DEN-Snapdeal TVShop reaches 30 million homes in 5 months, takes over $2M worth orders
With the battle for e-leadership intensifying, e-commerce companies aren’t leaving any market avenues to chance. While most companies have stayed away from television, Snapdeal partnered with DEN Networks in the beginning of 2015, diving headfirst into the television industry.
Within a span of five months, the joint venture has established a reach of 30 million households. It now processes over 90,000 orders on a monthly basis. “We captured half the reach of our rivals, who have been in the market longer," says Maneesh Goel, CEO, DEN-Snapdeal TV-Shop.
The joint venture aspires to grab over 40 per cent of the INR 1,300 crore market (commissions revenue basis) and reach an INR 500 crore turnover mark from TV commerce. “Since our launch, we’ve been growing 50 percent on a monthly basis in business terms,” says Maneesh.
Unlike e-commerce players, who offer a wide selection and product assortments, DEN Snapdeal TV Shop pushes only 80-100 products a month. “We push quality and high ticket size products. This enables us to have bigger average basket size when compared to e-commerce peers,” points out Maneesh.
The average basket size of DEN Snapdeal TV-Shop stands at around Rs 2,000. The platform does over INR 13-15 crore worth orders in a month (presently) with 50 percent monthly growth. Fashion, lifestyle and home furnishing contribute 60 percent of the orders for the company.
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Contrary to popular belief, TV commerce works better in geographies where internet penetration is low. More than 35 percent of the orders for DEN Snapdeal TV-Shop come from big cities and metropolitan centres like Delhi, Bengaluru and Mumbai. “NCR is the biggest market for us, so far. Close to 20 per cent of the orders come from Delhi (NCR) region,” states Maneesh.
The joint venture has a presence in most parts of the country except Uttar Pradesh, Kerela and a few other states.
Television commerce is observably different from web commerce. Moreover, it’s a function of reach while web commerce relies heavily on marketing. “Reach is key to success in TV commerce, and we are confident we’ll reach 50 million more homes by the end of the current fiscal year,” says Maneesh. The company only recently launched its marketing campaign, ‘Don’t postpone your happiness, Buy Now,’ too.
Television commerce isn’t growing as fast as web commerce. It’s been unable to attract capital from VCs, but the space still has decent growth and potential. According to some industry estimates, TV commerce processes INR 15-20 crore worth orders in a day, and the market size stands close to INR 1,300-1500 crore on a commissions revenue basis with a growth rate of 60-70 per cent annually.
Currently, HomeShop18 is leading the industry with 40 per cent market share followed by StarCJ and Naaptol.
Snapdeal, which competes with Flipkart and Amazon, sees TV commerce as an additional revenue channel where its competitors are absent. With this joint venture, the eBay-funded company aspires to grab 35 percent of overall market share, but it’s not going to be an easy ride for Snapdeal.
HS18, Star CJ and Napptol have been in the market for a far longer time, and they will not allow DEN Snapdeal TV-Shop to invade their territory easily. Going forward, experts will keep their eyes peeled to see whether other e-commerce giants will enter TV commerce, and see how veterans like HS18 will respond to Snapdeal’s aggressive aspirations. So stay tuned for more updates!