There is something strongly evocative about a comeback because we can all see reflections of our own lives in it. Highs and lows, successes and failures, hits and misses are part of everybody’s life. It is both captivating and educative to see others work through their challenges.
Comebacks in modern business are hard. Comebacks in a fiercely competitive world, moving fast on the wheels of big money is harder still.
And that is why the journey and story of Snapdeal’s assume importance and worth telling. Especially, when the ecosystem, has not witnessed a single turnaround story where a startup resurged after losing vigour in the past.
Companies tend to find it hard to recognise their flaws. Correcting them, obviously, is a bigger challenge. Some companies circle the loss or traps they create on the journey and never come out; some take up the challenge and turn things around.
In this context, Snapdeal has surely turned a corner. From emerging as a poster boy of the e-commerce industry and raising close to $2 billion in funding, to near-death experience in 2017. Almost rising from the ashes, it has claimed to touch an all-time high in monthly transacting customers without doing anything crazy or spending big money.
The company has moved from a high burn game to a sharp focus on the value-conscious Bharat market comprising of non-metro towns. The move appears to have paid off well for the Gurugram-based company.
The company’s co-founder and CEO, Kunal Bahl, recently shared on Twitter that the company registered its highest ever number of monthly transacting users in September this year. While he did not share the number of transactions in the post, the company’s recent Diwali sale claimed of 76 million visits to the platform.
The growth graph shared by Bahl shows that the e-commerce marketplace had a previous peak in the festive month of Oct 2015, followed by a similar peak same time next year during Diwali 2016. The recent peak in September 2019 establishes a new high. It is likely that this new milestone is driven by the success of the company’s strategy of focusing on non-metro buyers and value for money products.
Recent media reports state that Snapdeal saw a 52% growth in sales volume during the recent Diwali sale as compared to the previous year and that almost 90% of the orders received on the platform came from non-metro towns.
On the basis of its audited financials for FY 2018-19, Snapdeal had reduced its loss by 96% over the last two years. At the same time, its transacting customers grew 2.2X and traffic surged 2.3X to 70 million unique users per month.
All this happened while other e-commerce companies in India burnt over $2 billion last year in the pursuit of growth.
In the last two years, it has once again emerged as the top three leading marketplaces, pursuing growth in the small towns (aka Bharat) and value segment with sound business economics.
With the downsizing of Paytm Mall and the collapse of Shopclues in recent times, Snapdeal has grabbed the lead in the value segment and cemented its position as the third-largest marketplace in India. The company seems to have made this comeback by not only doing a lot of right things but also correcting what wasn’t working for the company.
Recognising and fixing the problem is one part. Publicly sharing its learnings so that others can find guidance is a whole new level of transparency not seen in most Indian firms.
The intent and conviction shown by the Snapdeal founders and team to turn things around, instead of giving up, is what entrepreneurship is all about – carving a path and staying the course.