Flipkart To Start Advertising For Other eCommerce Players On Its Platform

eCommerce platform Flipkart will soon start featuring contextual advertising of third–party sellers.

The company is expected to start including advertisements alongside product listings for other platforms and portals. This move may very well be the first of its kind. So far no Indian eCommerce player has willingly offered to advertise for other players, unless there was a signed mutual agreement or funding involved.

What will Flipkart display? Contextual Advertisings are essentially ads that monitor viewer behavior and site visits to beam relevant text based advertising. Taking cues from the Big Data that Flipkart gathers from its visitors, the company will be able to offer a smarter advertising platform.

Flipkart has nearly 12.6 Million Unique Visitors per month. Flipkart already has the purchase history of customers, and also information on what users are looking for. Google and Facebook employ similar targeted advertising via Search and Social Graph respectively. Targeted Advertising is surely a lot more profitable for a Brand Manager since it offers fairly predictable patterns and increases likelihood of effecting a purchase.

Why is Flipkart willing to advertise for other players? Indian eCommerce may be growing steadily, but from a financial perspective, the companies involved have a long way to go. Very few are able to keep their expenditure below their income and while they are making profits, the Operational Expenses erode nearly the entire treasury.

In a segment that is governed by funding and where stronger companies routinely devour smaller and apparently inefficient companies, Flipkart is trying to improve its bottom–line via third–party advertising.

Other players like Amazon and Flipkart’s arch rival Snapdeal have been burning cash to attract and retain customers, but owing to regular rounds of funding the latter has funds at its disposal. Not that Flipkart isn’t backed strongly, it certainly doesn’t hurt to explore newer revenue sources. What do you think?

Source | nextbigwhat

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