All about Online coupon sales and eCommerce in India
Indians are known for discount hunting while buying any new product. Doesn’t matter if we are buying online or offline, we never let a good bargain pass. Typically, one would look for discount tags when shopping in brick and mortar shops and go to price comparison sites when buying online. After arriving at the most reasonable price, one round of coupon hunting on sites like CouponDunia, 27coupons and CouponNation before clicking on buy button is a must if you are looking to shave a few hundred rupees off the final price.There are over a hundred coupon aggregation sites in India and over the last 2 years, the online coupon aggregation and distribution space has been witnessing significant traction. The space is showing strong signs of maturity like big markets in the west.
According to a report released by ComScore in August last year, around 4.6 million Internet users in India aged 15 and older accessed the coupons category from a home or work computer, reaching 10.4 % of the entire online population. At present, referral traffic from coupon websites is the largest source of sales eCommerce websites like Yebhi, Pepperfry and Myntra besides the traffic from organic Google search traffic and in certain cases, direct traffic.
Coupon websites are helping eCommerce players in the following ways
– Ecommerce players leverage (can leverage) a strong viewership or connect of coupon websites to sell their dead inventory.
– They can convert these coupons and the cost incurred into customer acquisition cost, which is technically lower than consumer acquired via Google Adwords and search engine marketing.
– Online retailers can create a buzz by targeting specific segment or category of their website through coupons.
Currently, there are 150 websites which are actively involved in coupon business. On a conservative estimate, these sites generate a combined 6-7 million page views per month.
Nrupal Das, co-founder, 27Coupon says that coupon sites drive more than half a million visits every month to the top 20 eCommerce websites.
Travel sites and online retailers with multiple categories see maximum redemption of coupons from aggregators as marketing campaigns carried out by these mass etailers generate awareness about availability and distribution of their coupons.
On the other hand, specialized (vertical focused) stores that sell only one or two categories like books or designer wear, have lower redemption rates because of their positioning as specialised stores where you get the best in the segment at the most affordable price. They also distribute fewer coupons.
Growth of major coupon aggregators
Though there are more than 150 sites in the coupon business, the space has only a few serious players. The others are simply ‘inspired’ by leading sites and there seems to be many copy paste jobs at large.
Players such as Coupondunia, 27coupons, DesiDime and recently launched CouponNation and CuponHero including several others have been leading the space. Price comparison sites like MySmartPrice and the recently launched Shoppingwish.in also deal with coupons. Presently, CouponDunia gets well over 1 million visits a month. “Among our direct competitors we are very easily the leaders. Every public metric confirms that. We’re growing very quickly. And the future is bright because we’re going to grow right along with ecommerce. As overall ecommerce volumes will grow, so will ours,” said Sameer Parwani, founder, CouponDunia.
27coupons claims that it has grown organically over 700% during the past one year (Nov 2011 – Nov 2012). In terms of traffic sources, the website receives approximately 99% from organic search, referrals, social media and email newsletters. “We had historically never ventured into SEM and have been sporadically involved during past 2 months which gives us less than 0.5% of our traffic. The ratio of download to actual redemption is between 4 % to 20% and it’s higher for travel sector and also for etailers which distribute coupon codes” said Das.
Coupon aggregators run on an affiliate model. The sites get paid from eCommerce sites. E commerce companies have their terms and conditions mostly revolving around non-usage of branded keywords in SEM and others. Some of the ecommerce website work on affiliate model, some don’t (for example Homeshop18 and ebay).
Single conversion ranges widely from Rs 10 or less for a recharge customer up to Rs 800 for a jewellery customer, further depends on the site and category. Revenue split of leading coupon aggregators is roughly 80:20 (ratio split across commission and advertising) with 80% commission and 20% fixed advertising ( by selling ad banners on the website).
– Some industry experts have view that couponing space has become overcrowded. However, according to a poll conducted by CouponDunia outside shopping malls reveals that under 10% of online shoppers are even aware right now that they can find coupons by searching online or that coupon sites exist. Spreading awareness (especially across tier 2 and 3 cities) seems to be major concern for coupon aggregators.
– Short term focus by majority of aggregators or ‘making hay while sun shines’ approach. Industry experts suggest that lot of business models around couponing started with focus of making money from ecommerce website till they have huge funding from Venture funds.
– Innovations appear to be limited in this space and existing coupon aggregation space need to evolve in order to survive. Aggregators need to make this business balanced for consumers and ecommerce stores. The focus should be on facilitating ecommerce and pass maximum benefits on consumers.
The coupon business will grow strongly on the back of growth in eCommerce and at least for the next 2 years, a decline is not in sight. Conversions in ecommerce due to coupons should be higher , considering the value (discount) it offers to consumers. This leads to no clamp down by ecommerce websites on coupon from their end.
Also new ecommerce ventures would be distributing coupons to tap into this user base whose buying behaviour is being impacted by couponing. Word of mouth marketing of couponing is also catching up and hence the usages likely to grow.
However, supply of coupons would be hampered in long run, which is 3-4 years away from now . “Consolidation of the financial aspect of ecommerce business would lead to certain restriction on distribution of coupons by well established ecommerce companies,” concluded Das.http://www.nextbigwhat.com/discount-coupons-online-297/http://www.nextbigwhat.com/wp-content/uploads/2012/12/Coupon-Discount.jpghttp://www.nextbigwhat.com/wp-content/uploads/2012/12/Coupon-Discount-290x290.jpgyebhi