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Snapdeal – From Troubling Times to Turnaround



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Code : COM0269

Year :
2020

Industry :-

Region : India

Teaching Note: Available

Structured Assignment : Not Available

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A NOTE ON ONLINE RETAIL INDUSTRY IN INDIA:

According to PricewaterhouseCoopers, modern trade in India was increasing 15-20% each year with retail penetration of 8%. As of June 2015, the total internet user base in India was 352 million, and more than 60% users accessed the internet through their mobile phones . With the ongoing digital revolution, it was expected that the country's internet user base would go up to 829 million by 2021..

 

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ABOUT SNAPDEAL:

In May 2008, Kunal Bahl (Kunal) and Rohit Bansal (Rohit), two school friends, decided to come together to open a venture. Kunal who had graduated from Wharton and was an alumnus of IIT Delhi, started an offline couponing business along with Rohit. The company was named Money Saver. Inspired by the Alibaba group , the founders decided to do something similar in India. In February 2010, the founders launched their new company, ‘Snapdeal’, based on the concept of online shopping...

SNAPDEAL IN TROUBLE:

Within four years of its launch, Snapdeal had become a billion dollar company. It had registered a year on year growth of almost 600% by 2014 with the average age of the workforce being only 25. It had over 50,000 merchants selling around 5 million products on its website...

THE REBRANDING EXERCISE:

In September 2016, Snapdeal launched a rebranding exercise with the goal of transforming its image and staying relevant in the battle for market share with its larger rivals Flipkart and Amazon. Snapdeal discarded its old red and blue logo and came up with a new logo which had a red box (Refer to Exhibit IV). It unveiled its new brand identity Unbox Zindagi (unbox life) in 2016...

THE TROUBLE DEEPENS:

By July 2016, Snapdeal had just about $500 million in cash reserves in hand. It had also not accepted a couple of funding offers due to the differences between SoftBank on the one side and Nexus as well as Kalaari on the other...

THE TURNAROUND: The company’s founders took a decision to continue operating Snapdeal as an independent company with Snapdeal 2.0 as their new vision, and introduced a lot of changes. Instead of competing on gross sales with Amazon and Flipkart, they decided to operate on a smaller scale, and reduced the total team size from 2000 in 2016-17 to around 750 people in 2019...

EXHIBITS

Exhibit-I: Online Retail Spending in India
Exhibit-II: Timeline of Snapdeal
Exhibit-III: Online Retail Market Share (%)
Exhibit-IV: New Logo of Snapdeal after Rebranding
Exhibit-V: Snapdeal Unbox Diwali 2016 Campaign





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