E-commerce player Snapdeal and cable distribution network Den have launched a new TV shopping channel known as “Den Snapdeal TV Shop”. The channel will be available to all Den’s subscribers and will soon be extended to other cable and DTH players over the next six months. This is essentially an extension of the pilot announced in September.
The TV channel will operate as a marketplace for selling unbranded and branded merchandise, services and third-party vouchers, to television home shopping audiences.
The products will be featured on dedicated TV shows providing customers details of the products along with their features. Snapdeal will be responsible for quality and delivery of the products and will offer cash-on-delivery for customers. Snapdeal plans to reach 100 million households in India over the next 12 months through the new TV channel.
Snapdeal is not the first online retailer wanting to appeal to the TV home shopping audience. In April, Naaptol had announced looking for funds for launching its own 24-hour television shopping channel. The company had said then it expected to close the deal in three months, but no further developments have been reported on this front yet. Previously home shopping TV channel ventures including HomeShop18 and Star CJ had branched out into e-commerce, with Homeshop18 launching its website in January 2011 and mobile apps in 2013 and Star CJ going live with its website in February 2011.
TV vs Web
It is interesting to note that Snapdeal is moving from web to TV, while Homeshop18 went from TV to web. The TV homeshopping demographic is vastly different from the online crowd. Here are some of the observations we noticed.
– TV shoppers are impulsive, Internet is about search: TV is about impulse, web and Internet is about search. Hence, it is about a long tail of products, and TV is about specific products and propositions to drive impulse. So your product mix is different.
-Average order value: Based on Homeshop18’s IPO filing it seems that the average order value on TV seems to be higher than Internet. For example, at Homeshop18 the average order value on TV was $38.6 in H1 FY14 compared to $25 for Internet in H1 FY14.
– Average gross commission: Again based on Homeshop18’s IPO filing, the average commissions on TV is substantially higher than on the Internet. For example, It was 29.9% in H1-FY14 for TV and 17.2% in H1-FY14 for Internet.
–TV has fewer stock keeping units (SKUs)on sale: Sundeep Malhotra, CEO of Homeshop18, explained to Medianama in an interview that TV as a medium has limited bandwidth in terms of products. The categories are slightly different and limited in numbers. The web has unlimited opportunity, in terms of capability to showcase products. On TV Homeshop18 handpicks 3000-4000 products every year.
Other developments at Snapdeal
-Snapdeal raised $627 Million from SoftBank Group in October
-Snapdeal & FINO PayTech partnered to launch e-kiosks in 70,000 rural areas across India
-Saavn partnered with Snapdeal to offer Android users making purchases through Snapdeal’s mobile site free subscriptions to their premium service for two months.
-Snapdeal acquired gift recommendation portal Wishpicker.com for an undisclosed amount. This was Snapdeal’s second acquisition in 2014. It had acquired Delhi-based fashion & lifestyle product discovery site Doozton, in April.