 "Indian e-commerce boom? After Flipkart, Snapdeal eyes $1 bn sales in 2014")
Not wanting to be outdone by rival Flipkart, homegrown e-commerce platform Snapdeal has announced that, similar to its competitor, it also plans to hit the $1 billion sales mark in 2014, 12 months ahead of schedule, the_Times of India_ reports.
According to company CEO Kunal Bahl the company grew 500 percent in the past one year, a period which also saw an eBay-led investor consortium pump in Rs 830 crore into Snapdeal.
With over 20 million members, 500 plus product categories and over 20,000 sellers, Snapdeal had earlier predicted that it plans to clock gross merchandise sales of $1 billion by 2015, while expecting FY14 to end by notching up gross merchandise sales value of Rs 3,000 crore, as was reported earlier by Firstbiz.
Bahl attributes the website’s success to maintaining a simple marketplace model rather than investing in capital-intensive inventory infrastructure and targeting Tier II and Tier III cities, instead of the metros.
“Over 60% of all units sold on Snapdeal are fashion goods. About 15 months ago, it was zero…About 90% of our assortment is not comparable to any site in India. We don’t focus on brands; we focus on the long tail of other offerings,” Bahl told ToI.
In a profile of Snapdeal outlined in a January 2014 Macquarie report titled ‘Indian E-Commerce - Tip of the iceberg’, the company said it will be heavily banking on growth from the mobile sector.Its mobile commerce site witnesses about 12 million average visits per month. Of the mobile-based transactions, 75 percent involve cash on delivery and 25 percent are prepaid transactions, with the majority of customers coming from Delhi, Mumbai, Chennai, Kolkata, Bangalore andHyderabad.
However, the report goes on to state that, as is the case for most marketplace models, Snapdeal is vulnerable to inherent risks, such as depending on third parties for every aspect of business or outsourcing from supply chains to payment and logistics.
According to Snapdeal, three new products to the site every minute. The company aims to have a 10 million strong inventory by the end of 2014.
Macquarie estimates the Indian e-commerce industry will cross $1 trillion by FY15.
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