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Snapdeal is betting big on value e-commerce to grow its business. It also expects to debut on the Open Network for Digital Commerce (ONDC) later this month. ONDC is an initiative aiming to promote open networks for all aspects of exchanging goods and services over digital or electronic networks.
In an interview with BusinessLine, Snapdeal’s President Himanshu Chakrawarti outlines the company’s growth drivers.
Snapdeal registered a 88 per cent growth in volumes last year. What are the contributing factors?
RedSeer estimates 350 million people will shop online in India by FY26, including 256 million buyers from tier-2+ cities and towns that account for more than 80 per cent of the country’s population. These numbers show that while the “mature” segment of the total consumer base is nearing saturation, the “emerging” consumer segment is furthering e-commerce growth. These consumers fall into the middle-income bracket, and their shopping needs are driven by affordability. They are value-conscious, with quality and price as their top priorities.
How is Snapdeal catering to the shoppers in value commerce segment, and what is the response?
Value e-commerce offers users good quality merchandise at affordable prices without requiring a trade-off between price and quality. While a few platforms offer a limited selection of value items, Snapdeal has focussed on building a platform that is 100 per cent dedicated to value—both in terms of prices and relevance of assortment for users. On our platform, more than 90 per cent of the items sold are priced below ₹100. It is also perhaps why more than 77 per cent of business comes from repeat customers, mainly residing outside metro cities. More than 72 per cent of our orders come from buyers living in tier-2+ cities and towns, each with a population of less than one million.
What are your efforts to offer quality service to customers ?
Consumers on a budget expect quality that is usually associated with brands but at prices which they can afford. Snapdeal is trying to bridge this by carefully integrating the two most important criteria for a value shopper—quality and price.
Snapdeal consciously works with a narrow base of reliable sellers experienced in e-commerce processes to deliver quality experiences to users. Snapdeal follows a six-point quality management system that seeks to improve the quality of products for better customer experience through multiple interventions, including review and quality control of listings, insights to the sellers on catalogue and content enrichment, analysis of feedback from customers, sample quality checks through mystery shopping, screening of products at source, and curation of assortment in partnership with sellers.
As a result, the sellers consistently list new products to stay on top of the latest trends and typically offer low pricing throughout the year.
What are Snapdeal’s growth plans ?
We are focused on home, fashion (apparel, footwear and accessories), and beauty and personal care segments. Also, we will continue to grow the assortment in these segments within the twin guardrails of good quality and affordable prices. We will also continue enhancing the user experience through various ongoing and new initiatives. We have seen high app download and uptake rates, high rates of repeat usage, and, most importantly, a steadily rising customer NPS score (which gives us the most satisfaction). For now, we want to keep going in this direction to draw more and more value-conscious lifestyle e-commerce customers to our platform.
When will Snapdeal debut on the Open Network for Digital Commerce (ONDC)? How will the company benefit from the move?
We are excited to partner with ONDC, and we will be ready to go live with three key categories—fashion, home, and beauty personal care by the end of this month. Teams on both sides are in advanced stages of completing the required technical integration to enable a pan-India launch.
The growing digitisation of retail sector represents a transformational potential for the country’s sellers, consumers, and other stakeholders. The work of ONDC will spur this development in the right direction and contribute to the development of a digital commerce environment that is open, enabling, and inclusive.
Besides Flipkart and Amazon, Snapdeal was the only major e-commerce player in the initial years. Over the last few years, the e-commerce marketplace has had several players who play in the niche segments. Where does that place Snapdeal in this fragmented market, and what are the company’s growth plans?
Snapdeal’s proposition is centred around value e-commerce and targets value-seeking, middle-income users who make price-conscious buying decisions and are predominantly located in tier-2+ cities. To its users, Snapdeal offers a wide selection of quality, value-priced products, an easy-to-use platform that enables the discovery of exciting products with a personalised interface, customer support, trackable deliveries, cash on delivery and multi-lingual, multi-channel customer service.
In particular, we are equipped to cater to buyers’ needs in the tier-2+ cities, where most of our value-seeking buyers are located.
Do you have any plans to acquire small e-commerce players to scale Snapdeal’s operations?
Currently, our focus is on executing our plan concerning customer experience, growth and profitability.
The e-commerce policy is still a work in progress. What kind of changes does the management see, given the dynamic nature of the business Snapdeal operates in?
E-Commerce has multiple touch points across retail and technology domains, all of which require careful consideration, especially in a global environment shaped by cross-border flows of data, investments and trade. With right policy choices, we can truly harness the transformative impact of e-commerce on India’s MSMEs, employment and retail evolution. After evaluating what works best for India, the government will decide well.
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