Trends in eCommerce Industry in India

Image Courtesy: http://www.arabiangazette.com

Last weekend, I was watching a football game on TV and I watched a couple of ads from Amazon and Flipkart. Both the ads were focussed on improved customer experience and originality of the products they sell on their respective portals. There is a shift in advertising from usual eComm Portal ads that used to sell 50%+discounts on the products. What could be the reason for this change? I have tried to analyse the same in this article.

Lets first have a look at India’s eCommerce market scenario. As per Morgan Stanley report, India’s eCommerce Market is going to grow faster over next 3 years, and the major eCommerce players are trying to grab maximum of this market. As per the report, Flipkart has the largest chunk of Indian eComm Market (45% including Myntra) and Snapdeal is the second largest (26%) with Amazon catching up with the first entrant Indian players (12%).

Let us now see how the eComm Players advertised and entered in our life at first place. If you can analyse, the marketing trends of Flipkart and Snapdeal were based on following themes in recent times:

  1. Discounts and Sales : Both Flipkart and Snapdeal were initially offering huge discounts on the products making them cheaper than those available in retail stores. The investors money was directed towards discounts to attract more and more consumers towards the Online platform. It is a perfect strategy in country like India where Value for Money is regarded of utmost importance by the consumers. Flipkart also came up with Big Billion Day Sale and competitors like Amazon and Snapdeal also entered the war of Sales offering unbelievable discounts on range of products. Another marketing gimmick from eComm companies to increase number of visits to the online portals. The Government of India passed the resolution for 100% FDI on Online Marketplace only model, making the Inventory model players like Flipkart and Amazon handicapped in the game of big discounts. The foreign investors will invest in Marketplace players like Snapdeal or itself make an entry in India like Chinese major Alibaba. Only the market place model companies will be able to give extravagent discounts to improve their marketshare.
  2. Exclusive Flash Sale: Flipkart is major player in partnering with Mobile companies like Chinese firm Xiaomi to become exclusive medium to sell their mobiles in India. The flash sale which usually takes place for hardly few minutes to sell thousands of mobiles is also a reason to give free publicity to the online portal where it is sold,appears in news headlines. Following Flipkart’s exclusive partnership model, other competitors have also bagged exclusive rights of certain mobile phones to be sold in India. I remember, the single page ads in the newspapers announcing the flash sale of certain mobile phones with Flipkart logo at the bottom. The advertising expenses must have been shared by the two partners for sure.
  3. One Day Delivery: Another strategy to boast about the Logistical strength and USP of few eComm companies but now it is ubiquitous at all the eComm companies.This is valid for some of the products that can be delivered in less than 24 Hours with premium charged. With Govt of India regulating the Inventory Based Model, it will be difficult to deliver the products in one day as the partial dependancy will be on third party vendors.
  4. App only Strategy: The eCommerce portals were initially trying to promote the Apps Only strategy for following reasons:

a) To Maintain Exclusive Customer Base: When someone searches on Flipkart website the search data is stored in Web Browser as Cache. This is used by Google Ads software and it becomes a Lead for other eCommerce Portals. Have you ever noticed that if you search something on one eComm portal in Google Chrome Web Browser, you keep on receiving the ads for the same product from other eComm portals on other websites you browse. This cannot be the case in fully owned Apps of the eComm Portals as the Search data is not leaked to any other third party like Google.

b) To Get Insights about Customers: The Customer Data on their Apps is used by the eComm company to get insights about the individual. If you search for a product on app, the App can suggest you similar products. The App can also use your historic data of buys and can understand your spending trend and can suggest you similar products in your spending capability using predictive modelling.

c) One on One Communication Medium: The App only strategy is effective because the Apps can communicate with the customers in real time. The Apps like Myntra also run survey on their Apps to understand latest trends in the market. The notifications on Sale, Discounts etc are provided timely by the Apps to customers.

The Apps Only strategy is effective for the eComm Companies but it restricts the users from doing Online Shopping on PC which is still popular in India because accessing the Apps on Mobile consumes your network operator data which is more costly for Indian Consumer than using Wired Internet Connection of your Office PC to do shopping in spare time. That’s the reason companies like Flipkart have directed themselves away from Apps Only strategy and decided to continue Website Presence as well.

“With the constantly changing scenario in the Indian eCommerce industry, the companies have to find newer and more unique selling points to do better marketing and improve their sales”

5. Chat and Shop: Flipkart recently launched their own Chatting App called Ping which helps their customers to chat with each other and suggest each other what to buy. They have basically provided Online Chat Platform for Word Of Mouth publicity and to understand likes and dislikes of the customers in order to modify Flipkart’s own marketing strategy. eComm companies have to come up such innovative solutions to attract more customers on their apps.

6. Customer Support and Originality of Products: With the rise of marketplace model, the eComm companies have to be careful about the genuiness of the products they sell on their portals. Very strict policy on banning the vendors that are found selling fake products is required. Earlier the eComm companies have received a lot of negative publicity on Social Media when it was found that that they were selling duplicate products. The Social Media is very powerful tool today, where the consumer can vent his/her anger very easily. Therefore improved multi channel Customer Support is also a need of hour for the eComm companies. The advertisements of Amazon and Flipkart are based on these themes today.

These were some of the marketing strategies of eComm players in India which I could think of. If you can think of more, please suggest more in the comments below. All in all, the eComm Industry is constantly evolving and the players are innovating every day in order to stay in the race. With new players like Alibaba entering Indian market, the eComm industry in India can see a new phase altogether, where 2 or 3 major players may come together. Apart from industry consolidation, going public is also another option for the eComm players to raise more funds like Infibeam did recently. Amidst the funds cut from the Investors and employees lay off news in eComm industry, I see a glimmer of hope for Indian players as they understand the Indian market better than others.


Image Courtesy: http://blog.ksidc.org/