Wednesday, 6 April 2016

Amazon, Flipkart tackle trust issues

Amazon, Flipkart tackle trust issues

Well before the recent government order clamping down on big discounts on online marketplaces, Amazon and Flipkart had been beating a new path to customers' doors. Far from the days of big sales and sharp deals, the two had begun reaching out to customers in small towns and semi-urban areas with a new deck of cards; trust, convenience and easy returns. The new mantra is fast replacing the tried and tested discounts pitch that these companies have always emphasised on.

Both say that they are looking at widening their base of customers. They are focused on converting the older generation into online shoppers - from a family member to a subordinate at the workplace, the ads use a young e-commerce evangelist to convey the message of change.


Interestingly these campaigns seem to be timed almost perfectly, coming as they do just as the Department of Industrial Policy and Promotion (DIPP) has stipulated that "e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field." In short, stipulating that discounts or big sale days cannot serve as bait anymore.

Both Amazon's 'apni dukan' (your own shop) and the 'Flipkart matlab bilkul pakka' (Flipkart means quality assured) campaign, on air now, seemed to anticipate the changing order. Was it foresight or had the companies realised that this was the only way to march forward?

Both companies say they wanted to expand the customer base and the profile of the potential customers they were targeting was different and this meant changing the communication strategy. "While e-commerce adoption is growing, there is still a large section that is hesitant about making purchases online," says a spokesperson for Amazon India.

This is especially true for Tier II and III cities. With the e-commerce industry set to cross the Rs 3,800 crore mark by the end of this year, as per Associated Chambers of Commerce and Industry of India (ASSOCHAM), the online marketplaces are vying for more attention from these towns.

The e-commerce industry has, thus far, built its band of buyers using discounts and sale-days. "The predominant noise was on price, discount and offers," says Ambi Parameswaran, brand strategist, advisor FCB Ulka Advertising. The first to don a different hat was Amazon India. The idea was to build trust in online marketplaces and wean buyers away from the local neighbourhood stores. The Flipkart campaign relays similar messages and the ads for both companies seem to fall back on similar character archetypes too.

In both ads there is a role reversal of sorts; a daughter advising her mother, an employee his boss and a patient his doctor."They (e-commerce companies) have boxed themselves into the 'discount' segment. So in this light, it is good to see them trying to widen the appeal and go beyond just price and offers," says Parameswaran.

The convenience of shopping at home amid the option of accepting cash on delivery is driving the point home for most of the consumers in the bracket of 18-25 years old. However, the generation, which is slightly older, is where the opportunity lies. And they need a different story, if they are to be brought online.

The ads also seem to be talking to a distinctly non-metro audience. "While the start has been great, we feel the journey has only just begun especially when the majority of the country is yet to experience online shopping," says Shoumyan Biswas, VP, marketing, Flipkart. The aim is to break into the next phase of online penetration, not only in terms of geographical spread but also with respect to the buyers' age group. Hence discounts alone won't break the ice.

Parameswaran says that the e-commerce firms are doing what telecom firms did yesterday. The telecom brands relied on offer based advertising (similar to discounts), but on a parallel path, they began promoting the 'brand' and also the 'network'. "Time e-commerce brands started doing this in earnest," he said.

Biswas said, "Over the next few weeks you will see the campaign get amplified by a strong social, digital and outdoor plan reaching out to national metro as well as regional markets." And it all seems to have tied up well for the two companies since the new DIPP order also steers e-commerce firms away from the path of price discounts. "The Indian e-commerce space is still at a very nascent stage with significant potential for innovation and growth," said an Amazon India spokesperson. As the new campaigns indicate, nothing will be left to chance when it comes to converting this potential into reality

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