E-commerce
Companies in India
The
Dotcom boom seems to be affecting India at a much higher rate in the last few
years, as online portals have started using mass media campaigns to increase
their brand awareness. It’s not just the big ones spending on TV ads but even
the start-ups like Fabfurnish, an online furniture retailer will kick start its
first television advertisement in January.
According
to the estimates, the advertising spent on online portals in the last two years
has gone up. ‘TV campaigns help to educate and create much more brand awareness
among consumers’, as claimed by the companies. Due to this, more number of
internet users in India have started buying products online. The major players
in this sector are Snapdeal, Flipkart and Fashion portal Myntra whose sales
have increased considerably because of mass campaigns.
The
Indian e-commerce market is seeing a surge in growth. According to 2012 CRISIL
report, Indian online industry will grow from ₹32 billion in 2012 to ₹100 billion in 2015. To add to the
growth prospects of the industry, infrastructure such as internet connectivity
is expected to grow exponentially in the country. Apart from Laptops and
Desktop, mobile phones and tablets are becoming the major drivers. The Internet
and Mobile Association of India (IAMAI) said India has 200 million internet
users and the number is growing to rise by 18.53% in the coming year.
The
main reason for online retailers to advertise in mass media such as television
is to bring more creditability. But the question is - whether TV advertisement
brings in the expected return on investment (ROI)? In fiscal 2013, Jasper
InfoTech – the parent firm of Snapdeal – posted looses of ₹120.1crore, wider than the ₹81.2crore loss in fiscal2012,
according to the data filled with RoC. But as the Indian online market seems to
be changing, Snapdeal expects to reach₹6220crore in gross sales by the
next year, and profitability the year after. Even fashion retailer Myntra aims
to be profitable by the end of 2104. In fiscal 2013, the company had sales of ₹212.4crore at a loss of ₹134.7crore according to the
Ministry of corporate affairs website. Even Flipkart India – reported a loss of
₹281.7crore
before extraordinary items and tax in fiscal 2013.
Even
though the online portals are at loss, the sales are increasing drastically
year by year, and thus many companies are claiming to be profitable by the end
of 2015.
Sources: - The Economic Times