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Diwali ad boom expected

News, 27 September 2016

NEW DELHI: India's leading e-commerce firms are reported to be incentivising sellers to encourage them to spend more on advertising and promotions in the run-up to Diwali, in addition to what the platforms themselves will be spending.

Amazon India, for example, will be spending up to Rs 250 crore on marketing and promotions, according to the Economic Times.

And industry executives told the newspaper that the e-commerce giant also intended to incentivise its leading sellers, with the target of having them spend at least three times more than their monthly average on advertising and promotions.

"Amazon is focusing majorly on driving traffic and wants sellers to be more proactive through sponsored ads and promotions to drive sales," one of the sellers said.

Another expected that discounts this year would be mainly cashback offers while large sellers would be enticed with reduced seller fees. "The marketplaces will push their sponsored ad programmes aggressively to the sellers," he said.

An Amazon India spokesperson said 20,000 sellers had joined the Amazon marketplace in the past 5-6 weeks in order to benefit from the year's biggest shopping season.

Rival Flipkart is following a similar path, the executives said, with plans to reward more than 2,000 sellers across cities and categories.

The approach has become necessary since the introduction of new rules which require any discounts, offers or inducements to come from a seller and not the marketplace it operates on – so Amazon and Flipkart cannot themselves directly fund discounts.

Non-marketplace sites are also expecting to benefit from consumers' search for online bargains.

"The Indian buyer likes to compare on price, delivery, warranty, service and easy return – which the marketplaces fall short on," explained Kashyap Vadapalli, chief marketing officer at lifestyle e-commerce firm Pepperfry.

"While the traffic increases by close to 100%, conversions go up by 50% during the festive season," he added.

Data sourced from Economic Times; additional content by Warc staff