Snapdeal has announced that it is soon going to roll out its own advertising platform to add a new revenue channel, and cut on its dependence on Google and Facebook.
Snapdeal Ads will largely revolve around deploying native advertising formats for product commercials for sellers that can be showcased across its website, mobile site and app. According to Vishal Chadha, Senior Vice-President of Marketing Development at Snapdeal, this move will help “drive discovery of sellers’ products and increase revenue through targeted advertising tools that Snapdeal has developed in-house’’.
The company has stated that it will roll out its platform in phases. Banner ads and other formats will be made available in the second phase, which could take three to six months. Commenting on the development, Chief Product Officer Anand Chandrasekaran maintained, “The advertising tools will help our over-two lakh strong seller community simplify their business journey and boost overall revenue as more users discover their products.”
Notably, in March 2015, Flipkart had acquired AdiQuity Technologies Pvt. Ltd with the same intention – to improve its ads platform and make advertisements a core part of its business.
Given the fact that the marketplaces in eCommerce space in India are struggling for profitability and the competition to establish as well as retain a presence in the market is highly challenging, native companies are aggressively trying to find additional revenue streams for themselves. They are clearly adopting the road taken by the Chinese company Alibaba which not only dominates China’s eCommerce but also runs one of the biggest online advertising businesses in the country. In fact, advertising accounts for more than half of Alibaba’s revenue and it has been predicted that Alibaba will surpass pass Baidu in net revenues from mobile search and display ads this year, when it will take in $4.75 billion from such paid placements.
This move by Snapdeal is reflective of the general pressure that eCommerce companies in India are under- as they move forward to explore different revenue models and business strategies to become more scalable and competitive.