Snapdeal, once a serious challenger to fellow unicorn, Flipkart, is now just a fraction of its 2015 self. Two-thirds to be precise.
The Ken sent Snapdeal a detailed questionnaire last week but despite repeated reminders, a reply was not forthcoming till the time of publishing.
On January 11, Snapdeal brought in Jason Kothari from Housing. Kothari will now be the chief strategy and investment officer in the company. This is a significant appointment. We’ll explain why in just a bit.
Multiple sources confirm that the e-commerce seller recorded about 30% drop in shipped revenue in 2016, compared to 2015. For 2015, Snapdeal had recorded a shipped revenue of anywhere between Rs 10,000-12,000 crore. But for the year ended December 2016, the numbers dropped to around Rs 8,000 crore.
Shipped revenue equals booked revenue minus bulk orders. Shipped revenue is not Gross Merchandise Value (GMV) but one step deeper than GMV.
Now, things get a little tricky. In their submissions to the Ministry of Corporate Affairs, marketplaces do not declare their gross sales. They declare the revenue earned from commissions. Snapdeal hasn’t completed its submissions yet. So, how shipped revenue translates to actual revenue is not known as yet.
But Flipkart has completed its submissions. In comparison to Snapdeal, Flipkart grew from Rs 10,000 crore in 2015 to Rs 15,000 crore in 2016, that too in net revenue.Email circulated within Snapdeal after the Diwali sale
Additionally, the drop in Snapdeal’s revenue has come at the cost of competitiveness in the lucrative electronics product category, and mobile phones, in particular. “There has been a big drop in phones. Snapdeal has not been able to shift these products anymore,” says a former employee with a competing e-commerce company. He requested anonymity as he was not authorised to speak to the media. Another blow to Snapdeal has been the absence of exclusive smartphone deals. The likes of Amazon and Flipkart, both, have set up arrangements with brands like OnePlus, Motorola and Xiaomi. “If these phones weren’t brands earlier, they have become now. The initial marketing paid off, and now they sell themselves,” says one of the people quoted above. And this miss is hurting Snapdeal deep. The absence of these deals means that most of India’s 50 million e-commerce shoppers stay away.
“It also stopped discounting heavily.