What happens when brands, thanks to the e-commerce explosion during COVID, begin to rival e-commerce players with their own platforms?
The inaugural session of afaqs! CMO Week looked at the e-commerce story. In the darkest hour of 2020, e-commerce found many first-time users. Now, as brands invest in their own e-commerce channels, will they rival the very platforms that rescued them?
Sreekant Khandekar, co-founder and director, afaqs!, moderated the session. The panel included:
Anand Narang, Bata India
Gitanjali Saxena, Tata CLiQ Luxury
Navin Shenoy, Viacom18
Samridh Dasgupta, Bombay Shaving Company (BSC)
Sumit Sonal, Xiaomi
Khandekar kicked off the session by stating the now universal fact that COVID has affected large parts of the economy, but “there have been a few bright spots, and e-commerce has been one of them.”
He went on to say that even within the e-commerce category, some segments did substantially better than others.
He talked about the early e-commerce years, when most brands were happy to ride the aggregators like Amazon and Flipkart... “Several brands were content to go along with the aggregators to increase their reach.”
Now, with COVID, “many of them have relooked their view of e-commerce,” remarked Khandekar. Many have spent money to build a reach of their own, while continuing to be on the aggregators.
He also spoke about the youth, who were near impossible to keep inside their homes. Now, they’re stuck inside their homes for months. So, has their view of the world and e-commerce changed?
“Has their (brands’) view of e-commerce, retailing, being on aggregators… has their view changed and has their ambition as independent brands grown?”
Bata’s Narang went first and said that it’s not an “either-or” situation (aggregators or websites). It’s not a horizontal platform like Amazon, Flipkart or Myntra... “For us, it’s both.”
He remarked that it’s important for marketers and business owners to understand “who our consumers are, their pain points, online behaviour and journey analytics.” And from these points, create solutions to solve consumers’ digital handicaps.
Saxena of Tata CLiQ said nothing has digitised India like COVID. “We have seen purchases of over Rs 5 lakh happen online, and it’s where adoption of online is a big story.” She added that the brand serviced geographies (had to use a map to find the place) where it didn’t expect to see a luxury shopper.
“We realised that people still wanted to consume and gain some sort of gratification because they were not getting it from travel, events or weddings. They didn’t want to indulge themselves...” She also revealed that gifting performed well as a category… “We saw a lot of demand in this category, and new players entered the space.”
“What we’ve seen is an acceleration of existing trends more than anything else,” said Viacom18’s Shenoy. He went back to the time when modern trade was seen as the end of the small retail store because the modern trade experience “reduced friction along the lines of choice and convenience and things like that…”
He said that e-commerce reduces the friction along other dimensions. That’s the reason it’s here to stay and co-exist with other forms of distribution.
“We saw three to four human motivations that got triggered due to the constraints (COVID),” remarked Shenoy, talking about catering to young people at MTV. Young people wanted a sense of belonging, self-improvement and self-preservation.
Speaking about the entertainment category, he said that the time spent on smartphones by young people was up 20-30 per cent at the bare minimum. The average time they spent on smartphones daily was around five hours.
“We’ve seen a lot of our content translate equally well across linear TV and OTT.” It’s a good time for entertainment and content brands because “content needs to be platform-agnostic...,” Shenoy remarked.
BSC’s Dasgupta said e-commerce has not substituted the company’s direct to consumer platform. But yes, the online marketplaces did help the company accelerate, as he looked back at the last nine months. He said that BSC enjoyed exponential growth in personal care during this time. It also helped the company diversify into female grooming solutions from being just a male grooming brand, and it added to the top line.
Dasgupta, speaking from a purchase and behaviour perspective, said that if someone was spending a minute trying to find the website they like, they are now spending upwards of two-and-a-half minutes.
“Content has to be so much richer, you have to start investing on telling better stories… not hope one Facebook ad will help convert…” People have time to deliberate on their purchase decisions and as marketers, “the prerogative is on us, how we make that work.”
“Everyone understood COVID has put stress on supply chains… The entire facet of next day delivery and the immediacy of consumption is no longer the largest driver. Now, there are far more important drivers: Is the packaged being packed well? Are you making sure that the safety protocols deemed important are being followed? Are you being able to follow the checkpoints to make sure what I am getting is safe and secure?”
Dasgupta also said that media has become expensive as more brands have entered the market than ever before. And as marketers, our media planning has gone for a different paradigm shift.
According to him, it’s been a good nine months, in terms of consumption, and it’s been rigorous, in terms of investment. One needs to look at that as the e-commerce story unfolds.
Xiaomi’s Sonal spoke about the “adoption of UPI in our financial system, which allowed us to scale up in the last nine months.” Xiaomi has seen 2x growth in smartphones and people have invested in buying bigger smart TVs.
Sonal remarked that Xiaomi’s story was different. It entered as an online smartphone brand only. People were like who’d buy smartphones online. “Today, we’re number one (brand) for 13 quarters.” He also remarked Xiaomi was the first smartphone brand to enter the country with its e-commerce portal, without relying on anything else. “We relied on Flipkart, but by 2015, we had me.com up and running.”
“I think e-commerce is here to stay and hyper localisation is one model which will continue to grow even on e-commerce,” Sonal concluded.
The session was sponsored by India TV and powered by Nickelodeon Sonic.
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