Im Loving It

Written by Anushree Chandran | New Delhi | Updated: Jun 24 2014, 07:47am hrs
Global e-tailer Amazon Incs sizzling India entry and its hawkish moves to woo consumers has stirred up the 13 $ billion (Rs.77,025 crore) e-commerce market in India. Consolidation at operational level and offering consumers more at a lot less is the route all major e-tailers in India are exploring. One of the largest homegrown companies in the space Flipkart acquired the countrys biggest fashion portal Myntra, paving way for more consolidation and competitive prices in the e-retail space. Even as the big players begin the process of consolidation, there are many more new players that keep entering the space. According to analytics firm comScore, at least 600 new online shopping destinations sprung up between August 2012 and September 2013.

The direct beneficiary of this fiercely competitive new world is the over Rs.6000 crore couponing industry which lives off cheap deals and discounts offered by e-tailers to be passed on to consumers. Outside of Google search, couponing industry is estimated to be the largest source of sales for e-commerce sites. Arvind Singhal, chairman of Technopak says that the couponing industry has come in, many years too late in India, but is thriving. "Couponing thrived in countries such as the US and the UK, many decades ago.

India got a head start only recently. Today, digital coupons have replaced physical ones and the redemption rates are high. Part of it is because of the e-commerce boom and part of it is because any retailer - even the brick and mortar ones - finds a captive audience in the digital space as over 137 million users in India shop online.

Couponing websites say that they have been witnessing at least a 20-30% increase in traffic, year after year.

With e-commerce growing at an average annual rate of 35% and with an increase in the desire of the consumers to make bargains on the internet, the Indian market for online coupons already accounted for more than $2 billion sales in 2013 and is expected to grow by 30% annually for the next five years, says Monojeet Sinha, country head- India, CupoNation.

For the first two years, we have been able to bring some of the best deals and coupons for our users from 8000 online retailers, he added. The company claims to be the market leader in the couponing space.

"We trebled our revenues in the last quarter of 2013. In 2014, we are seeing a similar growth story and are progressing on a similar trajectory, says Sinha. There has definitely been an increase in the action from all major e-commerce players and they are targeting the large Indian user base looking for best deals and coupons for their purchase. The way the compensation for the couponing industry works is that there is a flat fee for referrals that make their way to these e-commerce sites. If it translates into a sale, there is a revenue sharing between the parties.

Another such coupon website CouponDunia pushes over Rs.20 crore worth sales to different e-commerce partners every month. Times Internet has majority stake in this firm, which works with as many as 1500 e-merchants. "E-commerce is growing in India and with more shoppers visiting multiple e-commerce websites to find the right product at right value; they are discovering coupons and coupon websites. Awareness of using coupons while buying online has grown to over 20% amongst online shoppers as compared to less than 10% a year back. Referral sites started business about three years back in India and there has been a steady increase in the number of users," says Mithun Ekbote, head corporate strategy at CouponDunia.

Ekbote adds that the introduction of the market place model has opened a lot of space for retailers to sell online. There are estimated 10 lakh retailers selling through different market places online. Coupons will be a big part of this growth story in the coming days, he says.

Amazon India says that the Amazon Associates program is the internets oldest affiliate marketing program and lets users earn money by advertising Amazon products. When website owners and bloggers who are associates create links and customers click through those links and buy products from Amazon, they earn referral fees that can be up to 15% of the product value. In less than a year of its launch in India, the Amazon Associates Program has attracted several thousands of registered associates. For most of our partners in this segment, Amazon is among the top three merchants by revenue. We incentivize these partners by giving them access to product data feeds, and offering them promotional fee hikes tied to their performance. We also share the best deals and promotions from across Amazon in with these partners on a daily basis," says Kishore Thota, head, digital marketing at Amazon India.

Ravi Kumar, founder of FreeKaaMaal.com, another coupon web site says that it has over 7.5 million page views per month. It generates monthly sales worth Rs.15 crore for its partner websites. As much as 20-30% of the earnings go to FreeKaaMaal.

Ravi Kumar, founder of FreeKaaMaal says that the site allows for discussion on the best deals on major e-commerce sites and sees over 80,000 members. "Myntra offers flash sales and Amazon offers deal of the day which makes for great discounts. The couponing business has thrived since Amazon got here.