 |
Ecommerce in India: Will the Advertising Spend Pay Off?
EXCERPTS
BRAND BUILDING EFFORTS OF INDIAN ECOMMERCE COMPANIES
Due to the relatively nascent nature of the industry, the brand recognition of Indian ecommerce companies was relatively low when compared to their counterparts in developed countries. In order to expand their reach and attract more customers to buy products from them, Indian ecommerce companies relied on giving deep discounts on the products and services they sold. Products were sold at a very cheap price when compared to those prevailing in the independent brick and mortar stores and retail chains. Competition between the newly started ecommerce companies resulted in a further cut in prices. Some analysts opined that the lower margins resulting from the steep discounts offered by the ecommerce companies made it very difficult for them to cover their fixed and operating costs... |
|
SPENDING ON ADVERTISING
In order to reach their target customers, ecommerce companies started using various marketing communication channels. While some players focused more on digital media, others gave importance to both digital and traditional media like print and television...
WILL THE SPENDING PAY OFF?
As the Indian ecommerce companies were attracting good investments due to the high growth prospects for the sector, their advertising spending was only expected to increase in the years ahead...
OUTLOOK
Going forward, while some analysts and industry experts were doubtful as to whether the ecommerce companies would continue with their high advertising spending in future, others were of the view that there was no other alternative for players in the sector to increase their brand image...
EXHIBITS
Exhibit - I: Sales of India’s Ecommerce and Etail
Exhibit - II: Internet Penetration in India as Percentage of Population (2014)
Exhibit - III: Top Ecommerce Companies in India
Exhibit - IV: Market Shares of Major Media Channels from 2009 to 2013 in India
Exhibit - V: Ecommerce Companies’ Advertising Spend on Traditional Media
