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Homegrown e-commerce platforms Ajio and Tata CLiQ Luxury likely to match advertising might of Amazon and Flipkart

With competition intensifying in the e-commerce segment, homegrown e-tailers such as Ajio and Tata CLiQ Luxury may take Amazon and the Walmart-owned Flipkart group heads-on in terms of advertising during the upcoming festive season

India’s e-commerce segment adex, which has been dominated by multinationals such as Amazon and the Flipkart group, is likely to increase spending, which is also flowing in from domestic platforms such as Ajio and Tata CLiQ Luxury among others. 

With competition intensifying to attract more customers, the homegrown platforms will be spending much more than previous years. 

According to industry experts, the ad spending in this segment has been dominated by Amazon, followed by Flipkart. The local players have also been spending but it has not been more than 12% of the total category spend. But as Ajio, along with other Reliance Retail’s platforms and Tata Group’s online commerce platforms gain more traction in the Indian market, the homegrown companies may spend in equal proportion as well. 

This increased competition will also give a double-digit boost to the overall adex of the country, which reduced to Rs 56,000 crore in the last calendar year. 

In 2020, e-commerce sales during the first week of the festive season amounted to Rs 290 billion, compared to Rs 190 billion during the festive season in 2019 in India. E-commerce sales continued to increase each year from 2016, making India the fastest growing e-commerce market. And this year, reports suggest these players will witness at least a 40% boost in sales.

E-commerce has become more mainstream than ever and every year, the festive season sees players holding multiple sale events, timed around Dussehra and Diwali.

While last year the Flipkart group (including Myntra) and Amazon accounted for more than 88% of the entire gross merchandise value (GMV) for the festive month, and this year Snapdeal too is betting high to make a comeback.

Soumyadip Chatterjee

Soumyadip Chatterjee, Director, Brand Marketing, Snapdeal, said the e-retailer is planning to launch tactical ad campaigns during the festive months, while keeping its ad spends at competitive level.

“We have planned a tactical campaign around the festive season that builds perception and reintroduces Snapdeal 2.0 at a brand level. The creative bit of the same is still being worked out. It is a common knowledge that the majority of the shopping across all e-commerce and retail happens during the festive season and so it's natural that the players will hike up their ad spend,” he said.

Since last year, Tata CLiQ Luxury has been seeing a steady growth trajectory on the platform, with a growing user base month after month.

With the current growth trajectory, Mohua Das Gupta, Head, Brand Marketing, Tata CLiQ Luxury, said that it strongly indicates that consumer sentiments are positive.

As a luxury e-commerce platform, it will continue to be digital-first in all its marketing efforts this festive season.

Prabhkiran Singh

Prabhkiran Singh, Founder and CEO, Bewakoof, expects the festive season to be a competitive one.

“The festive season is bound to get e-commerce players to put in more ad spends. The festive season is expected to bring faster recovery in already improving sales numbers. Customers are showing buying intent. Many e-commerce players, including us, have already reached pre-Covid levels,” he said.

He said the adex is expected to reach pre-Covid numbers.

For Bewakoof, the overall ad spend is in the range of 10-15% of its net revenue. Last year, due to Covid, its ad spends were below 10%. But with the additional funding this year, it is planning to accelerate its growth trajectory by investing in marketing, branding, technology and talent acquisition.

Its focus is to bring the best of fashion at the best of prices for which it will take the brand to an unexplored new customer base, which will be enabled through mass media such as TV and print campaigns.

According to industry estimates, leading sellers on these e-commerce platforms have started to place large orders with the manufacturers for the largest-selling categories of smartphones, televisions, laptops and home appliances in the upcoming festive season.

In terms of luxury products online, Gupta said that with a slowdown in international travel and lockdown restrictions, consumers have turned to the internet for their luxury purchases.

She believes its thoughtfully curated brand offerings, mindfully developed brand stores, bespoke delivery, and personalised privilege programs provide an unparalleled shopping experience, encouraging consumers to continue shopping for luxury on its platform.

For the last-mile delivery which has become a necessity, the companies are also gearing up to ramp up the hiring of temporary and gig workers. The Indian Staffing Federation (ISF) research shows that the e-commerce sector will be employing over three lakh flexi-staff and gig workers this year, which includes an addition of 60,000 to 70,000 workers during the festive season in the current year.

As luxury shoppers become more comfortable making purchases online, Gupta said the digital medium will undoubtedly scale up.

She said, “Luxury brands across categories are  boosting their spending on the digital platform to reach out to existing and new customers. Our overall strategy has been to embrace the principles of ‘slow commerce’. In doing so, the emphasis is on the finer elements – craftsmanship and the tranquillity of the overall experience of purchasing a luxury product. With slow commerce, the aim has been to elevate the ‘quality’ of everything we do. We will continue to nurture our brand distinction through various brand and festive campaigns, with this brand philosophy.”

Tata CLiQ Luxury is hoping to double its growth this festive season compared to last year.

“Given the trends and progress we have witnessed month after month, we are optimistic about this festive season,” Gupta added.

Chatterjee, too, is hopeful that the intent of people is very high this festive season, which will make brands increase their ad spends.

Snapdeal is enhancing its focus on discovery-led models and putting forth the proposition of great value at less price this year.

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