Indian consumers flock to coupon sites

7 October 2014

NEW DELHI: Coupon websites are growing in popularity in India as internet penetration increases, ecommerce takes off and leading brands find them a useful way of acquiring customers.

Sites such as CouponDunia and Groupon India have seen revenues rise by as much as 500% in the recent past thanks in part to the promotional activities of major online retailers like Flipkart, Amazon India and Snapdeal.

One site, FreeCharge, has a distinctive take, offering coupons and discounts to people who recharge their mobile phones, data cards or DTH television service through its platform. They can choose offers from a wide variety of companies, with McDonald's, Costa Coffee and Myntra among the 150 firms listed.

Kedar Tenny, director/marketing and digital, at QSR brand McDonald's India (West & South), told Afaqs that the couponing site had been able to "drive in a significant number of customers from the online world into our restaurants". And he described the performance-tracking as being "on a par with online digital advertising".

Sharat Dhall, president/marketing at online travel agent Yatra.com, welcomed the volume of traffic and brand visibility generated. "Also, the cost of acquiring new customers is low, compared to other avenues," he added, as the coupons necessitate a subsequent visit to his site for redemption.

A travel site will typically pay between Rs 100-300 per flight booking to the couponing platform, according to the Economic Times, while the electronics category attracts a commission of between 2% and 5% and the clothing category an even higher stipend, of between 10% and 15%.

And fashion websites report that many online shoppers start their purchase journey from couponing sites; Myntra, for example, estimates that affiliates drive as much as 15% of its overall transactions.

As more and more Indians make the switch from feature phones to smartphones, mobile is expected to be the future of couponing, with Sameer Parwani, founder of CouponDunia, claiming that the firm's mobile app will be a "game changer".

Data sourced from Afaqs, Economic Times; additional content by Warc staff