The emerging arena of ‘Offers’

We daily come across offers and discounts, either by our local sellers or brands. While some offers are mere gimmicks others are well received. One such growing industry is of the ‘Reader’s Offer’ which was commenced in the year 2005 by a well-known tabloid in Mumbai. The industry since then has achieved a market share of over 700 crores per annum and growing at the rate of 50% yearly.

What is this industry?

The Reader’s Offer originated in the print medium but has advanced into the internet. Western countries are highly dependent on the virtual medium for their purchases of products and services. In USA pest control subscriptions, renewal of insurance policy is also made through this medium.

The offers are given out by individual sellers or by popular social shopping websites like naaptol.com. The print media advertises offers as they have a far reaching loyal consumer base.

The sellers find it feasible as they are exposed to a larger crowd with less cost induced. Social shopping websites ropes in such sellers at minimum cost and opens them up to wider audience. Such sites reduce the advertising burden of the sellers and help them focus on selling and distribution whilst increasing their sales.

What makes this industry so attractive?

It clearly offers advantages to both the buyers and sellers. Sellers can achieve economies of scale with bulk orders and the same is passed on to the buyers.

Moreover it benefits the media by co-branding and offering value to readers, thus gaining good will and increasing sales. This helps in binding a loyal net of buyers, as the print media is still preferred over the internet as the latter’s penetration is low as compared to western countries.

In country like India the cost of distribution is very high and sometime involves various hands such as import to mega distributors to regional distributors to local retailers. In direct to reader’s offers it is distributed directly from importer/manufacturers to end user hence the multiple cost of distribution is passed on to end users.

There are many products which are metro specific and many times not available in B,C,D class of town however demand for the same exits for e.g. health and fitness products, specific brand of jewelry, some of the mobile handsets, Digital camcorders etc. There is a need and demand for such products which reader’s offers can directly cater to.

For Mobile industry and service provides the platform offers immense opportunities.

There life cycle of a hand set is not more than 1 year in India. Most the mobile brands lands with excess inventory many times during the year and liquidation is a problem. The platform offers easy liquidation at minimum cost for most of the mobile brands.

There are many B and C class brands today in India offering good quality handsets and very reasonable price however cost of distribution, cost of holding of inventory, cost of credit in market and most important reach to B.C.D class of market is a major issue. This platform provides them easy and unique way to reach to end consumers at very minimal cost.

For service provides also it offers to create new connection base as service provides offers various combo of handset+ connection+ free sim+ free gift+ long term talk time and puts the offers through readers offers to gain more and more new connection.

The most important factor behind the success of this medium is convenience of buying.

The infrastructure in India today supports cash on delivery at more than 2000 different towns through various courier partners. The platform providers like naaptol.com do have huge trained call centers, supported by SMS gateway and online presence. The customer have the choice to call or SMS or place order online and either on inbound or outbound calls a sale is closed and most important buyers pays when product is delivered at their own home.

Most players like naaptol.com etc. also have developed in house after sale service facilities. In case of any issue the products are replaces in maximum 7 days time and most of the products comes with 6 to 12 months of replacement warranty which further ensures the buyers to be rest assured of proper after sale services.

Such is the popularity that some products are exclusively sold by this medium. Different media mediums sell different products and services, giving umpteen choices to the buyers. It offers 365 days revenue generating opportunity which is why is it popular with the print industry. Most national dailies and tabloids in India carry the Reader’s Offer.

Hari Trivedi, President, naaptol.com, also the founder of this industry in India, shares, “There is demand of offered products in the non-metro region as well in metro market, but with the lack of internet reach these offers are carried out in the newspapers. Just on a call one can place order and a popular purchasing method is the Cash on Delivery. There are about 2000 locations available in COD through various logistic networks.

This industry is now growing @ 40% p.a. and more and more print media in India is joining the same now”

Naaptol.com in just the fourth month of its Reader’s Offer project has marketed 40% of the industry share. It boasts 1700 orders on daily basis and is expected to reach 5000 orders daily by the year end 2009. With humongous growth potential and benefits to all, this industry is gaining momentum and spreading across mediums offering a variety of products and services.

The Print media also sees not only the 365 days long term revenue prospectus but also looks at their readers loyalty towards their news paper. There are buyers today have purchased more than 5 products a year and they also refer the print medium to their friends, relatives etc. which in turn for the print media ensures retention of current regular readers but also helps in expansion of overall readership and print circulation.