Dotcom Marketing in India

Marketing or Publicity? Contd...

Thus, there was an over-emphasis on publicity rather than marketing. India Today's associate editor Shankar Iyer said, "A kind of PDS approach which assumes that once there is a shopfront, shoppers will come walking in and buy In other words a distributive rather than a marketing approach which again is rather sad. Revenue will not come merely via words on hoardings." Analysts felt that ultimately, a well-designed user-friendly site would attract traffic. Zaveri of Indbazaar.com said, "Of all the mind-grabbers not many are really brands.

Sure, the customer may visit a site once out of curiosity. But will he want to visit again? That is what really makes a brand." During 2000-01, the global dotcom industry witnessed a slowdown and the dotcom bubble bust. In India, many dotcom companies were either shut down or sold. In the late 1990s, there were about 5000 dotcom companies in India. But only a few (about 25-30) could survive the bust (Refer Exhibit III for survivors). Lack of proper business models, huge advertising expenses, lack of professional management etc., were outlined as some of the reasons for the dotcom bust. Analysts remarked that though some companies had invested heavily on advertising, they could not generate revenues. On the other hand, some of the companies, which survived the dotcom bust, either spent very less or did not spend at all on advertising (Refer Table III).

TABLE III
AD SPEND OF THE SURVIVORS IN 2000

Dotcom	Ad Spend in 2000
Bharatplanet, Indiamart	Nil
Agencyfaqs (advertising and media, ChennaiBazaar (gifting site), Hungama	Less than Rs. 1 million
Others (from the list of Exhibit III)	Less than Rs. 5 million

Source: Businessworld, May 14, 2001.

To establish themselves, many portals looked at alternate revenue models. Some turned into IT services companies by selling their expertise. The dotcom industry also witnessed many acquisitions and mergers. Analysts remarked that in the near future, many of the portals might not even be recognized as dotcom companies.

Exhibits

Exhibit I: Business Models of Portals
Exhibit II: Ideas for Marketing Different Types of Sites
Exhibit III: Some of the Survivors of the Dotcom Bust

Case Details

Case Code : ITSY006
Themes: e-Business
Case Length : 08 Pages
Period : 1990-2001
Organization : Equus Advertising, Hungama.com
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Information Technology (Electronic Commerce)

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