An eminent daily reported on Wednesday that struggling e-commerce firm Snapdeal, which has over the past year more than halved its employee strength, is reportedly in talks with Flipkart and Paytm for potential sale.
However, the company has firmly denied this, saying that the information is incorrect and without basis.
When contacted, a Snapdeal spokesperson told Indiaretailing Bureau:
“Snapdeal categorically denies having had any such discussion. The information is incorrect and without basis. We are making decisive progress in our journey towards profitability and all our efforts are aligned in this direction.”
Despite the clarification, the beleaguered e-commerce firm has shutdown marketplace Shopo in February after a year-and-a-half of operations. The company had acquired Shopo – a platform that allowed small and medium-sized businesses to chat, buy and sell on the platform on a zero-commission model – in 2013. Ironically, in 2015, Snapdeal had announced an investment of US $100 million in this very marketplace.
The e-commerce player has also laid off around 600 people across its e-commerce, logistics and payments operations over the past few weeks. Even, its founders had agreed to take a 100 per cent pay cut, even as the firm initiated a process to rationalise a part of its workforce to make the company profitable in two years.
Snapdeal, which has been locked in an intense battle with rivals Amazon and Flipkart, has been struggling to raise fresh capital.
Snapdeal has already taken a number of steps to increase optimisation of operations that resulted in 35 per cent lower delivery costs and 25 per cent lower company fixed costs.
Snapdeal, which has gone into cash-conservation mode, has, in the last three to four months slashed discounts and minimized marketing spending.
The company’s loss more than doubled to Rs 3,316 core in the year ended 31 March 2016 even as revenue rose 56 per cent to Rs 1,457 crore.