Ad spends on e-commerce on the rise: Sankalp Mehrotra, Flipkart

At the Pitch Madison Advertising Report 2023 unveiling event hosted by the exchange4media group in Mumbai on Wednesday, Sankalp Mehrotra, VP - Monetisation, Flipkart, took the centre stage to deliver a special address on ‘The growing importance of Retail Media’.

Mehrotra started by sharing insights on the current scenario of the e-commerce media in the country. “India has the 3rd largest e-commerce base globally and the factors facilitating this growth are ubiquitous data, and the rise of the middle class and the GenZ or digital natives becoming a part of the key consuming segment. The e-commerce market is expected to grow to $170 billion by the end of 2027.”

He further explained how e-commerce follows a predictable trajectory as it has three stages: early adoption, growing stickiness and massification. India, as a market, is in stage two and taking rapid strides towards the third stage now, Mehrotra stated. 

Talking about the extent of ad spending, he shared that e-commerce media is at upwards of $1 billion and spends, and it is growing faster than the growth of digital adex. Adding on what fuels this growth, Mehrotra said, “The first thing is search verticalisation as search has changed drastically from horizontal search - the user journey is starting from e-commerce platforms. Secondly, most people come to a destination like ours to research even when buying offline. And finally, the customer is already there to shop and for the longest time advertisers have wanted to have a full-funnel view of what is happening to their advertising dollars, and commerce media facilitates just that.”

According to Mehrotra, the top trend in e-commerce is micro-segmentation. “There is a wide cohort of consumers coming in, there are different kinds of consumers who face different kinds of barriers and have different motivations. Along with micro-segmentation, there are new models of e-commerce coming in like social commerce, video commerce and quick commerce. New experiences are being created for the consumers.”

Concluding his address about what the future looks like for e-commerce, Mehrotra shared that the advertising spending on e-commerce is only rising where 80% of the spends is likely to be net new. “Nearly 40% of commerce advertising spends are spent for the top of the funnel and it has to be for brand-building. Therefore, as we move towards the future, commerce advertising needs to be part of every media outreach.”