined scale, e-commerce players have invested close to Rs 100 crore on sports properties till now.Sources indicate that e-commerce players would also invest in upcoming sports properties like FIFA and India’s tour post IPL.
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