2017

SNAPDEAL V 2.O?
Ticket to Redemption or a shot in the Dark?

Submitted by:
Dhroov Sharma
Manav Singh
Contents
About the company ...................................................................................................................................... 3
History ....................................................................................................................................................... 3
Investors.................................................................................................................................................... 4
Acquisitions ............................................................................................................................................... 5
Achievements............................................................................................................................................ 5
Competitors Analysis .................................................................................................................................... 7
Growth of the company ................................................................................................................................ 9
Past approaches of the company................................................................................................................ 10
Current Market Scenario ............................................................................................................................ 11
Snapdeal 2.0................................................................................................................................................ 13
Recommended Strategies in 2.0 ............................................................................................................. 13
Inference ..................................................................................................................................................... 14
References ..................................................................................................... Error! Bookmark not defined.

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About the companyi
SnapDeal is an Indian e-commerce company incorporated in February 2010 as a daily deal
platform inspired by groupon.com but expended in September 2011 to become an online market
place. The company is based in New Delhi. The CEO of the company is Kunal Bahl and Rohit
Bansal.

History
Snapdeal was one of the fastest growing e-commerce companies in India. In just three and half
years, the company went from scrapping their group coupon business and starting an online
marketplace to become a billion dollar company. Its year on year growth is almost 600%. Year
2010, Kunal Bahl and Rohit Bansal wanted to start their own business, they chose an offline
couponing business and named it Money Saver. 15000 coupons were sold in three months and it
was time to take the business to the next level. Inspired by the success of Alibaba.com, founders
wanted to create something on similar lines. The deals business was shut down and an online
marketplace was opened instead.

SnapDeal is an Indian e-commerce company based in New Delhi, India. The company was
started by Kunal Bahl and Rohit Bansal in February 2010. SnapDeal currently has 300,000
sellers, over 60 million products across 800+ diverse categories from over 125,000 regional,
national, and international brands and retailers and a reach of 6,000+ towns and cities across the
country.

SnapDeal has grown to become one of the largest online market place in India. In March 2015,
SnapDeal brought actor Aamir Khan for the promotion of its website in India.

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Investorsii

Round of Funding ($ mn)

700 627
600 500
500
400
300 200
200 133 105 113
100 47 50 Funding ($ mn)
0
2011, 2011, 2014, 2014, 2014, 2015, 2015, 2017,
Nexus Ebay Ebay Blackrock Softbank Alibaba Jasper Nexus
venture & Group Infotech venture
Indo- US
venture

In January 2011, SnapDeal received a funding of $12 million from Nexus venture
partners and Indo-US venture partners.
In July 2011, the company raised a further $45 million from business venture partner,
along with existing investors Nexus venture partners and Indo-US venture partners
SnapDeal then raised a third round of funding worth $50 million from eBay and received
participation from existing investors- i.e. Bessemer venture partner, Nexus venture and
Indo-US venture partners.
SnapDeal received its fourth round of funding of $133 million on February 2014. The
fourth round of funding was led by eBay with all the current institutional investors,
including kalaari capital, Nexus venture partners, Bessemer venture partner, Intel capital
and saama capital all participating.
SnapDeal received its fifth round of funding of $105 million in May 2014. The fifth
round included investments by Blackrock, Temasek Holdings, Premji Invest and others.
The round value SnapDeal at $1,000,000,000.
SnapDeal received its sixth round of funding in October 2014 from Softbank with
investments worth $627 million in fresh capital. This makes Softbank the largest investor
in SnapDeal.
SnapDeal received its seventh round of funding in August 2015, Alibaba Group, Foxconn
and SoftBank invested USD $500 million as fresh capital. 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
USD $200 million in the Jasper Infotech-owned company.
SnapDeal received its eighth round of funding in May 2017, Snapdeal raised funding
worth Rs 113 crore funding from Nexus Venture Partners.

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Acquisitions
2010 Gets launched as online deals merchant by Kunal Bahl and Rohit Bansal.

Acquired Bangalore-based group, Grabbon.com

2012 Acquired eSportsbuy.com, an Indian online sports goods retailer

2013 Acquired Shopo.in, popular online shopping website

2014 Acquired spree by buying Doozton.com, a fashion and lifestyle website

Acquired gifting recommendation site, Wishpicker.com

2015 Acquired Freecharge, India's leading website for online recharges

Acquired another lifestyle website, Exclusively.com

Acquired majority stake in Rupeepower.com

Acquired Letsgomo and martmobi

2016 Acquires TargetingMantra, a boutique technology company, which has done

Path breaking work in the field of personalizing shopping experience for
Customers e-commerce platform.

Achievements
2010 Gets launched as online deals merchant by Kunal Bahl and Rohit Bansal

2011 Attracts first investor, Nexus Venture, and receives $10 million investment

Gets $45 million more as Bessemer Venture Partners jumps on the investment
bandwagon.

Decides to shut down deals to become online marketplace offering products to

consumers.

2012 Initiates marketplace as first 10 sellers come on board to sell their wares
Closes the year with 1000 sellers on board selling their products

2013 Investment from global e-commerce giant, eBay

Launches TrustPay - a consumer protection service

Hits a milestone with 20k+ seller on board now

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 2014 Receives second round of funding from eBay - $133.77 million
Gets another investment boost with investments from industrialist Mr. Ratana
Tata, Launches Capital Assist to enable sellers meet their growing working
Capital requirement.

Gets whopping $627 million funding from Japanese Multinational Corporation,

Softbank

2015 Debuts in TV commerce with launch of DEN-SnapDeal TV shop

2016 SnapDeal unveils a new brand identity with Unbox Zindagi

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Competitors Analysis

Flipkart is an electronic commerce company

headquartered in Bangalore, Karnataka. It was
founded in October 2007 by Sachin Bansal and
Binny Bansal. Flipkart is Indias leading e-
commerce marketplace with 80 million products
across 80+ categories. In October and November
2011, Flipkart acquired the websites Mime360.com
and Chakpak.com. Flipkart generated the revenue of
15,129 crore. As of April 2017, the company was
valued at $11.6 billion. Flipkart had a share of
35.7% in March 2017.

Competitor's Market Share (%)

50
45
40
35
30 Snapdeal

25 Amazon

20 Flipkart

15 Others

10
5
0
2014 2015 2016 2017

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 Amazon is an American electronic commerce and
cloud computing company based in Seattle,
Washington that was founded by Jeff Bezos on July
5, 1994. Amazon has separate retail websites for the
United States, the United Kingdom, Japan, China,
India, etc. Amazon also offers international
shipping to certain other countries for some of its
products. Amazon generated the revenue of 15,129
crore. Amazon India has commanded a higher
market share of 44.6% in March 2017.

ShopClues is an online marketplace, headquartered

in Gurugram, India. The company was founded in
California's Silicon Valley in 2011. It has over
12,000 registered merchants retail 2,00,000+
products on the platform to over 42 million visitors
every year across 9500 locations in the country.
ShopClues is the subsidiary of Clues Network Inc. a
US Corporation and was founded in November
2011 by Radhika Aggarwal, her husband, Wall
Street internet analyst Sandeep Aggarwal and
Sanjay Sethi.

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Growth of the company

Growth of Snapdeal
5000
5000

4000

3000

2000 1779

682 637
1000
250
2 6 8 22 40 208 50 216 134 100 100
0
0.00 Sep-09 Jan-11 Jul-11 Apr-13 Feb-14 May-14 Oct-14 Apr-15

Round of Funding ($mm) Implied Valuation ($mm)

It is never easy to start a business. One need to work on your ideas, find capital and investors and
then need to work hard to get results. Snapdeal set a niche for itself in the sphere of e-commerce
in India. Initially started as an offline business, Sneapdeal went online in 2010. It was a bumpy
ride in the first few months. Mistakes were made, but lessons were learnt. It is this kind of hard
work and diligent attempt to offer the best to the customers that gave Snapdeal its initial success.

Snapdeal has been rated the #1 E-commerce site in India, in terms of traction by
Dataquest/Sapient E-commerce Survey 2011. As per the above chart, the growth of the company
is good as they started with 4 million products but now they have 60 million products.

In FY 2013-14, snapdeal has received two round of funding i.e. $50 mn and $134 mn the total
revenue generated by the company at the end of the FY was around $898 mn which is
approximately 5 times of the funding. After analysis the above chart we can conclude that the
company was performing tremendously.

In FY 2014-15, similar scenario was happened as the snapdeal has received two round of funding
again next year i.e. total of $737 mn and generated $1879 mn which approximately 2.5 times the
funding. As per the previous growth this time SD was not upto the mark, because in this year SD
comes up with the strategy Bachatey Raho but somehow this was not successful.

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In FY 2015-16, After the failure of the previous strategy, snapdeal come up with the new
strategy as appointing Aamir Khan as a brand ambassador and they reinnovated the tag line
with Dil Ki Deal. So, this Strategy was a successful call as they received the funding of $250
mn and they generated the revenue of $5000 mn.

Past approaches of the company

Snapdeal comes up with the many new strategies so that they can survive in the market. So their
past Strategies are as follows:

Save while you shop, Bachatey Raho, is what

Snapdeal believes in and this is what their first
slogan was. Snapdeal is not an e-commerce
shopping site like other websites but is an entire e-commerce marketplace. It is a platform given
to the vendors across the country that has varied products on offer for the consumers. It helps
connect the vendor directly to the consumer without any middle men and their extra fees. It is
mainly due to this reason that Snapdeal offers amazing diwali deals and discounts that none other
can deliver.

Dil ki deal was launched with the vision to create

Indias most impactful digital commerce ecosystem
that creates life-changing experiences for all of its
buyers and sellers. Where the focus of this campaign was on the emotional fulfillment for its
consumers and the objective was to grow the number of buyers and sellers on the platform. They
tried to connect on the emotional level with their consumers. With the increasing growth of
internet penetration in the country, the brand has chosen the one of the best face of Bollywood
Aamir Khan to promote its online marketplace across India.

An initiative taken by the company after the great

success of Dil Ki Deal. Company rebranded the
strategy and they have started promoting their brand
digitally through Facebook, Twitter and other social media websites. This strategy was taken
because of the steady growth of the company and they are getting positive response from the
consumers thats why they opt for the strategy of going digital.

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Current Market Scenarioiii

Monthly Active Users (%)

50
45
40
35
30
25 Amazon
20 Flipkart
15 Snapdeal
10
5
0

The main competitor of the snapdeal is flipkart because they have maximum market share. So,
just because of it Softbank want a merger of Flipkart and Sanpdeal but because of some demands
put by the Flipkart against snapdeal which cannot be fulfilled because of it some of the early-
stage investors in Snapdeal, such as Nexus Venture Capital, have come out in support of the co-
founders Mr. Bhal and Bansal move to end merger talks with Flipkart. Snapdeal is in very
critical situation because they dont have much funding from investors. As per the Mint report
snapdeal only have cash reserves left for less than two months. As per the above chart we can
easily see that sandeal is struggling very much to remain in the market. So, to acquire the market
share, snapdeal has adopted a new strategy i.e. Snapdeal 2.0.

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 Most Preferred eStore in India

70 61%
55%
60
50
40 28% 26%
30 21%

20 10%
10
0
Flipkart Amazon Snapdeal Pay Tm Shopclues Myntra

As per the above graph the most preferred estore is flipkart as per the survey made in 2016.
Flipkart is the best selling portal a per the customers point of view because it provides better
product and in affordable prices which other eportal are failing to do so.

It is very important to understand what is the need of the customer and then work according to it
so that we can achieve the organizational goal and in India it is very important to retain the
customer.

After flipkart, Amazon stood second position and after that Snapdeal as per customers
preference. To change the mindset of the customers snapdeal needs to come up with an
innovative ideas and for it snapdeal is coming with 2.0.

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Snapdeal v2.0
After analyzing the past approaches of the company we can conclude that overall company is not
doing good is E-commerce market because in last FY snapdeal lost market share drastically,
while its competitor filpkart manage to hold its own long enough.

One problem is that it gets harder to ensure a good customer experience in a marketplace without
inventories, where all and sundry become sellers and deliveries can get messy. That is why
Amazon stuck to the managed model despite the early success of Ebay, which at one time could
offer a much wider selection of categories and products. So, even though Snapdeal 2.0 can
reduce cost by not holding inventory, its going to be harder to improve an already shaky
customer experience.

Kunal Bahl and Rohit Bansal, co-founders of Indian ecommerce company Snapdeal fought a
boardroom battle and regained control from their big investor, SoftBank, by walking away from
talks to sell the struggling firm to arch rival Flipkart.

The failure of the past strategies is that snapdeal fail to analyze the strategies of their competitor
as well as the behavior of the consumers.

Recommended Strategies in v2.0

Improving the quality of customer services.
Product range will be tip to toe.
Product will be delivered within 48 hours.
Improved and attractive packaging.
Use of mass communication for promotion.
Launching the TV channel for the customers who found difficulties in surfing
Internet.
Telephonic order can be placed.
Service will available in all the cities.
More secure payment method.
Tie up with the more merchant bank.
More combo and attractive deals.
Just in time inventory
Snapdeal Supreme for videos and games.
Movie ticket and restaurant coupons while purchase of Rs 1000/- or more.
Gift vouchers while purchase of Rs 2500/- or more.
Free workshops for people to aware them about the use of internet, e-commerce and
benefits of using Snapdeal.

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Inference
As per the above analysis, we can conclude that the Indian market is in the favor of Ecommerce
and India is becoming digital. So, snapdeal have great opportunity to penetrate in the market
again.

Internet users are increasing day by day in India, can be seen in below graph. Though this we can
see the future growth in the market.

Internet Users in India(mn)

600
503
500
427
400 354

300 278
Internet Users
189.6
200

100

0
2013 2014 2015 2016 2017

Earlier, people used to go and purchase the goods in local market as traditional method but now
people are changing their preference as they have hectic Schedule and they want things to be
delivered at their door step, through below graph we can see how rapidly the E-commerce is
growingiv.

E-Commerce Growth in India ($bn)

35
30.2
30
25
21.4
20
16.4
15
9.5 9.5 Growth ($bn)
10 5.3 7
5
0
2010 2011
2012 2013 2014 2015 2016

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As per the rapid growth of E-commerce & M-commerce market in current scenario, we can
assume that the E-commerce & M-commerce market will get more penetrate in Indian market in
the near future.

Below are the graphs which forecast the Market in near futurev vi.

Retail eCommerce Sales in India (Forecasted)

90
77.7%
80
70
60 55.5%
46.2%
50
40 34.1%
30 23.9% 22%
20
10
10.3 16.02 23.42 31.39 38.9 47.45
0
2015 2016 2017 2018 2019 2020

Sales ($bn) Growth (YoY)

Retail mCommerce Sales in India (Forecasted)

90 80%
75.3% 77.6%
80 71.8%
65.3%
70 58.5%
60
50
37.96
40 30.2
30 23.64
16.81
20 10.46
10 6.02
0
2015 2016 2017 2018 2019 2020

Sales ($bn) % of Retail eCommerce Sales

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References
i
www.snapdeal.com
ii
www.en.wikipedia.org/wiki/Snapdeal
iii
www.wearesocial.com
iv
www.trak.in
v
www.dazeinfo.com
vi
www.dazeinfo.com

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