Long before Prime Minister Narendra Modi had visualised a digital India, the country was already witnessing a trend on the digital front, which was enabling education, retail and eatery reach out to people faster and cheaper. The sudden upsurge in eCommerce did not come in as a surprise given the technology driven time where mobile phones with Internet have become a lifeline for Indian consumers.
A large number of Indian audiences are hooked to their smartphone screens looking for the next big sale. Now this brings a huge opportunity for the eCommerce firms and as well as the advertising world.
GroupM, the world’s largest advertising media investment company, in their report titled “This Year Next Year’, says, “eCommerce is expected to lead the charge in 2015 in terms of ad spend growth although from a relatively smaller base than more established categories.”
No wonder eCommerce firms are going to every extent to capitalise on the mindsets of the people. Time and money both are in favour of eCommerce. But does that mean the brands are lagging behind somewhere while eCommerce makes it a win-win situation? Not really! The digital platform is there for every brand and many of them are using the digital and social media to the core.
But what makes eCommerce firms do aggressive advertising is that they bring brands under one umbrella, are easy to access and are available for a much cheaper price – exactly the things Indians urge for. When we spoke to Flipkart about their advertising funda, this is what their spokesperson shared.
“In the recent years, the advertising landscape in India has undergone a lot of changes. It has transformed into a more engaging and communicative medium. Changing consumer mindset has pushed every brand to experiment with innovative OOH, digital and social campaigns.”
She further added, “The need and target audience of every campaign determines the use of different mediums. TV and print have been extensively used for most of our campaigns. Additionally, we have observed that change in the media consumption pattern of Indians has made social and digital advertising crucial for the success of a campaign. With rapid growth in the number of Indians accessing internet and the rise in mobile browsing─ mobile and online advertising have seen a rapid growth/adoption by brands too.”
Overall, the Indian advertising industry is growing and brimming with new-age mediums of communicating with the customers. Depending on the nature of the campaign and target consumers, the advertising spends are distributed between traditional and new media. Like with most brands, spends on new media has been increasing over the last few years.
Given the analysis, is it possible that a nascent sector like eCommerce can really topple the big spending behemoths like FMCG, Auto and BFSI?
Anil S Nair, CEO & Managing Partner, Law & Kenneth Saatchi & Saatchi, believes that there is nothing new to this analysis. “eCommerce and new tech-enabled businesses have been dominating the ad spends for two quarters now. I don’t see a change for sometime till the funding dries up or investors run out of patience. It will drive ad rates up and make the traditional brands panic a bit. And we will get stupid briefs like “I want you to do a Flipkart on this.”
Kartik Iyer, CEO, Happy Creative Services, also feels that the analysis by GroupM is obvious, “It is quite a possibility and they should know best as they would be aware of the kind of inventories that have been bought for the IPL. Besides the evident need to gain maximum mind share and the aggression to grow the category, it doesn’t have any unique impact on the messaging. A brand still needs to say what it needs to, no matter what it spends on visibility. But for sure the pressure on ROI will be definitely felt from the marketing departments.”
K Vaitheeswaran, eCommerce pioneer and Founder of Indiaplaza, India’s first eCommerce website, opines, “The forecast is not surprising. Selected Indian eCommerce companies are flush with funds. Their only goal currently is to increase top line and acquire customers, whatever the cost to enable the next round of funding. Hence these companies, and of course, Amazon who is also competing hard to build scale in India, will spend massive amounts on mass media this year. I expect this to continue for the next two years at least. I also expect mobile only eCommerce firms like PayTM to also spend lot more.”
Strangely, traditionally large offline ad spenders like FMCG, Telecom, BFSI companies are allocating higher amounts from their ad budgets to online, while pure play online companies like eCommerce firms are spending more offline.
Mahesh Murthy, Founder, Pinstorm & Managing Partner, Seedfund, believes that this is a temporary blip, which is happening because eCommerce firms have been funded in silly ways to burn each other – and not to do good business.
“Within 12 – 18 months, sanity and depleting bank balances will prevail, and this spend will shrink to a fraction of its current levels. This is just a temporary bonanza for TV channels and news papers who get big ad revenues; and for consumers – who can buy products below cost. But it won’t last long,” states Murthy.
Now given the platform being huge and too many players trying to make it big, marketing strategies have to absolutely nail it. Murthy says, “In terms of strategy, more firms and their backers will realize that undifferentiated offerings do not work online. Creativity in terms of graphics and text won’t make a difference. And undifferentiated firms will die, after burning through their cash.”
Truly differentiated offerings, that can capture healthy consumer word-of-mouth, are the ones who will survive. This means fewer people who are trying to copy Amazon or some Chinese company and more people building businesses to uniquely answer India’s needs.
However, Vaitheeswaran believes that he does not expect any change in approach or strategy. “It will be more of the same – deals, discounts, offers, specials, and savings in some random order. With so much of spends, there is a perfect opportunity for an eCommerce company to create a memorable campaign but no one so far has attempted to do it.”
Differentiate or Die?
Much has been written about positioning of eCommerce firms since the concept was first introduced to the world of marketing. With thousands of eCommerce sites offering very similar product lines and looking almost identical, it is either that these sites ignore this very simple marketing concept or that differentiating themselves is much more challenging online.
Iyer believes, “I don’t think I can agree that most eCommerce platforms lack differentiation. Each one scores differently on trust, quality of delivery and service. This is the primary area that consumers build relationships with eCommerce brands. Do we see similar car ads? They all have four wheels and fight with the same specs in each category. So it’s unfair to assume that the creative ideas will be the same. Well, I sure do hope they won’t.”
Whereas Nair expresses, “It’s a case of Quantity vs. Quality, though some of them have realized that behaving like footpath vendors outside the railway station no matter how loud you can scream will not make a sustainable brand. So as we have seen in some cases, few emotive stories will emerge and hopefully differentiate.”
This year, Indian TV has seen big events like ICC World Cup and IPL tournament and in this race for numbers, top line is all that matters. And very rightly, it is also predicted that during IPL, eCommerce brands will dominate ad spends on broadcast platform.
For eCommerce to advertise a lot during the tournament and also to be the lead sector spending on ads throughout the year, experts believe, will add on to their traffic, sales and losses too.
Source: AdAge India