Snapdeal is India’s largest online marketplace, with more than 10 million products, 40 million members, and nearly 100,000 sellers. From 2013 to 2014, Snapdeal grew 600%, making it the fastest growing e-commerce company in India.
In 2010, when Kunal Bahl and Rohit Bansal wanted to start their own business, they chose an offline couponing business and named it MoneySaver. In three months only, 15000 coupons were sold and it was time to carry the business to the next level.
Currently, more than 50,000 sellers sell around 5 million products on Snapdeal. The company‘s phenomenal growth in a short span has been a remarkable journey. The company began to concentrate on building scale and improving speed. Their values – Innovation, Change, Openness, Honesty and Ownership drive them to press for greater success. The company’s growth had been phenomenal but it is their continued effort to bring the best to the market and their zeal to succeed as the best B2C (Business to customer) marketplace is what sets them apart.
Starting Of Snapdeal
If we see some of the major success stories of entrepreneurs then the story of Snapdeal should definitely be in the top 10.
a short entrepreneurial journey that began in 2007, friends-turned-business partners Kunal Bahl and Rohit Bansal found themselves facing a day to forget in just two years. Sometime in 2009, the two founders of Jasper Infotech were grappling with how to pay salaries amounting to Rs 4 lakh; the company account was almost bare and pay day was upon them. They had no choice but to dig into their personal accounts that, together, held a balance of Rs 5 lakh.
Bahl had done business management from Wharton School and Bansal had earned his engineering stripes from IIT Delhi.
They met investor Vani Kola but the first meeting did not worked well and after another round of discussion, Vani Kola’s venture capital firm decided to invest in Snapdeal. And it was the time for Snapdeal to take the journey to next stage. Initially started as an offline business, Snapdeal went online in 2010. It was a jerky ride in the first few months. Mistakes were made, but lessons were learnt too.
Initial Investment in Snapdeal
Initially, investments were made by Vani Kola’s firm but it did not happen at the first meeting, in fact, the first meeting went pretty bad. It was only after some time that Vani Kola’s venture capital firm decided to invest in Snapdeal and realized the earning potential of that company.
It was a make or break decision. Snapdeal had a huge market share in the deals business at that time and starting something new was very risky and the move surprised the investors too. At that point of time, eBay was the only marketplace in India. In early 2011, the company received funds of about 12 million from Nexus Venture Partners and Indo-US Venture Partners.
Mistakes were made, but lessons were learnt. It is this kind of hard work and diligent attempt to offer the best to the customers that gave Snapdeal its initial success.
Success of Snapdeal
It was a decision that was not for the short term. When Rohit Bahl managed to gain the nod the board, the present form of Snapdeal took shape. The very fact that Snapdeal is valued at a billion dollars today is a testimony to the vision of its founders. After seeing the huge success of Alibaba ( an online portal ), company’s founder Kunal and Rohit both decided to shift the whole business model. Hence, a new online marketplace was open.
In just two years, the company went from scrapping their group coupon business and starting an online marketplace to become a billion dollar company. Its year on year growth is almost 600%.The average age of the workforce at Snapdeal is 25. Snapdeal had a huge market share in the deals business at that time and starting something new was very risky and the move surprised the investors too. At that point of time, eBay was the only marketplace in India. Snapdeal is valued at a billion dollars today is a testimony to the vision of its founders, for the long term.
A marketplace model like Snapdeal needs to ensure that technology integrations work seamlessly and this is what Bahl is trying to achieve constantly. The powerful model of local merchant & physical product e-commerce is something which is very unique to Snapdeal.com, and it gives the opportunity to provide wider variety of choice to the customers.
As of 2014 Snapdeal had 300,000 sellers, over 30 million products across 800+ diverse categories from over 125,000 regional, national, and international brands and retailers and a reach of 6,000 towns and cities across the country
Marketing Strategy & Company Values
Their values –
- Ownership drive them to press for greater success.
When launched, Snapdeal was first of its kind. When it was establishing its niche in the industry, websites like mydala.com and DealsandYou came as its core competitor. But working and focusing primarily on its goal, within 2 years, Snapdeal succeeded in making 8-9 million user base. They entered in top 100 Indian websites in terms of traffic.
Company started “Get your first deal free” offer which got huge response from the user side. This led to the strong brand value of Snapdeal. Side by side to these strategies, affiliate marketing campaign was also working. This campaign was launched after 8-9 months of its inception. They started cost per lead (CPL) campaign in which the affiliates were paid Rs. 30 for each lead generated.
Snapdeal knew how to remain in the market and for this they kept on promoting themselves in any situation. After leads were generated, an aggressive email marketing campaign was launched to reach out those leads. Every day on regular basis, promotional emails were sent to the registered users.
- 50 million from E-bay
- In January 2011, Snapdeal received a funding of $12 million from Nexus Venture Partners and Indo-US Venture Partners.
- In July 2011, the company raised a further $45 million from Bessemer Venture Partners, along with existing investors Nexus Venture Partners and Indo-US Venture Partners.
- 50 million from E-bay
- In Feb 2014, 133 million from E-bay with investors like Kalaari Capital, Nexus Venture Partners
- In May 2014, 105 million from Blackrock, Temasek Holdings etc
- Snapdeal received its 6th round of funding in Oct-2014 from Softbank with investments worth $647 million in fresh capital.This makes SoftBank the largest investor in Snapdeal.
- Snapdeal received its 7th round of funding in Aug-2015 from Alibaba group & Foxconn group and SoftBank with investments worth $500 million in fresh capital.
• In April 2012, Snapdeal acquired esportsbuy.com, an online sports goods retailer from Delhi.
• In May 2013, Snapdeal acquired Shopo.in, an online marketplace for Indian handicraft products.
• In April 2014, Snapdeal acquired fashion products discovery site, Doozton.com.
• In January 2015, Snapdeal acquired a stake in product comparison website Smartprix.com.
• In March 2015, Snapdeal acquired 20% stake in Gojavas.com.
• In April 2015, Snapdeal acquired m-Commerce payments firm Freecharge for an undisclosed amount. However according to some sources the acquisition was made for $450 million in cash and stock.
There is a possibility of acquisition of Snapdeal by Flipkart, the company may have to deal with the Reserve Bank of India rules on Foreign Exchange to protect the interest of Snapdeal shareholders.
Jasper Infotech Pvt. Ltd, which runs online market place Snapdeal, more than doubled its losses to Rs 2,960 crore (around $436 million) in the financial year ended 31 March 2016. Its total revenues went up by 56% to Rs 1,456.6 crore in FY 2015-16.
This was followed by another round in July 2011 worth USD $45 million from Bessemer Venture Partners and existing investors. The third round of funding was worth USD $50 million and came from eBay and other pre-existing investors. Three years later, in February 2014, Snapdeal raised funding of USD $133 million.