Snapdeal posts record sales after sponsoring ‘Bigg Boss’
Snapdeal has an exclusivity clause with Colors that bars other Internet companies from advertising during ‘Bigg Boss’
New Delhi/Bangalore: India’s second-biggest online retailer Snapdeal is recording its highest-ever sales after the company started sponsoring popular reality TV show Bigg Boss, which began on Sunday, a top company executive said.
Bigg Boss, based on the original Dutch format Big Brother created by the Netherlands-based TV production company Endemol, is a lucrative platform for advertisers and brands as it reaches hundreds of millions of Indians, all potential customers, during prime time television.
Bigg Boss signed Snapdeal as its lead sponsor in a deal estimated to be worth Rs.35 crore after the e-commerce firm fought off competition from several rivals, Mint reported on 5 August.
“Every day since Bigg Boss has been our highest ever day in terms of traffic and orders,” chief executive Kunal Bahl said in an interview. “All e-commerce companies want to penetrate the tier-II market and Bigg Boss is a great medium for that,” Bahl said during the Global Mobile Internet Conference, which took place in India for the first time on Friday.
Snapdeal has an exclusivity clause with Colors, the Hindi entertainment channel that telecasts Bigg Boss. The clause bars other Internet companies from advertising during Bigg Boss or being an associate sponsor.
Snapdeal will do much more integration with Bigg Boss than just branding, said Bahl. “You will see integration with house inmates even shopping on Snapdeal,” he added.
Flush with money from recent fund-raising efforts, Snapdeal, Flipkart and other e-commerce companies are preparing for the festive season sales, which are seen as crucial for these companies’ valuations. Sites have lined up deep discounts, exclusive merchandise, cash-back schemes, and other promotional offers for this year’s festive season, which they see as an opportunity to sell more, gain market share, and justify—maybe even increase—their valuations.
Flipkart was valued at $7 billion (including the $1 billion in cash) in late July when it raised $1 billion, mostly from its existing investors led by Tiger Global and Naspers. Snapdeal was valued at more than $1 billion when it raised $100 million in May.
Online retail is valued at $3.1 billion and is estimated to grow to $22 billion in five years, according to a November 2013 report by brokerage CLSA.
Snapdeal, which is run by Jasper Infotech Pvt Ltd, is aiming for gross merchandise value (GMV) of over $170 million next month in the festive season sale period, Snapdeal’s Bahl said.
GMV is the value of goods sold on a site, but does not account for discounts or even sales returns. So, if a firm says its GMV is $10 million, it could actually book sales of anywhere between $2 million and $5 million.
“This Diwali, we are much better prepared, there is much more awareness in the market about us, and even Bigg Boss will hit its peak during October. So we will see an even higher jump in orders this festive season than the 60-70% increase that we had last time,” Bahl said.
Flipkart has already started marketing the Diwali sale, which starts on 6 October. The company is calling it the Big Billion Day.
“On 6 October, India will see its biggest ever sale. We’ve been preparing it for months and we will give never seen before offers,” Bansal said, without elaborating.