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Snapdeal Bets On Lifestyle E-commerce

23 December, 2011

Snapdeal, the largest group buying site in the country, has been quickly ramping up its product sales. The two-year-old company, which has forayed into product sales nearly three months ago, already claims to be the largest e-tailer of lifestyle products.

“We have the highest traffic, compared to any other e-commerce site in India. In fact, we are the largest e-tailers in product categories like watches, sunglasses, personal care items, perfumes and jewellery,” said Kunal Bahl, founder and CEO of Snapdeal.

According to Bahl, there are 11 million registered users on Snapdeal and about one in eight online users ‘browse and buy’ from Snapdeal. The recent set of numbers from ComScore suggests that Snapdeal.com led the coupon category with 5.2 million visitors, followed by Mydala.com with 1.4 million visitors and Crazeal.com with around 1 million visitors.

For a group buying site which is the largest in daily deals service, a foray into product sales is just a natural extension, feels Bahl.

“Our philosophy is very simple. The consumers who are going to a salon or a spa are the same who are buying mobile, perfume, personal care products and so on. So why shouldn’t we get a greater share of their wallet who already have trust in us,” argues Bahl.

Bahl adds that having an integrated products and services platform not only makes it uniquely placed in the ecosystem but also enables cross-selling. “With services being a better proxy to understand the buying patterns of consumers, we leverage that data and analytics, and use our recommendations engines to drive cross-selling,” asserts Bahl. The group buying portal is essentially leveraging its huge captive base (11 million registered users) which is highly amenable to buying products online.

Deals Are A Bait, An Entry Point

It is clear that the game is certainly getting bigger for Snapdeal, which essentially began as a group buying site and is often touted as the Groupon clone in India. The company is now a full-fledged e-commerce company. “Deals are an entry point, a bait to get customers in. When your demand pipe is so strong, all you need to do is to figure out how you get more supply,” says Bahl.

Building A Lean E-commerce Company

The e-commerce company has raised a total of $52 million in private capital from venture capitalists. However, the company claims that it has only used up to 20 per cent of the capital raised. Also, unlike other e-commerce companies, Snapdeal doesn’t own inventory and hence doesn’t block so much of cash. “We are averse to an inventory-led model,” Bahl says.

The company has built information systems that enable them to ship products either directly from merchants or as a transit route through the merchants’ warehouse that goes directly to the consumers. In spite of employing 800 people, the company has kept its operating costs low as it has focused its energies in employing very young people. “We believe that a passionate team of young people scores much more than a veteran team.” Watch the full interview to know more about the company.

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Ankit Jain . 6 years ago

Nice Interview… got to know a lot about the company and its operations.. although i am still a little skeptical about the future of e-commerce in India. Most of the e-tailers are suffering losses because the intense competition has forced them to sell products below cost..it will be interesting to see how many survive and how many perish…

@Shrija: I have seen some of your earlier interviews and they were great.. still wondering why you decided not to show yourself in this one..

Roopesh . 6 years ago

Group Buying business is succeeding in developed markets, and is in great shape, both physical and electronic (it actually originated in physical form) in China!

Quite likely to succeed in India as well, we love bargains! Lessons to be learnt of course from global experience..

Snapdeal Bets On Lifestyle E-commerce

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