Flipkart plans to attract advertisers from banking and financial services since these are areas where the company does not have a very strong presence.
One of India’s biggest online retailers, Flipkart plans to double its annualised sales from digital advertising with an aim to compete with market leaders like Google and Facebook. Flipkart currently generates the third highest revenue from online ads in India, as per a report by Livemint.
The company aims to reach sales roughly worth $200 million by March.
Flipkart plans to attract advertisers from banking and financial services since these are areas where the company does not have a very strong presence, said Prakash Sikaria, Senior Director and Head of Monetisation and Growth at Flipkart.
Flipkart is looking forward to partner with diverse brands from many sectors to open up the platform more, he said.
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For the year ended March 2018, the e-tailer’s ad business reached $100 million. The company would double down on video space as it is the fastest growing sector in the overall digital ads business, Sikaria said.
Former Flipkart CEO Sachin Bansal had tried to make Flipkart into an online marketplace that would generate billions in ad revenue from sellers and brands. Bansal had drawn inspiration from the business model of China’s Alibaba Group. This, however, never happened. Flipkart had been unable to meet its own projections, even though the company’s ad sales have been large for an e-commerce firm.
Google and Facebook are the major players when it comes to digital ad spending, and are estimated to grow at an annual rate of 32 percent and touch Rs 18,986 crore by 2020, according to a report. Flipkart is beginning to make a credible presence in the segment.
Digital ad spending is seeing a shift from desktop to mobile devices in the last few years, since a boost in smartphone sales. This will continue over the next 5 years, experts say.
This significant increase in digital ad spending poses a remarkable opportunity for businesses like Amazon and Flipkart, and they have been prompt in capitalising on it. Advertisements would be an alternative revenue source for e-commerce players. This would end up reducing their dependence on categories like clothes and smartphone sales, where a majority of sales occur.
Flipkart has 100 million registered users, a majority of the mobile users. Digital ad revenue can be a massive addition to the company’s business in the future. Flipkart also generates revenue through paid content from brands.