Burgeoning Indian online retail industry has been splurging lots of money on mass media advertising in past six months in order to penetrate the urban consumer base including tier 2 and 3 cities. According to latest data by TAM Media Research, appetite for advertisement from online retailers have witnessed whopping rise by 228 % on television, 78 % on print and unbeatable 797 % on radio.
Online retailers such as flipkart.com, yebhi.com, myntra.com and bestylish.com have been allocating fat advertising mix to obtain maximum brand visibility across the country (especially in tier 2 & 3 cities) in light of large chunk of funds they raised from VCs and PEs. However, the growth numbers from TAM are based on ad volumes and not absolute spends.
According to an industry source, Bangalore-based online retailer Flipkart has marked Rs 100 crore as its advertising budget. However, Banglore based retailer has yet to hop on to the road of profit . Flipkart, which sells books and electronics online, is labelled as the poster boy of Indian e-commerce and has invested heavily in building distribution and brand visibility across 50 cities.
Speaking more about advertising mix of Flipkart, Ravi Vora, VP, Marketing said “Flipkart is already the leader in the e-commerce space in India. Though majority of our customers come from metros and tier 1 cities, we have seen a big rise in our customer base in tier 2 and tier 3 cities as well. To reach out to this large consumer base traditional medium like TV, outdoor and print are more appropriate not only due to their reach but also the higher level of engagement they enjoy”.
In fact, online retailers in India are using TV commercials mainly for two purposes; primarily to launch their brand online and secondary is to get extended growth, that they weren’t getting through online advertising. Brands like Naukri and Monster have used television commercials effectively to build a higher brand recall and generate more business.
Shedding light on online retailers aggressive appetite for TV commercials, Harish Bahl, Founder & Chairman Fashion and You said that TV helps brand to become more credible among its consumer base, in fact internet is better equipped, meanwhile, TV has a capacity even to reach to far flung areas. However, trend of eCommerce companies going for television commercials has more to do with credibility rather than reach.