Out of the next 200 million online shoppers, 180 million people would be from the value segment, according to Snapdeal CEO Himanshu Chakrawarti. Snapdeal is looking at reaching out to more than 90 per cent online shoppers, especially from the smaller towns of India. And while this market is driving sales for Snapdeal, almost 85-90 per cent of the shoppers from ‘Bharat’ are placing the orders using cash on delivery as their preferred mode of payment, Himanshu Chakrawarti told FinancialExpress.com. The CEO talked about the categories rural India is looking at, and the technological integrations at Snapdeal aimed at making the shopping experience more convenient for the consumers of tier-II and beyond towns. Chakrawarti also talked about the company’s IPO plans.
Here are the edited excerpts from the interview:
What are the most sold categories at Snapdeal? What are the most popular modes of payment on the e-commerce site?
Since we serve Bharat, most of the orders that we are getting are on the cash on delivery (COD) mode still because I think many of them are still not very comfortable with online transactions. So in our case also, close to around 85- 90 per cent of our orders are COD orders. And only 10- 15 per cent is the prepaid order of some form of the other. In terms of categories, the largest category that we have is fashion and a significant contribution comes from categories like home, general merchandise, beauty and personal care.
How is AI, technology helping brands improve customer experience and accessibility?
Technology plays a significant role in all its forms to solve customer problems. We have made our products pages low on texts and heavy on visuals. We have incorporated audio assistance as well in various languages. We are aware that in India, dialect changes every 50 kilometres and to make the voice search easier, we have added voice assistance in many dialects. Around 30-35 per cent of our users are first ever online shoppers on e-commerce and since they are not as comfortable navigating the website on their own, we use technology to help train our system to understand the problems they are facing and guide them through.
Listen to the complete interview here:
In that case, would video or live commerce make much more sense for a value retailer like Snapdeal?
We are, in fact, quite ready to do it but the commercial numbers do not stack up. We actually did a pilot on some of the platforms and the number of attendees range between 20 and 40 while the cost of creating the content for live commerce, etc. is much more; the entire economics actually does not work out. While we agree that it’s a powerful medium, but commercially it is not workable right now.
How has the fulfillment and supply chain changed at Snapdeal over the years? How are you competing against the brands offering 1-day or 2-days delivery?
This quick commerce or semi-quick commerce or same day delivery or next day delivery is a phenomenon which is more to do with the metro audiences and the more affluent audiences. Right now, as I said, 75 per cent of our audiences are from tier-II and beyond cities and based on our qualitative and quantitative research, what is more important for them is to know the certainty on the delivery time. If, for instance, we have 4-5 days of delivery timeline, our customers want us to be true to that promise.
What are your expansion plans/ strategies, going forward? What kind of investment are you planning to make for these expansion plans or even bringing in new innovations at Snapdeal?
Primarily, there are two growth engines – one is Snapdeal, the platform. So there, of course we are constantly trying to grow by making the platform better, more intuitive, more relevant for the customer. Secondly, we created two subsidiaries – cloud-based e-commerce enabler Unicommerce eSolution and Newfangled Internet that houses Stellaro and its portfolio brands. Under Stellaro, we have got brands under various categories like home, beauty, fragrances, skincare, fashion (menswear and women’s ethnic wear) and athleisure. We will be adding some more brands to this list as we move forward. These brands are live on Amazon, Flipkart and of course Snapdeal. Some of these brands also went live on Ajio and TataCLiQ.
Do Indian consumers still look for discounts at value retail brands? How does discounting work in value retail? Does it affect the margins and if not, quality of products?
In the value segment, there are hardly any brands, they are all labels. So what is very important is that the price value equation has to hold up, not discounts. If the price value equation is holding up, then the transaction would take place. In value retail, it’s not about who gives the most excessive discount but about where the customer sees the price value fit.