SoftBank-backed Indian e-tailer Snapdeal predicts profits in 2 years | Reuters
By Sankalp Phartiyal and Euan Rocha | MUMBAI MUMBAI Indian e-commerce firm Snapdeal expects to turn profitable in the next two years, its CEO said, as the company cuts costs and boosts efficiency in a market currently dominated by homegrown Flipkart and U.S.
By Sankalp Phartiyal and Euan Rocha
MUMBAI Indian e-commerce firm Snapdeal expects to turn profitable in the next two years, its CEO said, as the company cuts costs and boosts efficiency in a market currently dominated by homegrown Flipkart and U.S. internet giant Amazon.Kunal Bahl, who co-founded Snapdeal in 2010, also told Reuters in an interview that the online marketplace provider backed by Japan's SoftBank Group did not immediately need to raise capital unless it makes an acquisition.A burgeoning Indian middle class' rapid uptake of wireless high-speed internet has prompted buyers to shop online, boosting sales at e-tailers and making the country's internet services market one of the world's fastest growing.The value of goods sold online in India is expected to jump tenfold to $188 billion by 2025, according to a Bank of America Merrill Lynch note last September. High competition and steep discounting, has however meant most big online retailers are losing money.Snapdeal was valued at $6.5 billion after a fund-raising last year. But valuations of Indian e-commerce firms are generally believed to have softened since then. Fidelity Investments has marked down the value of its holding in Flipkart by around 36 percent.Snapdeal reported a loss of 29.6 billion rupees ($441 million) in the financial year to March 31, 2016, according to regulatory filings, but Bahl said they were steadily improving.
"I see a relatively clear line of sight to (profit) and we've been making great progress in that direction also," Bahl said on Monday."We needed capital to build the infrastructure which we have, now we have to take control of our destiny."Snapdeal's EBIDTA, or earnings before interest, tax, depreciation and amortization, for the nine months of the current financial year has improved by about 40 percent from a year earlier, while commissions have grown 3.5 times, he said.
Marketplace providers like Snapdeal earn commissions from sellers on their platform as a percentage of value of goods sold. Snapdeal, with 12 percent share of the so-called gross merchandise value, lags Flipkart's 43 percent and Amazon's 28 percent, according to Bank of America Merrill Lynch's estimates for 2016.Bahl said while Snapdeal, which also counts Chinese e-commerce giant Alibaba Group Holding and Taiwan's Foxconn as investors, did not look at gross merchandise value as a metric for growth, its focus was on getting good-quality products and on-time delivery at the lowest possible cost.Snapdeal's captive logistics arm Vulcan Express will turn profitable next month, Bahl said, thanks to significant investment over the past two years.
Vulcan has helped Snapdeal make inroads into the far-flung corners of India and building the unit "thoughtfully" without excess capacity has helped, he said.Snapdeal, which also uses third-party logistics services to deliver products to customers, has plans to allow Vulcan to seek external business in the coming months, Bahl said."I just don't think today that it's viable to build a 500-city network in India with only one customer as a logistics company." ($1 = 67.1650 rupees) (Reporting by Sankalp Phartiyal and Euan Rocha; Editing by Muralikumar Anantharaman)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.