Affiliate sites like CouponDunia, Cashkaro and others gain from e-commerce slugfest

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Early last month, when Flipkart was heavily promoting its largest single-day sale, rival Amazon India was busy courting online discount couponsellers, price-comparison websites, cash-back companies and other so-called affiliate networks to help drive traffic to its own site.

Amazon raised commissions by as much as 50 per cent to affiliates two days before Flipkart's Big Billion Day sale. It then bumped them up again on the day of the sale itself, October 6.

Online retailers lure customers by offering the cheapest price tags.

Affiliate-sites-like-CouponDunia-Cashkaro-and-others-gain-from-e-commerce-slugfest

But rising competition means rivals are trying to ensure that they have an advantage on all possible battle fronts.

No wonder then that Amazon is getting aggressive on affiliate commissions as India's e-commerce business evolves rapidly, prompting homegrown sites such as Flipkart and Snapdeal to play the catch up game.

Several executives at affiliates that ET spoke to said Amazon pays the highest commissions in the range of 5-15 per cent for every transaction routed from their sites. On October 6, the company doubled them to 10 per cent on the sale of electronics and offered up to 30 per cent on apparel and other high-margin products.

Such affiliates are typically sites that sell coupons or lure consumers with cash-back offers. They receive commission on every transaction they bring to e-commerce companies in the form of commissions. Affiliates are estimated to account for about 8 per cent of e-commerce sales in India.

"Since Amazon offered us double commission, a lot of affiliates like us on the ground were pushing Amazon more on that day (October 6)," said Swati Bhargava, cofounder of cash-back site Cashkaro.

com that also works with Flipkart and Snapdeal besides other online retailers. Higher commission helped Cashkaro to offer better cash-back deals to consumers, Bhargava said.

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Amazon India said that it had been aggressive on this front during Diwali but that this had nothing to do with competition.

"We were testing several commissioning rates during this period and to incentivising (the affiliates) differently," said Kishore Thota, head of digital marketing at Amazon India.

The company's tests seem to have worked. An executive at an affiliate said traffic routed to Flipkart and Snapdeal jumped 200 per cent during Diwali, compared with 250 per cent to Amazon. Similarly, dealsite FreeKaaMaal.com said traffic from its website to Amazon grew fourfold during Diwali.

Mausam Gadia, senior director of marketing at Flipkart, said he's unfazed by what rivals are doing. "We don't tend to react or change our commissions based on what the competition is doing," he said.

"We tend to have a fairly consistent commission structure that we maintain over a period of time and our relations with affiliates have been built over those lines and over a longer period of time as opposed to seasonal spikes or periodic reactions to activities."

With experts predicting a shakeout before long, e-commerce companies are seeking to ensure that they're the ones that will be left standing. To that end, large amounts of cash are being ploughed into the sectorAmazon is investing $2 billion in India while Flipkart has raised over $1.2 billion this year and Snapdeal is getting about $850 million. Online retail market is expected to surge to $32 billion by 2020 from $2.3 billion, accounting for 3 per cent of total Indian retail, according to consultant Technopak.


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