MxMIndia

Tag: flipkart

  • The e-commerce firms are investing heavily in the current edition of the Indian Premier League (IPL) for buying onair advertising space

    Amazon, Flipkart investing heavily on TV ads during IPL

    By Pritha Mitra Dasgupta

     

    A clutch of e-commerce companies are investing heavily in the current edition of the Indian Premier League (IPL), the country’s most glamorous cricketing extravaganza, for buying onair advertising space.

     

    Companies, including Amazon India, Flipkart and Go Daddy, have invested heavily in IPL7, confirmed Rohit Gupta, president of Multi Screen Media, the official broadcaster of the tournament. Multi Screen Media will have nine presenting and associate sponsors for this season of IPL.

     

    “This is at par with previous seasons of IPL where we had eight to 10 sponsors,” Gupta said. The presenting sponsors include Vodafone and Karbonn Mobile and the associate sponsors are Amazon India, Havells, Perfetti, Marico and TVS.

     

    According to Gupta, while the presenting sponsors have paid anywhere between Rs 50 crore andRs 60 crore, and will get airtime of over 200 seconds per match, the associate sponsors have paid Rs 25-35 crore and will get over 100 seconds of advertising time per match.

     

    “We will be signing two more associate sponsors next week,” he added. The channel has already sold 60-70% of its on-air inventory at Rs 4.75-5 lakh for a 10-second spot.

     

    Amazon India, which launched its operation in India 10 months ago, will be launching its first Indian television commercial during IPL 7. The company’s print and online campaigns have been created by Taproot and the media mandate is being handled by IPG Group company Initiative Media.

     

    “Amazon.in is working across platforms for the IPL season. In line with our vision to be the most customer-centric company, we have spent the last 10 months building on our favoured, trusted and reliable global brand,” Amazon India’s spokesperson said, but declined to divulge the details of the TV commercial. “As our target customers around the country will be watching IPL, we hope to entice and delight them with our trusted online shopping experience.”

     

    Sharing the advertisement space with the e-commerce firms is first-time entrant and two-wheeler maker TVS.

     

    According to Gupta, the Supreme Court verdict helped iron out the initial hiccups in signing the deals. “There was a lot of skepticism and apprehension in the beginning whether the tournament will happen or not and therefore we faced a lot of challenges in closing the deals with advertisers. But once the Supreme Court verdict came in favour of the tournament within 7-10 days, we closed most of the deals,” he said.

     

    A senior media planner attributed the surge in advertiser interest to the IPL brand. “Good or bad, there is no other property on television which can give the kind of mileage that IPL can deliver. And the tournament has built so many brands over the last six years, especially mobile handset brands like Micromax, which has now become aglobal player,” the media planner, who did not wish to be named, said. Multi Screen Media is expecting a spike in viewership to over 200 million, according to Gupta.

     

    “Firstly, the number of matches has come down to 60. Secondly, this year, there are fewer afternoon matches, which tend to get low viewership. Finally, because of the player auction, there are no clear favourites. Anyone can win the tournament. We believe all these factors will culminate into high viewership this year.”

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • The fashion portal has got the two top agencies to spearhead a marketing strategy in order to maintain its leading position in apparel retail

    Myntra hopes to maintain high with Lowe & Ogilvy in tow

    By Radhika P Nair

     

    Myntra, a fashion portal, has roped in advertising agencies Lowe Lintas and Partners and Ogilvy India Worldwide to spearhead its marketing strategy in a bid to maintain its leading position as an online apparel retailer.

     

    The Bengaluru-based company will also create separate brand identities for a few of its in-house labels that it plans to sell on other portals and offline stores, as these will provide higher margins. While Ogilvy will focus on the private-label branding, Lowe will handle the overall strategy for Myntra.

     

    Companies such as Flipkart and Myntra are vying for a pie of an overall online retail industry worth more than $3 billion ( 18,000 crore). Lifestyle, including fashion, accounted for 35% of the industry. Myntra aims to be a 10,000-crore firm in the next three to four years and is targeting 1,500 crore in sales during the next fiscal year.

     

    “A couple of our private labels have become quite large and we will now create a brand identity for them beyond Myntra,” said Vikas Ahuja, Myntra’s chief marketing officer. “They will also be available in other online and offline stores by end of the year.” Some of the private labels in the company’s stable have the potential to become a 500-crore brand in two years, Mr Ahuja said.

     

    The company is also finalising kidswear and men’s formalwear ranges to be unveiled in the coming months. A private label is a range of products manufactured and sold by a multi-brand retailer. While third-party apparel brands provide margins of between 30% and 40%, in-house labels can provide over 60%.

     

    Mr Ahuja said the appointment of the two agencies was the next step in the company’s journey. “Our objective is to be the largest and preferred fashion destination in the country. Brand communication is almost as important as the products on offer,” said Mr Ahuja, who was Nestle India’s country business manager til last year.

     

    Online retail market leader Flipkart, on the other hand, has so far used a little known Bengaluru-based agency, Happy Creative Services, which came up with the retailer’s distinctive kids-masquerading-as-adults ads.

     

    Lowe’s recent ads include the one for Tanishq which was scripted around the topic of remarriage and the series of Micromax ads featuring Hollywood actor Hugh Jackman.

     

    While Myntra and the agency did not go into specifics of the marketing strategy, G V Krishnan, Lowe’s executive director, said the focus will be on creating a ‘fandom’ for Myntra. “We want to make the brand endearing, aspirational and yet inclusive to all its consumers.”

     

    Myntra’s Mr Ahuja said the company is still finalising the private labels around which they will announce specific marketing campaigns. The firm, which raised $50 million (over Rs 300 crore) earlier this year, has a range of western casual wear labels for men and women and an ethnic wear label for women.

     

    Poran Malani, president at Ogilvy India Worldwide, said Myntra was “forging the New Digital India.”

     

    It makes business sense for Myntra to create specific campaigns around their successful labels, Aashish Bhinde, executive director at financial services firm Avendus Capital, said. “The idea is to bring in higher margins and they will keep introducing private labels for that.”

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

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  • From Rs 10k to $1bn, how the cart didn't flip & flop for Sachin & Binny Bansal + how the Bansals lord over e-commece-land

    Billon Dollar Bansals

     

    By Radhika P Nair

     

    It was a 10,000-a-month allowance from their parents for almost 18 months that helped Sachin Bansal and Binny Bansal launch an e-commerce website retailing books in October 2007. Today, the near-20% stake they hold, along with the top management, in Flipkart is valued at almost Rs 2,000 crore.

     

    Sachin Bansal

    Sachin Bansal, the chief executive of Bengaluru-based Flipkart, says he has a knack for underestimation. That is exactly what happened in March 2011 when he and Binny Bansal, who are not related to each other, announced they would reach the $1-billion (Rs 6,100-crore) sales mark in 2015. Last week, the site, which now sells everything from books to electronics, apparel and jewellery, reached the milestone, a full year ahead of the target.

     

     

    Flipkart, Lenskart, Myntra & Snapdeal: All have Bansals at the helm

     

    By Biswarup Gooptu & Harsimran Julka

     

    Even a decade ago, the name “Bansal” would have brought in images of coaching classes in Rajasthan’s Kota, but today it is the common factor binding the who’s who of India’s fledgling e-commerce sector.

     

    Five young men who answer to that name have emerged as trailblazers of Indian e-commerce, taking on global biggies like Amazon and eBay for top honours in the country’s exploding market for online retail.

     

    Online marketplaces Flipkart and Snapdeal, apparel retailer Myntra and eyewear retailer LensKart all have Bansals at the helm. Such is their clout that they account for nearly Rs 10,000 crore of the total online retail pie of about $2 billion.

     

    But their adeptness at trade and commerce is not a state secret. As a sub-sect of the Aggarwal community, the Bansals are known for running a tight ship when it comes to business and entrepreneurship.

     

    “We (Bansals) have the math, finance and data skills that are extremely important for e-commerce,” said Rohit Bansal who teamed up with schoolmate and Wharton alumnus Kunal Bahl to set up online marketplace Snapdeal in 2010.

     

    The Bansals of the new economy also sport degrees from IIT and IIMs. The five Bansals with their four companies – Flipkart, Myntra, Snapdeal and LensKart – set up shop within the last seven years and control about 85% of India’s entire e-tailing industry.

     

    But they have to contend with the might of $75-billion (Rs 4.5 lakh crore) Amazon, which entered India last year and is investing heavily.

     

    Heading the fightback are Sachin Bansal, 32, and Binny Bansal, 31- founders of Bengaluru-based Flipkart – who met each other while studying at IIT-Delhi. Their company today generates about Rs 6,100 crore in sales, half the industry total.Flipkart is also the biggest challenge for Amazon, a company where both the Bansals honed their skills before setting up on their own in 2007. Coming second is Snapdeal, whose Rohit Bansal, 31, graduated ahead of Sachin and Binny from IIT Delhi.

     

    “My ancestors from my paternal and maternal sides have all been businessmen,” said Rohit Bansal, who is from Malout, a small town in Punjab, just four hours from Chandigarh where the Bansals from Flipkart grew up.

     

    Snapdeal’s turnover is now half of Flipkart, and it is expected to cross the $1 billion mark next year. The Bansals are making a mark not just in horizontal marketplaces, but also single-category retail. Bengaluru-based Myntra Designs, founded by another IITian Mukesh Bansal, is giving stiff competition to Flipkart in apparel, one of the highest-margin categories, where profits range from 30 to 50 percent.

     

    “It has come full circle with me getting in fashion retail online,” said Mukesh Bansal, CEO at Myntra, who hails from Haridwar. His father had opted for a public sector job over joining the family business — ironically, clothes trading. “No family influence made me think of entrepreneurship. But the startup bug bit me in Silicon Valley,” said Myntra’s Bansal, 38, who moved to India to start Myntra in 2007. His venture is targeting sales of Rs 1,500 crore next fiscal from apparel sales, the largest in its category.

     

    LensKart, founded by another Peyush Bansal, 30, is considering selling his other portals such as WatchKart, BagsKart and JewelKart to a horizontal player at the ‘right price’ to focus on the eyewear market. “My parents didn’t understand while I was starting up. But they came around later. You have to understand that they are products of their generation,” said Bansal, who is targeting revenue of Rs 100 crore from LensKart next fiscal.

     

    RBI Chair Professor for Economics & Social Sciences at IIM Bengaluru Charan Singh says that a community’s dominance over a certain trade is a factor of its social interactions. “It can be likened to the Jewish community in the US which continues to hold top posts in US banking and technology industry.” Ashish Jhalani, head of retail advisory firm eTailing India, agrees. “Certain communities in India do encourage entrepreneurship. The Bansals and Aggarwals have definitely dominated businesses in India, particularly retail trading, for centuries.”

     

    (With inputs from Radhika P Nair)

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

    “To say billion-dollar in 2011 was crazy when we were doing a $10 million (Rs 61 crore) run rate,” says Sachin, 32, in his first interview after the firm achieved the sales target. “It was just a belief.”

     

    Sachin, like his co-founder, grew up in Chandigarh. That is not the only coincidence. Both went to IIT-Delhi and worked at different companies for about a year before ending up in the same team at Amazon. It was during this stint that the two decided to start up.

     

    The duo pooled in Rs 2 lakh each and with two computers launched the site from their two-bedroom apartment in Koramangala, a primarily residential locality in Bengaluru where the company now has multiple offices. For 10 days, the site did not see a single sale and then a customer from Andhra Pradesh placed the first order for the book ‘Leaving Microsoft to Change the World’ by John Wood.

     

    “We were not thinking about numbers then, but we knew something big can be built out of ecommerce,” says Binny. The two co-founders, who have a tendency to finish each other’s sentences in conversations, are close friends. What has helped maintain the bond through the ups-and-downs of entrepreneurship? “By fighting every day,” says Binny, 31, as the two burst out laughing. “But seriously, it is important to know what the other guy is thinking. That becomes very important as the message and the thinking become consistent. Communication is key.”

     

    The two are demanding bosses, say their employees. “Both have high expectations, but that raises our bar. That makes working with them rewarding as well,” says Amod Malviya, head of engineering at Flipkart. He says the Bansals have complementary personalities. While Binny is analytical and driven by logic, Sachin is more instinctive and is driven by emotion and passion, says Malviya, who joined the company in 2010 as a senior manager.

     

    Employees are also impressed by the simplicity the duo has managed to retain. As they live close to work, both walk to office. They also fly and stay budget while travelling and eat with other employees whenever possible. “They are very much in the Azim Premji mould and shy away from ostentation,” says an employee, who did not want to be identified.

     

    Experts say the success of Flipkart can be chalked down to the founders’ attitude. “The two have the right attitude. They are cocky and confident, and along with that they have the ability to execute,” says Arvind Singhal, chairman of retail consultancy Technopak. This attitude has helped them deal with the ever-shifting baselines in Indian ecommerce.

     

    After raising about $190 million (over Rs 1,150 crore) until 2012 from Tiger Global and Accel Partners, industry insiders had begun questioning the viability of the business, which was burning about 50 crore of cash each month. In 2012, the company took action, by tightening its employee base, using more technology to cut costs and shutting down its music downloads category, which was not scaling up. More importantly Flipkart, which started out as a direct seller of goods, changed to an asset-light marketplace model where multiple merchants, along with the company’s own WS Retail, sell to customers on the site.

     

    In 2013, the company raised $360 million (about Rs 2,200 crore) in two tranches, primarily from South African Internet major Naspers at a whopping valuation of $1.6 billion (Rs 9,772 crore). At the time, Sachin termed the cash infusion as a “great validation” and one which refuted the scepticism about his company in particular and Indian ecommerce in general.

     

    Supam Maheshwari, founder of online babycare site Firstcry, says Sachin and Binny Bansal managed to find early investors who kept backing them. “They executed well, especially in logistics and warehouse, and did not lose focus,” says Supam. “But they have had to spend a lot to reach the billion-dollar mark.”

     

    Flipkart’s sales milestone could also send out a signal to international players that the Indian ecommerce market is mature enough for them to enter, says Maheshwari. One such player could be Alibaba, which only has its business-to-business portal at present in the country.

     

    Comparisons with Alibaba’s Jack Ma are inevitable. Jack too started out from a small apartment in China’s Hangzhou in 1999.

     

    Jack diversified into payments, cloud computing and multiple ecommerce models. Bansals have made their intentions to diversify clear and have already done so by opening up their online payments solution and logistics for use by other Internet companies.

     

    Jack has, however, already beaten Amazon in China. Alibaba expects to triple the volume of transactions to $490 billion (almost Rs 30 lakh crore) in 2016. For Flipkart, the battle has just begun. Peyush Bansal, founder of Delhi-based eyewear e-tailer Lenskart, says competition will intensify between the large multi-category portals. Amazon, which entered the Indian market a little over six months ago, has rapidly expanded into 18 categories of products and has been busy setting up its logistics and warehouse network. Snapdeal, which is targeting $1 billion in sales next year, recently raised a further 830 crore from investors led by eBay. “The site that would come out on top could be the one with the deepest pockets or the one with the best economic efficiencies,” said Peyush Bansal.

     

    Technopak’s Arvind says Flipkart, which employs about 10,000 people, will have to continue to maintain its lead in technology, customer experience, supply chain management and consumer logistics to hold onto leadership.

     

    “It is like a three-hour movie where just the first 30 minutes are over; the plot is still unfolding,” says Arvind.

     

    Flipkart, which has over 1,000 sellers on its platform, is now shifting focus towards scale with intelligence, which will lead its mobile commerce drive. Sachin believes mobile will revolutionise ecommerce and Internet businesses. “My four-year-old son does not even understand keyboard. He expects the television to also be a touchscreen device,” says Sachin, who expects Flipkart to become a mobile commerce platform in the near future with features customised to individual users. “The next six-and-a-half years are going to be even more exciting.”

     

    (With inputs from Biswarup Gooptu and Harsimran Julka)

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Flipkart hits $1 billion in sales, a year ahead of schedule

    Billion dollar baby Flipkart crosses miletone faster than Amazon

    By Radhika P Nair

     

    Indian ecommerce flag bearer Flipkart has hit $1 billion in sales. This is a coming of age for Indian ecommerce as the market leader hits the target a year ahead of schedule. Global ecommerce giant Amazon reached the same target seven years after its launch. Flipkart, launched in October 2007, has achieved this milestone a few months faster.

     

    “We are really proud and excited to announce that we have hit a run rate of $1 billion GMV (gross merchandise value) one year before our target,” said co-founders Sachin Bansal and Binny Bansal, in a joint message. “In March 2011 we announced that by 2015 we wanted to hit $1bn in GMV. At that point in time our run rate was $10 million.”

     

    Flipkart, which started out as an online retailer of books, has raised over $550 million in risk capital funding. The company, which is backed by South African internet major Naspers and investments funds like Dragoneer Investment Group, Morgan Stanley Investment Management, Tiger Global and Accel Partners, was valued at $1.6 billion when they raised $360 million last year.

     

    The company, which started out as an inventory retailer, pivoted to an online marketplace in 2012. The company, which ships out over 1 lakh orders a day on an average, now has about 1,000 merchants on its platform.

     

    The Bengaluru-based firm, which has over 10,000 employees, has also grown beyond ecommerce. It spun out its payment solution PayZippy into a separate entity last year. This service is used by other internet companies like MakeMyTrip, Zansaar and Yepme. The company is also opening up its logistics arm, eKart, which supplies to 150 cities, to other online retailers.

     

    The company is also increasingly focusing on mobile commerce, as over 20% of its sales already comes from handheld devices. Sachin Bansal, in an earlier conversation, had said that in the near future Flipkart.com would be a m-commerce based marketplace.”

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

     

  • Flipkart India retained the Pune-based strategic design firm to design it's private label fashion brand 'flippd'

    Flipkart gets Elephant Design to create identity for ‘flippd’

    By A Correspondent

     

    Flipkart India got strategic design company Elephant to design flippd, its recently launched lifestyle label.

     

    The designs aims to be vibrant and bold with a youthful attitude that is sure to appeal to the young, trendy online shopper.

     

    “Our lifestyle category, though fairly new, has been doing extremely well. We felt the time was right to extend our range of offerings in this space. The flippd brand is all about vivid colours and witty expressions on a wide choice of casual clothes and accessories. It’s aimed at the  young fashion conscious generation that thrives on trends.” said Ankit Nagori, VP – Retail, Flipkart India Pvt Ltd.

     

    Speaking about the visual identity, Ashwini Deshpande, Founder-Director Elephant said, “flippd visual identity is created with a doodle-happy hand to showcase a casual yet self-expressive language. Black is the basic colour of this visual language as it can stand out on any colour or surface. A young colour palette supports the identity with flexibility of applications. ”

     

  • Online retailer Flipkart.com has mopped up a further $160 million ( Rs 976 crore) from mostly new investors, taking the total in the fifth round to $360 million (Rs 2,196 crore).

    With $160 mn fresh funding, Flipkart’s $1.5-bn valuation comparable to P&G India, Tata Global Beverages

    By A Correspondent

     

    Continuing its capital-raising successes, online retailer Flipkart.com has mopped up a further $160 million ( Rs 976 crore) from mostly new investors, taking the total in the fifth round to $360 million ( Rs 2,196 crore).

     

    The latest funding values Flipkart, considered the Amazon of India, at over $1.6 billion, or Rs 9,760 crore. This is similar to its valuation in July, when it raised $200 million. Incidentally, Flipkart is worth more than the total market cap of all 15 listed retail companies, including Future Retail, Shoppers Stop etc. Among brand-led firms, Flipkart’s valuation is comparable with heavyweights such as P&G India and Tata Global Beverages (Tata Global Beverages owns Tata Tea, Tetley and Himalayan). It is also more valuable than 28 banks, including the likes of IDBI Bank, Union Bank, Central Bank of India, etc.

     

    Investment advisory firm Dragoneer Investment, investment bank Morgan Stanley Investment Management, private equity firm Sofina and Vulcan Capital participated in the latest round. Tiger Global – one of the first backers of the Bangalore-based company – also invested.

     

    “It’s the quality of the asset that is attracting investors,” said Raja Lahiri, partner at advisory firm Grant Thornton India. “E-commerce is a cash-intensive business. The top four-five players in this space will keep attracting investments in the next few years.”

     

    Experts point out that the latest fund-raising by Flipkart is an indicator of the growth potential of the Rs 10,000-crore online retailing industry, which is expanding at 54% annually, according to Internet and Mobile Association of India. E-commerce is expected to grow to $200 billion ( Rs 1.2 lakh crore) in India by 2020.

     

    Besides Flipkart, online marketplace Snapdeal has so far raised about $50 million ( Rs 305 crore) while fashion e-tailer Myntra received about $25 million ( Rs 152 crore) in risk capital.

     

    “These new investors are willing to participate again if required like Naspers, Accel, and Tiger. Investor alignment with our strategy is very important,” said Sachin Bansal, 32, co-founder of Flipkart.

     

    Started as primarily an online book store in 2007 by two former Amazon India employees – Sachin Bansal and Binny Bansal – Flipkart has till date raised $541 million (Rs 3,300 crore). In the first phase of this round, Flipkart raised $200 million from South African Internet company Naspers, venture fund Accel Partners, and investment firms Tiger Global and Iconiq Capital.

     

    The company has ventured into payment gateway solutions this year by launching PayZippy. Flipkart, which employs close to 3,000 people, has close to 10 lakh visitors on its website every day.

     

    The company’s revenues were Rs 217 crore in 2011-12, according to a filing with the ministry of corporate affairs. But in 2012-13, it soared to an estimated Rs 2,000 crore.

     

    “Flipkart has got its timing, investments and vertical business strategy right,” said Rajesh Sawhney, angel investor and founder of GSF Superangels. “It will be difficult to replicate Flipkart’s success again, as that phase of scale is already over. New entrepreneurs will have to mine newer verticals.”

     

    The company changed its model from being inventory led to that of an online marketplace earlier this year.

     

    As per India’s current FDI rules, foreign investors are not permitted to invest in branded online retail business. Some experts feel that the change in model is also attracting foreign capital.

     

    The participation by San Francisco-based Dragoneer Investment Group ratifies Flipkart’s success globally. A long-term investor, Dragoneer, has backed companies such as Facebook, Alibaba and 360Buy in the past.

     

    “All our investors think long term; this is patient capital,” said Mr Bansal. “Dragoneer also brings a network that is really helpful.”

     

    With inputs from Ramkrishna Kashelkar

     

    Source:The Economic Times
    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved
    Licensed to republish

     

  • The e-commerce major's new four-ad campaign is titled 'India Wants to Know' and the anchor is an Arnab Goswami lookalike

    Flipkart spoofs Arnab Goswami’s ‘India wants to know’ in new TVCs

    By A Correspondent

     

    For India’s leading ecommerce player Flipkart, the greatest stumbling block is convincing consumers of the safety, speed and ease of buying. Almost all of its commercials till date have helped drive home the message in an interesting way. “You have to say many things in the commercial,” reasons Kartik Iyer, Chief Executive Officer, Happy Creative Services which has created the new set of TVCs

     

    Continuing with using kids as adults in funny settings,  the new campaign attempts to do the same: educate the consumers about the benefits, ease and convenience of shopping on Flipkart.com. But zara hat ke. It uses a news channel discussion format with various people highlighting the benefits of the ecommerce provider’s service.

     

    Nothing unusual about it so far. Except that the campaign is titled ‘India Wants to Know’ and the anchor is an Arnab Goswami lookalike. The Times Now editor-in-chief and star anchor of the primetime show ‘Newshour’ has built a reputation of being tough on his guests and often uses the line “India wants to know” or “India wants the answers”.

     

    In the first commercial, one of the characters for instance is fashioned on adman-turned-lobbyist Suhel Seth who is a regular face on news channel discussions. And the anchor shakes his head quite like the reigning star of English news television does on his nightly show.

     

    “We’re pretty excited as it’s the first time a reflection of media content has been attempted in advertising, in the country,” said Mr Iyer, adding: “What needs to be said needs to be said without twisting things around too much. Hence the need for an entertaining format that will make the country sit up and notice.” Not getting drawn into a discussion on the comparisons with Mr Goswami, Mr Iyer said: “It’s not going behind an individual. We are using a sentiment of society and what’s all over social media.”

     

    On the new campaign, Ravi Vora, Vice President -Marketing, Flipkart, commented, “As the largest online shopping destination in India, we have managed to build the confidence of a large number of Indians to shop online. However, this is still very small compared to the number of Indians active online. Most of them are still reluctant to complete the transaction online. Hence this campaign is a continuation of our efforts to make people shop online by talking about benefits like large selection, competitive pricing and customer-friendly policies.”

     

    Mr Iyer added that the campaign will be seen across all the GECs since the brand intends to target people who are still apprehensive about online shopping. We would suggesting sponsoring Newshour on Times Now. And playing the commercial in the breaks. What say, Messrs Vora and Iyer?

     

  • Kartik Iyer and Praveen Das of five-year-old Bengaluru-based agency Happy Creative Services insist on not compromising on results

    Happy route to success

     

    By Tuhina Anand

     

    When they are not playing successful admen, Kartik Iyer and Praveen Das, are dutiful husbands and loving fathers. Five years back, the duo joined hands to launch Happy Creative Services and there’s been no looking back since. Interestingly, the duo had never partnered before and their first work together was at Happy. What makes Happy an interesting story is that these men were no celebrities before they started their venture unlike many on the entrepreneurial road who have reached at the helm of an agency and then decide to go on their own. So pretty much a risk that Iyer and Das took but a risk definitely worth taken.

     

    L to R: Praveen Das, Kartik Iyer

    Happy was first noticed for its work on Lee which came to them when they set shop. Since then they have gone on to do many notable work. Their association with the e-commerce behemoth Flipkart has won them both awards and accolades. In fact, Flipkart works have catapulted Happy if one may say in a ‘Happy state’ as these works have been noticed by many. Besides, the works have helped Flipkart in debunking many myths related to online shopping and the biggest achievement being that it helped in creating the brand Flipkart. If people know of Flipkart today the credit to a large extent also goes to Happy for helping in creating the brand.

     

    Mr Iyer in fact pointed that with changing economies and new age companies being launched, there has emerged a need for new age agencies. He said, “The world is changing at a rapid pace.  While there are old school companies that are married to their agencies and the creative team might come and go or the quality may differ but it would not impact their relationships as they are pretty much set in stone. But in an era when new businesses are being born not from HUL and Tata, there also is a need for new age people and new age thinking.”

     

    “In any market one is willing to try anything that is new but the key is that you should be good to succeed. Initially when we launched, I think we were like a new packet of juice in the market, every client wanted to meet us especially after the Lee campaign but the challenge is to take new businesses and delivering quality work which is superior and consistent.”

     

    The Bengaluru-based agency has recently expanded its footprint to Mumbai. However, the decision to be in Mumbai has to purely do with the fact that it helps them in servicing their clients better who are based in the city. The base camp very much remains Bengaluru. In fact, their inspiration to set shop and be successful in the laidback city of Bengaluru which is known more for its IT than its creative prowess comes from the city’s other success story- Nirvana Films. Nirvana has done several successful big brands films even though they are based in Bengaluru  so pretty much a good example to follow for Happy.

     

    When Messrs Iyer and Das who were both at Ogilvy decided to start on their own, they pretty much didn’t have a plan in place but oodles of energy and enthusiasm. They chatted and discussed for almost 30 days and from there emerged Happy. Mr Iyer said, “That’s the secret of our story that we didn’t have any plan. But yes as we talked, we became clear how we will be different, what will be our offering, what will be special about us and that’s how a broad framework emerged. Even today we are totally open to learn and adapt. I think the uninformed choice is much better which we followed when we started.”

     

    Mr Das, the quieter of the duo however added, “It’s definitely not been an easy run but both of us are ambitious as well as driven to make Happy happening. If we were to start all over again today and knowing what all we had to do in the process, I don’t know if we could do it.”

     

    The agency takes pride in the fact that almost 80 percent of their clients have come back to them for more work in future. As any business, there have been hits and few misses but the key has been to move away as quickly as possible once realizing that it’s a bad deal they have got into.

     

    On the Happy edge, Mr Iyer pointed, “We try and work on big ideas. We are good at building brands and that’s our forte.”

     

    Mr Das too added, “There is no bigger joy than creating a brand from scratch. We can always do campaigns for existing brands but to create something new is where we excel and that is our difference. We bring enthusiasm and new energy to brands we work on.”

     

    The agency has 35 people on board and that’s been a conscious decision on their part to not grow mindlessly but be small and be involved personally with their clients brands. Focus being to deliver work that is result-oriented after all that is what matters – creativity that is geared towards achieving results for the brand.

     

    As for the duo and their equation with each other, as Mr Iyer puts, “There are no arguments or fights, that’s not a culture we endorse in our agency. We listen to each other but there are no ego clashes. If there were any, we wouldn’t be Happy people!”

     

  • Questions marks on the business models of ecommerce have led to worries on what lies ahead for click-and-shops

    Is there money to be made in e-commerce?

     

    By Tuhina Anand

     

    There has been a lot of buzz surrounding e-commerce, what with new sites being launched every other day, investment galore and customers finally warming up to buying more than air or train tickets online, one would think that the category come of age.

     

    However, if the front-end gives an impression that everything is hunky dory, a closer look will throw up a completely different picture. There are several reports doing rounds on how Flipkart, the site which is largely responsible for rewriting the game of e-comm is bleeding profusely and unofficial estimates put the losses to around Rs6-7 crores monthly. One does wonder if this is the scenario, then how it is with other e-comm sites and what lies ahead for the players.

     

    Kashyap Vadapalli

    Kashyap Vadapalli, Chief Marketing Officer, eBay India said: “There is a lot of buzz around e-commerce – new funding, new player announcements, consolidations and closures, expansions into new areas of business – all making news and hitting the consumer consciousness. However, it is certain that e-commerce is here to stay. Reputed players in the e-commerce industry are focusing on building consumer trust by evangelising online shopping’s benefits to them. This is probably of as much importance as it is to convert internet users to online shopping.”

     

    “There is a significant increase in supply side dynamism, especially over the last 2-3 years, where we have seen large brands, manufacturers and offline retail chains increasingly showing interest in the e-commerce opportunity. Once brands with offline recognition participate in e-commerce, comfort levels for end users will also increase. The fundamental characteristic of building a successful e-commerce business is one that provides consumers with ‘selection’ or ‘variety’ and not just ‘deals or value for money’,” he added.

     

    An interesting facet is that for the many outside the few cities where modern retail has penetrated, online shopping provides access to brands which are not available in their city or town, bridging distribution inefficiencies. eBay India Census 2011 identified buyers from 3,311 Indian cities which are shopping online covering all 28 states & 7 union territories of India.

     

    The Internet & Mobile Association of India (IAMAI) has estimated Indian eCommerce market to be worth Rs46,520 crore or $10 billion in 2011, with a user base estimated at around 10 million people.

     

    Ravi Vora, VP – Marketing, Flipkart said: “The e-commerce story in India is still to reach its full potential. 2011 was the year when this industry finally started to come of age. Today, increased attention from serious players and investors has given this ecosystem a much needed boost. Consumers too are slowly buying into the concept of online shopping – and as online companies continue to improve on their service experience, we see this trend continuing. It’s true that we are seeing the entry of lots of players in the current scenario – and going forward we do expect to see some consolidation in this space. However, the India n e-commerce story is far from over. In fact, in the near future we expect to see it become as robust a model as offline retail is in the country today.”

     

    Mr Vora of Flipkart elaborates that the domestic market has a lot of potential: “The company is scaling up business in order to be able to make the most of it. Our initial customers were the urban, net-savvy youth. However, with our current campaign we have started focusing on offline shoppers, especially in tier 2 and 3 cities. We believe this is where the growth will come from in the coming months – and our aim is to convert these offline shoppers to the online mode. Additionally, we are betting big on the digital business. We think it will expand a lot in the near future and have already made our debut with our online music download service – Flyte.”

     

    K Vaitheeswaran

    While the players talk about potential, and the largely untapped, market in tier II and III towns, there is another side of the story. K Vaitheeswaran, Founder & CEO, India plaza.com, one of the pioneers in online shopping in India, having founded www.fabmart.com in 1999 and later acquired and rebranded as Indiaplaza.com, has been through two cycles of boom and bust in the dotcom. He is of the opinion that the category has already begun to see some correction: “Unlike the first time when most e-comm companies had to shut shop, I think now the scenario will be different. Now the customers have experienced online shopping and know its merits so what one would see is consolidation in this category.”

     

    For him the mantra for success has been by “keeping a ruthless focus on cost management”. So no snazzy address and definitely no stocking inventory or having a warehouse, but focus is on great selection of products, good pricing and timely delivery. It’s a simple market place structure where they have vendors who provide goods and they manage the backend. Mr Vaitheeswaran said: “If you look at our ROCE (return on capital employed), I think we will top in profitability. Today most players are burning money; I mean how can a business be profitable if you are losing money faster than you are making and you are mindlessly growing operations cost? I think its high time people look at e-comm as a business and not merely as hobby.”

     

    The estimated size of the e-commerce industry is Rs2,000 crore (that is if one is looking at margins) minus the travel. This has been growing at 50 per cent, especially last year.

     

    In this growth, Flipkart has played a role which cannot be undermined. With its superfast delivery mechanism and COD (cash on delivery) option, it has revolutionized the e-comm market in India. Its high decibel campaign addressing deterrents in e-comm has also helped in making e-comm amenable to Indians, besides helping the company create a brand name for itself, which has a high recall. However, this has come at a cost for the company. Its investors – Tiger Global Management and Accel Partners (the latter did not revert on our query) – it seems are not keen on investing any further. Hence, now for Flipkart, which has recently acquired Letsbuy.com, the option is to be either open to acquisition by a global giant or look for a larger PE investor.

     

    Mahendra Swarup

    Giving his take, Mahendra Swarup, Partner, Avigo Capital, said: “In the long run, e-commerce will grow, given that internet penetration in India will only rise and more number of population will become comfortable with the medium.”

     

    He believes what has gone wrong is the way e-comm companies have been structured. What the companies have been selling on the net is a value proposition, while at the same time, the cost of customer acquisition remains high. In fact, in many categories like the books there is hardly any margin. He said: “The VC’s have taken the e-comm business to scale, but after a point there is a need for large PEs to come to rescue as in the case of Flipkart.”

     

    Mr Swarup’s company Avigo Capital has not invested in any e-comm sites as he said: “we are not interested in that game”. He makes a relevant point when he says that most e-comm sites have failed to create a mature management and have been stuck at the entrepreneur level, unlike in other parts of the world where entrepreneurs take back seat and hand over the reins in able managers while still remaining the face of the company, fine example being Google and Facebook.

     

    Also their supply-chain management is not that mature, so in reality, they haven’t created anything that will be attractive for a PE to invest: “I think many small e-comm companies who are non-funded have a better chance to survive than the funded ones.”

     

    Mr Swarup said that the whole talk of Amazon buying Flipkart holds no value as the latter has created no value or attractive proposition for the former to buy and as far as customer loyalty on the web is concerned, none exists. He feels niche players providing specialized merchandise like bikes, mountaineering equipments or kids clothing and accessories have a better chance of survival.

     

    However, the whole e-comm buzz has helped players who remained dormant after creating e-comm platforms on their sites. A large player has seen 100 per cent growth in last year by just tweaking its website and catalogue changes with no additional cost. In fact, most players follow no inventory, no warehouse model, unlike Flipkart whose losses is attributed to its business model of stocking products, which has helped it in delivering fast but cost a dent to the company.

     

    Also, the COD model, which has lured many customers to order from the net, is seen as a complete ‘con game’, as one doesn’t get cash immediately and margins gets reduced immensely plus products get returned, thus creating additional cost burden. In fact, this problem could be solved by creating a database which can be shared by the e-comm players with suspect customers similar to banking sector.

     

    Ashutosh Lawania

    However, all is not lost, Ashutosh Lawania, Co-Founder & Head of Sales, Myntra.com, said: “We have been doubling every six months and it has gone as per the plan. Currently there are 120 million internet users in India which is estimated to grow to 300-400 million users. Out of the 120 mn internet users today, only 10 per cent are transacting online. This number will only grow as more and more people will have trust on online shopping. Overall, this is a big market and there is enough for all the players. In the next 12-24 months, I do see some kind of consolidation happening.”

     

    Myntra, which started with offering personalized merchandise, now sees almost 55 per cent demand from the footwear category. There is potential and there are ready customers so the e-comm story which began as a roller-coaster ride will see some correction to pave way for future growth.

     

    However, one should pay caution to the business model as speedy growth comes at a cost and for running a business what one must always remember is the basic – be profitable and do whatever it takes to achieve that. However, e-comm in India right now has become nothing less than a soap opera.

     

  • Ranjona Banerji writes about a grouse. Either spewing venom or tongue-in-cheek

    Ranjona Banerji: Irritating ads that irritate

    Ranjona Banerji

    By Ranjona Banerji

     

    Am stepping on a few toes here and other people’s territory but then wothehell. As much news as you watch on TV (or as much TV that you watch, be honest) you’re forced to watch as much advertising as content.

     

    And sometimes it’s fun (like Hari Sadu and naukri.com) or even the poor chappie who thinks he’s eating chicken, but it turns out to be a doggie. Or Fastrack’s funny series on the risqué side with Genelia D’Souza and Virat Kohli. Or even the Flipkart ads where children play adults.

     

    But what does one make of Priyanka Chopra squirming about on the ground to a song that does not match the bizarre dance she does as she tells us she hates the “chip chip”. All that happens for Garnier is that most people throw up and switch channels.

     

    Through the telecast of Wimbledon on Star Sports you get to hear that “amazing Thailand always amazes”. Well, duh, couldn’t they think of another word? Or has someone done Thailand tourism in?

     

    The Kelloggs ads with that vastly annoying mother who does something as simple as throw a few almonds on a bowl of cereal and pretends she’s invented sliced bread is anodyne as such ads normally are.

     

    But the winners of the most irritating ads have to be Reliance Foundation and Coca-Cola. Insensitivity seems to rule the Coca-Cola ad in which a group of not very well off (how do I say this politely?) children play cricket in some dusty desert scrub land as a voice over tells us poetically how they have no cricket bat, ball, stumps, the pavilion has no roof and so on and ends some poignant note about how this is not play but the call of the earth or something. Then Sachin Tendulkar with his strange new hairstyle drinks a Coke and says play on. The children and Tendulkar never meet and you get the feeling that the children cannot afford to drink Coca-Cola, certainly not one each.

     

    And there’s the Reliance Foundation. I’m not getting to the connection with the programme Satyamev Jayate. For one, the ad looks like a copy of the Vedanta ad, which claimed to be saving the lives of various village children with schools and food and making their dreams come true. The ad ran into as many problems as Vedanta does with its mining projects and the company’s attempt to redeem itself with this real or exaggerated NGO social work effort did not work.

     

    If indeed Nita Ambani is moving into social work, an ad that copies an already discredited ad is surely not the best vehicle. Also, the figures put up for the number of children fed or schooled or clothed is embarrassingly small for a company the size of Reliance. Even worse, Nita Ambani’s look is so carefully crafted that it looks just that. Also makes her ears look unnaturally large.

     

    Hidden persuasion is fine. But these are attempts at such blatant manipulation that they are not just exploitative, they may not even work.

     

    For those interested in advertising and how it works, try and catch The Gruen Transfer on the Australia Network or Youtube. Hosted by Australian comic Will Anderson, it is funny, incisive, intelligent and hard-hitting. And did I say funny?

     

    All right, I’ll watch the news from tomorrow.

     

  • Mr Roy or Sid, as he is fondly known, will be responsible for Happy's operations across branches

    Happy gets Siddhartha Roy as COO

    By A Correspondent

     

    With operations kicking off recently in Mumbai, Bangalore-based creative agency Happy has welcomed Siddhartha Roy as their first Chief Operating Officer. In a short span of five years, Happy has grown to a team of over 30, and a newly appointed COO marks the beginning of big things to come from the Idea Shop.

     

    Mr Roy or Sid, as he is fondly known, will be responsible for Happy’s operations across branches. He has over 16 years in the business, of which 10 years were spent with Ogilvy in Mumbai, Bangalore and Sri Lanka.  Besides Ogilvy, he has worked with Ambience and Everest as well as loyalty marketing specialists, DIREM.

     

    He has been associated with a diverse spread of categories and brands such as FMCG (Cadbury, ITC Foods, Nestle, Coke, Ceylon Tobacco Company), Telecom (Hutch/Vodafone, Reliance, Sri Lanka Telecom), Web (Yahoo) and Retail (Madura Garments). His contribution extends to several campaigns that have been awarded for not only marketing effectiveness but creative excellence as well. In Phoenix Ogilvy – Sri Lanka, Sid set up & headed the Strategic Planning cell along with leading Account Management.

     

    “I think there are seismic changes taking place in the business of communications today. Gone are the days of agency imperialism. While marketers are looking for ‘ideas’, large network agencies are increasingly selling ‘processes’. And over the past few years, Happy has been successfully capitalizing on this need-gap. This is the primary reason for me to join the HAPPY family – and I’m extremely excited about it,” said Mr Roy.

     

    “Kartik and Praveen have been doing a fabulous job over the past few years to create and keep conversations alive around Happy with their work. My mandate at Happy is to partner them in augmenting the same while driving business efficiencies,” he added.

     

    On the new appointment, co-founder and CEO, Kartik Iyer commented: “Praveen and myself have done things by ourselves so far. We think it’s time to take a more structured approach to reach our goals. He comes with the right level of experience combined with the hunger to do the unexpected – this is very much the DNA of Happy. Known as the ‘oldmonkster’ among friends, we think he is the perfect fit as our COO. We welcome him and are very confident this addition will take things to a whole new level. In fact, it already has.”

     

    Happy is responsible for the much appreciated Flipkart campaigns featuring little kids which won a silver at the Asia Pacific Adfest in Pattaya this year. They are also well known globally for their ‘Lee – Never Wasted’ shopping bag design, which won them a Cannes nomination. Happy was also the agency behind the highly acclaimed Incredible India tourism commercial titled the ‘post card’.

     

  • Good stuff. The ad will appeal to the non net savvy folks too, and this could result in a huge boost in sales for Flipkart

    Debrief: Flipkart: Clever and entertaining

    By Anil Thakraney

     

    Using kids as adults isn’t really a novel idea in advertising. But because it’s done well in this instance, ads from Flipkart are always great fun to watch. Flipkart is back with a brand new series of commercials, and the one I watched is quite funny.

     

    This time the theme is ‘Shopping ka Naya Address’. And it looks like Flipkart is out to nail folks in the non-metro towns as well with an old world Hindi film treatment. The ad features three generations of a family living together in a house. The grandson receives a pack via courier that contains a mobile phone which the grandpa has ordered. From Flipkart, of course. The boy’s father plays the cynic of the family, and he expresses doubts over online transactions. This makes his missus join in the conversation, and it all gets really amusing. As kids play elders, with all the make-up and expressions in place.

     

    [youtube width=”400″ height=”200″]http://www.youtube.com/watch?v=tt18PjLzNcw[/youtube]

    Good stuff. The ad will appeal to the non net savvy folks too, and this could result in a huge boost in sales for Flipkart. The execution isn’t slapstick or over-the-top, and that’s why it works. The humour is understated and this makes the ad charming. And the kids have simply rocked it.

     

    Rating: (On a scale of 1-5): 3.5 Smart marketing strategy. Cool creative work.