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Major e-commerce players spend more on ads

Update On :09 January 2017

Major e-commerce players spend more on ads

According to recent report of Kotak Institutional Equities report major e-commerce players in India were pilled up with losses in 2016. Anushree Bhattacharya, a writer of e-commerce & startup in financial express said that inspite of this situation they continue to spend more on advertising whether on television or radio. MAP (TAM Adex) data shows that E-tailers spent R7,252 crore in 2016, which is a 26% jump over the amount spent in 2015. By and large, it’s the bigger players that are advertising, the smaller lot is quiet.

Ashish Bhasin, chairman and CEO, Dentsu Aegis Network (DAN), observed that while large companies such as Flipkart, Amazon and Snapdeal have upped their advertising spends, several smaller companies appear to have disappeared.

Last year, for instance, companies such as LocalBanya and PepperTap, which were active advertisers, shut down. In contrast, Paytm which in early 2016 cut back on advertising spends, especially on traditional media, started to spend post-demonetisation. The wallet firm’s bill jumped to Rs 239 crore in November and December, from just Rs 92 crore between January and October.

Meanwhile, the bigger e-commerce firms continued to splurge. For example, Amazon India upped its ad budget by about a fourth in 2016, spending Rs 946.4 compared to Rs 766.3 crore in 2015. However, according to Sam Balsara, chairman of Madison World, spends could come off since investors are cautious about infusing money into e-retailers.

As per the Pitch-Madison 2016 Ad report, the Indian advertising industry has increased by Rs 6,586 crore to reach Rs 43,991 crore in 2015. The categories which contributed most to the overall growth in 2015 were FMCG, e-commerce, auto and telecom. FMCG remained the most dominant sector with a 28% share of the total Indian advertising industry pie followed by e-commerce at 10% and auto at 9%.

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