Chapter #3: Why Snapdeal Failed ?

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The fierce tussle for no.1 position in the Indian e-commerce space is no secret. To cope up with the ever increasing competition and to keep up the ongoing fight with the formidable foe, Amazon, the very own home grown Flipkart had to be sold to Walmart, a couple of years ago. Apart from Flipkart, there was another budding player, gaining ground as a preferred no.2 and it aspired to be there forever. But as they say, "if you are not playing to win, don't play at all"!! As a result, the sweet no.2 spot is far from its reach today!! I am talking about Snapdeal. 

A Good Start:-
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  • The Gurugram based company, founded in 2010 by Kunal Bahl and Rohit Bansal, started off well. 
  • Those were the days when Flipkart was the only e-comm platform in India, with Amazon yet to dive in the Great Indian Market.
    marketingmistakes24.blogspot.com
  • In 2014, when the market space was being looted by other players like Amazon, Paytm etc., Snapdeal posted a healthy growth with a good market share and continued the same in 2015 as well. It had consistently maintained the no.2 spot, no.1 being Flipkart.
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  • A decade has passed, and the tables seem to have turned right on to its head. Much of flak has been faced by this promising Indian startup in the last decade and all of it seemed to be a consequence of the blunders committed by its own management.

Mistakes:-
 Far too many acquisitions
marketingmistakes24.blogspot.com

  • Starting from Grabbon.com, a discount coupon service, in 2010 to GoJavas, a logistics company in 2015, Snapdeal acquired much more than was required, but failed to realize the full potential of almost its acquisitions, with the sole exception of GoJavas.
    marketingmistakes24.blogspot.com
  • In 2015, Snapdeal acquired Freecharge at a whopping $400million, in a move to compete with Paytm, but in the pro-demonetization era, where on one hand Paytm became the face of the digital India, Snapdeal was not able to realize the full potential of Freecharge, as a result of which the sales of Freecharge went down.
  • Later Snapdeal had to sell it off to Axis bank at $60million.


A Zero USP Company

  • While the other giants (amazon & flipkart) understood the Indian market and created their unique selling point, Snapdeal was just not able to identify it’s USP.
  • On one hand Flipkart launched its Big Billion Days with a niche on mobile phones and tied up with the mobile companies for exclusive deals,Amazon on the other,had its Prime platform, ready to peek into Indian commons.
  • All Snapdeal could do was, to copy some of their tactics but eventually failed to create its uniqueness.


Unsatisfied Sellers

  • E-commerce is the game of balancing the emotions of sellers and buyers. None of two can be satisfied at the expense of the other.
  • There were many such cases reported where the sellers were forced to move their inventories in the Snapdeal owned warehouses, and in not doing so there were consequences.
  • In order to keep pace with other players opting “one day deliver”, Snapdeal tried to put extra pressure on the sellers to do so, without any extra payment or bonus assured.


Snapdeal Gold

  • To take Amazon Prime by the horns, Snapdeal came up with Snapdeal Gold, which promised a free registration, for a one day delivery and a 14 day return policy. But customers didn’t just wanted a fast delivery, they wanted a good experience as well.


No Democracy in Decision Making


  • All was not well inside Snapdeal. Almost all decisions were taken by the top bosses, without taking sane voices into consideration.
  • For a startup it is very essential to develop a culture and Snapdeal just managed to faulter that with perfection.
  • The top panel focused only on revenues and profits and much to everyone’s surprise, they were not very keen to distribute the profits with other employees, not even the exit loads. At one point of time the founders were taking in 46crores as annual salary!!! 


Flipkart Deal

  • The much talked about deal in 2017, gained a lot of media exposure and would have been a life saver for the low lying Snapdeal, but it didn’t go well and the merger was called off.
  • Snapdeal then decided to go solo.


The Controversy:-

  • The Amir Khan controversy, is well known to all. The then brand ambassador of Snapdeal’s derogatory comments were not at all received well by the commons and it led to a huge outrage not just against the actor, but also against the image of Snapdeal.
  • The uninstall app and low rating the app campaigns were run against the already reeling company, which added much to its woes.


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