MxMIndia

Tag: e-commerce

  • The task for Lintas is not only to build saliency for the brand but also to encourage a change in shopping habits for apparel and accessories

    LMG bags Yepme’s media duties

    By A Correspondent

     

    Online fashion brand Yepme has awarded its media planning and buying duties to Lintas Media Group. Yepme already has a line of men’s fashion wear and accessories and is launching the women’s wear line on May 30. The brand has signed leading Bollywood actress Kangana Ranaut as its style ambassador. Yepme has over 1.1 million fans on Facebook, making it the largest fan base amongst Indian e-commerce sites.

     

    The task for Lintas is not only to build saliency for the brand but also to encourage a change in shopping habits for apparel and accessories. As Vivek Gaur, CEO at Yepme said: “Yepme is creating a category for itself. Unlike most other brands that are using the online route, Yepme has a non-metro focus and is creating a network of clients across the country. The role of media for such a challenge is extremely critical and requires a fine balance between mass reach and narrow targeting. We are glad to have Lintas Media Group partner us and give us very strong support in media as we nurture the brand further”.

     

    Suresh Balakrishna of Lintas Media Group was very enthusiastic about the addition of this new age business: “Yepme will go a long way in adding a young and futuristic character to the portfolio of brands that we work with. Fashion and e-tailing are both growth areas of the future and their media needs are extremely dynamic. We are very glad that the management of Yepme recognized our strengths and decided to partner with us for their future growth”. The account size is estimated at Rs30 Crores annually. This win comes soon after the recent wins at Lintas Media Group of Henkel,EdenCityand OCL.

     

  • With the increasing options available online and the easy way to find them, the internet makes customer fickle. This results in websites offering increasing levels of customer service to ensure that their customer is happy, says Suvir Khullar

    The Anchor: 5 trends to watch out for in e-com in India

    By Suvir Khullar

     

    1. Multiple channels in e-retailing

    A variety of SCM models are being created and new methods are evolving daily to procure/deliver products from varied brands/manufacturers. This helps offer a variety of brand and product options to customers with minimal investment in inventory and increase customer stickiness.

     

    2. Customer Service like never before

    With the increasing options available online and the easy way to find them, the internet makes customer fickle. This results in websites offering increasing levels of customer service to ensure that their customer is happy – from 100 per cent satisfaction guaranteed to Cash on Delivery to 5 minute deadlines to respond to customer queries and complaints.

     

    3. Promotion through Social media

    Social Media is gathering force and becoming an important tool for promotion. It reels in the customer with events and stories relevant to the product/ service being offered while informing his friends and colleagues his interests thus enticing them to view the same. Social Media is also giving the customer free rein to comment about his experience and keeping the website on its toes to offer the best service model.

     

    4. Brand Awareness

    The e-commerce platform is increasing the awareness of a brand among a large range of customers. Earlier for a brand to gain awareness, it was necessary for them to open an outlet in all major relevant locations. Now the brand outlet can be in a Tier 2 city and service its online customers across the country by showcasing its products online. This will also result in limited mindshare of brand names, as more and more take up space in the customers mind. Unknown brands during the pre e-commerce time will become household names now.

     

    5. Brand Loyalty to Website Loyalty

    The loyalty a customer had to his favorite brand has diluted with the advent to tempting deals and offers available across competitive brands. Now depending on the offers and services offered by an e-commerce site, the customers’ loyalty will be held by the site instead of the brand. The product that site offers will become the customers brand basket to choose from.

     

    Suvir Khullar is Founder & Director, Gifting Ideas Pvt. Ltd.

     

  • Internet advertising hit $84.8 billion in 2011, representing a 16 percent increase over the previous year, according to a new report from GroupM

    GroupM study says global web spends up 16% in 2011

    By A Correspondent

     

    Internet advertising hit $84.8 billion in 2011, representing a 16 per cent increase over the previous year and accounting for more than 17 per cent of all global measured advertising expenditures, according to a new report from GroupM.

     

    North America led the pack in terms of overall digital ad spending with an estimated $34.5 billion; Asia-Pacific came in second with $24.8 billion followed by Western Europe with $21 billion, according to the study, entitled This Year, Next Year: Interaction 2012.

     

    The study is part of GroupM’s media and marketing forecasting series drawn from data supplied by parent company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications. It was released on Wednesday by London-based GroupM Futures Director Adam Smith and New York-based GroupM Interaction Global CEO Rob Norman.

     

    The study also predicts that in 2012, digital advertising spending will reach $98.2 billion globally, almost 16 per cent more than this year.  The figure represents almost 19 per cent of all measured advertising investment.  In the 2012 forecast, North America once again ranks first with an estimated $38 billion in digital ad spend; Asia-Pacific follows with $31.4 billion followed by Western Europe with $23 billion.

     

    In the US, digital advertising spending hit $32.2 billion in 2011, representing a 22 per cent share of the overall domestic market and a 12 per cent increase over the previous year, according to the study.  This year those figures are expected to reach $35.4 billion for a 23 per cent share and a 10 per cent increase over 2011.

     

    The report also includes detailed commentary on the current state of various digital marketing developments and offers insightful observations on the evolution of digital communications and the inherent implications for marketers.

     

    “At the risk of an ‘oh really?’ response, it’s possible to argue that for the first time since these reports began that the last year has been one of evolution rather than revolution,” Mr Norman wrote in the report’s introduction.  “It seems that less is brand new and that a combination of scale of usage of an increasingly social and mobile web, the penetration of devices supported by it, and the continued atomization of audiences and content, in both their creation and distribution combine to tell the story of the year.”

     

    Mr Norman added: “In 2007 we speculated about a world that would be truly social, searchable, mobile, addressable and interactive and illuminated by data that could be collected and applied across all marketing functions; in 2012 that is no longer a matter for conjecture.”

     

    In addition to spending forecasts, the comprehensive, 20-country report also details ad investment in paid search and Internet display as well as providing data on broadband penetration, media time spent online and e-commerce per user data.

     

    Additional key findings in the survey include the following:

     

    • Digital advertising’s share of total ad investment rose from 4.4 per cent worldwide in 2004 to a projected 18.8 per cent in 2012.
    • The average percentage of consumers’ “media time” spent online increased from 11 percent in 2006 to 19 percent in 2011. The absolute number of broadband homes worldwide has nearly tripled in this period to reach 500 million, and the typical country has seen broadband penetration grow by half.
    • Aside from general monetary inflation, ad investment growth has two main vectors: aggregate audience hours, and advertising intensity per individual. Average online advertising investment per online user doubled between 2006 and 2011.  For 2011, Norway had the highest per-capita online ad investment in the study’s sample–$200.
    • E-commerce accounts for about 5 per cent of global retail sales today, with instant-on devices, secure and simple payment, vouchering, and the optimization of retail for mobile serving as catalysts for growth.
    • Consumer tablet penetration reached double digits in only three of the survey’s countries in 2011: the US, Finland and South Korea.  However, take-up is expected to be rapid and nine countries should reach double digit penetration in 2012.

     

  • Buyers of books (and other stuff) are now browsing more than ever, and not in the bookshop meaning. Flipkart.com CEO Sachin Bansal on the e-buying phenomenon.

    The Anchor: 5 indications that India is e-commerce-ready

    #1 Internet penetration

    The sheer number of internet users has grown drastically in the past decade. In 2001, the number of internet users in India stood at 7 million. In 2010 this figure had grown to 100 million (source: Internetworldstats). As a result, the size of the market that needs to be addressed by e-commerce players today is very different and has much more potential.

    This growth in internet users is also largely due to the fact that the key enablers for e-commerce are currently coming together in the Indian market. Aspects like broadband and credit card penetration, wireless connectivity, and penetration of hand-held and computing devices have found widespread acceptance today, unlike their limited penetration in 2001. Moreover with mobiles, especially smartphones, becoming more accessible to the average consumer, internet access through mobile platforms is also on the rise.

     

    #2 Multiple players investing to increase awareness and adoption rates

    The players currently operating in the e-commerce space are also of an extremely different mindset. Players are more organized, and understand and appreciate the value proposition offered by the industry far better. E-commerce companies are today making investments in technology and innovation that will serve to strengthen and grow their business in the long run. They are not looking at short-term business solutions but are interested in scaling up their operations over a period of time. They are also taking the trouble to understand the points of concern that consumers may have with respect to online shopping and taking the trouble to address that. At Flipkart, for example, we have started our own logistics company to smoothen last-mile deliveries. We also offer services and features like cash/card on delivery, EMIs and 30 Day Replacement Policies to deal with concerns like revealing credit card details or not being able to check the quality of products online.

     

    #3 Change in consumer mindset

    Additionally, an increasing number of Indians are now trusting online players as a reliable channel for shopping. Post the success of travel sites, more and more customers are beginning to appreciate the convenience of online shopping. They are beginning to realize that the choice, convenience and cost benefits of online shopping outweigh those of physical retail stores, and are turning to e-commerce for more and more of their shopping requirements.

    The industry is expected to grow by 47 percent in 2011 to reach Rs.46, 520 crore by the year-end, according to a report by the Internet and Mobile Association of India. Online retail (excluding travel ticket booking, etc.) will account for 6 percent, or about Rs.2, 700 crore, of the total market. By 2015, this space is expected to grow to about $10 billion. E-commerce users today stand at 10 million (including travel) and this number is constantly growing.

     

    #4 Popularity of online travel sites

    Certain sectors related to e-commerce have already proven themselves in terms of their growth and popularity. Online travel sites began to do well even when there were hardly any players in the online retail sector. This has given e-commerce companies the confidence that the Indian consumer is open to the idea of shopping online and the success story of online travel has consequently begun to rub off on other verticals as well.

     

    #5 Growing investment in an e-commerce eco-system

    Market trends are not going unnoticed and more and more professionals/industry bodies are giving serious consideration to e-commerce as a viable investment option. There have been extensive investments made in the e-commerce ecosystem by both government and private players. The realization that the industry players are in this for the long term and are building up their business, keeping in mind benefits to the consumer and the economy, have fuelled an interest that can only speak well for the Indian e-commerce market.

    We have been a big believer in the e-commerce story of India. With the country poised to become one of the largest e-commerce led economies in the world, we will continue to aggressively invest in this space and contribute to this growth story in every way we can.

     

    Sachin Bansal is the CEO and Co-founder of Flipkart.com.

     

  • With a booming retail market and over 100 million internet users in the country, e-commerce is likely to enter a high growth phase in coming years.

    Travel industry to lead e-commerce trade in India

    By A Correspondent

    With a booming retail market and over 100 million internet users in the country, e-commerce is likely to enter a high growth phase in coming years, economic advisor at the Department of Information Technology Mr BN Satpathy has said.

    Travel will continue lead the online trade of goods and services in India and globally as new business models emerge in e-commerce space, he said while addressing delegates at a conference organised by The Associated Chambers of Commerce and Industry of India (Assocham).

    Mr Satpathy said the government is working on a new Information Technology Policy which will propel the growth of low-cost, internet-enabled and hand-held devices. He asked business chambers like Assocham to be an interface so that industry data gathering and dissemination can be made online.

    Chamber secretary general Mr DS Rawat said the market size of e-commerce industry is expected to be Rs 46,520 crore by December 2011 with 81 per cent travel transactions and 6 per cent product purchases.

    “India is poised to be one of the top e-commerce hubs in the near future as number of internet users boom. This will bring in a new revolution in retail industry,” he said, adding that the size of e-commerce globally is about 700 billion dollars.

    Accelerated innovations have expanded the online retail market to $241 billion in Europe, $176 billion in the United States, $76.4 billion in China and $10.3 billion in India.

    The Indian retail industry is currently estimated at $520 billion and e-commerce is a sub-set of it. With high GDP growth rate figures, young population with a median age of 25 years, large and relatively insulated rural tracts coupled with people’s hunger for achievement, the country is projected to witness maximum growth coming from tier II and tier III cities.

    At present, small towns contribute 40 percent of all e-commerce transactions due to increasing broadband penetration. Industry experts say the numbers of people who have ever used internet and personal computer literates have increased to 88 million and 119 million respectively.

    India has the second fastest growing travel market globally which is estimated at $42 billion. Of this, the online travel market is expected to grow from $2.9 billion in 2008 to $7 billion by next year.

    Others who spoke during the conference were Mr Balendu Srivastava, group business director of e-Tech Group at IMRB International, Mr Kashyap Vadapalli, director of Category Management at eBay India, Mr Dhruv Shringi, co-founder and CEO of yatra.com, Mr Harish Bijoor, CEO of Harish Bijoor Consults Inc and Mr Bikky Khosla, CEO of tradeindia.com.

  • Flipkart.com’s founder Sachin Bansal talks about how the peculiarities of the Indian buyer have become the online store’s strengths.

    Flipkart: Making e-commerce click with an Indian flavour

    Sachin Bansal is the CEO and Co-founder of Flipkart and oversees all the customer facing activities of the company ranging from technology to marketing. He is also in charge of Flipkart’s corporate divisions which include the finance and legal departments. A graduated from IIT-Delhi with a degree in Computer Engineering, he joined Amazon.com in India in the year 2006. He left the company to set up Flipkart in 2007, and talks to Tuhina Anand about current developments and future plans.

    Q: With plans of Amazon firming up in India, how do you think this will affect Flipkart, considering the might of Amazon?

    E-commerce in India is at a very nascent stage. The industry is evolving and the growth will escalate with the entrance of serious players like Amazon. Such a development should boost the momentum that the e-commerce market is now witnessing. We do not see this impacting Flipkart’s plans to a great extent. We have met all the benchmarks that we had set for ourselves and will continue to do so in the near future.

    Q: Do you think that India is a different market and even a behemoth like Amazon can’t succeed unless it understands Indian sensibilities like Flipkart has, especially with its COD option which even FashionandYou has adopted to?

    Amazon has the advantage of being an established brand name. However, the challenges posed by the market in India are unique – from supply-chain and logistics to warehousing and payments. Any company which is starting operations in this country will have to invest time and resources to overcome challenges that most other companies operating in this space have already faced

    Q: There has been a lot of speculation on Flipkart looking for PE/VC funding. What is your response to it?

    We are not commenting on any speculation with respect to our funding.

    Q: What are some of the portfolio expansion in terms of selling that one should expect from Flipkart in the next few months?

    We have recently added categories like healthcare and personal products as well as home appliances. We will complete the entire gamut of electronics first and will then look at other categories. We will continue to add more products / selection to our existing categories as well. For example, we have recently added tablets, desktops and peripherals like printers and scanners to our computers category.

    Q: Any plans of partnering with Indian e-book reader companies to offer on Flipkart?

    We are keeping a close watch on this market and also studying similar models abroad. We will definitely give this space serious consideration when we see that the opportunity is right in India.

     

    Q: What would you say has been the reason for Flipkart’s success?

    We were confident of the space and the model we were operating in.  We continued to focus on delivering a positive customer experience by ensuring convenience and a hassle-free shopping experience at every customer engagement point, and this translated into strong word-of-mouth promotion for us.

    Our obsession with customer experience, coupled with offers, EMI options as well as setting up our own delivery network to take care of last mile delivery bottlenecks, has worked in our favour and made it easier for customers to trust us.

    What started off as a modest venture has gone on to becoming one of India’s leading online shopping destinations with 2,500 employees across the country. We are present across ten product categories – movies, music, games, mobiles and accessories, computers, gaming consoles, MP3 players and iPods, personal and healthcare products and home appliances – and are still growing. In books alone we have nearly 11.5 million titles, making us the largest online book retailer in India.

    We now have a registered user base of 1 million customers and are currently selling 22,000 items a day, clocking daily sales of Rs 1.5 crore.

    Q: Recently, the brand has been active in advertising, especially with the new TVC; what really prompted this move at this point of time? How are these TVCs being supported offline?

    While most consumers in Flipkart’s core target group understand the benefits of online shopping, such as selection, price and convenience, many are held back by apprehensions associated with online purchase of physical goods. These range from shipment of faulty products, delayed or lost shipments and the reluctance to divulge credit card details online.

    The campaign, which talks of some of our path-breaking initiatives like payment on delivery, product warranty and 30-day replacement policy, seeks to address these concerns and bring those shopping offline into the online space.

    Our national campaign on TV and print is being supported by other mediums like OOH and radio. These will be used to expand reach in markets that already have high e-commerce penetration like Mumbai, Delhi and Bangalore.