Today, people log online to do their own research and learn

By January 19, 2015Uncategorized

Pairing Off

The world of canada goose uk outlet e commerce has given the word ‘exclusive’ an all new meaning. More canada goose black friday sale and more brands, across categories, are forging partnerships with e commerce platforms of their choosing. buy canada goose jacket Here’s how it works: only the selected site has the right to sell the product, across the country; no other retailer online or offline can stock that product. A look at the model and what it entails. Post that, the trend only surged. And the results have been extremely favourable.

For instance, the 2014 partnership between Flipkart and Motorola, for Moto G, resulted in the sale of over three million Motorola handsets (retail value of approximately Rs.3,000 crore). The duo continued the partnership for the launch of two canada goose outlet more smartphones, Moto X and Moto E, in India. Motorola, now a part of Lenovo, has edged past Nokia to become the official canada goose outlet fourth largest smartphone maker in India. In August, Flipkart also launched mobile phones made by Xiaomi, a partnership that resulted in the sale of over 240,000 Redmi 1 handsets (retail value of approximately Rs.150 crore).

After apparel and mobile phone brands reaped the benefits of this model, other product segments hopped on. Today, books, TVs, home appliances, and food and beverage brands are being launched in the market through exclusive tie ups with e commerce sites.

Sample these examples: Amazon recently announced that it would canada goose clearance sale be the sole seller of Microsoft’s interactive entertainment canada goose factory outlet products in India, including the latest version of its gaming console, Xbox One. More recently, Pranab Mukherjee’s new book ‘The Dramatic Decade: The Indira Gandhi Years’ was launched exclusively on Amazon.

Coca Cola expanded its product portfolio in India with the launch of its sugar free offering Coca Cola Zero, which was sold exclusively on Amazon for the first two weeks. The product got 1,700 online bookings in four hours of its launch on September 19. Apparel brand Grasim has announced an exclusive tie up with Amazon, a partnership it hopes will make the brand more accessible to its digital age consumers.

Home appliance brands like Kenstar and Maharaja Whiteline also took buy canada goose jacket cheap a similar route while launching new products in India. Online, a brand can take its products to consumers in far flung areas that are difficult to reach through brick and mortar stores. Besides, it is very difficult for brands to open stores in every city.”

Secondly, such partnerships spare the marketer a lot of hassles since a big chunk of it is taken care of by the concerned e commerce platform. Websites typically announce the tie ups through full page advertisements in leading dailies and TV spots. Of course, the brands in turn, sacrifice their margins, which goes to the e commerce company for its efforts.

“Such deals are seen among lesser known brands, as the partnership allows them to be present on mainstream media channels,” says K Vaitheeswaran, e commerce consultant (and founder of Indiaplaza, India’s first e commerce website), citing Xiaomi and Oppo Mobile as examples of brands that became famous in this market only due to such marketing push.

The nature of the deal, though, varies from brand to brand. If the brand on sale is an established one, the marketing responsibilities are shared by the brand team and the e commerce company in question. Sometimes, e commerce platforms have standard rules for canada goose outlet parka all the brands they tie up with.

For brands, another big advantage of this model is the data they stand to receive from their e commerce partners. Michael Adnani, cheap canada goose head, strategic brand alliances, Flipkart, says, “We can let the sellers know at what price points their products will sell, and the kind of offers/discounts customers show a preference for, across categories. This kind of market intelligence helps them position their brands better.”

Another pertinent reason for the rise of these partnerships is the omission of the distributor network, one that comprises the ‘middlemen’ of Indian retail. “Launching a product via this distribution canada goose outlet online model increases its end price by almost 30 to 40 per cent, and even more than that if the target market is a rural one. So launching a product online helps us control the cost,” states Bhaavish VR, country manager, SkyHi Digital, a Bengaluru based startup that sells consumer electronics online only under the brand SkyHi. The company has tied up with different online platforms to e tail different products; it sells Smart TVs on Snapdeal, and LED TVs on HomeShop18.

Of course, giving offline distribution a skip makes sense for international brands, canada goose uk black friday as they typically lack a strong on ground network in India. But what makes Indian brands gravitate towards canada goose outlet jackets this model? Arun Pal, chief operating officer, small home appliances, Kenstar, rejects the notion that exclusive e commerce tie ups are beneficial to just international brands. “Micromax and Karbonn have adopted this model quite successfully,” he reminds us, adding, “We tied up with Flipkart in canada goose outlet nyc order to go mass with the Oxy Fryer, especially during its early days. Today, people log online to do their own research and learn about the product before purchasing it.”

Emmanuel Serot Almeras, vice president, marketing, Groupe SEB India, the company that owns Maharaja Whiteline, feels e commerce partnerships give brands instant and cost effective reach in Tier II and Tier III markets. “Brands can also leverage the data and play up their attributes accordingly,” he says. Speaking of advantages, these partnerships are a great way for e commerce players to differentiate themselves from their competitors. States Indiaplaza’s Vaitheeswaran, “As a result of the massive consolidation happening in the e commerce space, these platforms strive to differentiate themselves from one another by offering competitive prices.”

For a website, he explains, the advantage of an exclusive tie up with a brand is two fold: Firstly, since the product is not available in any other store, the website can control the pricing and secure its own margins. Secondly, partnering with a well established brand can help bring new consumers/first time e buyers into the fold.

The canada goose factory sale Flip Side

Exclusivity comes at a price, apparently. For one, when a brand launches through an online tie up, it subsequently finds it difficult to expand its availability across other online, and also offline, retailers. And this is a fact across markets and types of products. After all, when American singer Beyonce launched her album exclusively on iTunes late last year, Amazon and supermarket chain Target refused to stock CDs of the album.

Why so? For the most part, it’s because the competitive rates/discounts offered by brands’ online partners are tough to rival. A Delhi based electronics retailer captures the sentiment of his fraternity beautifully in a placard placed outside his shop. It reads ‘Please Do Not Discuss Flipkart Rates Here’. In fact, if a brand has already been launched online, some offline retailers agree to stock it only if the brand team offers certain additional benefits.

Some brands try and find a non binding middle path. But Flipkart is just the exclusive online partner; the book was canada goose outlet store uk made available at offline bookstores on the day of its release.

Establishing online partnerships is not something all brands should blindly do; it ought to be a function of the TG, caution experts. “Brands targeting urban, tech savvy consumers will tend to do well in these partnerships. However, for a brand targeting some other TG, which is not predominantly online, canada goose outlet uk sale I am not too sure how this arrangement can be successful,” wonders Vaitheeswaran. That’s probably why tech based products like smartphones sell like hot cakes online.

Offline Versus Online

To what extent is the burgeoning e tail industry, replete with exclusive deals with brands, a threat to offline retailers?

First, a look at some facts: The online retail market in India is estimated (by IAMAI) to grow from $2.3 billion today (which is 0.4 per cent of the country’s overall retail market) to $32 billion in 2020 (three per cent of the retail market). During the canada goose outlet shop same period, the share of the organised retail segment is expected canada goose store to grow from 8.4 per cent to 14 per cent. Unorganised retail will still dominate.

In most developed countries, both models offline and online retail co exist. “Though e commerce is here to stay, it is imperative for a brand canada goose outlet to have a brick and mortar presence as well,” reasons Pal of Kenstar, adding, “Segregating products based on their TG and making them available on the right platforms, is where the strategic planning lies.”

Vaitheeswaran paints an interesting scenario: The day an canada goose coats offline retail giant cracks the online game is the day the offline retail segment ought to start worrying.

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