SnapDeal 200 Crore Facelift - Too Little - Too Late


Amazon for the last six month showed their calibrated onslaught on Indian e-Commerce startup with open wallet and changed the dynamics of Indian E-Commerce segment. The downturn in funding to e-Commerce companies and valuation marked down by many investor led investor confidence loss on the  business model of Indian e-Commerce companies which relies on discount to generate sale.
The burn rate of Indian E-Commerce segment is too high and there is no profitability in sight. Flipkart lost many high profile resource whereas Snapdeal faced increasing challenge to attract big names to use their platform. It's not important that how many sellers are there on the platform but its more important that how the brands are getting attached with the platform.

Based on the newpaper report, SnapDeal embarked 200 Crore to go for brand facelift so that they attract brands on their portal. It's a fact that most of the e-commerce companies are generating most of the GMV through electronics and the competition is so intense that the chance of profitability is near to zero but to ensure that user buys the product from the platform, e-commerce companies are offering discounts.

SnapDeal also bought many analytical companies to recharge companies in order to integrate it with the central platform to differentiate themselves from the competitors but they failed to achieve the same for one or another reason. They completely failed to monetize their platform through alternative revenue stream and i should say that all the e-commerce companies in India failed in that segment.
The much delayed advertisement blitz is not going to help SnapDeal much to change their fortune but they can do so if they invest half of the embarked budget in enhancing their platform and go full blown user acquisition in disruptive model.

I would love to see Indiane-Commerce companies grow and be successful but the prospects are bleak as the number of buyers on e-commerce portals are limited and still retail segment is very strong.

Even though I wish SnapDeal all the best and hoping that they will come back strongly.

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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