E-commerce firm Shopclues, which focuses on tier-II and tier-III towns and cities, expects to enter the billion-dollar club, most probably post this festive season, said sources in the company.
Shopclues will be the fourth e-commerce firm after Flipkart, Snapdeal and Amazon India to cross a billion dollar in gross merchandise value, or GMV — the most widely used parameter to measure growth of e-commerce platforms — it is the total value of goods sold through the platform.
“The transactions and traffic started picking up on the second day of the sale — we witnessed seven times growth in traffic on second day,” said Sanjay Sethi, CEO and co-founder of Shopclues.
Sethi expects 100 millions visits in the next 30 days, with five million transactions worth Rs 1,000 crore. By December, the number according to internal calculations show that Shopclues is expected to do Rs 1,500 crore ($250 million) of transactions.
With a current annual GMV run rate of $1.2 billion, by the end of the festive season Shopclues will close the festive season at a billion dollar. “We are looking at getting 15% market share by the end of the festive season,” said Sethi.
Discounts which are more than what is available on other e-commerce is driving traffic for Shopclues — a Samsung 43 television is available for Rs 25,000, while on other e-commerce platforms it is for Rs 32,000 onwards. Unique products like cow-dung cakes, havan kunds, etc, that are popular in smaller towns and cities are available on the platform — has also helped in getting buyers.
Most of Shopclues’ GMV is coming from the categories of home and kitchen, and lifestyle. However, the gap between Shopclues and larger e-commerce firms like Snapdeal are much higher. Snapdeal did Rs 1,500 crore of transactions in the first four days of the sale, which Shopclues plans to do in the entire festive season.
Sethi said, that other companies have a much higher burn rate because of extreme discounting.
“Our burn rate is 10% of the topline sales, while for others its close to 25%. We have made efforts to get sellers to offer the discounts backed by huge volumes, which is why we have a lower burn rate” he said.
Increasingly, the festive season is becoming a war zone, fuelled by heavy discounting by e-commerce companies.
Industry estimates that this festive season, transactions on e-commerce companies will reach $8 billion, compared to $1.8 billion last year.