E-commerce portals' foray into TV

E-commerce portals, most of which have raked in close to Rs 100 crore in revenues over the past year-and-a-half, are looking to foray into television’s infomercial segment by the end of 2011.

The infomercial segment consists of television commercials that run from five minutes to an hour and is also called teleshopping. The Rs 2,000-crore infomercial segment, currently dominated by players like Homeshop18, is the natural step ahead for e-commerce portals, which already have most of the delivery infrastructure in place.

The launch of new e-commerce portals like Naaptol, Snapdeal, LetsBuy, and DealHoJaye, along with specialised ones like Vamoose, Myntra, Fashion&You, have taken much of the tier II, III and IV cities by storm.

Of these, Naaptol.com, which was also the biggest advertiser in print last year and receives an average of 20,000 calls in a year, is looking at a foray into television with an investment of Rs 60 crore.

“We already have partnerships with multiple channels on hourly slots and are now looking at launching a 24-hour channel for selling,” said Manu Agarwal, founder and CEO, Naaptol.com.

Agarwal said the company was looking at raising $25 million from venture capital funds over the year for the venture. Additional funding would be required for production, studio and distribution capacity.

In India, over 60 per cent of the e-retail business happens over the phone, which makes the call centre capacity of an infomercial company critical. Keeping this in mind, Agarwal set up four call centres with over 650 employees. On an average, the company docks a business of Rs 1.5 crore per day.

The move, while requiring a significant investment, will increase the chances of deal monetisation, something that is a problem as most people are still uncomfortable buying online and end up using the websites as price and product reference points.

“E-Commerce is the third-highest activity on the Web, after email and news services. The market size is about Rs 32,000 crore in India, and will grow with diversification. While consolidation in this space is likely, it will be easier if portals position themselves as specialist providers,” said Shaily Shah, a research analyst with Gartner.

Others like Sanpdeal.com, currently present in over 50 cities with an employee strength of over 400, is the fastest-growing start-up e-commerce portal. Like Naaptol.com, it is looking at a foray into television. “We have been eyeing a presence on television for a while. The problem is it is a costly medium to sell deals. However, we do plan on something soon and will partner with those already in the business,” said Kunal Bahl, CEO of Snapdeal.com.