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Ecommerce kills branding

News, 23 April 2015

NEW DELHI: India's fast-growing ecommerce businesses remains focused on price as the way of attracting customers, a strategy that industry observers argue works against building brand loyalty for the longer term.

"Consumers are completely promiscuous and they surf the sites to pick the best price," brand strategist Harish Bijoor told the Economic Times.

"When players will attempt to rise above price to make an emotional connect, then brand building will happen," he added.

Snapdeal has moved in this direction with the recent launch of its 'Dil Ki Deal' brand campaign, which sees the online marketplace attempting to progress beyond a simple appeal to the consumer's wallet.

"We feel Snapdeal today has evolved to take the next step in its communication journey and lay emphasis on the emotional fulfilment it enables for its consumers," said Sandeep Komaravelly, svp/marketing at Snapdeal.

As part of that process, it has recruited actor Aamir Khan as the face of the campaign and Komaravelly felt this association would "go a long way in strengthening our brand across various consumer segments".

Other ecommerce brands are also exploring the use of celebrity brand ambassadors – Myntra with Ranveer Singh, for example, and Yepme with Shah Rukh Khan – but not everyone agrees this is the right approach.

"Celebrity endorsements are like toppings on your ice-cream," said Ashita Aggarwal Sharma, professor of marketing at SP Jain Institute of Management & Research. "They can attract customer attention but are not the reason for them to buy the ice-cream."

For now, price seems destined to remain the most significant factor for many consumers, and will continue to be as long as the online retailers direct plentiful venture capital funds at offering discounts in order to build scale.

The Economic Times noted that the sector is expected to spend around Rs 3,500 crore on advertising in 2015, or about one sixth of the total raised in funding in 2014 and questioned how long this ad boom could continue if businesses weren't making profits.

Data sourced from Economic Times; Campaign India; additional content by Warc staff