Online marketplace ShopClues on Wednesday rolled out AdZone, a bidding platform for merchants to promote products using native and custom ads on it.
This is expected to impact the company’s bottom line significantly and contribute to 35% of the overall revenue for the company, officials said.
The service is similar to other product services offered to sellers by other e-commerce players in the market. For instance, Flipkart has product listing ads wherein, it shows these products as ‘Featured Products’ on relevant pages of its website.
Commenting on the Development, Sanjay Sethi, co-founder of ShopClues said, “It is a simple platform for promoting product and pushing the listing of the sellers on top of the page. Currently, it is contributing to about 10% of our total revenues, but as we scale up, we expect 35% of our total revenue to come from this. It is a high gross margin category (about 95-98%) and it will contribute significantly to the bottom line, he said. “The fact that we have raised only about $20 million and continue to grow show that we are not burning cash unlike other players in the market,” Sethi added.
ShopClues says it has about 5 lakh sellers on the platform and claims about 40% of them have used some kind of the paid services offered by the company, apart from listing the products on the marketplace. Flipkart has about 90,000 sellers, Amazon says it has 85,000 sellers and Snapdeal claims to have about 3 lakh sellers on its platform.
AdZone is a dedicated sellers’ platform where merchants looking to advertise their products on ShopClues can enter a bidding process to initiate their campaign. Minimum budget for a campaign is Rs1,000 while the minimum bids vary for different categories. The product ads will be displayed in the category and sub-category pages, thus ensuring top slots and resulting in high orders.
For ShopClues, about 25% of orders comes from the smartphone category and another 25% from the appeal category.
Radhika Aggarwal, co-founder and chief business officer at ShopClues said, “About 70% of our orders cater to tier 2 tier 3 cities. We focus on unstructured categories and about 95% of the sellers are in this segment. It is a high margin segment for us and we will continue to remain in this segment. For instance, the average mobile price purchased by users on our platform is R4,000, whereas for other players, it ranges between 10,000-12,000.”