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Ecommerce in India: building brand image or consumer base?

Over the last few years various ecommerce players have established their foothold in the market in India but in order to stand the competition against their peers, e-tailers must move beyond the pricing model of the product and innovate to attract customers. The year 2014, was the year of flash sales and heavy festive discounts where every ecommerce player claimed to offer better discounts than the other. However, as the online shopping industry matures, they will need to venture into new strategies, besides the discount trick.

Digital Market Asia in association with Knowlarity launched the first leg of ‘MEcommerce: When Brands take the ecommerce route’ under its Knowledge Series where industry experts came together to discuss the current business scenario in India in the ecommerce domain.

“Brands cannot rely on ecommerce players to employ marketing strategies for them in order to push the product; this is something brands have to do themselves,” said Gautham Maediratta, General Manager of Digital & Mobility at Omnicom Media Group India reiterating the importance of brands employing strategies to push sales on the ecommerce.

Narayan Devanathan, EVP – National Planning Director at Dentsu India Group emphasised how foreign brands have used ecommerce as just a platform for accessing the consumer but did not let the glamour around the brand dim by launching their own exclusive networks such as Dollar Shave Club and Progressive Corporation.

Instead of luring customer with discounts, Progressive.com introduced the concept of comparison shopping which allowed the consumer to compare the price against Progressive’s competitors on the website, said Mr Devanathan. This is an example of a strategy that the ecommerce platform used to drive customers in US.

According to Deepak Jayaram, Principal Partner at GroupM, the strategy of brands on ecommerce will be more dependent on the channel they use. “Am I going to build my brand on brand.com (a reference to a brand’s own web entity) or build volumes on pure play such as Amazon, Flipkart amongst others. It is the category of products that will largely define the kind of business model they use,” he said.

Brands may choose to build reach and increase volumes on a pure play platforms that are offering competitor products as well, but brands have the responsibility to attract a dedicated share of audience for its product which it can redirect to its exclusive site at a later stage.

Many brands are involved in passive selling through established platform such as Flipkart, Snapdeal and Myntra, among others but they are not devising ways to improve the own delivery system, pointed Jyotsna Pattabiraman, SVP Marketing at Knowlarity. Ecommerce platforms have the potential to help the brand grow but it needs reinventing from the brands end too, she added.

As the industry matures, a time will come when the consumer will not be driven by just cheaper price of transaction and discount sales on ecommerce but brands will seek better user experience in online shopping.

Going forward, brands need to carefully study market dynamics in order to build a sustainable model and leverage the opportunities on the ecommerce platform . Online shopping brings the stores to consumers’ door step and benefits the brands in terms of reaching out to a large consumer base. It is a win-win situation for both but how brands build on the platform and evaluate opportunities, will guide the growth when brands take the ecommerce route.

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