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E-commerce major Snapdeal’s immediate focus in not profitability; but setting up the infrastructure.
According to Kunal Bahl, CEO of Snapdeal, the company’s focus is currently on “building highways for e-commerce” and to provide logistics support such as warehousing to sellers.
“We are a capital-efficient business. We don’t own any inventory. So we can turn profitable in two quarters, if we want to. But, now, we are building the highways of e-commerce and setting up the infrastructure (for the future),” he told BusinessLine when asked about turning profitable.
Business model Bahl was in the city to sign an MoU with the State Bank of India (SBI) for seller financing schemes. Snapdeal operates in a market-place model, that is, it does not own the inventory but rather provides the vendor (or seller) an option to sell using its platform. Snapdeal in-turn charges a commission for such usage.
Rent-outs According to Bahl, his company (Snapdeal) is at present setting up the logistics, such as warehousing, that is rent out to sellers. The infrastructure renting happens at a “no profit–no loss” basis.
Snapdeal, with a 35-per-cent market share, has 150,000 sellers on its platform and Bahl hopes to the take the number of “online entrepreneurs” (sellers) to 10 lakh (1 million) soon.
In February 2010, Bahl along with Rohit Bansal, started the Delhi-based Snapdeal.com. The company acquired Freecharge in 2015, a leading mobile transactions platform and became the largest e-commerce company in the country. It has already partnered with several global marquee investors and individuals such as SoftBank, BlackRock, Temasek, eBay Inc, Premji Invest, Intel Capital, Bessemer Venture Partners, Ratan Tata, among others.
Mobile site Despite the 75 per cent of its business coming from the mobile – wap site and mobile applications (apps); Bahl said there are no immediate plans to become an app-only e-commerce player. Earlier this month, Myntra, became one of the first players to be an app only e-tailer.
“People are still discovering e-commerce through their PCs and laptops, which account for this remaining 25 per cent of the business. As of now there are no plans to become an app-only player,” he added.
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