Flipkart eyes more buys to boost mobile ad biz

20 Mar,2015

By Samidha Sharma

 

India’s largest online commerce player Flipkart is looking to strengthen its mobile advertising platform, a vertical that may help it clock substantial revenues at better margins in a business which has only been guzzling cash till now.

 

Sachin Bansal, co-founder & CEO of the Bengaluru-based Flipkart, said in an exclusive chat that the e-commerce company , which acquired AdIQuity Technologies recently , will build a 200-people strong team in a year for its ad business as mobile becomes its focus area for investments going forward.

 

Accepting that desktops weren’t giving the same returns on investments anymore compared to a few years ago, Bansal said Flipkart will keep an eye out for more acquisitions in the mobile space and look to fill the gaps on tech and talent front.

 

“I believe it (mobile advertising) can be a big business for us,“ said Bansal, who is spearheading the ad business for Flipkart post a reorganisation at the seven-year-old company which started off as an online bookstore.

 

Search giant Google and social networking site Facebook dominate the online and mobile advertising space, globally and in India, but e-commerce majors who boast of large consumer traffic and data are now looking to target shoppers on their platforms, prompted by their growing seller base and high adoption of smartphones.

 

The e-tailer, valued at over $11 billion, first started dabbling with advertising a year ago with a few banner ads but put its weight behind the vertical only in the last six months.

 

“Sellers and brands really needed this platform as they wanted to have more control over their sales, we learnt this from our initial experiment. That’s when we thought we needed a company which had expertise in the mobile ad space,“ Bansal said.

 

With its massive data insights on consumers, Flipkart is a great platform as marketing dollars move towards data-driven advertising, said Anurag Dod, founder of AdIQuity , who was Bansal’s senior at IIT Delhi. AdIQuity , which started off in 2006, exactly a year prior to Flipkart, as a search engine under the name Guruji, is likely to help Flipkart with mobile-specific ad technology .

 

Bansal said with a push towards expanding its marketplace, where merchants directly sell to consumers, it was imperative to address the concern of sellers who wanted to push their brands and products on Flipkart.The company claims to have 30,000 sellers and directly competes with Amazon and Snapdeal. For now , the e-commerce biggie will open the mobile platform to its own sellers for advertising and then look at getting external brands on board.

 

“It’s still unclear in the short term as to how many of the sellers on ecommerce platforms would convert into big advertisers other than the top 30 of the big merchants. Also, if you look at the China digital ad market, it’s 40-50 times larger than India. This is the main reason why Alibaba is able to monetize Taobao via advertising revenue,“ said Karan Mohla, VP at IDG Ventures India.

 

Source:The Economic Times

Copyright © 2015, Bennett, Coleman & Co. Ltd.

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