Gaurav Kapoor, 24 and self employed, is not a shopaholic and definitely not one when it comes to buying stuff online. But this time it was different. Like any usual day, he logged on to Facebook to check his account and came across a Flipkart advertisement which was inviting him to buy a book. Clicking on it, it took him directly to the website and he could not resist buying four books that very day. Yes, this is effective advertising, where a consumer like Gaurav ends up buying a product even when he does not need it and he never planned this purchase. Most of the e-commerce companies today are looking for innovative ways to sell more and more and want to pay the website only when the consumer actually buys the product and not pay per click. While big companies like Flipkart, OLX, Snapdeal, Naaptol are coming up with TV commercials along with digital marketing. The new entrants like Zovi.com, GreenDust.com are playing primarily on online as well as digital marketing techniques and are clubbing pay per performance with the conventional pay per click.
There are marketing companies that help this performance based model and call it affiliate marketing. Bharat Malik, country manager, Online Media Group, a performance marketing company says, Affiliate marketing is a new concept in India and it is performance based. We are paid only when the transaction happens and not when the consumer just clicks on the advertisement. We have clients like Yatra.com, Flipkart, MakeMyTrip, cleartrip, inkfruit, Zovi.com. Malik says that over the last one year, these e-commerce companies have realised that it is very important to acquire customers online through digital marketing and just getting clicked on their ad is not the way ahead. According to IAMAI (Internet and Mobile Association of India), the internet commerce industry in India is estimated to grow by 47% and reach R46,520 crore mark by the end of 2011.
Young start ups in the ecommerce space are the most open to experimentation. Zovi.com , an online apparel brand and eight months old into the e commerce world knows that online marketing needs more efforts now, when compared to what companies did a year back. Monappa Nalyanda, marketing head, Zovi.com says, We are a very young company and and are dependent on social media , Google ads and affiliate marketing to get results. Though affiliate has never been a scalable model in India. We believe that with more and more ecommerce companies, the ideology will change. We have affiliate partners like Tyroo, Ozone and Komli. The affiliate partners are generally websites that direct you the e commerce companys website. Affiliate websites usually have all the brands directing the consumer to different websites.
On similar lines, Hitendra Chaturvedi,managing director,GreenDust.com, an online website that sells refurbished goods, factory seconds and branded surplus shares, We do affiliate marketing as affiliates (online) have a broad reach and they can speared the word to a larger group. They act as our extended sales arm. Our affiliates in the offline world are our franchisees and our dealers who buy our product and the resell. All the major websites in online space are our affiliates.
The bigger picture
There are established ecommerce companies that ventured into TV commercials recently and believe that affiliate marketing still has time to pick up in India. Sachin Singhal, head (e-commerce), Napptol.com says, We are already very strong in print and TV advertising. Unlike other ecommerce companies, we do Return on Investment (ROI) driven campaigns and also do enough media buying across the web. We advertise on Google and Facebook and also look at domestic social networks like networkplay. Singhal says that Naaptol spends more than $1 million per month on marketing and advertising. Annual revenues of the company are more than R100 crores. Its been more than a year that Naaptol started TV commercials. At present, we are not looking at the affiliate marketing model, he adds.
Three-year-old start-up Valyoo Technologies owning e-commerce sites like Lenskart (eyeglasses), Watchkart (watches) and Bagskart (bags) also has similar views on affiliate marketing, Our entire marketing happens online. It is a combination of Facebook and Google adwords. Affiliate marketing is not happening that much in India, but we may look at it in the future.
Companies know that their portfolio of advertising has to be big. Amarjit Batra, country head, OLX.in, a local classified site where one can sell used second hand stuff says, We are primarily using online search and display along with Television. We are running a TVC promoting the idea of Sab Kuchh Bikta Hai, any thing or everything can be sold off on OLX.in. Besides TV, we are having an active online presence during the TV campaign, and within that we have used Youtube and Facebook as a support.
Thus, as the start up space in ecommerce gets hotter, save yourself from being that next customer like Gaurav who might just buy a product, even when it is not needed.