ShopClues, which claims to focus on smaller towns and cities, said the new product called AdZone, a self-service solution that helps merchants promote products using native and custom ads, was developed in partnership with ad tech firm C1X.
This is unlike Flipkart and Snap deal, which acquired Ad I Quity Technologies Pvt Ltd and Reduce Data, respectively, to strengthen their presence in the digital ads space. ShopClues claims to have run a pilot with 300 merchants for the ad product and launched 1,000 ad campaigns over a 10-day period earlier this month.
“This platform will boost the visibility of products and maximise product views, helping vendors to increase business with us. The bidding system ensures transparency, while our differential bidding mechanism for products is essential for retailers,” said Radhika Aggarwal, co-founder, ShopClues.
The move by ShopClues, which has raised at least $200 million from the likes of Nexus Venture Partners, Tiger Global Management LLC and Singapore’ s sovereign wealth fund GIC Pte Ltd, among others, comes at a time when e-commerce companies are exploring ancillary revenue streams such as ads.
For instance, in China, some e-commerce companies have built large ads businesses. Alibaba Group generates larger mobile ad sales than even Baidu, China’s local search engine, according to researcher eMarketer. Alibaba generates more than half its sales from ads.
Closer home, both Flipkart and Snapdeal have launched ad products for merchants.
Flipkart generates $1 million in monthly advertisement sales, making the company one of the largest digital ad platforms in India less than a year after it launched its ads business. It launched the digital ad product in May last year, after buying Ad IQuity in March. The platform is for merchants as well as brands.
SoftBank-backed Snapdeal launched a new version of its advertising platform Snapdeal Ads, which aims to help sellers target shop person the site based on behavioural data. The company’s foray into the segment came after it acquired Reduce Data in September last year.
Digital ad spending in India is expected to increase by 40% to ₹6,525 crore this year, according to a January report by media agency GroupM. A majority of the ad spending currently goes to Google and Facebook.