Why e-tailers are spending more on ads

In a bid to stay ahead in the cut throat competition, Indian eCommerce sector is splurging on attracting more consumers. Besides, eCommerce has turned out to be the hottest industry for advertisements.
Why e-tailers are spending more on ads

In a bid to stay ahead in the cut throat competition, Indian Ecommerce sector is splurging on attracting more consumers. Besides, ecommerce has turned out to be the hottest industry for advertisements.

Besides, the spending on advertisements by e commerce companies surpassed that of consumer durables, banking and financial sectors in 2014. They are spending as much as the traditional table-toppers -telecom and auto companies.

As per, TAM Adex data show that the big four e-commerce companies - Amazon, Flipkart, Snapdeal and OLX - alone spent a staggering Rs 600 crore on ads in 2014. Overall, the sector spent Rs 750-800 crore in 2014 and the budget would cross Rs 1,000 crore in 2015, say media planners.

While, Amazon started advertising in India as late as in May 2014, which  forced other portals like  Flipkart and Snapdeal, to beef up their efforts. In 2014, the sector spent Rs 60-70 crore on print ads, as they vied for premium positions, such as front page, jacket and double jacket ads in newspapers.The sector spent Rs 32-35 crore only on jacket ads - four full pages of advertisement that cover the rest of the newspaper as a jacket.

Furthermore, foreign investors who saw e-commerce as an opportunity to play in the nation's mammoth $500 billion retail market have bank-rolled top online retailers' efforts to scale up quickly over the past few years.

This has also increased competition in the online market, where the players are waging a war to win over the consumer. While the companies have of late cut down on discounts to consumers, they are focusing more on brand building, signing up Bollywood celebrities as brand ambassadors and stepping advertisement activities around sporting events.

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