Snapdeal, which didn’t fare as well as its competitors in the recent festive season, has learnt some lessons from the experience. To tackle its logistical difficulties, which are seen as a weak area, it is beefing up its delivery processes, partnering with Vulcal for the first mile pickup and Gojavas to ensure last-mile delivery. The company is talking tough too. “If a seller fails to fulfill delivery in reasonable amount of time, it is delisted from the platform,” says Jayant Sood, chief customer experience officer at Snapdeal.
With close to 1.3 billion square feet across 63 warehouses in 25 cities, Snapdeal has also made the documentation process for its delivery team more stringent to ensure quality checks at every stage.
As per a survey by Bank of America Merrill Lynch conducted early in 2015, customers felt Snapdeal had a broader variety of products and was even relatively cheaper than other sites, but Flipkart was perceived to be faster and reliable in terms of order and delivery. Amazon ranked somewhere in between the two.
In October, Amazon India was the leading e-tailer (by traffic) with 200 million unique visitors, followed by Flipkart with 164 million and Snapdeal with 109 million, as per a report by Kotak Institutional Equities. While Flipkart held a five-day ‘Big Billion’ sale from October 13-17 with different product categories on sale each day, Snapdeal held a five-day sale on exactly the same dates. Later, Snapdeal held special sales on all Mondays till Diwali, while Amazon held its festive sale in two phases.
Unlike other e-commerce players, Snapdeal does not charge its two lakh vendors a listing charge, but earns a marketing fee on every transaction. To boost revenues, Snapdeal is looking to tap advertisers. Snapdeal services 28,000 pincodes, which is twice the number that Amazon and Flipkart service, claims Sood. As per one estimate, 60% of Snapdeal’s gross merchandise value (GMV) comes from semi-urban areas.
The portal achieved a 10-fold rise in sales during the festive sale period against sales on a normal day, according to Sood. Since 2014, the company claims to have had doubled its GMV from $2 billion.
Registrar of Companies data available for the financial year ended March 2014 shows Snapdeal’s revenues were R154.11 crore, while losses were at R264.6 crore.
Snapdeal has raised $500 million in its latest round of funding led by Alibaba, Foxconn and Softbank in August. So far, it has raised $992 million over five years.
Existing investors Temasek, Myriad and Premji had also participated in the fund-raising activity. However, Sood added that Snapdeal has no funding raising activity in the pipeline for the next few months.