Bengaluru: This year’s festive season sales have proved to be largely successful for India’s top online retailers, but Flipkart managed to get maximum bang for its buck, mounting a low-profile marketing campaign to reap larger dividends than its rivals did.
Flipkart spent about half of what rivals such as Amazon India and Snapdeal did in promoting their recent sales events, six e-commerce executives with knowledge of the matter said on condition of anonymity.
In its 2-6 October Big Billion Days (BBD), Flipkart sold 15.5 million units and raked in sales of about Rs3,000 crore, the executives mentioned above said—marginally edging out arch-rival Amazon India which shipped 15 million units during a blockbuster sale that was easily the biggest showdown in the history of Indian e-commerce.
In an interview, Flipkart marketing chief Samardeep Subandh said three things worked wonders for Flipkart: a large-scale e-commerce awareness campaign that began in July, an advertising campaign that echoed past successful campaigns, exclusive tie-ups with top smartphone and apparel brands and the use of tools such as Facebook 360.
“This year’s BBD was very important for us, it was the third version, and compared to previous years, it’s far more competitive and other people are closer to us. So, it was important that in this year’s event, we re-stamp our authority as the No. 1 e-commerce player in India,” said Subandh.
“And from that perspective, the fact that we’ve got the maximum attention and traffic for our event at much lesser budgets than what our competitors had is the standout outcome for us. We had half the budget and much more business—that is something all of us are happy about,” he added.
For Flipkart, this season is literally a make or break time. If it had lost out to Amazon India in the first of the festive season sales, that may have forced a massive shakeout in India’s e-commerce industry.
But the successful Big Billion Days gives Flipkart added momentum for the next 6-12 months and paves the way to raise more funds at desired valuations. And Flipkart has already initiated talks to raise up to $1 billion in fresh funds, Mint reported earlier on 8 October.
“Over last six months, (co-founder and CEO) Binny (Bansal) and the rest of us have been working on this philosophy that Flipkart wants to make quality products affordable to India. If you look at the past, Flipkart has brought products across categories that have disrupted the price value equation. If you look at smartphones and large appliances, for example. In the last six months, we took that further and launched things like Flipkart Assured,” said Subandh. With Flipkart Assured, Flipkart is attempting to take on Amazon’s flagship Prime programme.
And while Flipkart was rolling out its advertising campaign, the company’s supply chain was working parallelly on initiatives to improve speed of delivery.
“The second part of the campaign was to build communication based on insights, based on budgets of people. And we came up with our campaign Itne mein Itna (For this amount, you get this much). And that helped us stand out,” said Subandh.
According to a report by RedSeer Consulting, aggressive advertising campaigns by online retailers led to a significant percentage of India’s shopping population becoming more aware of the online festive sales.
“For the first time, we used Facebook 360 and gave people access to our offices through Facebook 360 and told them to go find out where the offers are. And the more people found the offers, they would get offers. That worked brilliantly—we got more than a million views. And that was surprising—to get that kind of scale with an idea like that,” said Subandh. “Finally, we had exclusives with a lot of top brands, especially in apparels and smartphones, and that gave us a clear edge.”
Amazon India said its own marketing campaign worked exactly according to plan and claimed that it exceeded all its targets and goals for the festive season sale.
Amazon is now planning to launch “waves” (as is known in Amazon argot) of sale events over the next few weeks, Amazon India chief Amit Agarwal told Mint last week.
“The purpose of these kind of sale events is not to sell a particular kind of product in large quantities. What is important in these sale events is to expand your customer base so that when they come to you every day subsequent to the sale you’ll keep growing. That’s the objective. If you ask yourself, was my sale successful? You’d consider these things: did I get a lot of new customers; did I get new customers from areas I wasn’t known in before; and are they going to come back after the sale?,” said Agarwal.
“We’ve grown 135%, on average, year-over-year in every quarter (this calendar year). That compares with flat or negative growth for the overall market and for other players. And we continued that momentum (by recording three times sales growth in the sale week). It’s exciting that in a little over three years, we have done and we’ve led the pack for what e-commerce should be, what others in 10 years and with multiple acquisitions have not come close to doing. I’ll take this any day,” added Agarwal.
Experts tracking marketing and advertising also pointed out that Flipkart’s edge over Amazon was partly also due to the fact that the Bangalore-based e-commerce giant has also been around much longer than its American rival.
“What you have to also take into account is the fact that Flipkart would anyway have a larger base as compared to Amazon in India -- Amazon has been around for only three years, but they are catching up fast. Now it remains to be seen how long Flipkart can maintain this lead -- and whoever has the strongest backend, technology, the ability to process large number of orders, returns and can deliver consistently on that scale, will end up winning the battle in the long run,” said Kiran Khalap, co-founder and managing director at Chlorophyll Brand & Communications Consultancy Pvt. Ltd.