1. Ecommerce: At Rs 1,052 crore ad spend, e-retail plugs itself in India

Ecommerce: At Rs 1,052 crore ad spend, e-retail plugs itself in India

As e-commerce players slug it out for market share and the stakes become bigger, it’s no surprise their advertising spending has been galloping.

By: | Updated: June 23, 2015 9:25 AM
At this pace, ad spends in 2015 should grow way beyond the estimated increase of 15-20%, say industry watchers.

Ecommerce in India: At this pace, e-retail ad spend in 2015 should grow way beyond the estimated increase of 15-20%, say industry watchers.

As ecommerce players in India slug it out for market share and the stakes become bigger, it’s no surprise their advertising spending has been galloping. Industry estimates put the outlays between January and mid-May at close to Rs 1,052 crore — that’s nearly three-fourths of the Rs 1,483 crore spent by e-retailers in all of 2014.

At this pace, ad spends in 2015 should grow way beyond the estimated increase of 15-20%, say industry watchers.

They also see a chance of the online category overtaking cars to become the third-biggest spender in 2015; with a tab in the region of Rs 1,500-2,000 crore, the auto sector is the third highest spender. Meanwhile, the FMCG segment, with advertising expenses of Rs 8,000-9,000 crore, will easily hold on to the top spot while the telecom-mobile category, which forks out some Rs 5,000 crore each year, should retain its No. 2 position. Advertising across print, radio and TV this year is expected to hit an estimated Rs 54,320 crore compared with Rs 47,490crore in 2014.

Until last year, it was by and large the bigger e-commerce players that were unleashing the big campaigns whether on television, radio or print. But the smaller e-retailers are slowly joining in. Online apparel brand Yepme.com, for instance, has already coughed up Rs 125.9 crore this year and Sandeep Sharma, the company’s COO and co-founder, believes the money has been well spent. “We’re using the media to talk about the platform’s benefits rather than the discounts being offered. That strategy has worked and we have seen a threefold jump in revenues in Q1FY15,” Sharma said.

Roopam Garg, general manager, North MEC India, a media agency network, however, foresees a drop in spends for the online category after 2016. “These firms are using up the capital funds that they have mobilised to advertise. However, not everyone is going to survive and there will be some players that run out of money. So after a point spends on aggregate will stabilise,” Garg pointed out.

Industry majors, of course, aren’t holding back on new campaigns — indeed they’re rolling them out thick and fast.

Amazon India has rolled out ‘Aur dikhao’, having coughed up about Rs 124 crore so far this year, while rival Snapdeal has forked out Rs 111.4 crore. For some reason, Flipkart, popular for its quirky ads, has a much smaller bill of just Rs 75.4 crore but perhaps it is saving up for new brand campaigns, ‘Ab har wish hogi poori’ and ‘Acha kiya nahi kharida’.

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Shoumyan Biswas, senior director, marketing, Flipkart.com, says the campaign is somewhat thematic — a story of how different wishes connect us with each other. “We’ve got 20 lakh views in just three days,””Biswas said.

Naaptol, an online player with a home shopping channel, is another company that has upped spends this year with a bill of Rs 68.2 crore. Manu Agarwal, founder and CEO, Naaptol.com, says he expects television advertising to reflect in higher sales. “Unlike our peers, we are not advertising on television to drive traffic to our website or the app as the cost of customer acquisition is very high,” Agarwal said. When it is not a special campaign, it is responses to those of rivals. Snapdeal’s new campaign, which says, ‘Acha kiya bata diya. #YahanSeKharido’ took a dig a Flipkart’s campaign ‘Acha kiya nahi kharida’. Both companies are also fighting it out offline. Last year, both Flipkart and Snapdeal took on each other on Flipkart’s Big Billion Day.

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Yepme.com launched its first big-ticket campaign last December, ‘Fresh fashion’, featuring actor Shah Rukh Khan. It then launched another campaign revolving around the same idea of fresh fashion in February this year featuring West Indian cricketers like Chris Gayle, Darren Sammy, Marlon Samuels and captain Jason Holder.

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