While one could argue that the digital advertising ecosystem is shaped by the actions and decisions of a few big companies, there are signs of change now, and nowhere is this more evident than at our own shores. The Big Five (Google, Meta, Apple, MS, and Amazon) of tech have traditionally held the keys, the gate, and indeed pretty much the kingdom for much of our online history. However, now, the world’s most populous country and fastest growing major economy is looking to challenge the status quo.

While we’ve touched upon retail media and its potential earlier, this more localized marketplace for this particular kind of media that India is developing in a world of Amazon and eBay, to say nothing of the overreach of Google and Meta.

Apart from Flipkart, local-origin platforms like Myntra, Nykaa, Snapdeal, and many others of their ilk have become a positive mine of rich consumer data. The number of online transactions in India is still growing. As per reports from Bain and Co, as of 2022 there are approximately 180 million - 190 million internet users who transact online making the overall e-retail market of India worth $ 50 Bn. This number is to grow up to 400 million to 450 million online transactors, by 2027, taking the overall e-retail market of India to $ 150 billion.

The Good, The Bad…

Anmol Kumar Dang , AVP Media, FCB/SIX India, says there is no question that the retail media platforms in India are seeing an unprecedented growth and the primary reason for the same is the ever growing Internet population of India.

“This growth at scale has had an all-round impact, especially on the made in India platforms like Flipkart, Big Basket, PharmEasy, etc. This is visible by the growth of MAUs on each platform,” says Dang, adding that there are two primary reasons that are leading to this phenomenon.

The first is the ever increasing per capita income of India which is growing at a CAGR of 6.55% - giving the population the financial freedom to transact online. And the second is the increase in internet users - which as of 2023 stood at 800 million and is expected to grow to 1 billion users by 2026 (as per a report from Pwc).

“The new internet users are digital natives and seek convenience at every step. They are the ones riding the wave and this is a great opportunity for any platform with robust tech stack to take advantage of these audiences to its fullest,” says Dang.

Pointing out that the retail landscape has undergone a profound transformation, departing from the one-way linear advertising approach where brands struggled to measure consumer sentiment and impact, Nikhil Kumar, Chief Growth Officer at mediasmart, Affle, observes that the advent of digitalization, powered by programmatic advertising, has reshaped the dynamics for retail brands.

“Retail media is one of the fastest growing advertising channels as brands seek more meaningful interactions with the customers. The evolution extends beyond online presence; retail media has flourished through technologies that target proximity locations, competitors' stores, own stores, and first-party data dependency on third-party data.”

“The impact of the same is already being realised by the brands listed across the platforms and that has led them to increase spends on e-retail over the last couple of quarters. As per a latest report, ad spends on marketplaces has seen double digit growth, which is more than the legacy channels, clearly signifying the winds of change towards e-retail," adds Dang.

However, there are still plenty of weeds and brambles to clear, before the retail media landscape in India becomes a veritable garden of paradise.  

Chirag Bhatia, EVP & Business Head – Digital, Mudramax, says that while overall, the retail media market in India is expected to reach approximately 1.5 billion USD, the Made in India retail media platforms currently make up only about 40% of this share. This indicates that they still have significant room for growth.

“If we truly need to give ourselves a reality check, then we have a long way to go in terms of platform sophistication and user experience. There is much work to be done before we can aspire to compete with global companies in this space. These companies had an early mover advantage, as a globally adopted product was ready to be tweaked to suit the Indian ecosystem before launching operations in India. Hence, the adoption was superfast by advertisers, given the phenomenal results achieved,” says Bhatia.

Also, apart from the top Made in India retail media players, most of them are just ticking the box rather than having a laser-sharp focus on ad monetization, according to Bhatia. “This may be a function of prioritization due to the stage of business they are at, which requires more focus on other aspects than ad monetization. However, advertisers are becoming aware of the long tail, and we seldom receive requests for strategies on tapping into long-tail retail media beyond the Flipkart-Amazon duopoly in India.”

Potent Potential

That being said, Dang is confident that there is an immense potential with all the data that these platforms have been accumulating from some time now, and it all depends on the right data mining and modeling implementations, these platforms can actually predict the buying behaviour of a user, like that’s of a user who purchased a diabetes medicine from PharmEasy.

Now if the same data is sold to a potential harma data buyer, they could potentially upsell their diabetic IoT devices and subscription which is based on the buying behaviour of a particular audience. “The data signals become really critical for brands when promoting such medicines and IoT devices on channels like Google becomes difficult because of the platform restrictions. This is just a small example of the multiple possibilities that this data holds, and this 1st party data is going to be key for the brands to survive in the cookie-less world that we are heading towards,” adds Dang.

Speaking from a brand perspective, Sucharita Ghosh, Marketing Operations and Strategy Head, Suta, agrees that the rise of Indian platforms like Flipkart, Big Basket, PharmEasy, and others in the retail media space is indeed an exciting phenomenon.

“These platforms in the consumer data market are likely to play a larger role in the future. With their growing user base and access to vast amounts of consumer data, these platforms hold significant potential for providing valuable insights to marketers and advertisers. As they continue to refine their data analytics capabilities, they can offer more precise targeting and personalized advertising options.”

Indeed, Bhatia believes that retail media space is starting to become like the new walled gardens, “Similar to the Google Meta duopoly with the top two driving the product, experience, innovations and trends with the rest just following.  With Reliance’s aspirations of entering this space it would be an interesting space to monitor in the immediate to midterm.”

Shopping for Consumers

“A key benefit of these platforms is their focus on shopping. When advertisers utilize these platforms, they can reach an audience already motivated to make purchases and open to spending. This often leads to better conversion rates and Return on Advertising Spend (ROAS),” says Siddharth Devnani, co-founder and Director, SoCheers, adding that these platforms play a significant role in the consumer data market, a role that is expected to expand as online shopping continues to grow in the country.

Agreeing that these retail media platforms have immense potential to play a larger role in the consumer data market, Sourav Patwari, VP Growth & Marketing, Truemeds India, says that, as they evolve, they'll likely become pivotal in driving more targeted, personalised marketing strategies. “However, their larger role should be underpinned by a commitment to responsible data stewardship. Compliance with evolving data privacy regulations, continuous improvement in data anonymization techniques, and empowering consumers with control over their data will be critical factors shaping their expansion in the consumer data landscape.”

“Ultimately, responsible and incremental utilisation of these platforms not only ensures ethical data practices but also fosters a trustworthy relationship between businesses and consumers, paving the way for sustainable growth and innovation in the consumer data market,” he says.

“E-tail data/E-comm data is bigger than gold as e-tailers know the user intent and the stage of purchase funnel the consumer is in. This could be a double edge sword as anyone in possession of this data has a lot of power in their hands, hence regulations are absolutely needed to guard the nation’s and consumer’s interest. It’s still early stage when it comes to DPDP act 2023, and I am eager to see how is it implemented and ensures e-tailers act responsibly,” says Bhatia.