Shopclues’ Diwali strategy – Spend less cash, back sellers, aim profitability

Indian ecommerce leaders Flipkart, Amazon and Snapdeal are ready with fresh pile of cash to spend on marketing campaigns during the peak shopping season.

But Gurgaon-based Shopclues has slashed its marketing budget for Diwali sales (from October 1st to October 10th) unlike the big ecommerce players.  The etailer’s aim is to limit cash burn and prioritize profits.

To keep tight hold on its wallet

Shopclues’ co-founder Radhika Aggarwal divulged that compared to last year’s festive sales, the firm is going to spend considerably less on ads and promotional activities.

“Our digital marketing and television commercials (that go live on Monday) are all focused to tell the consumers that they can get a lot more (products) in a lot less (money spent),”Aggarwal said.

On the other hand, Flipkart is going to spend Rs 30 crore, Amazon Rs 125-130 crore and Snapdeal has already spent Rs. 200 crore!

Will invest in sellers

If Amazon calls itself ‘consumer first company’ then, Shopclues calls itself ‘merchant first company’.

Hence, the etailer has reserved 15-20% of the Diwali marketing campaign budget for seller initiatives.

“Our success lies in (the) merchants’ success. That’s why they remain a very important part of our campaign,” asserted Aggarwal.

Some of its seller initiatives for the shopping extravaganza 2016 are:

• Capital Wings –short term loans  service for sellers
• AdZone – a merchant ad bidding platform to display custom ads on the marketplace
• Will spend around Rs. 1-2 crore from its own pocket to assist sellers in marketing and get affordable loans
• Other initiatives like Store Manager, Business Guru

The only Indian ecommerce players to be on the right track?

Even though Shopclues doesn’t feature in the top 3 list, the company is quite close to dethroning Snapdeal. When the ecommerce leaders focused on metropolitan cities, Shopclues expanded its business in tier 2 & 3 cities, which is why the company has strong hold in non-metro cities. And it helped the company to keep its losses low compared to other firms too.  

With the decision to keep an eye on cash burn rate and focus on profitability, will it be wrong to assume that maybe Shopclues in the only online marketplace that is on the right track in terms of business growth?