Indian eCommerce Giants Expand Ad Business

flipkartIndia-based internet retailers Snapdeal and Flipkart are building large advertisement sales teams and improving the technology they use to serve ads based on the shopping habits of the millions of consumers that serve.

Due to the scale of both companies and the market dominance they enjoy, the expansion potentially puts them into direct competition with brands like Google and Facebook in West Asian markets.

According to Live Mint, Sachin Bansal, co-founder of Flipkart, is spearheading the growth of the companies ad business following restructuring earlier this month, seeking to build large ad monetisation teams that will increase the ad revenues the companies started seeing last year. Flipkart recently acquired mobile ad tech firm AdIQuity Technologies, and has plans to compete with Google and Facebook in India for a share of online ad spending.

Flipkart and Snapdeal generate ad revenue in three ways – through traditional banner ads, by getting brand partners like Chinese phone manufacturer Xiaomi to spend on marketing on their sites, or by charging extra fees to promote third-party sellers within searches.

With thousands of sellers added each year, the companies are hoping that competition amongst sellers will drive ad rates up on their marketplaces, while their combined user base is growing fast and gives them access to a huge amount of data that could be used to target online and mobile advertising.