Indian ecommerce start-ups pile into cricket sponsorship

Upstart businesses in India's booming ecommerce sector will open a new front in their battle for customers over the next two months - by going head to head as backers of the glitzy annual Indian Premier League cricket tournament.

Buoyed by a recent influx of venture funding, a series of fast-growing ecommerce groups have signed up to become sponsors or advertisers during the lucrative IPL event, which kicks off its eighth season on Wednesday in Kolkata.

US-based Amazon and India's mobile commerce company Paytm, which recently agreed a $500m investment deal with China's Alibaba, have struck official sponsor deals with Sony Entertainment Television, the event's main broadcaster.

Other ecommerce companies also plan to run advertising campaigns during the tournament, including CarTrade, the car sales site, Magicbricks, the housing portal, and Snapdeale, the commerce platform. Other global technology groups, such as Uber, the taxi-hailing app, have struck deals with individual cricket teams.

"This year sponsorship of the IPL has hit a new high and lots of ecommerce companies are getting involved for the first time," says Vinit Karnik, national director of GroupM ESP in India, the sports marketing consultancy. "They recognise the IPL is the best way to win a wide audience, although it is an expensive one."

Despite a string of corruption scandals and management bust-ups, the eight-team IPL has consistently attracted global brands as sponsors since its launch in 2008, including a $65m deal with PepsiCo in 2012.

But this year ecommerce companies will contribute as much as a quarter of the Rs9.5bn ($152m) Sony expects to earn from advertising during the 47-day event, according to Rohit Gupta of Multi Screen Media, Sony Entertainment Television's parent.

The cricket spending splurge provides a further sign of India's buoyant start-up scene. Global technology funds have invested record sums over the past year, on hopes that Indian ecommerce groups will mimic the rapid growth of Chinese giants such as Baidu and Tencent.

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However, the sight of relatively inexperienced technology businesses signing up for an event that offers India's most expensive advertising rates is also raising concerns about businesses burning through their recently acquired cash.

"This is a good sign for the IPL, it shows it is still the only pan-national advertising event in a country as big and diverse as India. But whether it's a good sign for these ecommerce companies, I'm not sure," says Praveen Chakravarty, a Mumbai-based angel investor, who has also advised various IPL franchises.

"Frankly, if I was an investor on the board of a start-up that came to me and said they were going to spend a few million dollars on a month of IPL adverts and then they came back and said they'd blown their whole marketing budget and now needed more cash, I'd be livid," Mr Chakravarty says.

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