Ad spend by e-commerce companies drops in the face of operational trouble

After splurging on employees, promotions, and sales which brought several organizations to a fund crunch, our e-commerce companies have finally started reining in costs. Companies like Snapdeal (Jasper Infotech Pvt. Ltd), Jabong (Jade Eservices Pvt. Ltd) and Flipkart Ltd, who in 2015 doled out fortunes to broadcasters and publishers to build market share, have curtailed the flow out in 2016.

According to data released by AdEx India, a division of TAM Media Research, shows that the overall share of business-to-consumer or B2C e-commerce firms in TV advertising (by volume) declined to 2.49 percent, as on 18 June, from 3.18 percent in the first half of 2015 (January-June). In print, it has reduced to 1.25 percent from 1.29 percent. Some e-commerce firms have also struck smart ad-for-equity deals with media companies.

In the first half of 2015, Flipkart, Snapdeal, and Jabong were all among the top 10 advertisers by volume across TV and print. Flipkart was at No. 2, Snapdeal No. 3 and Jabong No. 8. This year, Flipkart dropped one position to No. 3; Snapdeal crashed 7 positions to come down to No. 10, while Jabong has fallen out of the top 10.

The only company to buck the trend is US-based Amazon.com Inc.’s Indian arm, which is anyone’s guess, considering the tough competition it is posing for the likes of Flipkart and Snapdeal. Amazon is the top e-commerce advertiser by volume so far this year, with 18 percent share of TV advertising and a 21 percent share of print among e-commerce firms. Last month, the firm announced that it would invest an additional $3 billion in India on top of the $2 billion it has invested since July 2014.