E-commerce brands focus on Tier II and III cities this festive with digital in their media mix

The festive season serves as a pivotal battleground for the Indian e-commerce brands. These brands have unleashed a marketing extravaganza to drive a surge in sales and expand their consumer base. Each year, this tradition of fierce competition among India's e-commerce brands emerges in the spotlight, as they seize the golden opportunity of the festive season to outdo one another.

In the quest for an upswing in sales, they are launched right amidst the festive season. Amazon has the Great Indian Festival, Flipkart launches Big Billion Days, it’s Meesho Mega Blockbuster Sale for Meesho, Big Fashion Sale for Myntra, The Grand Sale for Tata Neu, and All Stars Sale for AJIO.

And these brands leave no stone unturned, launching comprehensive marketing campaigns that span the entire spectrum of media channels. From captivating ad films filled with celebrities and eye-catching out-of-home displays to digital advertisements, striking posters, compelling print ads, and television commercials, they are armed with an array of marketing tools to lock horns and ensure maximum reach during the festive season.

No wonder e-com is one of the big spenders during festive.

Looking at the current trends in the market, the E-commerce industry is definitely one of the top spenders during the festive season. We are confidently anticipating a substantial 20% to 30% increase in advertising expenditures for this year. - Rohit Pabalkar, Media Director, The Starter Labs [Zoo Media]

According to a report by Redseer, sales are expected to grow 18-20% to around $11 billion during the ongoing festive season.

While the festive season typically witnesses a substantial surge in shopping activity in metropolitan areas, experts indicate that this year, e-commerce brands are intensifying their efforts to cater to consumer segments in Tier II and Tier III cities.

Tier 2 and 3 Markets Take Center Stage

According to a recent festive report by Meta, consumers look for content in their local languages during the festive season. 76% of Diwali shoppers prefer to see advertising in the local language, growing significantly year-on-year. 

This is one of the trends shaping the e-commerce landscape during the festive season. 

Arpan Biswas, AVP – Marketing, AJIO, highlighted the growing prominence of smaller towns and cities in the e-commerce space.

He said, "In terms of trends, smaller towns and cities have embraced online shopping and we’ve witnessed massive growth from tier 2 and 3 markets." 

To cater to them, AJIO has added 500 brands this festive season, offering a total of 5500+ brands. 

Speaking about the marketing plan, Biswas added, “The Cricket World Cup (CWC 2023) will be a big event we index on, as it coincides with our festive sales.”

Apart from the festive content as per specific state, the brand has curated content around the different regions of India like South, East, West and North and the specialties of that region.

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Rahul Dayama, Head of Marketing at Urbanic also highlighted that during the festive period in India, Tier I & II cities are expected to experience significant sales growth - these cities have been increasingly driving economic development and consumer spending, making them attractive markets for Urbanic and for various industries, including retail, as they continue to grow and prosper. 

He said, “There is a large segment of youth there, who want to keep up with the latest trends, and are fashion forward, yet who may not have access to many options - this is where our strategic online marketing has let us play to our strengths.”

This festive, along with campaigns, Urbanic is also focusing on offline events looped in for its customers and community. 

Similarly, Gopal Asthana, CEO of Tata CLiQ, also emphasized the importance of these markets and mentioned that there is a significant focus on tier II and tier III cities, reflecting the growing digital adoption in these regions. 

He said, “Apart from metros, we are witnessing a substantial uptick in sales from non-metro markets as well. Approximately 55-60% of our revenue during the festive season comes from non-metro markets like Karnal, Pune, Lucknow, Surat, etc." 

To woo these audiences, CLiQ’s marketing zooms in on providing a ‘magical shopping experience, which means providing personalization along with offers across categories. 

While Soumitra Choubey, Associate Director, Brand Marketing at Meesho, said, “Meesho saw 80% of orders coming from from the length and breadth of the country, including cities like Amravati, Aurangabad, Dehradun, Nellore, Solapur, and Warangal.”

This statistic demonstrates that the appeal of online shopping is no longer limited to metropolitan areas, with tier 2 and 3 cities becoming major contributors to festive season sales.

Digital-first approach and transforming content

Talking about media channels that have grabbed more attention from e-com players, Pabalkar said, “While social media still stays relevant, a shift towards content marketing is pretty evident. E-commerce brands are now leveraging the strength of content to increase their Customer Lifetime Value.”

In the digital age, a strong online presence and a well-crafted digital strategy are essential for e-commerce brands. According to a report by Merkle Sokrati, 76% of consumers are likely to research and purchase products online this festive season. Moreover, beyond metros, 7/10 of rural shoppers are going to use online touchpoints in their purchase journeys.

During this festive season, these brands are going all-in with a ‘digital-first’ approach, adapting their content to engage customers during this celebratory period.

Dayama highlighted that shoppers are more willing to make online purchases, especially for gifts and holiday-related items, and they often actively seek out special deals and discounts during this period. 

He said, “E-commerce companies can capitalize on this by offering attractive promotions, creating a sense of urgency, and ensuring seamless shopping experiences to harness the festive season's heightened consumer sentiment and drive sales growth.”

He mentioned that YouTube has acted like an underdog for Urbanic and the brand has received good reach and engagement on this platform, so it intends to focus more on that.

Furthermore, Biswas highlighted how digital channels play a significant role in their marketing strategy. 

Indicating the growing importance of digital platforms in their content strategy, Biswas of AJIO said, “For marketing, our budgets will be at par with our sales targets. We have a 360-degree approach to marketing with an almost equal budget split between traditional and new-age mediums.”

The festive report by Meta revealed that influencer and creator content significantly impacts purchasing choices. As per the report, 66% of Diwali shoppers concur that creators have a considerable influence on their purchase decisions. 

Asthana highlighted that consumers are gravitating from traditional to new-age channels for the discovery of fashion products and trends. 

Sharing the marketing plan for CLiQ, Asthana said, “Digital and social will be the primary channels we use to reach out to our existing and new customers. We have been actively working on building an influencer-first approach on our social media to drive relevancy and intent amongst potential shoppers. We plan to double down on it during the festive season with the added lens of localising influencers.”

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Asthana further mentioned that CLiQ is experimenting with AI-based creative and communication across multiple consumer touch points. It has seen ‘encouraging results’ on consumer engagement and plans to gradually scale it up.

Consumer sentiment rides high this festive season

Consumer sentiment plays a huge role in the success of the e-commerce industry during the festive season. The anticipation, enthusiasm, and willingness to indulge in shopping defines the consumer landscape. 

As per Asthana, there are three big trends shaping consumer sentiment during this season:

• Demand for premium products: The Indian economy has seen a strong recovery post-COVID, and discretionary spending is supposed to surge based on multiple industry research reports. This, coupled with a strong economic outlook and the desire to upgrade one’s lifestyle, will fuel the demand for premium products and categories. We expect the order values to grow on the back of this, along with non-metro penetration going for premium categories.
• Higher need for authenticity: Consumers are putting a higher weight on the trust and authenticity of the platforms they are purchasing from, even if they need to do it at a premium. This is higher among first-time high-value online shoppers, especially during the festive period. Platforms with strong SEO and customer reviews will benefit from this.
• Need for relevance and personalisation: Amongst fashion shoppers, there is a growing demand for product and platform personalisation based on past shopping and browsing histories. Platforms will double down on personalisation, driven by AI and ML, giving consumers the best-in-class browsing and shopping experience. This ability to drive relevance will further make shoppers gravitate towards online vs. offline, increasing the share of online in the overall fashion e-commerce space.

Attested to the prevailing optimism, Biswas, said, "Consumer sentiment is at an all-time high, and Ajio has witnessed a surge in sales with the start of the festive season." 

The growing importance of digital platforms, influencers, and personalized, localized content in the e-commerce industry sums up the brands’ festive season strategies. These brands are leveraging the digital landscape to connect with their customers, create relevant content, and aim to provide a seamless shopping experience during the festive season. The season acts as a catalyst for this regional expansion and the growth in non-metro markets suggests that e-commerce brands are actively working to make their platforms more accessible and appealing to consumers in smaller towns and cities.