Snapdeal set to sell own products, too

Abhishek Law Kolkata | Updated on January 15, 2018 Published on November 14, 2016

BL15_Kunal Bahl

E-commerce major Snapdeal will invest $100 million in the fashion segment over the next one year.

According to Kunal Bahl, co-Founder, Snapdeal, investments will be across technology, logistics, partnership with brands and marketing.

“In the next few months we will make some big moves in fashion. We will not limit ourselves to selling other people’s products only,” he said at event at IIM-Calcutta. “We will spend $100 million and are building capabilities in fashion,” he added.

According to Bahl, today the online fashion segment is “driven by people selling others’ brands.” But this model still does not help make money. “I am not the judge of right or wrong. But all I can say is that it (current business model) is not sufficient. The purpose of doing fashion online is to make money. If you are selling brands at a loss, why sell them in the first place,” he added.

The Snapdeal co-Founder did not specifically mention whether it would be a private label or otherwise.

Cash-on-delivery hit

According to Bahl, demonetisation has marginally hit the cash-on-delivery (COD) segment of e-com sector.

Snapdeal along with Amazon and Flipkart are amongst the top players in this sector in India.

“Discretionary spends” have gone down. But there has been a visible shift towards non-cash transactions.

“There has been a short-term dip in the COD business mode specifically with discretionary purchases having taken a dip,” he told reporters at IIM-Calcutta on Monday. “There has been not much material decline (in overall sales),” Bahl added.

According to him, the dip is temporary.

Interestingly, some e-commerce companies had discontinued cash-on-delivery payment options for initial days post demonetisation on November 8.

Good for e-com

However, the gain for Snapdeal and the e-com business overall has been a huge shift towards non-cash payment options. Bahl said in the medium- to long-term it is a right thing.

“It simplifies the e-commerce business on the whole,” he added.

More and more people are moving to upfront payment through debit/credit cards and digital payment options.

And Bahl maintained that studies show that people who have once moved away from cash-on-delivery options, prefer other forms of payment.

Dip in cash-on-delivery

He cites an example. In the formative years of Snapdeal, cash-on-delivery accounted for 70 per cent of its sales. Now the cash to non-cash payment is in a 50-50 range.

To convenience customers who had ordered for COD mode, Snapdeal had been insisting to make payments using Freecharge e-wallet.

“For the last three to four days, we are seeing good traction in this,” he said.

Published on November 14, 2016

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