How Snapdeal lost it's position in the Indian e-commerce sector? Read this post now

What led to the downfall of Snapdeal in India?



There was a time not very long ago when Snapdeal was a rising star in the Indian e-commerce market
It was a unicorn backed by marquee investors with a massive valuation of $6.5 billion.
But then things went wrong and once the rising sun is now behind the thunder clouds
Snapdeal started as a deal and discount platform the startup used to share deals and coupon codes online.
After some initial traction, both the founders Kunal Bahl and Rohit Bansal turned Snapdeal into a market place the initial years were quite good for the business. Snapdeal was the second biggest player in the e-commerce sector in India with Amazon being the distant third.

The company raised a few big rounds of investments from marquee names like Alibaba, Temasek. With venture dollars in Snapdeal's pocket, the company hit the road for an acquisition drive.
Snapdeal spent big bucks to acquire companies like FreeCharge,shopo, exclusively, etc. Unlike the competitors, these acquisitions were not done with a thoughtful and well-defined road map ahead.
Most of the companies acquired by Snapdeal to boost its strength
 Failed to integrate into Snapdeals core platform.
Snapdeal acquired FreeCharge for $450 million in 2015  and sold it to Axis Bank for a whopping $60 million in 2017.
With more sellers onboarding and increasing order volume, the company failed to keep up the quality of products being sold.
In many instances, buyers complained about receiving fake or very low-quality products.
This posed a threat to the reputation of the brand.

  • How other e-commerce platforms in India were building their presence?

Snapdeals competitors focused mainly on only two or three features to improve at a time.
Flipkart focused on logistics with the ekarts and smartphones segment and amazon focused on prime quick deliveries.

  • Problem with Snapdeal?

Snapdeal wanted to do everything at once.

This created a lack of coordination among its various divisions. By the end of 2018, it seems like Snapdeal has bitten off more than it can chew.
Snapdeal was once a rising start-up and a prime competitor of Flipkart.
It is now almost a forgotten player in the field of Indian e-commerce platforms.

  • Unicorn status?

The company has lost its own unicorn status. The founders decided to lay off most of its workforce and steer the company towards an open market model.
The founders are calling it Snapdeal 2.0.
Now only time will tell will the founders be able to steer the sunken ship to the shore.