Snapdeal

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Snapdeal Private Limited
Snapdeal new official logo.png
Type of businessPrivate
Type of site
E-commerce
Available inEnglish
Founded2010; 11 years ago (2010) [1]
HeadquartersNew Delhi, India
Area servedIndia
Founder(s)
Key peopleKunal Bahl
(CEO)
IndustryE-commerce
ServicesOnline shopping
RevenueIncrease 925 crore (US$130 million) (FY 2019)[2]
URLwww.snapdeal.com
CommercialYes
RegistrationRequired
Current statusActive
Native client(s) oniOS, Android, Windows

Snapdeal is an Indian e-commerce company, based in New Delhi, India. The company was founded in February 2010 by Kunal Bahl and Rohit Bansal, alumni of The Wharton School and Indian Institute of Technology Delhi respectively.[3]

History[edit]

Snapdeal was founded on 4 February 2010 as a daily deals platform, and expanded in September 2011 to become an online marketplace.[4] Snapdeal has grown to become one of the largest online marketplace in India.[5] Snapdeal’s focus is on the value ecommerce segment - a market that is three times larger than the size of the branded goods market.[6] Sellers on Snapdeal offer good quality (local / regional / seller  branded)  merchandise, that offers customers value-for-money options, similar to what would sell in local markets and high streets in a city. Fashion, home and general merchandise account for a majority of the products sold by more than 500,000 independent sellers on Snapdeal platform.[7] Buyers from more than 3,700 towns across India—accounting for 92% of India’s total 4,000 towns and cities—shop on Snapdeal.[8]

Funding & Acquisitions[edit]

Snapdeal has received several rounds of funding. It received its first funding worth US$12 million from Nexus Venture Partners and Indo-US Venture Partners in January 2011. This was followed by another round in July 2011 worth US$45 million from Bessemer Venture Partners and existing investors. The third round of funding was worth US$50 million and came from eBay and other pre-existing investors.[9]

Three years later, in February 2014, Snapdeal raised funding of US$133 million. This round was led by eBay with participation from then-current institutional investors: Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.[10] In May of the same year, funding worth US$105 million was raised. This was backed by investors BlackRock, Temasek Holdings, PremjiInvest and others.[11] Softbank invested US$647 million in October 2014, making it the largest investor in Snapdeal so far.[12]

In August 2015, Alibaba Group, Foxconn and SoftBank invested US$500 million as fresh capital.[13] In February of the following year, one of the world's largest pension funds, Ontario Teachers' Pension Plan, and Singapore-based investment entity Brother Fortune Apparel, led an investment worth US$200 million in the Jasper Infotech-owned company.[14] In May 2017, Snapdeal raised funding worth 113 crore funding from Nexus Venture Partners.[15][16]

Snapdeal has acquired several business enterprises. In June 2010, Snapdeal's holding company Jasper Infotech Private Limited* acquired Bengaluru-based group buying website Grabbon.com for an undisclosed amount.[17] In April 2012, Delhi-based online sports goods retailer esportsbuy.com was acquired.[18][19] This was followed in 2013 by the acquisition of Shopo.in, a C2C ecommerce platform.[20] In 2014, Snapdeal acquired Doozton.com, a fashion product discovery technology platform,[21] and Wishpicker.com, a tech platform that uses machine learning to deliver recommendations for gift purchases. Both deals were for undisclosed amounts.[22][23]

Snapdeal made majority of its acquisitions in the year 2015. In January, it acquired a stake in product comparison website, Smartprix.com[24] followed by the acquisition of luxury fashion products discovery site, Exclusively.in.[25] In March, the firm acquired 20% stake in logistics service company Gojavas.com.[26] Two more acquisitions in the same month were eCommerce management software and fulfilment solution[buzzword] provider, Unicommerce.com[27] and RupeePower, a digital platform for financial transactions.[28][29][30] In April 2015, mobile-payments company FreeCharge.com was acquired.[31] Programmatic display advertising platform, Reduce Data was acquired in September of the same year.[32] In August 2016, logistics firm Pigeon Express acquired a 51% stake in GoJavas with Snapdeal holding 49% stake in the firm.[33] Snapdeal later exited GoJavas.

* In 2019, Jasper Infotech Private Limited changed its name to Snapdeal Private Limited. [34]

Leadership[edit]

Snapdeal was valued at USD 6.5 billion in Feb 2016 and it raised USD 200 million at that valuation. [35] In anticipation of this funding and immediately afterwards snapdeal tried to get senior and high profile leaders to bolster its leadership team. People who joined Snapdeal in this duration included Anand Chandrashekharan (from Airtel),[36] Jayant Sood (from Airtel) [37] Amit Kumar,[38] Rajiv Mangla (from Adobe) [39] and many more.

Merger rumours[edit]

In the second half of 2016 a number of media houses reported that SoftBank, one of the major investors in Snapdeal, wanted to engineer a merger of Snapdeal and Flipkart, India’s two biggest homegrown e-commerce groups.[40] [41] The discussions on merger with Flipkart went on for a number of months, but the deal did not go through due to lack of consensus within the Snapdeal Board. It was also reported that disagreements over valuation and proposed special payouts to Snapdeal's early investors - Nexus Venture Partners and Kalaari Capital - did not allow the deal to proceed ahead.[42] [43] The discussions ended in July 2017 when Snapdeal’s Board decided not to go ahead with the proposed merger. Snapdeal chose to pursue an independent path, which it described as Snapdeal 2.0.[44][45]

Snapdeal 2.0[edit]

As part of its 2.0 initiative, Jasper Infotech sold off its non-core businesses, Freecharge[46] & Vulcan Express[47] and chose to focus all its attention and resources on its core business, the Snapdeal marketplace.

Snapdeal’s 2.0 strategy has yielded strong results. In the period 2017-2021, the company has restructured its business by focusing on the value segment and aligning its costs accordingly.  In this period, Snapdeal has grown back its revenue to 74% of the peak, while slashing its loss by nearly 95% in the same period. This makes it one of the most efficient large-scale e-commerce businesses in India.

Snapdeal has built an asset light model and operational capabilities specific to serving the value segment, including decentralised logistics and zero inventory. Through a focused approach and disciplined execution, it has been able to keep cost of operations low to serve the segment with positive unit economics.

The transacting users and traffic to the platform have also continued to climb, indicating a distinctive positioning. Due to a better product-market fit, the traffic to Snapdeal's marketplace and the number of users has continued to climb. The number of unique customers on Snapdeal’s platform have grown from 8.99 Mn in FY 18 to 27 Mn in FY 20. More than 90% of Snapdeal's orders come from non-metro users, indicating a strong appeal amidst value-savvy buyers.[48][49]

Snapdeal 2.0’s success is also built on recreating online the bustle and diversity and India’s thriving bazaars. For Snapdeal, one of the learning curves of selling value-for-money products to non-metro buyers has been the need to add engagement and entertainment just like in the physical world and not only provide the fastest way to find products and check out. “Snapdeal’s engagement with this new and a large part of our existing user base is built on three key themes of video, voice, and vernacular. All these initiatives are built around the central idea of how we can help our users discover and transact better, rather than a traditional approach of how we can sell better,” Snapdeal’s CEO & co-founder, Kunal Bahl told KrASIA.com in February 2021.[50]

Other news about Snapdeal[edit]

In March 2015, Snapdeal engaged actor Aamir Khan for the promotion of its website in India with its Diwali campaign, "Dil Ki Deal.[51] The year-long engagement witnessed turbulence when comments made by Aamir Khan in his personal capacity stirred controversy.[52]

In January 2021, Snapdeal slammed US Trade Department (USTR) for falsely identifying it as a marketplace where counterfeit products are sold. In its response Snapdeal said that the USTR report "reflected a blinkered and flawed view of the world that not only fails to make a distinction between the respective roles of brands, sellers and platforms, but also wilfully ignores the applicable laws in various jurisdictions, including in India".[53] Calling the report ill-informed, Snapdeal sent a notice to USTR asking to retract its “false statements and issue a corrigendum” to its report.[54]

Snapdeal is part of International Trademark Association (INTA), a global association that has more than 7200 members across 187 countries and is devoted to supporting protection of intellectual property on online marketplaces.[55]

Snapdeal's sharp focus on the value segment has caught the attention of Indian FMCG companies like Godrej, Himalaya etc. who are utilizing Snapdeal's reach deep into India to sell their popular brands. As part of the arrangement, the products are being sold on Snapdeal directly by the brands through dealers authorised by them. Many upcoming brands including The Man Company, Mamaearth, and Ustraa have also partnered with Snapdeal to penetrate non-metros.[56]

See also[edit]

References[edit]

  1. ^ Chakraborty, Alokananda (18 July 2014). "Lunch with BS: Sachin Bansal". Business Standard Ltd. Retrieved 16 November 2014.
  2. ^ "Snapdeal's revenue grows 73%, losses drop by 71% in FY19". Economic Times. ET Bureau. 17 July 2019. Retrieved 30 May 2020.
  3. ^ Gooptu, Biswarup (28 February 2014). "Snapdeal co-founder Kunal Bahl: A rising star of India's e-commerce space". The Economic Times. Archived from the original on 18 December 2014. Retrieved 16 November 2014.
  4. ^ Agrawal, Shrija; Rai, Anand. "We should do a billion dollar in gross merchandise value by 2015: Snapdeal's Shyam Bahl". techcircle.vccircle.com/. Retrieved 16 November 2014.
  5. ^ Bhattacharjee, Nivedita; PM, Indulal. "Japan's SoftBank kicks off $10 billion India online spree, buys stake in Snapdeal". Reuters. Retrieved 16 November 2014.
  6. ^ "How Snapdeal Is Turning Around Its Fortune". Forbes India. Retrieved 5 February 2021.
  7. ^ "Snapdeal to add another 5000 manufacturer-sellers to its platform in 2020". The Economic Times. Retrieved 5 February 2021.
  8. ^ "India's Snapdeal staged a comeback by diving into small cities | Tales from India's Towns". KrASIA. 4 February 2021. Retrieved 5 February 2021.
  9. ^ "Exclusive: Snapdeal raises $50 Million from eBay and existing investors". 1 April 2013.
  10. ^ "eBay increases stake in Snapdeal, invests $134 million". The Times of India. 27 February 2014.
  11. ^ "Snapdeal raises $100M in fresh funding from BlackRock, Temasek, PremjiInvest, others".
  12. ^ "SoftBank becomes largest investor in Snapdeal" Archived 28 October 2014 at archive.today, Affairscloud, 28 October 2014.
  13. ^ "Snapdeal secures USD 500 Million in an investment round led by Alibaba, Foxconn and SoftBank to power its digital commerce ecosystem - Snapdeal Blog". 18 August 2015. Archived from the original on 22 August 2015.
  14. ^ "Ontario Teachers' Pension Plan and others lead $200 million funding round in Snapdeal". The Economic Times. 15 February 2016. Retrieved 19 August 2017.
  15. ^ "Snapdeal gets Rs 113 crore from Nexus, founders in surprise funding". Livemint. 29 May 2017.
  16. ^ "Struggling Snapdeal gets Rs 113 cr funding". The Economic Times. 29 May 2017.
  17. ^ Shrija Argawal, "SnapDeal owners acquire Grabbon; to expand & differentiate," Reuters, 29 June 2010.
  18. ^ "Snapdeal acquires Esportsbuy.com". Economic Times. 4 April 2012.
  19. ^ "Snapdeal buys Esportsbuy.com". The Hindu Business Line. 4 April 2012.
  20. ^ "Snapdeal acquires Shopo.in". The Times of India. 1 June 2013. Archived from the original on 17 June 2013.
  21. ^ Priyanka Pani, "Snapdeal.com buys fashion products discovery platform Doozton.com," The Hindu Business Line, 16 April 2014.
  22. ^ "Snapdeal acquires gifting recommendation tech firm Wishpicker," The Economic Times, 11 December 2014.
  23. ^ "Snapdeal, One Of India’s Leading E-commerce Sites, Acquires Wishpicker To Deliver Better Product Recommendations," TechCrunch, 11 December 2014.
  24. ^ "Snapdeal buys stake in product comparison site Smartprix.com". VC Circle. Retrieved 6 January 2014.
  25. ^ ", Business-standard", 18 February 2015.
  26. ^ "Snapdeal acquired 20% stake in Gojavas.com". LiveMint. Retrieved 18 March 2015.
  27. ^ "Snapdeal buys e-commerce management firm Unicommerce". LiveMint. Retrieved 31 March 2015.
  28. ^ "Snapdeal acquires majority stake of RupeePower". articles.economictimes.indiatimes.com. Retrieved 1 April 2015.
  29. ^ "Snapdeal acquires majority stake of RupeePower". MoneyControl. Retrieved 31 March 2015.
  30. ^ "Snapdeal acquires majority stake of RupeePower". The Times of India. Retrieved 31 March 2015.
  31. ^ "India's Snapdeal Buys FreeCharge". The Wall Street Journal. Retrieved 8 April 2015.
  32. ^ "Snapdeal acquires Silicon Valley startup Reduce Data - The Economic Times". Retrieved 2 September 2015.
  33. ^ "Pigeon Express in talks to buy out Snapdeal's GoJavas stake - Live Mint". Retrieved 4 May 2017.
  34. ^ "PressReader.com - Your favorite newspapers and magazines". www.pressreader.com. Retrieved 5 February 2021.
  35. ^ "Snapdeal raises $200 million, giving it $6.5 billion market value".
  36. ^ "Anand Chandrasekaran joins Snapdeal as new product chief".
  37. ^ "Jayant Sood joins as chief customer experience officer for Snapdeal".
  38. ^ "Exclusive: OLX turns bullish on C2B model in used car segment, opening 30 stores in 6 cities".
  39. ^ "Rajiv Mangla is new CTO of Snapdeal".
  40. ^ "SoftBank Aiming for Flipkart-Snapdeal Merger, Rest of the Investors in a Disagreement - TechStory". TechStory. 5 April 2017. Retrieved 1 August 2017.
  41. ^ https://twitter.com/FinancialTimes/status/851126434399752192?s=20
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  43. ^ "How Kunal Bahl sold the idea of Snapdeal 2.0 and what's in store". The Economic Times. 1 August 2017.
  44. ^ Bhargava, Yuthika (31 July 2017). "Snapdeal wants no deal with Flipkart". The Hindu. ISSN 0971-751X. Retrieved 5 February 2021.
  45. ^ "Full text: Let's make Snapdeal 2.0 a success, says Bahl and Bansal's letter". Business Standard. 1 August 2017.
  46. ^ "Axis Bank Buys Freecharge From Snapdeal For Rs 385 Crore In All-cash Deal". Moneycontrol. Retrieved 5 February 2021.
  47. ^ Gooptu, Biswarup. "Future Supply Chain Solutions buys Vulcan Express for Rs 35 crore". The Economic Times. Retrieved 5 February 2021.
  48. ^ "How Snapdeal Is Turning Around Its Fortune". Forbes India. Retrieved 5 February 2021.
  49. ^ Bhattacharya, Ananya. "Snapdeal's comeback strategy seems to be paying off". Quartz India. Retrieved 5 February 2021.
  50. ^ "India's Snapdeal staged a comeback by diving into small cities | Tales from India's Towns". KrASIA. 4 February 2021. Retrieved 5 February 2021.
  51. ^ "Aamir Khan roped in as brand ambassador for Snapdeal". India Today. Retrieved 18 March 2015.
  52. ^ Reddy, Sujata. "Snapdeal releases official statement on Aamir Khan controversy". The Economic Times. Retrieved 5 February 2021.
  53. ^ "Snapdeal terms USTR report placing it on Notorious Markets List 'ill-informed'". mint. 16 January 2021. Retrieved 5 February 2021.
  54. ^ "Snapdeal writes letter to USTR protesting inclusion in Notorious Markets list". The Economic Times. Retrieved 5 February 2021.
  55. ^ https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/snapdeal-joins-international-trademark-association/72135331
  56. ^ "Marico, Godrej and Himalaya list value-selection on Snapdeal to widen reach in non-metros". The Economic Times. Retrieved 5 February 2021.

External links[edit]