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Online deal sites falter as e-commerce gets stronger

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set to cross Rs 46,000 crore with a 47% growth in 2011.

The festive season has failed to give a fillip to online daily deal sites this year, with most of these showing a decline in user traffic. According to ViziSense data, leaders in the segment, and , have seen a drop of 46 and 34 per cent, respectively, in October.

According to Amit Bhartiya, GM, ViziSense, "We noticed a drop across Indian deal sites. However, the impact on e-shopping sites like Flipkart and eBay was opposite, with traffic increasing in the same period." ViziSense, an online audience and ad measurement platform, has reported that while Snapdeal had 9.6 million users in September, the figure fell to 5.2 million in October.

But, Snapdeal CEO reasons it was the temporary halt in all marketing activities during the period that accounted for the slower traffic. "We were giving our site a makeover and had stopped marketing activities. However, sales have been growing phenomenally well, at 50 per cent month-on-month. We are now shipping products to 3,000 towns and cities," claims Bahl.

The Indian e-commerce market is set to cross the Rs 46,000-crore mark at a 47 per cent growth rate in 2011, reports IAMAI. E-tailing (online retail) comes second after online travel, with an eight per cent market share (Rs 1,550 crore).

, one of the fastest growing e-commerce portals in the country, grew 55 per cent in terms of users in October to 2.8 million, as compared to the 1.8 million they had in September. The country's largest online bookstore has rapidly expanded to other categories like music, video games, electronics and mobile phones. "Our satisfied customers have been the biggest source of incremental business. Their positive word of mouth brings us the biggest number of new customers. To add, media campaigns contributed significantly to the rise in traffic in our site," remarks Ravi Vora, VP, marketing, Flipkart.com.

Daily deal sites maintain they have been quick to reflect consumers' interest in discounted products. Snapdeal launched a mobile phone and timepieces' section four months back. They have now expanded to include personal care products, apparels and perfumes. With the holiday season round the corner, it hopes travel deals will help the site in fuelling traffic.

Another deal site, Mydala, too, is banking on the travel deals' section and more recently the wedding shoppers'. "We saw that around Karva Chauth and Diwali, people tended to buy deals for gifting. Keeping with this, we have included a wedding section that has everything from gifting to honeymoon to clothes. With easier categorisation, users don't have to search endlessly; they can get all in one place," explains Anisha Singh, founder and CEO, Mydala.com. Mydala saw a drop of 34 per cent to 3.1 million users in October from 4.6 million in September.

Singh claims the data is correct, but sales have gone up since then.

"The traffic we lost can be dubbed irrelevant, like window shoppers not being counted anymore. More, Mydala has collaborations with mobile operators to show users the deals they might be interested in. This has led to an increase in overall sales, with as many as 18 million users coming through the mobile platform," adds Singh.

Mydala has updated its backend technology platform so the website can now be accessed through any internet-enabled phone.

Yebhi.com, the franchise portal of Bigshoebazaar India, overtook eBay in terms of users in October with a jump of 67 per cent, estimates Vizisense. The site has recently added categories such as apparel, perfumes, jewellery, etc. that have taken sales up by 100 per cent. "It is our firm belief that deals do not drive the purchase in India, but variety proposition does. When I want to buy a watch, I will look at 10 different pieces and decide on one. We have to understand the choices and comparisons that work in our favour," remarks Manmohan Agarwal, CEO, Bigshoebazaar India (Yebhi.com).

IAMAI estimates the e­commerce user base in India is 10 million. It adds, "However, it is important to note that only a fraction of the country's people engage in e-commerce. Fortunately, access to digital payment solutions such as debit and credit cards, and the ability to use these among this section of people is considerably higher."

IAMAI also predicts the overall potential for e-commerce will increase from 146 million households in 2009-10 to 229 million in 2024-25.

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