I think most of the readers are familiar with this name and the E-commerce platforms used to deliver products like Amazon and Flipkart. Still, Snapdeal is delivering the products of users who book in their business.
Snapdeal the second largest E-commerce which ran successfully driven in past. They were in a race with Flipkart and Amazon once upon a time. The founders of Snadeal are Kunal Bahi and Rohit Bansal.
Initially, the founder’s idea was to start a company which provides the best deals to the users. They run the business successfully by providing the best deals. Their marketing strategies attracted potential customers to their store. In those times E-commerce was the ruling power in the world. America and China have captured the major share in E-commerce.
The founders of Snapdeal were also inspired by China’s e-commerce giant Alibaba and started the business. Their main focus is on Indian Village product delivery.
Snapdeal was founded in 2010, the very next year after they started the company they raised funds for more than their competitors had. In the year 2011, Snapdeal raised $ 1.2 million through venture capital. This was the largest investment in the market at that time. But Flipkart was stuck in a financial crisis.
As they received the highest investors they managed to make 2$ billion dollars through gross merchant value. 2015 was a markable year in their calendar. As the founder, inspired by Jack Ma, the owner of Alibaba, this year directly Alibaba bought stack in 4.4% in Snapdeal. At the same time, Snapdeal acquired a free-charge platform which provides recharge. They have acquired this company for 400 million $.
Flaws of Snapdeal:
Everything was looking great and going well until Goldman Sachs was in the picture. Goldman Sachs revealed the loss of making things of Snapdeal. According to Goldman Sachs at that time Snapdeal used to spend 1.5$ on every 1 $ order booked on their platform.
This was the time when Amazon the giant entered the market of India. This stole the position of Snapdeal in the market.
In addition to these issues, they have entered into the biggest issue of the nation. Those were the times when anti-China protests were at their peak. All the people around India were on the slogan of Boycott India. Alibaba is the stack holder of Snapdeal which negatively impacted them. Even they have made prevention acts and statements claiming they are Indians and also work for India. At that time people were nowhere to listen to them.
Trust-breaking moves:
In addition to this Snapdeal also deals with issues of wrong product delivery. I saw news Online in those times, a person who had ordered a 10K phone online and got the delivery of brick in place phone. And also customer service was at worst responding to this.
With these issues, there was another problem for the users of Snapdeal account blocks. We know that every company has its policy for their users. However, the policy must be user-friendly and also help to avoid scamsters. However, the policy they have released created a block of many users. And also they don’t have certain criteria to unblock the users when requested. This thing made most of the users lose trust in the platform.
While going to the backend, the vendor side and also their policies created a major problem. They kept a policy for vendors to only store the inventory they sell through Snapdeal in their specified warehouses. But most of the vendors have their warehouses where he does a lot of business. However, this policy created many difficulties for vendors.
Investors fault:
One thing that always needs to be kept in my mind, is every business doesn’t go like an upward arrow. There will be a saturation point where the growth will be stable. However, these estimations were not made by Snapdeal management.
They have shown the previous year’s figures and attracted investors. In the year 2016, they reached profits of 6.5 billion $. This was a big figure that helped more investors support Snapdeal.
But while coming the profits they acquired in 2017 are just 950 million $. The amount they have generated is 85% less than they claimed from the investors.
Fall and Rise of Snapdeal:
The founder of Snapdeal has done the recovery things that need to be done. He almost started the business again from scratch. They picked up the blue ocean strategy. Which is nothing but going into the segment and creating a new market space and demand.
Here Snapdeal 2.0 has evolved, here they wanted to deal with people who haven’t made any online purchases once. They are ready to research the needs of the people in tier 2 and tier 3 cities and villages of India. As we can see in the graphs 70% of the sales online are done from these tier towns and cities only.
Era of 2.0 v:
Snapdeal has targeting of them as their customers was a brilliant option for the business. And also they released that if they provide the product which is useful to them. Then there will be no need for fancy discounts and cash backs. They have designed Snapdeal in such a way that all the products available on their site are value for money and good quality products. Also, I have noticed that almost 80 to 90% of the stuff present in Snapdeal are less than Rs.1000.
They previously faced inventory handling issues which are warehouse issues. This time they were not into the segment of operating the inventory. This made them less operational cost. In addition to this, they have their own logistics partner. Unimove was acquired by Snapdeal which is a logistics company. The moves from them made major cost cuts.
As per the new CEO Snapdeal has almost recovered from the losses in the financial year 2023. This is a positive thing for Snapdeal. They have seen extreme highs initially and downs later. Even though they went down in the market of trust, they didn’t lose hope and kept on trying to withstand the market.
Their trials haven’t gone to waste. They were able to cover up their losses and able to run the business peacefully.
Learn more about another e-commerce maven, Flipkart.
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