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Shoppers Stop. As a result, overall spending in affiliate marketing dropped drastically, many campaigns were stopped and commission rates have since declined.

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This is primarily because the firms reduced commissions or paused campaigns over the past few years due to lack of funds. This allocation varies for each player. Some of the big brands such as Snapdeal, Goibibo, and Lenskart have paused their campaigns while a number of others like Faasos have decreased commissions, the aforementioned person said. Reddy said demonetisation was a big blow to the couponing industry as it took a hit on the mobile recharge segment, which used to drive a bulk of traffic and transactions to coupon platforms.

While transactions picked up in other segments like food and fashion after demonetisation, business from mobile recharges further scaled down with the arrival of Jio, Reliance Industries' telecom venture whose low tariffs have shaken up the segment. Besides the vertical leaders, there are at least a hundred platforms operating different variants of affiliate marketing, of which only about a handful of startups have raised venture capital investments.

The most recent high profile deal in the segment saw Vijay Shekhar Sharma-led Paytm acquire and merge its investee firm Little and online deals startup Nearbuy to create the country's largest online deal discovery platform.

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Without a unique selling proposition, it would be very hard for a new player to come and establish [themselves] in this segment. Reddy expects the advertising spends to scale down and performance marketing fund allocation to grow when the e-commerce companies approach profitability because affiliate marketing directly impacts sales conversions. He added that the only way coupon players can scale is to raise more funds and spend it on awareness programmes, especially in Tier II and III cities.

She said the players in the affiliate marketing segment have enough money to ward of competition but are incapable of carrying the huge burden of long-term marketing spends. The marketing spend in the segment is relatively small. The error is regretted.

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Has the coupon and cashback industry hit saturation point? Startups E-Commerce Analysis. Both coupons and cashback players provide discounts in addition to what e-tailers offer. Falling revenues While the big boys of e-commerce such as Flipkart and Amazon have continued to raise funds and have kept sectoral growth intact, investments into smaller firms almost dried up over the past couple of years.

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