The gross merchandise value (GMV) of Snapdeal, a leading home grown e-commerce player has gone up by 90% on higher number of repeat purchases, according to its largest investor, Softbank, the Japan-based technology company.
Softbank in its investor presentation following its annual financial results said that the 90% rise in GMV was between FY15 and FY16. Snapdeal, is locked in a three-way battle for the multi-billion Indian e-commerce market with its key two competitors being Amazon and Flipkart.
Softbank became the majority shareholder in Snapdeal when it invested $627 million in 2014. In August last year, Snapdeal raised $500 million in fresh funds largely from Chinese e-commerce firm Alibaba Group, Foxconn Technology Group and existing investor Softbank Group. The deal valued the Delhi-based firm at about $4.8 billion.
Softbank also said that Snapdeal is investing in supply chain technology, which forms the key bedrock for an e-commerce company in increasing its market share and greater penetration.
GMV is a common parameter used to measure the growth of e-commerce companies which generally means the sale price to the customer.
According to a report by Morgan Stanley in February this year, Flipkart had the top spot with a GMV market share of 45% followed by Snapdeal at 26%. It put Amazon India in the third place with 12% share.
The combined GMV of Flipkart, Snapdeal, and Amazon, stood at $13.8 billion in 2015, while that of the top-10 offline retailers was $12.6 billion.
Founded in 2010 by Kunal Bahl and Rohit Bansal as a deals site, Snapdeal is estimated to have had an annualised GMV of $2 billion in last March. The company has about 1.5 lakh sellers and about 15 million product across 500 plus categories listed on its platform, delivering goods to over 5,000 cities and towns in India. The company had reported a loss of Rs 1,328.01 crore for FY15 when compared to Rs 264.6 crore in FY14.
Besides Snapdeal, the other investment of Softbank in India are Ola Cabs, OYO Rooms and Hike Messenger.
The Indian e-commerce market is expected to cross $100 billion by 2020 from the level of $16 billion in 2015, according to report by Deloitte. “A 6X growth over 5 years is envisaged for e-Commerce driven by factors like new-age technology, convenience, higher adoption rates and larger reach,” the report said.
According to Deloitte, Online shopping is increasing its share in the total internet usage in India. Improved data connectivity in both urban and rural parts of India, will further boost this trend. Along with the increase in basket size, the average spend on online shopping is increasing, although not at the same rate, the report noted.