ALL ADS UP

Amazon India spent twice as much as Flipkart on advertising in 2018

Top dollar.
Top dollar.
Image: REUTERS/Pascal Rossignol
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Flipkart and Amazon may be locked in a tight race for supremacy in Indian e-commerce, but when it comes to ad spends, the homegrown company does not even come close to its US rival.

Amazon India spent between Rs700 crore and Rs850 crore ($98 million-$119 million) on advertising in 2018, according to an analysis by the brokerage firm Edelweiss Securities. This was almost twice the Walmart-owned Flipkart’s ad spend of between an estimated Rs450 crore and Rs550 crore.

These numbers place Amazon India at the fourth rank in the list of India’s top advertisers, far ahead of Flipkart (13th rank). Amazon, however, dropped two places from 2017 while Flipkart rose 11 ranks.

Interestingly, Flipkart is a bigger revenue earner. In the financial year ended March 31, 2018, it raked in $3.8 billion, compared to Amazon’s $3.2 billion. The latter, however, topped in gross merchandise value (GMV), or the total value of goods sold on it.

Yet, spending by these new-age e-commerce firms is relatively modest compared to that of India’s established players.

FMCG on top

The top three players on Edelweiss’s list are all fast-moving consumer goods (FMCG) companies—Hindustan Unilever (HUL), Reckitt Benckiser, and Procter & Gamble (P&G). HUL towers above the rest, accounting for over a third of the top 10 advertisers’ spending.

Other advertisers in the top 10 include automobile companies Honda and Maruti Suzuki, electronics companies Samsung India and Vivo Mobiles, energy, petrochemicals, and telecom conglomerate Reliance Industries (RIL), and the FMCG major Godrej Consumer Products.

RIL and Honda seem to have ramped up spending, as each jumped eight places on Edelweiss’s list from their 15th and 16th spots respectively in 2017.