Online Friendships
India's top internet companies are increasingly partnering with each other in an attempt to reach out to a larger customer base and offer a greater variety of services in a cut-throat market. |
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“With this partnership with OLX, we will be able to provide an end-to-end solution to customers, especially in the Electronics categories where selling old products is an integral part of the buying process,“ said Ravi Vora, senior vice-president marketing at Flipkart.
Industry experts believe that such tie-ups will be par for the course going forward for the internet companies in India. “These are the new barter marketing tactics. They are constantly looking to come up with ways to grow disproportionately in a very short period of time. In other words, growth hacking,“ said Alok Goel, chief executive of Sequoia Capital-backed online recharge and coupling venture Freecharge, which has a similar partnership with e-commerce players Amazon and Snapdeal.
For OLX, a portfolio company of South African diversified media conglomerate Naspers Group, such a tie-up could give it a significant advantage over its peers, given that it now has access to Flipkart's 25 million users. Naspers is also an investor in Flipkart.
Successful conversions can be tracked through special tracking codes, according to industry experts.
“They could also issue coupons which can be redeemed on the affiliated website,“ pointed out Nitin Chhabra, founder of e-commerce consultancy Ace Turtle. There is, however, no clarity whether there is a revenue sharing agreement between Flipkart and OLX.
Online bus ticketing venture redBus and on-demand taxi transportation app Uber also announced a partnership in August that allows customers, after making a booking through redBus' mobile app, to avail two free rides in an Uber cab, valued at Rs 300 each, in six cities -Mumbai, Pune, Bangalore, Hyderabad, Delhi and Chennai.
For Uber, which launched its services in India last year, a strategic partnership with redBus makes sense, given that the latter sells more than a million bus tickets every month, and has over 2 million registered users.
“This goes to the limits of traditional marketing, using our marketing strategy to get users to experience Uber for the first time,“ said Akshay BD, communications manager for Uber in Bangalore.
While Uber refused to disclose the exact number of users that have availed of the offer, company executives said the tie-up had seen a `significant' rise in number of users.
According to Ashish Kashyap, head of the Goibibo Group, which acquired redBus from its founders for about Rs 800 crore in 2013, the initiative had been a runaway success for Uber, with the company reaching out to about 150,000 users transacting through redBus mobile app users.
“The partnership becomes highly symbiotic.redBus is enabled to deliver value to its online bookers and Uber is enabled to cross-sell to a targeted set of consumers who already have a need to avail such a service and is a mobile transacting user,“ Kashyap said, adding that there is no revenue sharing agreement between the two ventures.
Others, such as real estate venture CommonFloor, have tied up with taxi services providers like Olacabs and TaxiForSure.
“We have tie-ups with them to arrange site visits for our customers. The service is free for our customers, since we take money from our builder contractors. At the same time, we get discounted rates from these aggregators since we use them very often,“ said Sumit Jain, cofounder of CommonFloor.
The barter marketing tactics are further examples of internet companies in India looking to get a stronger grip on the consumer's wallet, in a hyper-competitive market, which is currently estimated at $2 billion (Rs 12,000 crore) but which could touch $38 billion (Rs 2.3 lakh crore) by the end of the decade, according to retail consultancy Technopak.
“This is almost unique to India. You don't really see this in the more developed markets such as the US, Europe or Japan,“ said Goel, who, before taking over at Freecharge in 2013, was the chief operating officer at redBus.
With an internet user base that is expected to cross 400 million in the next five years, driven by mobile, the stakes for companies such as Flipkart are high, given that they continue grapple with wafer-thin margins, high customer acquisition costs and fickle consumers.
Partnerships with traditional or offline companies are increasingly in vogue as well.
While Uber has partnered with multinational financial services behemoth American Express in India, Goibibo has tied up with insurance company Bajaj Allianz as well as a number of restaurant chains, such as Papa John's and Subway.
“This strategy works for us,“ said Uber's Akshay. “We look to partner with companies people identify with, and where we can offer an end-to-end consumer experience.“
Ref: An ET Article
In the battle for supremacy, internet companies in India are turning to the most unlikeliest of allies -each other -as they look to become leaders in one of the most competitive consumer markets globally.Flipkart, Uber, redBus and OLX are just some of the top internet companies that have joined hands to assist each other to leverage their strengths and attract more consumers to their platforms.
Last month, Flipkart, India's largest e-commerce company, and OLX India, an online and mobile marketplace for used goods, announced a marketing partnership that allows potential customers to sell their used products on the latter while buying new ones on Flipkart.“With this partnership with OLX, we will be able to provide an end-to-end solution to customers, especially in the Electronics categories where selling old products is an integral part of the buying process,“ said Ravi Vora, senior vice-president marketing at Flipkart.
Industry experts believe that such tie-ups will be par for the course going forward for the internet companies in India. “These are the new barter marketing tactics. They are constantly looking to come up with ways to grow disproportionately in a very short period of time. In other words, growth hacking,“ said Alok Goel, chief executive of Sequoia Capital-backed online recharge and coupling venture Freecharge, which has a similar partnership with e-commerce players Amazon and Snapdeal.
For OLX, a portfolio company of South African diversified media conglomerate Naspers Group, such a tie-up could give it a significant advantage over its peers, given that it now has access to Flipkart's 25 million users. Naspers is also an investor in Flipkart.
Successful conversions can be tracked through special tracking codes, according to industry experts.
“They could also issue coupons which can be redeemed on the affiliated website,“ pointed out Nitin Chhabra, founder of e-commerce consultancy Ace Turtle. There is, however, no clarity whether there is a revenue sharing agreement between Flipkart and OLX.
Online bus ticketing venture redBus and on-demand taxi transportation app Uber also announced a partnership in August that allows customers, after making a booking through redBus' mobile app, to avail two free rides in an Uber cab, valued at Rs 300 each, in six cities -Mumbai, Pune, Bangalore, Hyderabad, Delhi and Chennai.
For Uber, which launched its services in India last year, a strategic partnership with redBus makes sense, given that the latter sells more than a million bus tickets every month, and has over 2 million registered users.
“This goes to the limits of traditional marketing, using our marketing strategy to get users to experience Uber for the first time,“ said Akshay BD, communications manager for Uber in Bangalore.
While Uber refused to disclose the exact number of users that have availed of the offer, company executives said the tie-up had seen a `significant' rise in number of users.
According to Ashish Kashyap, head of the Goibibo Group, which acquired redBus from its founders for about Rs 800 crore in 2013, the initiative had been a runaway success for Uber, with the company reaching out to about 150,000 users transacting through redBus mobile app users.
“The partnership becomes highly symbiotic.redBus is enabled to deliver value to its online bookers and Uber is enabled to cross-sell to a targeted set of consumers who already have a need to avail such a service and is a mobile transacting user,“ Kashyap said, adding that there is no revenue sharing agreement between the two ventures.
Others, such as real estate venture CommonFloor, have tied up with taxi services providers like Olacabs and TaxiForSure.
“We have tie-ups with them to arrange site visits for our customers. The service is free for our customers, since we take money from our builder contractors. At the same time, we get discounted rates from these aggregators since we use them very often,“ said Sumit Jain, cofounder of CommonFloor.
The barter marketing tactics are further examples of internet companies in India looking to get a stronger grip on the consumer's wallet, in a hyper-competitive market, which is currently estimated at $2 billion (Rs 12,000 crore) but which could touch $38 billion (Rs 2.3 lakh crore) by the end of the decade, according to retail consultancy Technopak.
“This is almost unique to India. You don't really see this in the more developed markets such as the US, Europe or Japan,“ said Goel, who, before taking over at Freecharge in 2013, was the chief operating officer at redBus.
With an internet user base that is expected to cross 400 million in the next five years, driven by mobile, the stakes for companies such as Flipkart are high, given that they continue grapple with wafer-thin margins, high customer acquisition costs and fickle consumers.
Partnerships with traditional or offline companies are increasingly in vogue as well.
While Uber has partnered with multinational financial services behemoth American Express in India, Goibibo has tied up with insurance company Bajaj Allianz as well as a number of restaurant chains, such as Papa John's and Subway.
“This strategy works for us,“ said Uber's Akshay. “We look to partner with companies people identify with, and where we can offer an end-to-end consumer experience.“
Ref: An ET Article
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