Group No 4-Snapdeal

Submitted By: Group No. 4 Gajendra Sisodia (FT13125) Gaurav Varshney (FT13127) Gurpreet Singh(FT13132) 1

Table of Contents Submitted By: Group No. ...................................................................................................................... 1 Gajendra Sisodia (FT13125) .................................................................................................................... 1 Gaurav Varshney (FT13127).................................................................................................................... 1 Gurpreet Singh(FT13132)........................................................................................................................ 1 Introduction ............................................................................................................................................ 3 Existing Ecommerce practices by Snapdeal ............................................................................................ 3 Existing Ecommerce practices by competitors (Flipkart) ........................................................................ 3 Current website ...................................................................................................................................... 5 Opportunities: ......................................................................................................................................... 7 Promotion and Revenue: ........................................................................................................................ 7 Recommendations for new e-commerce model & Justification: ........................................................... 8

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Introduction: Snapdeal.com is a leading online marketplace, headquartered in New Delhi, India. Snapdeal features products across categories like Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Restaurants, Spas & Entertainment amongst others. The company was started by Kunal Bahl, a Wharton graduate and Rohit Bansal, alumnus of IIT Delhi, in February 2010. Snapdeal.com was started in February 2010, as a daily deal platform, but later expanded into product retailing across various categories. Snapdeal claims to have a subscriber base of around 18 million and has a presence across 50 cities in India. In January 2011, Snapdeal received a funding of $12 million from Nexus Venture Partners and Indo-US Venture Partners. Subsequently, 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, taking the total investment in the company to $52 million. It almost ships to around 4000+ towns and cities in India, has almost 3000+ featured brand, 250000+ listed products with over 200 categories. The company claims that everyday about 25000+ units are sold.

Existing Ecommerce practices by Snapdeal: The Company believes in working backwards to fulfilling what customer wants and then align supply chain, technology, product management, and customer support towards this objective." The Company interrogate things about what is the best experience for the customer." In doing all this, a conscious effort is made to make it cost-effective too. Its E-commerce business is built around three pillars: value, assortment, convenience. The valuebased approach of Walmart for example is hard to replicate. In India, there is no middle path in convenience. You are either convenient, or you are out of business. So, the only differentiating factor is assortment, Snapdeal, with 3000 products and adding a product every 10 seconds, has that edge in assortment as of now in both online and offline modes. Another significant factor is the retail sector worth $500 billion in India is only 10% organized. Clearly, Snapdeal has zipped ahead of others. Cash on delivery model is also one the key differentiating ecommerce practice adopted by the company however high charges for COD transactions and customer returns are quoted as two reasons for COD being unfavourable. Snapdeal’ s experience is different. Its COD charges are lower than expenses of online payments and so the company prefers that customer’s buy on COD. The courier companies returning products don’t charge Snapdeal. Furthermore, the returns are still single-digit figures, which doesn’t eat much into Snapdeal’s sales. When a user visit the website it gives an option to enter the users email address to receive daily promotional and discount offers. The company has a section by the name Today’s top offer from which a user can select the best offer as per his/her demand.

Existing Ecommerce practices by competitors (Flipkart): Flipkart an electronic commerce company was established by Sachin Bansal and Binny Bansal in 2007 and now it is among India’s largest online retailers with reported sales of Rs 75 crore for year 2011-11. Sachin Bansal and Binny Bansal both are alumni of Indian Institute of Technology Delhi who 3

started this company after quieting their jobs in Amazon.com with a vision To be one of the largest multi-category e-commerce destinations in India, with a strong focus on customer service. Initially Flipkart started with selling books online and has since diversified into a generic e-commerce site, selling CDs/DVDs of music, movies, games and software, as well mobile phones and electronics. Flipkart started with books because they are a comparatively easy category products to sell online. They do not require huge inventory maintenance, are easier to negotiate supplier terms and profit margins are high. Also since books are low value items, inducing customer trial was easy. It is a safe option to start off with books, given their appreciation in e-commerce the world over. Now Flipkart have about 11.5 million book titles, 11 different categories, more than 2 million registered users and sale of 30000 items a day which makes it India's answer to Amazon. The major goal of the company is to provide a memorable online shopping experience to their customers so that they come back again and again using innovative services like Cash on Delivery, a 30-day replacement policy, EMI options, free shipping, and discounted price and very importantly on time delivery of the products. Flipkart follows some of the best practices of supply chain 1. Building the Supplier base: The Company has established a network of more than 500 distributors and only stocks frequently ordered items. Items like the 'Long tail' are almost always sourced from suppliers in real time and as and when the customer places an order. 2. Building Infrastructure for Operations: The Company has 4 offices in 4 metros cities with more than 500 employees. Warehouses of the company are located in 7 cities including the metros. Company has tie-ups with more than 15 courier companies like Blue Dart, First Flight etc. to deliver their products and Indian post for areas where courier do not reach. 3. The Process of Supply Chain- The first step in buying the products like books online from the Filpkart.com site by making payments using payments options like credit/debit card, cashon-delivery, net banking, cheque/DD and money order and enter the phone number and address where the items need to be delivered. Depending on items purchased they are packed and shipped accordingly for example mobile phones and books are packed differently as per requirement and also all items have transit insurance against theft and damages that may be caused while they are in transit. Flipkart bears the cost of delivery and this make them give a reason/motivator for improving efficiency at every point of supply chain. This also makes them differentiate from their competitors. Depending upon the area where the item is to be shipped the company uses either their own internal logistics or Indian post and the delivery time varies between less than 24 hours 3 weeks and availability of the product like the products which are imported take 3 weeks’ time to get delivered to the customers. All the Team Members have been trained to work efficiently to meet customer expectation 4. Use of Information system: The Company use sales to predict the inventory levels. The warehouses are split into multiple areas — inventory, packing, shipping and so on. The stocks are replenished every 24-48 hours. In the Back End, Flipkart stores details of all the transactions that need to be carried out. They have an understanding with their associates for order tracking, reconciliation and MIS (Management Information Systems) reports. The private courier companies in turn have their own ways of tracking every package. The

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customer is also updated about the status of his shipment via message, email or through the website.

Current website: Snapdeal features products across categories like Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Restaurants, Spas & Entertainment amongst others. Snapdeal.com was started in February 2010, as a daily deal platform, but later expanded into product retailing across various categories. Snapdeal claims to have a subscriber base of around 18 million and has a presence across 50 cities in India. It is unique in a sense that it also offers services unlike other e commerce sites like Spa, Salon & Wellness, Restaurants, and Entertainment & Adventure. It comes out with “Today's Top Offers” and “This Hour's Top Sellers” information as well

Payment methods: Available on Snapdeal ranges from Credit Card, Debit Card, Net Banking, Cash On Delivery and Credit Card EMI. All major banks are included for the Net Banking facility. Visa, Master Card and American Express are credit card service providers. They don’t charge any extra money for COD facility. COD facility is available only on selected products. For Debit card payments all leading bank debit cards are valid. A person can pay in 3 or 6 monthly instalments with no Interest, no Paperwork or any Processing Fees. Citi Bank Master Card, Citi Bank Visa Card, HDFC Bank Master Card, HDFC Bank Visa Card and ICICI card are available with this Credit Card EMI facility after selecting one of the five options the user is taken to the transaction page where complete his purchase by putting his credentials.

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Privacy Policy: Snapdeal is registered as Jasper Infotech Private Limited and its privacy policy was last updated on May 25, 2012. Its privacy policy is designed on the below parameters.        

Information and Usage Shared Personal Information Links to Third Party Websites Security Disclosure User Discretion General Provisions Contact

Digital marketing, including the use of social media They were identified as the hottest Internet Companies of the year at the premier edition of the 'Young Turks Awards' organized by Mercedes Benz and CNBC-TV 18 in New Delhi - Jan, 2012. Afaqs's annual buzz-making poll voted them as the Buzziest brands of India in. They are present on Facebook, Twitter, Google Plus and Pinterest also. They share the pictures of hottest offers and promote it on their facebook page. Snapdeal has got huge no of likes on facebook and they promote to their followers these images. They also run contests on social media sites. Exciting offers of the days are promoted to their followers on twitters through daily tweets. Mostly sponsored adverts from Snapdeal appear on Facebook and Google search.

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Opportunities: Due to competition in the e-commerce space, many sites eventually shut down after acquiring losses. However, Snapdeal not only survived but also got successful in making amazing profits.In India has experienced an astonishing growth in recent times and this growth is going to increase considerably in the near future. This is the reason why General Atlantic, a private equity firm invested Rs 550 crore in Snapdeal. At present, snapdeal is the largest e-retailer that earns highest e-commerce traffic in India, with an 80% to 90% growth in traffic on Snapdeal.Snapdeal is already operating from 50 cities in India and internationally (Snapdeal has started in Sri Lanka, Nepal, Bangladesh, Maldives and Singapore) and company further expecting to move the company towards a broader retailbuying platform. With total market size of the industry Rs 46,520 crore there is lot of opportunity for Snapdeal.

Promotion and Revenue: Snapdeal uses advertisements on TV and radio as e-commerce is still nascent, so a lot of people of our parent’s age still don’t know what all this is. Awareness is increasing fast though. Snapdeal also took some social initiative. In one of these initiative they installed 15 hand pumps so that villagers wouldn't have to walk nearly two miles just to get clean water. The villagers were so grateful for the SnapDeal.com branded pumps, that they decided to change the name of their village, from Shiv to SnapDeal.com. Snapdeal also took the inorganic route to expand quickly. They looked for small companies which are riding on innovations and great ideas. Snapdeal.com acquired eSportsBuy.com an online retailer of sports & fitness equipment and accessories and Grabbon a group buying site. Company is are not only looking for e-commerce players that specialise in specific product categories, but also relevant technology firms that can add value to their business. It also raised money from from Bessemer Venture Partners and Nexus Venture Partners. Snapdeal.com expects to garner revenues of about Rs 600 crore in the current fiscal. Company at present have tie up with 3,000 odd stores - from local to national and international ones. The company plans to have 10,000 brand stores by the end of 2013 and 20,000 by December 2014. Snapdeal aims to record revenue of Rs500 crore by the year end and increase this to Rs5,500 crore by 2015.

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Recommendations for new e-commerce model & Justification: Given that Snapdeal is the largest player in daily deals business – this surely comes as a shock as the company is solely focusing on product business! Given that Snapdeal is the largest player in daily deals business – this surely comes as a shock as the company seems to be focusing on product business more and is moving away from daily deals business.  

Under new e commerce model proposed an equal importance on services deal should be provided. Top categories are: Lifestyle (fashion accessories) and electronics (drives 20-25% of the sales). They should focus more on apparels section where other sites like Jabong and Yebhi are going strong.

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With Snapdeal operations now extending across 50 of India’s largest cities and 10,000 brands and retailer partnering with the daily deal site, prospects are good. The startup is currently averaging 1.5 million new members per month and can extract a lot of value out of the new members. The company sells 4000-5000 products a day and 92% products get delivered within 5 days. As far as supply side is concerned, there is a lot of distress inventory. And demand side is (as-always) hunger for deals.

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The Company should work on a recommendation engine that will help them cross-sell products and service deals – i.e. if you bought a spa deal, you could be interested in cosmetics and the site will surface relevant deals based on your historical data.

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Snapdeal’s Product Business is 40% Driven by Tier-II Cities. It should start targeting in tier II cities by including more products into its portfolio that attracts consumer segments.

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