1. Snapdeal: The challenger

Snapdeal: The challenger

It’s a proud number two in a market where long term winners and losers are yet to be decided...

Published: December 23, 2014 1:50 AM

It’s a proud number two in a market where long term winners and losers are yet to be decided. If Flipkart inspired consumers to come online to shop, Snapdeal held their interest by offering them varied products and services at extremely competitive prices. Heard of real estate being sold online? Snapdeal managed the feat. It joined hands with Tata Value Homes that put up about 1000 flats in the price range of R18-70 lakh across Mumbai, Bangalore, Chennai, Pune and Ahmedabad. It is a sign of the credibility that Snapdeal enjoys that on the first day itself around 1000 registrations were generated.

Even Mahindra & Mahindra decided to ride Snapdeal’s platform to offer its SUV Scorpio to customers, making it the first time automobiles were booked online on a third party online platform.

To be sure, the promoters have been slow in raising funds but there is a reason for that. “We are not playing the valuation game,” Snapdeal co-promoter Kunal Bahl told The Financial Express earlier this year. He said the winners and the losers among e-tailers will be determined by the variety of products they offer, at prices they offer and the customer services they provide. Yet Snapdeal did not leave any opportunity to take on rivals.

When Flipkart launched its biggest campaign of the year ‘Big Billion Day’ under which it offered products at discounted prices in more than 70 categories, it found Snapdeal hard on its heels. Flipkart launched full cover page ads in the largest selling dailies across the country with a tagline that said, “Today, don’t look anywhere else. India’s greatest sale is here.” Snapdeal was in tow with one, and in some dailies, two page ads that said: “For others, it’s a big day. For us, it is no different.” It then went all out to promote its own sale “Snapdeal Savings Day” and huge discounts were offered on products such as the iPhone5S and Google Nexus 5.

During Diwali, Snapdeal launched a high decibel campaign of around 50 commercials featuring several TV stars.

Snapdeal today offers a wide assortment of 5 million-plus products across 500 categories, from regional, national and international brands and retailers. It made a rapid metamorphosis from a company that sold discount coupons first offline and then online, and then turned the business model around in order to be a market place based e-commerce company.

The company said it witnessed phenomenal growth in 2013-14 with a growth rate of 600%, with over 60% orders coming from mobile phones.

It claims to be delivering products to 5000-plus towns and cities, with over 30 million members and 50,000 merchants.

As another first, the company is reported to be exploring entry into the television broadcast space with a shopping channel in partnership with cable company Den Networks.

Shripad Nadkarni, founder and director of MarketGate says that Snapdeal has had to do a lot in order to keep up with its ambitious rival Flipkart. But it needs to differentiate beyond the discounts model in order to create a true brand.

Tags: Snapdeal
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