From a ‘deals only’ site to a full-fledged online marketplace, Snapdeal is all set to become the first billion-dollar company among the Indian e-commerce players. The company, which started in 2011, has evolved as the country’s largest online marketplace, a site where product and inventory information is provided by multiple third parties, while it processes the transactions. Founder Kunal Bahl says the company has grown manifold at Rs 2,000 crore in just three years. Edited exerpts:
While many players are getting aggressive with their marketplace model of late, Snapdeal had made the move long back. How has the journey been so far?
Definitely not, more players will just help grow the market and improve competition. You just need to realise what kind of player you are.
At present, the barriers are growth in the market and not the players operating in the market. We are on track and have grown almost six times since January. Our revenues are at Rs 2,000 crore. We have done this by increasing our product categories and assortments.
We have also increased our seller base and made huge investments in supply chain and logistics.
By 2015, we are looking at becoming a $1-billion company and we would be the first one to achieve that number in the Indian e-commerce market.
But what about profitability?
We can turn profitable the day we want to, but the question is not about profitability at the moment but growing the company and re-investing in it. We are expanding the technology base as well as the customer base. We are hopeful that in another 18 months, Snapdeal will be a profitable venture as we are asset-light compared to others who are heavily dependent on inventory.
You recently got funding from another online marketplace eBay. Does this mean that it is not a competitor anymore? What is the synergy between the two companies?
It is a great and successful company and we are fortunate to have them as partners. The association is mainly on the technology front.
All our investors have faith in us and we will raise funds as and when we need it. Right now we are well-funded.
Many e-commerce players, including eBay, have still not been able to break into the Indian e-commerce market. What were the things you did right or are doing to stay ahead of the competition?
We did a lot of things to localise ourselves and that is what has worked for us. While many players started doing consumer to consumer model on their site, we said we want to be a business to consumer player.
Consumers selling directly to consumers didn’t click due to the lack of trust factor.
Consumers at times didn’t receive products even after payment was done. At Snapdeal our sellers use our shipping and courier service.
Also, we focussed a lot on personalisation and created lot of filters and tags. For example, a search with blue saree with geometric prints would show hundreds of designs in one click.
Another step that we took right from the beginning was that we focussed on the unorganised retail market, which makes 93 per cent of the total market.
We wanted to be present in all those categories that a consumer needs in his daily life.
Snapdeal has been very aggressive on inorganic growth. Are you looking at further acquisitions?
It is an interesting period. We recently bought Sequoia-backed Shopo.in, which sells handicrafts. There are a number of companies which have failed to scale up due to funding constraints and we will be taking a call on the same in a couple of weeks.
We are looking for large group of unique sellers like Shopo.in, new categories and some technology-based companies.
Why are you getting into international markets when there is a huge potential in the domestic market?
We are witnessing a lot of buying interest from the international market such as Europe and the US. About 5-10 per cent of the sales are coming from these markets as consumers are looking for cheaper deals in jewellery, handicrafts, home décor and furnishings. We are testing it out in those markets to find how to ensure a smooth delivery and transaction process.