Business Standard

Tuesday, December 24, 2024 | 08:08 AM ISTEN Hindi

Notification Icon
userprofile IconSearch

ShopClues adopts Google ads model to monetise seller base

Many e-comm players are turning to ads to generate extra revenue to offset the losses from discounting products

The new-age ad warriors

Alnoor Peermohamed Bengaluru
Unstructured e-commerce marketplace ShopClues has followed in the footsteps of larger rivals Flipkart and Snapdeal to roll out its own advertising platform. The company looks to boost earnings to become profitable by the second quarter of next year.

ShopClues, which largely caters to demand from Tier-II and Tier-III towns, will follow a model pioneered by Google, allowing sellers to bid for more prominent placement of their products on the platform. Since the company largely deals with extremely small sellers — around half a million — and the largest base of sellers in India’s e-commerce space, bidding for ads on certain categories will begin at Rs 1.

“This platform will immensely boost the visibility of products and maximise product views, thereby helping vendors to increase their business with us. The bidding system ensures transparency, while our differential bidding mechanism for products is essential for retailers advertising varied products,” said Radhika Aggarwal, co-founder and chief business officer at ShopClues.

An increasing number of large e-commerce players in India are turning to ads to generate extra revenue to offset the losses they incur due to discounting of products. Both Flipkart and Snapdeal are trying to replicate Alibaba, which is said to get majority of its profits from ads its sellers pay for.

ShopClues, too, is upbeat about advertising on its platform. The company says 200,000 of the 500,000 sellers on its platform are already paying it for services such as help with cataloguing, which it offers. Moreover, such services, including advertising, have high margins.

By partnering with online advertising technology firm, C1X, to build its advertising platform, ShopClues hopes its sellers can list products more prominently on its website and app, and allow them to bid for keyword searches. The partnership will also allow sellers to post their ads on Snapdeal on other online platforms.

“We ran a pilot with about 300 merchants on the AdZone platform, and the results were extremely positive. We ran 1,000 ad campaigns over a 10-day period, and our merchants saw a healthy return on their investment,” said Arun Goel, vice-president of products at ShopClues.

ShopClues deals largely with unbranded, or local merchandise, which requires it to have a large number of sellers. The company in January this year raised close to $200 million from GIC, Tiger Global and other existing investors, valuing the company at $1.1 billion.

“We still have half of that ($100 million) in the bank,” said Sanjay Sethi, chief executive officer, ShopClues.
 

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jul 21 2016 | 12:25 AM IST

Explore News