Reliance's BigAdda Shop Clocks Rs 2Cr Sales; Focuses On Small Towns

Reliance Entertanment's social networking site BigAdda.com had logged 5.5 million registered users before it decided to pull the plug and convert it into an e-commerce site. In an official statement today, Reliance Entertainment announced it has discontinued its social media services unit and transformation into BigAdda Shop, which will focus on users in tier two and three cities.

Yesterday, the company's CEO (Digital) Rohit Sharma revealed the reason behind the transformation, stating that Facebook's dominance in India makes it impossible for local social networking sites to compete. "We believe that social networking is by virtue a business driven by communities and Facebook is ruling the roost in India," he told Techcircle.in. As of April, 2011, Facebook had 25 million users in India and over 700 million globally (May 2011).

"This is a conscious decision to transition Bigadda.com to e-commerce business. The digital space is dynamic and ever-changing. In 2007 when Bigadda.com was launched, social media networks were the next big thing in the digital space, and we believed that local social media platforms would do exceptionally well. However local social media networks show no potential anymore with dominance of Facebook and other global players," he reaffirmed today. Reliance Entertainment is now focusing on three growth drivers for the digital space - e-commerce (BigAdda Shop), gaming (Zapak and Jump Games) and video on demand (with Bigflix.com).

BigAdda Shop was launched as a pilot project in April. In three months, the company claims it has crossed Rs 2 crore worth of gross transactions per month.

Now, BigAdda will target users in small towns and cities. The majority of users of its social networking site were youth from tier two and tier three cities of India - 3.5 million out of the total 5.5 million registered users. The company will use the consumption information and analytics of media habits gleaned from the social network to deliver deals that will appeal to these users."With the increasing spending power and aspiration of youth in small towns of India and rising acceptance of credit/debit cards as a mode of online payments, e-commerce will grow exponentially in India," he said.

In e-commerce, it is up against heavyweights in horizontal shopping such as eBay India, Infibeam.com, Flipkart.com, Homeshop18.com, Indiaplaza.com, Yebhi.com and Naaptol.com. And then there are the daily deal sites such as Snapdeal.com, Groupon India (Sosasta.com), Letsbuy.com, Mydala.com, Koovs.com and Dealsandyou.com. They are popular amongst buyers in non-metros where availability is an issue so BigAdda will compete with them too.