Snapdeal switch gears and focuses on the value segment

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Online marketplace Snapdeal has announced that it is changing its business model to target the value-conscious end of the market. This development is in tow with the shelving a $950-million merger plan with rival Walmart-owned Flipkart in 2017 and consolidating its entire business, including laying off more than half its workforce and selling key assets such as mobile wallet business Freecharge to Axis Bank and logistics arm Vulcan Express to Kishore Biyani’s Future Group.

Kunal Bahl, founder & CEO at Snapdeal has revealed confidently that the company is very clear about the customers they are serving and that they are primarily ‘value shoppers’. So they have decided to not sell very expensive items or high-end brands. This is in sharp contrast to other online retailers in India such as Amazon and Flipkart that have set high gross merchandise value (GMV) and fat margins as benchmarks to measure success.

Harping on the importance of value e-commerce and how it important to reach customers Snapdeal is serving, the company revealed that they want to cater to the lower end of the market. Snapdeal has used its resources to build capabilities to provide depth in assortment and optimise its supply chain to reach remote areas. A sizable part of the country, especially very small towns, and villages still don’t get doorstep service from e-commerce and they wish to solve this problem. Snapdeal reported revenue of Rs 864 crore in FY20, marginally higher than Rs 839 crore in FY19.

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