India’s $ 210 billion (non-food, non-pharmaceutical) retail market, which is growing 9-11%, represents a vastly untapped online opportunity. Only 3% of valuable goods are currently sold online, which offers the potential for rapid growth of value e-commerce. Kunal Bahl, co-founder and CEO of Snapdeal, tells Activity area how the market with its 220 million and more valuable products taps into this segment by supplying 60 percent of Indian households with products they can afford. Extracts:
When do you plan to raise another round of funding, and how much will it be?
Right now, we are focused on executing our plan for customer experience, growth and profitability. Given the firm’s clear focus and leadership in the value e-commerce segment, investors continue to contact us to invest in the business, and at the right time we will explore the same.
Your recent campaign
focus on value
e-commerce. How is this different from traditional ecommerce offerings?
For a long time, e-commerce in India has been focused on brands on the one hand, and relatively low-quality, low-cost items on the other. Value e-commerce is about providing users with good quality goods at affordable prices, without requiring a trade-off between price and quality. Value e-commerce serves consumers who are primarily looking for affordable lifestyle products and are not necessarily looking to buy discounted brands. In India, a value driven platform has been a missing piece of the Indian e-commerce market. While a few platforms offer a limited selection of valuable items, at Snapdeal we understand that a dedicated value shopping platform is essential to reaching over 90% of online shoppers. Our efforts over the past four years have been focused on creating value in e-commerce.
How is Snapdeal different from other e-commerce players who also offer valuable offers? Is there a parallel with value added retailers such as DMart or Vishal Mega Mart?
Focus is the key success factor in an ultra-competitive e-commerce market. We have seen successful online businesses spring up in categories such as cosmetics, eyewear, and children’s products.
The value retail segment is the largest part of India’s retail business, and we believe that the growth opportunity for a value-added e-commerce leader such as Snapdeal is significant.
Well-established retail models such as DMart and Vishal Mega Mart are successfully serving this audience in physical markets. We are the first large-scale platform to create an online equivalent of these, with an exclusive focus on good quality and inexpensive products, such as everyday clothes, articles kitchenware for daily use and home decor items.
How did Snapdeal carve out
a positioning in
Finding a balance between good quality and affordable prices is not an easy task – it requires that every part of the business is optimized to deliver value to customers, given the small basket sizes, while ensuring consistent and good user experience.
For example, an industry first, we offer free shipping on all orders, with no minimum order value requirement, ensuring that shipping costs do not dramatically decrease prices. By working closely with our salespeople, we have built an assortment large enough to meet the full range of value needs.
For customers who are primarily looking for affordable value merchandise in discretionary categories such as clothing, footwear, home decor, and kitchen needs among others, we are able to meet all of their requirements without them having to. to shop at local bazaars.
On Snapdeal, 100% of products are billed based on their value and affordability. Technology has enabled us to provide a personalized flow to each client; a frictionless customer experience for easy ordering, delivery, as well as returns and refunds, which is very important to our customers who are mostly from small towns and are new to e-commerce.
Your last campaign
is interested in the brand-driven psyche. What
is the thought process
behind this campaign?
Seeking value is an integral part of an Indian customer’s buying consideration, both online and offline. Our latest campaign inspires consumers to look beyond the sales rhetoric to find the best value for their money and trust their wisdom to judge value against the hype.
In our research for the campaign, we surveyed hundreds of consumers who frequently buy brands and implicitly equate good quality with high prices. In blind testing, they were always surprised by the quality of the products, even when it came to affordable products and not well-known brands. The campaign uses humor to disrupt the idea that only expensive brands deliver good quality.