coupon industry in india

Hola amigos, people-who-love-discounts! We’re just kidding. We all love discounts as much as we love free food. Talking of discounts; there are vouchers, gift cards, buy 1 get 1 free things, cashback, and then to combine all these, we have COUPONS!

Coupons and cashback bring happiness to us in loads. Especially for us, Indians, who love to save money and when demonetization is hitting us hard in the guts.

Almost every eCommerce website today offers coupons or cashback because of some obvious reasons. It attracts customers’ eye, binds their interest which somehow builds customer loyalty and as a result of which, the coupon industry today is growing rapidly which begets exponential rise of eCommerce. It is a trend that is fast catching up with the rest of the world.

Quoting some stats of 2013, Indian consumers redeemed coupons worth 100 million and more, accounting for a share of 13.5% from the total eCommerce market with coupon business growing at the rate of 62.9 percent with 7.6 million unique users a month.

While in the US, the digital coupon distribution numbers stood at 329 billion in 2013, offering a saving of $1,617 per US citizen.

Some stats also said that out of 39 million total online shoppers, online shoppers searched coupons and deals for a total of about 37.05 Million in India. Mobile internet use resulted in a 14.2% growth of traffic in the Indian online retail market.

With more and more coupon websites and e-stores focusing on taking advantage of the mobile platforms. Although generic terms like “coupons” and “promo code” still dominate the search trend, brand specific terms are on the rise. Top upcoming brands seem to be OLA, Dominos, Freecharge, Jabong, and Paytm.

According to Google reports, coupon industry in India has grown 20 times since January 2009 with December 2014 being the peak of this trend. No wonder that in recent months, we estimate that on an average 200 new coupon websites go live in India.

The coupon industry in India is expected to grow at a compound annual growth rate expected to be at 57% between 2012 and 2016 as compared to a meager 3.6 percent increase in the US coupon market. But it doesn’t imply that coupon industry is anywhere less in The States. Some of the worldwide famous coupon website come from the US like Groupon, RetailMeNot etc.

Travel sites and online retailers with multiple categories see the maximum redemption of coupons from aggregators as marketing campaigns carried out by these mass retailers generate awareness about availability and distribution of their coupons.

On the other hand, specialized (vertical focused) stores that sell only one or two categories like books or designer wear, have lower redemption rates because of their positioning as specialized stores where you get the best in the segment at the most affordable price. They also distribute fewer coupons.

Coupon aggregators run on an affiliate model. The sites get paid from eCommerce sites.  E-commerce companies have their terms and conditions mostly revolving around non-usage of branded keywords in SEM and others. Some of the e-commerce website work on affiliate model, some don’t (for example Homeshop18 and eBay).

Single conversion ranges widely from Rs 10 or less for a recharge customer up to Rs 800 for a jewelry customer, further depends on the site and category. Revenue split of leading coupon aggregators is roughly 80:20 (ratio split across commission and advertising)  with 80% commission and 20% fixed advertising ( by selling ad banners on the website).

Some industry experts have the view  that couponing space has become overcrowded. However, according to a poll conducted outside shopping malls reveals that under 10% of online shoppers are even aware right now that they can find coupons by searching online or that coupon sites exist. Spreading awareness (especially across tier 2 and 3 cities) seems to be the major concern for coupon aggregators.

Innovations appear to be limited in this space and existing coupon aggregation space need to evolve in order to survive. Aggregators need to make this business balanced for consumers and e-commerce stores. The focus should be on facilitating e-commerce and pass maximum benefits on consumers.

Also new e-commerce ventures would be distributing coupons to tap into this user base whose buying behaviour is being impacted by couponing. Word of mouth marketing of couponing is also catching up and hence the usages likely to grow.

Lastly, In a country full of demonetization policies, go avail coupons!


Please enter your comment!
Please enter your name here