Why brands across categories are launching their own e-commerce sites

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Updated: Sep 24, 2020 5:09 PM

The high uptake in online shopping has encouraged a wide range of brands to venture into e-commerce

Bisleri, Cornitos, Kiehl’s and Amaris Jewels are some of the brands that have launched their own e-commerce platforms over the last few monthsBisleri, Cornitos, Kiehl’s and Amaris Jewels are some of the brands that have launched their own e-commerce platforms over the last few months

The high uptake in online shopping has encouraged a wide range of brands to venture into e-commerce. Many of them are opting to build their own e-commerce platforms, instead of merely listing their products on online marketplaces.

Bisleri, Cornitos, Kiehl’s and Amaris Jewels are some of the brands that have launched their own e-commerce platforms over the last few months. Apple, which used to get 30% of its annual sales in India from e-commerce sites here, launched its own online store for India this month.

Online on their own

Brands that rely mainly on offline sales are struggling, as there has been an 80% drop in footfall in malls and high streets. “The fear of going to malls and stores has led to a shift in purchase behaviour,” says Shikhee Agrawal, AVP, Kiehl’s India. The skincare brand’s online store, launched in June, provides e-consultations and exclusive offers to customers.

The dip in sales from modern trade outlets and supply chain issues which made it difficult to reach many parts of India, prompted Cornitos to launch its own e-commerce platform. Even though Cornitos is already available on sites such as Amazon, Flipkart, Grofers, Big Basket and Milkbasket, the company sensed the need to have an exclusive online store. “There is a limit on how many of our SKUs can be listed on these platforms. We offer a wholesome experience on our site, where we offer product bundles and run a loyalty programme,” says Vikram Agarwal, MD, Greendot Health Foods, which owns the Cornitos brand.

Meanwhile, Bisleri’s online shop allows consumers to purchase or subscribe to its mineral water bottles and cans, and club soda bottles. The company is yet to make its fizzy drinks available for purchase online. Consumers need to spend upwards of Rs 150 to make a single purchase from the online store.

Then there’s Amaris Jewels, a Delhi-based jewellery brand, which noticed a significant increase in orders placed through Instagram, and decided it was best to launch an online store. “The online store has opened us up to new markets within India and abroad. Most of our online orders are from the US,” says Prerna Rajpal, founder, Amaris Jewels.

Reeling in users

A report by Kalagato states that 10-11% of internet users across tier I, II and III cities in India shop online. The most popular categories of products sold online include fashion, electronics and home appliances. As per the market research firm, consumers spend about Rs 4,000-5,000 on buying products online every month.

It has been observed that e-commerce works better for brands that have a high-ticket size. Then what has propelled FMCG brands with low ticket size products to venture into this channel? “They get to save on margins that are otherwise lost to marketplaces. Further, brands have realised that end-consumer connection is critical, and competition is greater now because e-commerce has reduced entry barriers,” says Anand Ramanathan, partner, Deloitte India.

Another key factor is the control over user data. “Brands that are leveraging marketplaces like Amazon or Big Basket don’t have direct access to user data.

It is prudent for all brands to have their own websites as the data collected on users can be utilised for sharp targeting,” says Shankar Shinde, managing partner, Geometry Encompass.

Experts say that the cost of user acquisition will be high, but a necessary investment in the initial days. Neha Kulwal, country manager, Admitad, says that there has been an increase in affiliate marketing initiatives from newly launched e-commerce portals targeted at user acquisition. Brands that wish to leverage social media platforms like Instagram to drive sales also need to first build an e-commerce site.

Ramanathan says while it is expensive from a customer acquisition standpoint, “e-commerce is a great platform for brands to build loyalty and reward customers”.

Read Also: How shopping malls are strategizing to reach customers ahead of the festive season

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