In the ever-evolving world of ecommerce, Snapdeal has emerged as one of India’s prominent players, focusing on providing value-driven shopping experiences to millions of customers. With its roots tracing back to 2010, Snapdeal has played a pivotal role in shaping the digital marketplace in India, offering an array of products, lucrative deals, and discounts to customers.
The Beginning of Snapdeal: A Vision Realized
Founded by Kunal Bahl and Rohit Bansal in February 2010, Snapdeal originally started as a daily deals platform under the name MoneySaver. The duo, both from prestigious educational backgrounds, initially aimed to revolutionize how people in India could access discounts and deals. After a successful start,
They decided to pivot and rebrand their business to Snapdeal, positioning it as a full-fledged online marketplace. The company began offering a variety of products, from electronics to fashion and lifestyle goods, while also focusing on delivering great value to its customers.
In 2011, Snapdeal made a significant shift by transforming into a digital marketplace where third-party sellers could list their products, creating a platform that connected buyers and sellers across the country. This decision laid the foundation for Snapdeal’s future as one of India’s leading e-commerce giants.
Snapdeal’s Mission and Vision: Democratizing Value Commerce
Snapdeal’s mission is clear: to become the leading value lifestyle omnichannel platform in India. This mission is driven by a desire to make online shopping more accessible, enjoyable, and reliable for customers, especially those in tier II and tier III cities. The company recognizes the potential of Bharat, India’s rural and semi-urban markets, where consumers are more value-conscious but still want access to high-quality products at affordable prices.
The company’s vision extends beyond just selling products—it aims to create a shopping experience that helps customers fulfill their dreams, offering them more than just a transaction but a sense of aspiration. With an intuitive, bilingual interface and cutting-edge technology, Snapdeal has successfully catered to millions of users across India.
Innovative Business Model and Focus on Value
At the heart of Snapdeal’s business is its value-driven e-commerce model. The company operates as a business-to-customer (B2C) platform, allowing third-party vendors to sell their products directly to consumers. However, Snapdeal distinguishes itself from competitors by narrowing its focus on value-conscious consumers, who prefer affordable yet quality products.
In 2021, Snapdeal made a strategic shift to refine its product offerings further by honing in on value-oriented products instead of high-end luxury brands. This decision was part of its plan to cater more effectively to middle-class consumers in non-metropolitan cities, who are increasingly shopping online. The company’s broad reach, covering over 96% of India’s pin codes, ensures that it serves even the remotest areas of the country.
Revenue Model: How Snapdeal Earns
Snapdeal’s revenue model is built on commissions from its third-party sellers. Each product sold through the platform brings in a commission that ranges from a small percentage to a larger amount, depending on the product category. This commission-based model aligns Snapdeal’s success with that of its sellers, creating a symbiotic relationship.
Additionally, Snapdeal generates revenue through targeted advertising and promotional campaigns. Brands looking to increase their visibility on the platform can pay to have their products featured more prominently, which in turn benefits Snapdeal by driving additional revenue.
Despite the challenges posed by intense competition in the e-commerce space, Snapdeal’s strategic focus on affordable and value-oriented products has kept it on a growth trajectory.
Overcoming Challenges and Staying Resilient
Like any business, Snapdeal has faced its fair share of challenges. In the mid-2010s, the company found itself in direct competition with giants like Amazon and Flipkart, who were investing heavily in the Indian market. At one point, Snapdeal was even in talks to merge with Flipkart, but the deal fell through. Moreover, Snapdeal struggled with internal disagreements and funding shortages, which led to cost-cutting measures, staff layoffs, and a temporary slowdown.
However, despite these challenges, Snapdeal has remained resilient. The company opted to stay independent, and by focusing on value-driven e-commerce, it found a niche in a highly competitive market. Snapdeal’s leadership, particularly that of founders Kunal Bahl and Rohit Bansal, played a crucial role in steering the company through these turbulent times. Their decision to invest in customer experience, technological improvements, and a broader selection of affordable products has paid off.
Snapdeal’s Financials and Recent Growth
Snapdeal’s financials highlight a story of resilience and gradual recovery. In FY24, Snapdeal reported an operating revenue of INR 379.76 crore, reflecting a growth of 2.1% from the previous year. At the same time, the company managed to reduce its total expenses by 21.4%, bringing them down from INR 687.93 crore to INR 540.76 crore. As a result, Snapdeal’s losses narrowed significantly, from INR 282.20 crore in FY23 to INR -160.38 crore in FY24.
This reduction in losses is a positive sign for the company’s future. It suggests that Snapdeal is effectively managing its expenses while focusing on generating more revenue. This operational efficiency is key as the company continues to grow and adapt to the competitive e-commerce landscape.
Expanding Reach: Snapdeal’s Growth and Milestones
Snapdeal’s growth has been fueled by its ability to expand its customer base, especially in non-metropolitan cities. As of September 2023, Snapdeal boasted over 25 million active users per month and more than 200 million app downloads. Its reach spans across over 2,500 towns and cities, showcasing the vastness of its logistics network.
The company has also embraced new technologies and platforms to strengthen its position. For example, in July 2022, Snapdeal joined the Open Network for Digital Commerce (ONDC), fully integrating its buyer and seller platforms by March 2023. This move helped Snapdeal stay at the forefront of digital commerce and expanded its ability to serve consumers more effectively.
Snapdeal’s Advertisements and Social Media Campaigns
Snapdeal’s marketing strategy has been focused on attracting value-seeking consumers. The company has engaged in multiple successful campaigns, often leveraging Bollywood celebrities like Riteish and Genelia Deshmukh. These advertisements focus on the tagline “Brand waali quality, bazaar waali deal,” emphasizing Snapdeal’s commitment to providing high-quality products at affordable prices.
These campaigns have resonated well with Indian consumers, reinforcing Snapdeal’s image as a go-to platform for value-conscious shoppers.
Conclusion: A Bright Future Ahead
Snapdeal’s journey from a couponing platform to a leading e-commerce marketplace in India is a testament to the power of perseverance and strategic focus. By narrowing its focus on value commerce, Snapdeal has carved a unique space in the crowded e-commerce market. With its strong leadership, a resilient business model, and a commitment to providing customers with affordable yet quality products, Snapdeal is well-positioned for continued growth.
Looking ahead, Snapdeal’s future appears promising as it continues to expand its reach, refine its business model, and enhance its customer experience. As the Indian e-commerce market continues to grow, Snapdeal is likely to remain a key player, serving the needs of millions of consumers across the country.