In the works for several months, the Shopping tab will be piloted soon, prior to a fullfledged launch before the end of the year, one of the persons said.
Confirming the development, a Google spokesperson in an emailed response said, “We are always exploring options to help consumers find the products they want to buy more quickly and efficiently from local merchants.”
Google is already in talks with ecommerce players such as Flipkart, Paytm Mall and Snapdeal to partake in the company’s shopping tab initiative, according to one of the persons cited earlier. ET could not independently verify the same. To be sure, multiple sources ET spoke with clarified that Google will not, for the moment, fulfil online shopping, either through its payment product or otherwise.
Likely to Tap Into SMEs
Besides large ecommerce websites, Google is also expected to tap into its large network of registered small and medium enterprises or SMEs — from neighbourhood kirana stores to high-end handicraft stores — to help users discover products they want. These merchants need not necessarily list on platforms like Amazon or Flipkart.
“They (Google) will partner with retailers of all sizes — it can tell the user where the product is available, is it available online, etc.,” said another person in the know. For now, this service is being provided free of cost.
Some experts see the Google shopping tab as a precursor of the internet giant eventually setting up an ecommerce marketplace.
“It is like how Amazon launched price comparison website Junglee.com before foraying into ecommerce full-fledged after they got consumer data,” said one of the persons cited above. “Google will also first understand Indian shopping trends through the Shopping tab.”
DECLINING AD REVENUES
Google’s foray into product search comes at a time when the tech giant is said to be losing market share to Amazon on product searches in the US, which translates into declining ad revenues.
The US online retail market is dominated by the powerful network built by Amazon through its Prime programme, which analysts believe is difficult to overcome by any other tech company.
“In the US, 50-60% product search begins at Amazon, bypassing Google and cannibalising its market,” said Arpan Sheth, a partner at consulting firm Bain & Company. “Google is losing online shoppers because of this and it is taking a hit at their advertising revenue.”
Earlier this year, media reports said that Flipkart and Amazon had reduced their ad spending on Google by as much as 30%.
Google’s annual ad revenues are over $40 billion. Amazon’s annualised ad revenue is much lower at over $6 billion, but it’s growing at around 132% quarter-on-quarter.
Akin to the ‘News’ or ‘Images’ tabs on Google search page, the ‘Shopping’ tab allows users to sift through different merchant listings of the product they are looking for.
At present, online shoppers generally go to an ecommerce website directly to search for a particular product.
While Google already lists products through its ‘product listing ads’, the Shopping tab will give users a lot more control. For instance, users can filter the product they are looking for based on price or any other attributes, while also getting more details of the product by going to the ‘details’ page.
On the merchant side, anyone with a product feed can plug into Google’s merchant centre to be listed on the shopping tab, said the second person cited earlier.
“The idea is that of an open ecosystem. Google wants partners of all sizes and shapes — offline, online, pureplay, omnichannel,” the person said.