Jasper Infotech operated e-commerce platform Snapdeal is looking at exiting teleshopping business DEN-Snapdeal TV Shop by divesting its entire stake in the company. Sameer Manhanda-promoted multi-system operator (MSO) DEN Networks currently holds 82.87% stake in the company, while Snapdeal has 17.13%.
In an email response to queries sent by FE, a Snapdeal spokesperson said, “The decision to exit the DEN-Snapdeal JV was taken in early 2016 as part of our periodic evaluation to determine continued alignment of investments with our business needs. In execution of the decision, we had substantially reduced our stake mid-last year. The residual stake will be divested over the next few months to complete the process of exit.”
In 2014, DEN Networks Company entered into a 50:50 joint-venture with Snapdeal to launch a 24 hour teleshopping channel under the brand DEN-Snapdeal TV Shop. At the time, the idea behind the launch of the channel was to leverage Snapdeal’s brand, merchandising and logistics besides using DEN’s strengths in distribution and media.
“DEN Networks has been managing the business entirely on its own since last year. The idea is to gradually grow the business,” said a senior company official.
In July 2016, DEN Networks had increased its shareholding in the business which is operated under Marco Commerce, from 50% to 82.87%. The cost of acquisition was R6 crore including purchase of shares for R1 crore and subscription by way of rights issue for R5 crore.
The joint-venture posted a turnover of R28 crore in FY16, up from R3.17 crore in FY15. In FY16, the teleshopping business clocked an annualized gross merchandise value (GMV) of R240 crore with 30% of its customers returning to buy goods from the channel. The channel is available across 52 million homes. Moreover, a website was launched in February 2016.
DEN Networks posted a loss of R204 crore on the back of revenues of R1,144 crore in FY16. The company’s loss in FY15 stood at R113 crore, while it posted revenues of R943 crore in FY15.