Snapdeal's last shot at survival

If there was an award for the most number of pivots, twists and turns in strategy, e-commerce firm Snapdeal, founded by the duo of Kunal Bahl and Rohit Bansal, would qualify hands down. Starting out as a discount coupon venture back in 2007, Snapdeal then morphed into an e-commerce marketplace. It then went into a managed marketplace model and also attracted marquee investors, raising close to $1 billion in 2014. Mounting costs, a failed merger attempt and a shelved IPO later, Snapdeal is taking another shot at life, this time as a value commerce player. Investors and the e-commerce community are calling it Snapdeal’s ultimate pivot, in a sector known for pushing up players to dizzying heights only to be unforgiving in the manner in which they are brought crashing down. In Snapdeal’s value commerce avatar, with day-to-day running now in the hands of professional CEO Himanshu Chakrawarti, the company has shed hard-to-sell and heavily commoditised categories and is concentrating on value fashion, home and general merchandise. Gone are categories like smartphones and home appliances that at one point used to contribute as much as 50-60 per cent of Snapdeal’s business.

In the cover story, Binu Paul traces Snapdeal’s dramatic journey, its multiple pivots and its latest attempt at survival and growth in the value commerce sector. However, even as Snapdeal plans out its latest strategy, competition has heated up in value commerce as well. Flipkart (through its value commerce arm Shopsy) is also a serious player in this category, with Shopsy already accounting for as much as 40 per cent of Flipkart’s new customers. Then there is a newer rival Meesho, which has emerged as a strong rival with cash and big plans. Meesho also has plans to tap the public markets in the near future. But Chakrawarti is unfazed. He has a clear focus—grow steadily and thoughtfully. “You can grow steadily, and then you can use a step function to grow faster when opportunities arise,” he says.

So far, the strategy seems to be paying off, but further funding may prove to be a challenge. With Flipkart, Amazon and a recently profitable Meesho to contend with, it’s make-or-break time for Snapdeal. But Kunal Bahl and Rohit Bansal are true survivors of the game, and this latest pivot promises to be one to watch. Meanwhile, as election season gains momentum, with the recently concluded state polls, more state elections and the big General Elections coming up next year, Surabhi takes a close look at the cost of freebies offered by various political parties. Economists are of the view that while welfare measures do have a positive impact on development, freebies offered during elections add to the public debt burden that often falls on the voter by way of higher taxes.