Flipkart, Amazon digital marketing strategy paying off: RedSeer study
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Bengaluru: The shift towards digital marketing from traditional advertising by online retailers Flipkart and Amazon is working out well as awareness of this year’s sale events—The Big Billion Days and Great Indian Festival—has increased significantly compared with previous years, according to a RedSeer study.
Both Flipkart and Amazon have moved a large chunk of their ad spend towards digital this year, according to the study. At least 70% of the respondents polled for the study got to know about this year’s sale events through low-cost digital channels such as social media, said RedSeer.
This study is not just relevant for this week’s sale events, but also for the rest of the festive season, according to RedSeer.
In the past, top e-commerce firms such as Amazon and Flipkart used to spend hundreds of crores on expensive marketing and branding campaigns, as part of their broader strategies to attract new customers. Such costly campaigns in turn resulted in higher burn rates at top online retailers—which in turn forced them, particularly Flipkart, to take a fresh look at their overall marketing strategy.
Since Kalyan Krishnamurthy returned to Flipkart in June last year, the company has revamped its marketing strategy. During last year’s Diwali season Big Billion Days sale, for instance, Flipkart managed to get maximum bang for its buck, mounting a low-profile marketing campaign to reap larger dividends than its rivals did, Mint reported on 18 October 2016. Flipkart, at the time, spent about half of what rivals such as Amazon India and Snapdeal did in promoting their respective sales events, Great Indian Festival and Unbox Diwali Sale.
The strategy seems to have paid off for Flipkart, since awareness among a majority of the respondents polled for the study was in favour of Flipkart as compared to other online retailers.
“Low-cost social media promotions have worked as a high-return channel of promotion for the etailers as a majority of the respondents are reached through this medium. This continues the trends started by Flipkart last year where it achieved high returns using primarily digital channels,” said RedSeer.
“We cannot comment on poorly informed and purely speculative reports. With the most massive opening day ever, with record-breaking increases across high value categories such as smartphones and large appliances, with more than 80% new customers from Tier II and III towns, shoppers chose Amazon as their preferred destination to buy everything from TVs, washing machines, smartphones to their daily essentials,” said an Amazon spokeswoman.
A Flipkart spokeswoman said in an email: “The Big Billion Days is synonymous with festive shopping in India... These numbers on awareness and people’s preference to shop on Flipkart are a testimony to that.”
Based on the latest study and insights from at least half a dozen e-commerce executives, digital marketing has well and truly become mainstream in Indian e-commerce.
The study also highlighted the importance of the festive season sale events, given that top online retailers have a massive opportunity to gain market share at the expense of rivals due to the high volume of customers during the period.
According to experts tracking e-commerce, the overall online retail market is expected to expand during the festive season sale. Gross sales or gross merchandise value across online retailers may reach $1.7 billion in this festive sales period, a jump of 62% from last year, according to RedSeer.
“With the festive quarter typically accounting for 35-40% of all annual sales for the industry, there is ample ground for considering these events as very important milestones for industry,” it said.
The likes of Flipkart and Amazon have also spent a fair amount of resources this year to generate awareness of the sale season among their respective seller bases, which in turn has helped in planning the sale events in a more organized fashion.