E-Commerce

Snapdeal: The last standing independent Indian e-commerce player has gained its strength back

It is not always the profits that determine a company’s growth. Reductions in losses also reflect upon a business’s great run and when the reduction is a whopping 87%, then it is remarkable. Within one year, the company’s losses came down to $84.7 million from a massive $642 million recorded last year. The Indian e-commerce business is performing very well but very few of them have actually started earning profits from their businesses. Snapdeal is one of the rare enterprises in the industry that went cash flow positive in June this year. The expectation was to turn positive by September but they achieved it 3 months prior.

They were in the process of merging with India’s largest e-commerce player Flipkart but unfortunately, that deal fell through. Since then Snapdeal focused on changing its strategy to get back on positive earnings in the Indian market. They analyzed consumer behaviour and found that low priced and high-frequency products will be beneficial for them. The average sales value also came down to INR 1000-1200 from an earlier value of NR 2000-2500. However, the profits made are more important than the sales value.

The products with high-frequency help retain customers and low prices make sure the sales are high. This way Snapdeal made its move on the path of success. Snapdeal is now the only Indian e-commerce company at scale left in India that is independent and not owned or operated by a large multinational corporation.

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