Before we reveal the objective behind putting e-commerce on the cover the second time this year, let us recall some facts about the industry that you may have read several times:
In its report titled ?E-commerce Market in India?, Internet and Mobile Association of India (IAMAI) estimates that the internet commerce industry in India will grow by 47% to reach the Rs 46,520-crore mark by the end of 2011.
While internet on mobile is picking up, internet penetration in the country is still very low as compared to the US and Europe.
Companies in this space are getting multiple rounds of funding by venture capitalist firms.
Be it the days when Indian e-commerce companies were tagged as start-ups or today when they have turned into profitable businesses, the key to success has always been a strong business model. If on one hand this approach has worked wonders for these companies, it has made them put on the back-burner something that can cement their relationship with customers?branding and advertising. ButIndian e-commerce companies are now leaving no stone unturned to establish their identity with the right communication.
A recent example of this is the new campaign launched by online megastore Flipkart titled No kidding, no worries. ?The campaign is meant to mark the brand?s entry into the next phase and demystify the demons of shopping online,? says Kartik Iyer, chief executive officer of Happy Creative Services which is Flipkart?s creative agency. The multimedia campaign is using print, radio and outdoor. Started in 2007, the company woke up to above-the-line advertising with the launch of its first campaign in April this year. The objective then was to establish Flipkart?s expertise as the biggest online book seller before its diversification into other categories of products. ?Clients from e-commerce companies are not ignorant about the potential of advertising and come across as people who are highly receptive to new ideas,? adds Iyer, whose agency also works for online lifestyle products retailer Myntra.
Says Ravi Vora, vice-president, marketing, Flipkart, ?As industry consolidates and few leaders survive, branding will play a crucial role. Advertising may have the power to make a brand but poor service can cause unrepairable damage.? While books are immune to buying periods, electronics sales is at its peek during festivals for Flipkart. The second leg of the new campaign will run throughout this festive season.
According to media planners, media spends in the daily deals space have gone up by 150% from last year. Daily deals website Snapdeal which started operations in February last year did a three month-long media burst in January this year. ?We do advertising to build trust for our customers. It?s not something that can necessarily make or break our brand because we believe more in the quality of our service.? says Sandeep Komaravelly, head?marketing and alliances, Snapdeal.
Though advertising in e-commerce is a fairly new concept, can there be an ideal media plan for companies in this space? ?I fail to see the point behind advertising on television. Already a small number of people are online out of India?s 1.21 billion population. This group is further filtered as not all these people are comfortable transacting online,? says a senior media planner on the condition of anonymity.
Disagreeing with this view, Vatsim Vinit, media group head, Karishma Initiative, the third media agency of the Lintas Group, argues that historically television has been the most credible medium. ?While print is not cost effective, internet advertising is not trusted. In this scenario, a mix of TV, internet and radio will work well for an e-commerce player,? he adds.
In fact, there seems to be no thumb rule as players are exploring what works best for them in the long run. Besides running a TV commercial, comparison based social shopping portal Naaptol has been advertising in 50 publications almost everyday.
Currently, 50% of the company?s annualrevenue is being spent on advertising and marketing. Online retail store Yebhi.com has been running a digital marketing campaign since the website forayed into e-commerce space in 2010. Besides TV and print, the company launched a radio campaign for the first time which is actively running across stations in Delhi, Bangalore and Hyderabad. The company is talking to its target group with the proposition of Bade brands, badi deals, bade aaram se.
Nitin Khanapurkar, executive director, advisory services, KPMG observes that no matter how bullish the stakeholders are on e-commerce, there are many challenges they are yet to overcome before they start fretting over branding. ?For instance, we see more penetration in service categories than others. The smartphone revolution with various applications can help penetration in categories which have not picked up so far. Good customer experience and competitive price points work best in creating buzz around the brand through word of mouth. Another alternative can be brand association with a financial service company to build trust in terms of online payments,? he adds.
Mydala with its tagline We bargain, you gain has stuck to the ?viral? path for brand building. The company realised how social commerce is occupying timeshare with customers and translating into huge audience engagements, both in terms of time spent and transactions, which are scaling up well for Mydala. ?In social commerce, more the people are talking about your business, recommending and sharing it with their friends, the greater it is for your brand and that is of prime importance. The genesis of group buying and our business is to essentially allow individual like-minded users to get deals that were better than any deals they could get on their own,? says founder and CEO Anisha Singh.
?Our growth strategy and brand building has been focused on becoming a viral play with friends referring other friends and creating word of mouth marketing,? she adds. Being a pan-India business, the company debated much about coming up with a TV commercial but it?s a bit early from a brand build or a return of investment perspective.
For travel portal MakeMyTrip, advertising is most important during the first and second quarters with focus on television. ?TV remains an important part of our media mix. It gives us a good opportunity to establish brand connect at the emotional level. So we will use TV as key communication medium going forward too. Branding is essential to establish the brand, create awareness, strengthen saliency and drive repeat recall for the brand,? said a company spokesperson. The company’s first advertising campaign pitched MakeMyTrip as the provider of best deals. Its latest brand campaign titled ‘Memories Unlimited’ explains how great deals and great experiences culminate into unlimited memories.
In fact, the brand has taken up some unique advertising initiatives in the past. In August 2009, it launched an audio clip, titled Offisial Atyachaar, as a part of a viral marketing campaign kick starting the promotion of its weekend getaway travel packages. Treading the BTL (below-the-line) path a few months later, it hosted ‘Offisial Outburst’, a platform for attendees to vent their angst against work place exploitation in a fun environment.The event was held at The Epicentre in Gurgaon and saw a specially constructed venue, called Offise, inside a hall. Signboards at the entrance and parking area guided people towards the venue. Like a real office, the Offise had a ‘reseption’ (read reception) and a stage where corporate rock bands performed. 50 people selected in a lucky draw got an opportunity to vent their work-place frustration by smashing the Offise with a baseball bat.
Smile Group, which runs the private sales site Fashionandyou.com, group buying site Dealsandyou.com and online shoe store BeStylish.com is also pumping fresh blood in its brands through advertising initiatives. While Dealsandyou already spends more than 40% of its annual budget in marketing and advertising, Fashionandyou is all set to launch its first ad campaign along with a new logo later this month.
Trivikram Thakore, director ? marketing, DealsAndYou, finds branding exercises instrumental in creating a distinct image in an overcrowded category. ?With new e-commerce companies starting every day, offering the same or similar products and services, achieving a unique web presence has now become a relatively more difficult process. Branding and everything associated with the process is what will help a brand differentiate itself in the eyes of the consumer,? he says.
According to Sanjay Ramakrishnan, senior vice-president, Myntra, television is an important medium for the brand to reach its target audience, and it will continue to be the preferred medium for Myntra’s campaigns in next two to three quarters. ?Our marketing plans are based on three objectives ? customer acquisitions, brand building, and customer retention. We advertise online throughout the year as part of our customer acquisition programs. Timing of communication is mostly based on fashion seasonality. We do lots of personalised communications/promotions as part of the customer retention programme as well. Also, we have new brand launches on the website every single day. Every brand launch is supported with online and sometimes offline promotions,? he says.
Experts in the domain also pointed out how Amazon’s entry in India early next year is a major reason why Indian e-commerce players have suddenly transformed into consumer brands. At one level this may seem like comparing apples and oranges as Amazon’s current valuation stands at $95 billion. Singh of Mydala explains how Amazon is a world leader in e-commerce for several reasons. ?Prime among them is user experience and building consumer trust. I think most companies in this space in India have a lot to learn on both those fronts,? she says. ?The focus should be on creating a fundamentally sound business. Companies who are focused on that will succeed. Others who are just burning money will crash land if and when the funding dries up. There is plenty of opportunity for everyone and Amazon?s entry plans is an endorsement of that.?
Adding to this, Ramakrishnan of Myntra sees the entry of Amazon as a growth driver for India’s e-commerce industry, analytics and supply chain management (SCM). Manmohan Agarwal, co-founder of Yebhi, shares how his company is investing significant amount of energy and expertise in creating a strong back-end chain to overcome challenges. ?CRM (customer relationship management) is one area that merits considerable attention. We would be excessively harnessing the power of internet to drive a closer relationship with our customers and leveraging the potential,? he says. ?Scale will play a very important role once Amazon is here. To build that up companies will need to go through rough waters. Process improvements is something which will require deep focus and need for capital will only go up in near future,? adds Manu Agarwal, founder & CEO, Naaptol.com.
With all these and more challenges waiting to be addressed by players in India’s growing e-commerce landscape, advertising will play a pivotal role in getting more eyeballs by making these brands a part of popular discourse. Whether advertising can make or break these brands is yet to be seen.