Case Study Snapdeal Group 4

BIRLA|INSTITUTE|OF|MANAGEMENT|TECHNOLOGY
AUGUST 23, 2018
A D IT I V I KR A M
KESHAV GARG
N AR E N D R A G U N T A K A
LAKSHIKA RANAWAT
S AH I L S A N A N
S H A L IN I A R Y A
Death of a unicorn: Inside the Fall of Snapdeal, Once a $6.5 Billion Startup
“Snapdeal is an Indian internet business organization situated in New Delhi, India. The
organization was begun by Kunal Bahl and Rohit Bansal in February 2010. Starting at 2014
Snapdeal had 300,000 merchants, more than 30 million items crosswise over 800+ different classes
from more than 125,000 provincial, national, and worldwide brands and retailers and a compass
of 6,000 towns and urban areas the nation overi.”
“Organizations such as SoftBank Corp, Ru-Net Holdings, Tybourne Capital, PremjiInvest,
Alibaba Group, Temasek Holdings, Bessemer Venture Partners, IndoUS Ventures, Kalaari
Capital, Saama Capital, Foxconn Technology Group, Blackrock, eBay, Nexus Ventures, Intel
Capital, Ontario Teachers' Pension Plan, Singapore-based speculation substance Brother Fortune
Apparel and Ratan Tata are the major investors. Snapdeal procured FreeCharge for $400 million.”
“Snapdeal was begun on 4 February 2010 as a daily deals platform, however extended in
September 2011 to end up as an online commercial center. The move came as an amazement to
speculators, since the organization had a 70 percent share in the day by day bargains business.
Snapdeal has developed to wind up one of the biggest online commercial center in India offering
a variety of 10 million items crosswise over various classifications from more than 100,000
dealers, transportation to in excess of 5,000 towns and urban areas in India. In March 2015,
Snapdeal brought actor Aamir Khan for the promotion of its site in India. In October 2017,
According to the announced, Snapdeal's CFO Anup Vikal surrendered.”
“Snapdeal has gotten a few rounds of financing. It got its first financing worth USD $12 million
from Nexus Venture Partners and Indo-US Venture Partnersin January 2011. This was trailed by
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This document is authorized for use only in International Strategy Management at Birla Institute of Management Studies from Aug 2018 to Feb 2019.
another round in July 2011 worth USD $45 million from Bessemer Venture Partners and existing
financial specialists. The third round of subsidizing was worth USD $50 million and originated
from eBay and other prior speculators.”
“After three years, in February 2014, Snapdeal raised subsidizing of USD $133 million. This round
was driven by eBay with cooperation from that point current institutional financial specialists:
Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama
Capital. In May of that year, financing worth USD $105 million was raised. This was upheld by
speculators BlackRock, Temasek Holdings, PremjiInvest and others. Softbank put USD $647
million in October 2014, making it the biggest financial specialist in Snapdeal up until this point.”
“In August 2015, Alibaba Group, Foxconn and SoftBank contributed USD $500 million as crisp
capital. In February of the next year, one of the world's biggest benefits reserves, Ontario Teachers'
Pension Plan, and Singapore-based speculation element Brother Fortune Apparel, drove a
speculation worth USD $200 million in the Jasper Infotech-possessed company.In May 2017,
Snapdeal raised financing worth Rs 113 crore subsidizing from Nexus Venture Partners.”
How did Snapdeal, once among India’s top two contenders to e-commerce dominance, flame out
so spectacularly over less than 12 months?
India E-Commerce Industry
“India's web based business showcase was worth about $3.9 billion of every 2009, it went up to
$12.6 billion out of 2013. In 2013, the e-retail portion was worth US$2.3 billion. Around 79% of
India's internet business advertise is travel related. As indicated by Google India, there were 35
million online customers in India in 2014 Q1 and was relied upon to cross 100 million stamp by
end of year 2016ii. CAGR versus a worldwide development rate of 8– 10%. Gadgets and Apparel
are the greatest classifications as far as deals.”
“India's retail showcase was relied upon to develop to $675 billion by 2016 and $850 billion by
2020, – evaluated CAGR of 10%. As per Forrester, the web based business advertise in India was
set to become the speediest inside the Asia-Pacific Region at a CAGR of more than 57% between
2012– 16.”As for every "India Goes Digital", a report by Avendus Capital, “the Indian web based
business showcase is assessed at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel
constitutes a sizable bit (87%) of this market today. By and large online business showcase had
achieved Rs 1,07,800 crores (US$24 billion) constantly 2015iii.”
“Another division in internet business is online pharmaceutical, offering reciprocal and elective
solution or professionally prescribed medication on the web. There are no committed online drug
store laws in India and it is admissible to offer physician endorsed pharmaceutical online with a
honest to goodness permit. Online offers of extravagance items like jwelery likewise expanded
throughout the years. A large portion of the retail marks have likewise begun going into the market
and they expect no less than 20% deals through online in next 2– 3 years.”
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What Went Wrong With Snapdeal
No Differentiation
Snapdeal was building warehouses but didn’t build any category as their Unique Selling
Proposition (USP) the way Flipkart used fashion and electronics, and Amazon with PrimeaIt
didn’t do anything innovative in order to attract customers. Online retail, all things considered, is
additionally simply retail. Your rivals are in the same class as or superior to you. In the event that
you don't have a striking separation, for what reason should a customer pick you over the others?
Snapdeal neglected to emerge—they had the high ground in no specific classification or
administration," says an internet business master. Moreover, “Snapdeal's tie-ups with ClearTrip,
redBus, Zomato, and UrbanClap for their separate administrations likewise neglected to have any
effect as well”. It also acquired FreeCharge for $400 million which was of no use.
aAcquisitions for Nothinga

“A large number of Snapdeal's acquisitions ended up ending ineffectively. The exception is
lofistics firm GoJavas; however Snapdeal neglected to underwrite it long haul, and it fell under
the control of Pigeon Express regardless of Snapdeal's 20 million interest in it. Snapdeal's own
logistics arm Vulcan Express was also rumored to be in talks available to be purchased. In the
event that Flipkart gained Jabong and eBay India on their deathbeds, each organization Snapdeal
obtained was at its pinnacle. Be that as it may, as destiny would have it, Snapdeal's procurement
of Free Charge additionally neglected to make waves afar the organization, as Paytm kept on
being the pioneer in digital payment.”
“aSnapdeal could have had the upper hand in fashion, a high-margin category, had it acquired
aJabong. In fact, after Flipkart-owned Myntra acquired it, Snapdeal had tried acquiring
aaffordable fashion marketplace Voonik and luxury e-commerce platform Zapyle—according to
asources with direct knowledge of the talks—but failed to take the talks to a serious level.
aSnapdeal’s earlier acquisition of Exclusively.com, for luxury fashion, bombed in less than a
ayear and was shut down a few months ago.”
Omni Channel Downfalla
“The failure of Snapdeal's Omni channel strategy emerges in its rundown of destructions. When
it was lauched in October 2015,many specialists considered it to be a conceivable distinct
advantage for Snapdeal. Sorted out retail in the nation itself is winding up progressively Omni
channel, with conglomerates like Tata (with TataCliq) bouncing onto the web based business
fleeting trend. It had promised that clients can find items on the web and request with quicker
hyper-neighborhood fulfilment executed by disconnected retailers.”
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“It additionally lets clients to get to esteem included administrations including show,
establishment, enactment or returns at a store close them. Essentially, with this clients will have
the capacity to obtain items inside two long stretches of requesting and access these
administrations at the closest store in the event that they picked the pickup choice crosswise over
70 urban communities in India. (This administration was not accessible for money down
purchases.)Indian retail is developing to obscure the lines amongst on the web and disconnected
channels. This model had incredible potential—with starting tie-ups with Mobile Store, Shoppers
Stop, and so forth. With effective usage, it could have given Snapdeal a turnaround yet neglected
to make waves because of vital blunder. A previous senior official at Snapdeal tells that the
Omni channel group had confronted confusion inside the organization. “The leadership team had
little power.” They were unable to resource it to culmination because it needed a dedicated tech
team of engineers which it was not provided with.”
On the other hand, might be the time was not ideal for this launch. To give touch and feel as well
as lesser conveyance time for the client, all parts of the framework should work out. On the off
chance that disconnected retailers are not quick forget, the entire framework can fall. However,
Snapdeal could reduce comes back from more than 10 percent to insignificant for extensive
hardware with this activity, according to the individual specified previously. Its production
network costs were additionally cut by 33% at the pilot level.
“Around Rs 10 crore only was invested in it since it was a low-key effort. But it needed creative
partnerships and technology hacks. For inventory in offline network, they used order fulfillment
software e-commerce. But it stuck on the main tier-1 Snapdeal stack. Every time an update
happened, the e-commerce system went for a toss as it was not well integrated. Net promoter
score (NPS) in those categories went up to 25–50 percent. Customer experience bettered while
delivery time decreased; costs were minimal as return was almost zero,” ivsays the senior
executive of Snapdeal.
Not Expanding the Product line in Grocery or Furniture
These are the opportunities on which Snapdeal missed out. Both basic supply and furniture
classes have not been broken yet in Indian web based business. Indeed, even Flipkart is just
expanding on those now. (Amazon has been unobtrusively assembling its kirana system and
Amazon Pantry, and was apparently in talks with online basic supply showcase pioneer Big
Basket for its acquisition.)Online furniture advertise is nowhere close to immersion but then to
be investigated completely. Supply chains work distinctively for grocery than they improve the
situation different things; yet Snapdeal had GoJavas—one coordinations firm which experts
swear by. The Delhi-NCR district could have been an incredible place to pilot, say, specialists, as
Grofers - which right now has a high ground began just in late 2013.
“Snapdeal also had the highest number of satisfaction habitats for any online retail stage in the
country—69 crosswise over 25 urban communities, while Amazon presently has 27 and Flipkart
26. This could have been a noteworthy quality had they endeavored to push the furniture class—
one which requests impeccable logistics because of the likelihood of harm. Additionally,
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Snapdeal being situated in Gurgaon had favorable position considering the way that the furniture
fabricating industry is concentrated in the Rajasthan belt. The classification is yet to make
benefit; however there is no denying that it is one of the most noteworthy edge classes, and the
online market is no place close immersion.”
aLackaofaDemocracya
It’s not the money or brand, but the workculture which inspires the team members to work hard.
but in Snapdeal’s case, sources say, this was lacking. “Co-founders Kunal Bahl and Rohit Bansal
never allowed others to participate in decisions or shares. Many senior officials left Snapdeal—
aeven those with five years of experience there—due to the autocratic structure within the
aorganisation,” a former senior employee of Snapdeal says on the condition of anonymity. “The
founders took it all. In contrast, Flipkart is more democratic and inclusive. Snapdeal was never
bothered about building a culture; it never focused on its people”.
aNo GoldenaToucha
“Snapdeal Gold'— the free service that needed no signup it was followed after after the dispatch
of Amazon Prime, which charges Rs 499 every year. Under this offer, the client can get
following day free delivery in select territories, and standard free conveyance wherever else.
Additionally, returns can be made in 14 days rather than the standard seven days. Requests set
with money down don't get this offer. But too bad! Clients needed a superior affair, not simply
quick conveyance. Snapdeal claims that this administration was forcefully pushed following
demonetization a year ago, and now love than 20 percent of the request volume at Snapdeal is
dispatched through Snapdeal Gold. In any case, that metric does not look extraordinary when
contrasted with Amazon Prime's. Amazon claims that one in each three requests set on its stage
is from Prime clients, in spite of being a paid administration.”
aMultilingualaTragedya
“The vernacular application was praised at the season of propelling. In any case, either country
India was not ready for online business or vernacular was not the best method to contact the
majority. Those masses know how to execute – they make sense of it even without the provincial
dialect on the application. So there was no volume of clients to take into account with the 14
local dialects in the application. Moreover, the territorial group of onlookers must be
considerably bigger in number for such an activity to succeed. Dialect was not the greatest
boundary to online business; client encounter was. Language was, actually, never the greatest
issue to be settled to grow the client base for e-commerce. The whole shopping background from
UX to items to conveyance should be fine-tuned as per the requirements of this statistic.”
aLateaEntryaintoaMobileaPaymentsa
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Snapdeal ventured into mobile payments payment a bit past the point of no return with Free
Charge Wallet. Paytm's wallet administrations have officially cleared their way a long ways
ahead. While the market today has loaded with apayment wallets, Snapdeal's inability to develop
and best use Freecharge's stage has likewise not agone down well with industry specialists and
speculators.
aDrop in itsaValuationa
“Snapdeal's misfortunes has increased to INR 3,316 crore in financial 2015-2016, while its
income growth dropped. Snapdeal had posted a 150% expansion in misfortunes from INR 1,328
crore in the year finished March 31, 2015. (see exhibits) Revenue developed by 56% to INR
1,457 crore from INR a933 crore in a similar period, as indicated by reports.”
aDifficultiesainaRaising Fundsa
“The organization has been attempting to raise new finances because of the exceptional rivalry
with Amazon and Flipchart. Funding firms Kalaari Capital and Nexus Venture Partners, both of
which have relates on Snapdeal's board, are in a fight with SoftBank Group Corp., which has two
board seats, over the organization's valuation in a potential deal. The board enabled Snapdeal to
continue spending, prompting a money crunch.”
aSnapdeal Mass Lay-Offs (Cost-cutting measures)
“In July 2016, Snapdeal, raised some $1.4 billion since October 2014and launched campaigns to
transform its image.(see exhibit). It laid off 500-600 employees among its online business
commercial center, its organizations, portable wallet Freecharge and logistics part Vulcan
Express, with '100% pay cut' take. Snapdeal shut its purchaser to-buyer commercial center
'Shopo' as of late and disbanded SD Instant, its express conveyance benefit. Classifications like
magnificence and FMCG have been stopped as well.”
“We also started diversifying and starting new projects, while we still had not perfected the first
or made it profitable. We started building our team and capabilities for a much larger size of
business than what were required with the present scale.” Kunal Bahl the founder of Snapdeal
wrote in his mail.
Snapchat- Confusion costs against Snap chat
“After the Snap visit's CEO, Evan Spiegel was charged of saying that he would not like to extend
to poor countries resembles India and Spain, individuals began to down rate Snapdeal rather than
the Snap chat application.” It started off a blacklist development for 'Snap visit' yet got ignorant
in this tempest was the Indian web based business entry 'Snapdeal'. Internet based life clients are
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incorrectly downloading Snapdeal application, down rating its administrations and threatening to
quit utilizing it."We are getting non-stop calls since Sunday evening. I have never observed this
sort of online life upheaval for wrong news," said an authority from Snapdeal.
aWhataisanextaforaSnapdeal?
“Inventions can't work without a tolerable plan of action. Sources guarantee that Alibaba would
enter the scene by combining Snapdeal and Paytm's web based business entry. The following
pattern of new companies has now started. In the scenery of high valuations and absence of
accomplishment appeared by numerous players in the web based business division will assume a
lower priority now and many investor will begin to center on information driven new companies.
Speculation choices will be made on a plan of action, tech, and vision.”
What the Competitors Had
Amazon
Amazon.com Inc, the US-based retail giant, is the world's biggest internet retailer, and regardless
of the blast of online retail rivalry, figured out how to build its piece of the overall industry in
web retailing from 17% out of 2011 to 24% out of 2016. It has accomplished this in a channel
that posted an CAGR of near 23% more than 2011-2016; Amazon's own particular CAGR over a
similar period was 31%. The organization's prosperity depends on a system of determination,
cost and comfort. It started as an bookseller in 1994, and now offers things in most item classes
including books, music, toys and diversions, purchaser gadgets, housewares, wellbeing and
magnificence, clothing, and sustenance moreover ato administrations, for example, nearby
conveyance and web facilitating.
Its retail technique depends on a multifunctional site at the focal point of its customers' business
lives. Amazon Prime, its enrollment benefit, gives the esteem expected to achieve this through
boundless 2-day delivery, video and music spilling, photograph stockpiling, and digital book
borrowing. Shopping highlights incorporate client surveys, lists of things to get, a single tick
shopping, personalized suggestions, and various delivery choices. Client bolster, which includes
following data, is to a great degree dependable.
On top of this, it acts as a third party retail platform for other retailers to whom it provides
distribution services, sells its own brand of state-of-the-art consumer electronics at cost, produces
and distributes its own media including award-winning TV shows and films, and maintains a
substantial business hosting web services in a business-to-business capacity. The scope and
potential of the company are truly enormous.
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FlipKart
Flipkart Online Services is an independent company which was founded by Sachin and Binny
Bansal. The company has been the poster boy for internet retailing in India, and it has single-
handedly revolutionized the concept of internet retailing since its inception in 2007. The company
has a strong presence across India with the help of its delivery network, which covers second-tier
and third-tier cities not covered by most other internet retailers.
The company’s business is focused purely on internet retailing. It has a subsidiary named WS
Retail which acts as the front-end arm of the operations and which also provides warranties for all
of the consumer electronics and consumer appliances sold by the company.
Ekart is Flipkart’s in-house supply chain arm, and has powered the growth of the company with
innovations such as cash on delivery, in-a-day guarantee, and same-day guarantee schemes. It has
allowed Flipkart to extend its reach into the interior of India with a coverage of over 6,500 postal
index numbers. In May 2018, Walmart acquired a 77% stake in Flipkart. This acquisition is
expected to help Flipkart to maintain its leadership position and give tough completion to its fierce
rival Amazon India.
Paytm mall
Paytm Mall commenced operations in early 2017 with a $200 million investment from Alibaba.
According to a blog post in April, it extended its reach to 700 towns and 19,000 zip codes within
its first year of business. The company has ambitious growth targets, and it will use its newly-
bolstered finances to try and achieve them. After closing fiscal 2018 with a gross merchandising
volume (a measure of total sales) of $3 billion, it plans to triple this figure to $10 billion this
fiscal year.
Given that Paytm has no inventory of its own, it primarily facilitates the online sales of offline
businesses. This year, it also plans to ramp up its focus on offline store partnerships, given that
60% of its online sales come from offline stores. It has ties with around 75,000 of these stores,
and plans to onboard twice as many stores to its portal by 2019.
To enable these stores to sell online, Paytm will offer them devices for invoicing and inventory
management as well as insurance on these devices. Its Point of Sale (PoS) technology will be
gradually rolled out across its retail partners over the course of this year. The cloud-based
technology allows shopkeepers to manage orders, get real-time data on inventory and sales and
bill customers.Flipkart and Amazon should pay close attention. The two-way race to the top in
India’s e-commerce market could soon be crashed by a third contender. Paytm Mall, the e-
commerce arm of the country’s payments upstart Paytm, has reportedly closed the final round of
a $450 million (₹30 billion) cash infusion from its international backers, Softbank and Alibaba.
The investment, which was announced in April 2018, was completed in four tranches, with ₹26
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billion coming from Softbank and the remainder from the Chinese e-commerce giant. As a result,
Softbank now owns a 21% stake in the business while Alibaba has a 46% stake. The funding
round, which comes soon after Softbank agreed to sell its shares in Flipkart to Walmart, is said to
value Paytm Mall at as much as $2 billion. While this is still a far cry away from the enterprise
value of Flipkart and Amazon’s Indian business, it is by no means insignificant. The Indian e-
commerce market is expected to record $33 billion in sales the year 2018, eventually reaching
$72 billion by 2022. These figures could actually be much higher if Paytm Mall makes good on
its growth plans.
Porters Five Forces Analysis
Power of Suppliers
Snapdeal has a merchant base of approximately 50,000 sellers. Similar products are sold by
many sellers and it becomes difficult to price the products at higher prices, therefore the price
should be always competitive unless it is unique. Everyone in the marketplace tends to sell their
product. Companies like Dell, HP, Lenovo and other computer manufacturers see the
opportunity to reduce the costs by selling online. So the sellers cannot lose this channel.
Therefore, the supplier’s power is low in E-Commerce industry.
Power of buyers: in E-Commerce industry the buyers are the customers who purchase products
online. Customers are offered the same product, same brand at different online market places.
This gives the customers a wide range of choice to choose from. Customers mostly prefer the
one where they get the product at reasonable price, quick delivery, better return/ exchange
policies, EMI offers etc. Therefore, the power of buyers is very high.
Competitive Rivalry
There is a cut throat competition in the E-Commerce industry with bigger players like Flipkart,
Jabong, Myntra and global players like Amazon. Alibaba and Walmart are also trying to enter
into the Indian market. More competition means, more choces for the customers. This again led
to increased cost to the companies to stay in the minds of customers through promotions.
Snapdeal has got huge competiton in the industry, this requires the company to give the
customers better deals, make the customer experience delight and be continuously innovative.
There is a heavy rivalry in the industry.
Threat of New Entrants
Entry of new players is very high. There is no much capital requirement to start an online
market place like the model followed by Snapdeal. A website is to be developed and tie up with
the sellers to place the products and tie with the payment gateway to process the payments. This
makes the entry to new players, easy. The government of India gave a green signal for FDI upto
51% in multi brand E-retail stores and 100% FDI in single brand E-retail stores. This makes the
Indian market easily accessible to global players. India's retail market isIexpected to grow from
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$675 billion in 2016 to $850 billion by the yearI2020. This presents the potential for growth of
industry and makes it attractive to the new players.
Threat of Substitutes
There is no direct substitute for E-commerce industry. Physical offline stores can be considered
as substitutes but the online sales have disrupted the offline sales. The heavy discounts offered
online are very attractive for the customers. Recently the physical stores are also being integrated
with the online sites in the form of Omni channels. So the threat of substitutes is low.
Industry Life Cycle:
The E-commerce industry in India was in growth phase and is expected to overtake the US E-
commerce industry to become 2nd largest e-commerce market in world by the year 2034. E-
commerce industry in India is expected to grow from US$ 38.5 billion to US$ 200 billion by the
year 2017- 2026.
“Indian internet economy is expected to grow to US$ 250 billion by 2020, mainly supported by
E-commerce. Penetration of Internet in India has grown from 4% in 2007 to 34.42% per cent in
2017, with a CAGR of 24% between 2007& 2017. During Q1 off2018, penetration of Internet in
India is 38.02%. E-comm industry in India is funded with 21 Private equities and Venture
capitalist dealsoofuUS$2.2 billion in 2017& 38 deals of US$ 1,130 million in the first quarter of
2018. E-comm. Startups received US $787 million funding till date in 2018. E-Comm. sales of
India are anticipated to grew by 32 % to reach US$ 33 billion by 2018, majorly led by Amazon,
Flipkart and Paytm Mall. E-retail anticipated to contribute 2.9% of total retail market in the year
2018.”
Major industryigrowth has been stimulated by internetiand mobile penetration.
The internet user base in India is expected to grow from 494 million in 2018 to 830 million by
the year 2021. The e-commerce logistics industry in India is approximately US$ 1.35 billion in
2018 and is anticipated to grow with 36% CAGR in the next 5 years. The Government policies
and frameworks like 100% FDI innB2B E-comm space andd100% FDI underrautomatic route
for the Market Placeomodel of B2C E-commospace are expected to further augment the
growthiof sectorr.
Resource Based View
Tangible Resources
Snapdeal has required level of tangible resources. Snapdeal has received several rounds of funding.
Snapdeal built too many warehouses. Snapdeal tied up with too many companies such as Cleartrip
, Red bus, Zomato and urban clap. Although, there is no physical product it caters to. It is just an
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online retailer. They failed to stand out amongst their competitors mainly due to ineffective
strategies with plenty of cash burned by them in acquisitions and purchasing warehouses.
Intangible resources
From the shine of the once-appreciated brand ($6.5 billion in valuation at its pinnacle and a genuine
contender to lead India's detonating web based business showcase), the wander has seen its stock
slip and slide. What's more, en route, its image, adorned by a Rs 200 crore Unbox Zindagi crusade,
fall by the way side. Its previous image diplomat, Aamir Khan was chopped out even with serious
blowback for his remarks on developing narrow mindedness in India, and more regrettable, it
ended up blow-back for rampaging trolls, who downvoted its application for comments made by
Evan Spiegel, the CEO of Snapchat, an instant messaging app, headquartered a long way away, in
Los Angeles. In between, there were also the complaints that the company is selling prescription
drugs online, was mercilessly trolled for delivering soap bars instead of cell phones and was
attacked for abruptly sacking hundreds of employees when its business fumbled.
Human Resources
Snapdeal introduced a new management programme for its employees. The online marketplace
initiated a programme called ‘GROW’ which stands for ‘Goal setting, regular feedback’. It would
be followed every four month to adopt to the changes in the industry. Both Managers and
employees are required to meet at a regular interval of time to monitor an employees’ performance
as well as growth. Snapdeal has trained nearly 2400 employees in his academy.
Value chain Analysis
Firm Infrastructure
E- Commerce’s snapdeal’s major focus was not to become profitable, but setting up the
infrastructure. The company’s focus was “building highways for e-commerce” and to provide
logistics support such as warehouses to sellers. They don’t own any inventory.
Human resource Management
While several start-ups remain in the news for downsizing their workforce, snapdeal is one such
company which maintained the staff adequacy. They have invested the appropriate amount in their
human resource management.
Technology
Snap deal used Mongo DB’S scalable database for its extensive product catalog. Customers could
choose from the wide variety of 4 million products from more than 30,000 sellers in 500 or more
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categories. The deployment was expected to be a part of the company’s investment drive which it
is announced to reach its target of $1 billion by 2015, riding on the IT wave
Earlier the company said in an ET report that its IT team comprises 20% of its overall workforce
and close to 95% of all technology that Snapdeal uses, is developed and implemented in-house.
Inbound logistics
Snapdeal has no such inbound logistics as it is a retailer & not a manufacturer of goods. However,
it has efficient inbound management system through which it procures products from the
manufacturers.
Operations
Snapdeal possesses 1200 staffers as of now. It was also said that Snapdeal may run a ‘Taobao’
model in the near future which is a C2C online marketplace. The company witnessed a high
employee turnover across levels over the past few month. The company formulated itself as a
marketplace model in 2012 after starting as a deals and coupons platform.
Outbound logistics
The working of the company is to provide technology for both buyers and sellers. Snapdeal through
its innovative system gather updates from both shoppers and sellers. The sellers have a power to
list products for sale, manage inventory and make pricing decision at any point of time.
Marketing & Sales
In the past, Snapdeal has invested lot of their resources into discounts & advertising. For the re-
branding campaign, Snapdeal forked out nearly Rs200 crore and did heavy advertisement on its
sales event, in an attempt for stanching market share losses to Amazon and Flipkart.
Since October 2014, Snapdeal was able to raise around $1.4 billion and was still left with $500
million as of July 2016 . The cash reserves were spent in maintaining daily expenses and marketing
and by also offering discounts.
Service
The company has provided appropriate customer support services. Users were able to access the
platforms of cleartrip, zomato, redbus etc. through snapdeal’s app. The company mentioned call
centre numbers in its web view footers, order pages and ticket details. The company introduced
recharge and bill payments and the company claims to have done around $1 million transactions
within the starting month.
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Exhibit 1 Snapdeal Revenue & PAT (In crores)
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Source: adapted by casewriter
Exhibit 2 Shareholding Pattern
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Exhibit 3 Indian E-Commerce sector
Exhibit 4
Table 1: Comparative analysis of online shopping between Amazon, flipkart, snap deal, myntra, jabong, fashion
and you
Particulars Amazon flipkart snapdeal myntra jabong fashion and you

Most preferable shopping site 32% 66% 52% 4% 16% 4%
Best shopping site 28% 60% 26% 4% 2% 2%
Most frequently purchase the
product
1.Clothing 24% 34% 34% 14% 10% 10%

2.footwear's 10% 20% 14% 8% 6% 6%
3.Electronics 8% 30% 16% 0% 0% 0%
4.Kitchen and home 6% 8% 2% 2% 2% 2%
appliances
5.Accesareis and cosmetics 8% 6% 10% 2% 6% 2%
Mostly shopped during
1.Regularly 8% 8% 8% 4% 4% 4%
2.offers and discounts 20% 44% 30% 10% 14% 10%
3.occasions 8% 4% 14% 14% 6% 4%
4.Rarely 4% 14% 10% 0% 0% 0%
_________________________________________
15
Comparative analysis of most frequently purchased product
_________________________________________
16
Comparative analysis of products mostly shopped during
Exhibit 5 SWOT Analysis

_________________________________________
17
Exhibit 6 Funding of Snapdeal
_________________________________________
18
• Received $12 mn from 2012 • Received funding of $133 mn
from institutional investors like
Nexus Venture Partners Intel Capital , Kalaari Capital
and Indo-US Partners and many more
• Received funding of $45 • Received funding of $50 • Received $105 mn from
mn from existing mn from Ebay Blackrock , Temasek holding
investors and others
• Snapdeal reached value of $1
• Received $627 mn from
Softbank
2011
2014
Exhibit 7
Exhibit 8 Acquisitions and Investments of Snapdeal

_________________________________________
19
_________________________________________
20
Exhibit 9 Fund Raising of Snapdeal
Endnotes
_________________________________________
21
i
Factor Daily Article by Sunny Sen, June 13 2017, https://factordaily.com/snapdeal-flipkart-merger-kunal-bahl-
rohit-bansal/.
ii
Indian e-commerce industry analysis ,IBEF, https://www.ibef.org/industry/ecommerce-presentation.
iii
A student Report submitted to Ahmedabad university.
_________________________________________
22

Case Study Snapdeal Group 4

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Case Study Snapdeal Group 4

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BIRLA|INSTITUTE|OF|MANAGEMENT|TECHNOLOGY

AUGUST 23, 2018

India E-Commerce Industry

aAcquisitions for Nothinga

Omni Channel Downfalla

Not Expanding the Product line in Grocery or Furniture

aSnapdeal Mass Lay-Offs (Cost-cutting measures)

Snapchat- Confusion costs against Snap chat

What the Competitors Had

Porters Five Forces Analysis

Threat of New Entrants

Industry Life Cycle:

Resource Based View

Value chain Analysis

Human resource Management

Marketing & Sales

Exhibit 2 Shareholding Pattern

Particulars Amazon flipkart snapdeal myntra jabong fashion and you

1.Clothing 24% 34% 34% 14% 10% 10%

Exhibit 5 SWOT Analysis

Exhibit 8 Acquisitions and Investments of Snapdeal

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