Online retailer Flipkart addresses common consumer concerns through its new television campaign.
When the market leader comes to town, the incumbents need to be on their guard. So what is Flipkart doing by playing up the generic concerns about online shopping in its TV campaign when the world’s largest online retailer, Amazon.com, is set to enter India? Should it not concentrate on how to secure its head-start?
“Fighting for shares in a Rs 3,500-Rs 4,000 crore market does not make sense,” explains Ravi Vora, vice-president, marketing, Flipkart. “We are large enough in the current space. Now, we have to pull in more consumers from the offline shopping space to grow.” According to the Internet and Mobile Association of India, e-commerce in India is expected to reach Rs 46,000 crore by the end of 2011, propelled by online travel (Rs 39,000 crore) and financial services (Rs 2,500 crore). But the sector with scope to grow is online shopping by regular consumers like you and me.
Flipkart’s latest television campaign tackles two sides of its business at once — the apprehensions of most shoppers about online shopping on the one hand, and the range of products it hawks over and above books. The TV ads bring to the fore the benefits of shopping on Flipkart — services such as cash on delivery and a month’s replacement guarantee. Such features could put to rest worries of shoppers nervous about buying online.
The campaign follows Flipkart’s first TV ad, which depicted it as a veritable online bookstore selling 10 million titles. Since then Flipkart has added cellphones a year back, while cameras and laptops made their way to its inventory list in early 2011. Vora says there was need to address the generic fears for the new categories. “More often than not, books are not big-ticket items and a buyer has very little to lose if something goes wrong. However, if things go wrong with electronic products, it can be very inconvenient.” Books, which have higher margins for the merchant, comprise 65 per cent of Flipkart’s volumes but bring in 35-40 per cent its revenues.
The scripts for the ads are straightforward; what is engaging is the execution. The series puts kids in adult situations — such as a conversation at the office water-cooler or surfing the net at a cafe with free wi-fi — complete with adult voice-overs and mannerisms. “Kids were cast to break the clutter for a message which was otherwise direct,” says Vora.
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Kartik Iyer, chief executive officer, Happy Creative Services, which created both the TV campaigns for Flipkart, says, “The first ad was to establish Flipkart’s lead among online bookstores. Now we have to shore up trust for the other categories. Trust being the over-riding theme, we featured kids because they are the ones who give you unconditional trust.”
“While we are also targeting offline consumers with the messages, we know the immediate buyers would be people who have had at least one on-line transaction. It could have been just booking a travel ticket,” points out Vora. The media plan, according to him, is geared to tap such a crowd — the ads have been placed in English and youth channels encompassing movies, news, music and general entertainment.
Iyer says, “We have the first-mover advantage in mainstream media. So even if we highlight the issues common to the industry, our timing will make us stand apart.” Jude Fernandes, previously executive director, Mudra Group and chief executive officer, Mudra India, agrees, “The market is small to begin with. Differentiation among the players will be needed when there is more competition. For a nascent sector, it makes sense to tackle the customer prejudices first.”
Agrees Anand Halve, founder, chlorophyll Brand & Communication Consultancy. “The bigger picture right now is how to scale up and get more customers rather than worry about competition,” he says. “The secret to cracking online shopping is how well a company delivers on its promises. With a generic message there will be a risk of benefiting others but then it must have had the confidence that it will be able to execute those service offers well.” Over the years, Flipkart has put together the kind of logistics needed to meet the demands of cash on delivery and now replacement guarantees. It has its own network of delivery-people in 13 cities while the replacement guarantee will see it delivering the replacement at the customer’s doorstep as well. It has also introduced payment by instalments.
The execution of the campaign has divided experts. While some laud its humour and eye for detail, others question its relevance. For one, Halve says, “It is certainly a creative spin. But the primary audience for these ads is the earning young adult in the 20s. For that audience, kids might not appear cute but denote a chore such as baby-sitting. Hence, the connect might be lost.”
Again, a third ad in the series was citicised for allegedly propagating stereotypes by depicting girls with Oriental features tending to two other girls gossiping at a beauty salon. Flipkart promptly withdrew the ad and is reworking it. The fourth ad was to follow during Diwali.
Vora says sales on its website have gone up from a daily average of Rs 80 lakh in August to Rs 1.5 crore a day in September. It claims to have clocked Rs 50 crore in sales in the last fiscal year.