In an interaction with ET Digital, Chakrawarti talks about how Snapdeal is supporting micro, small, and medium enterprises (MSMEs) in India by acting as a bridge between MSME sellers and value-conscious consumers, enabling small businesses to reach a larger customer base and expand their businesses. Edited excerpts:
Economic Times (ET): What is the situation of India’s e-commerce market? What are the prominent challenges?
Himanshu Chakrawarti (HC): The Indian e-commerce market is currently valued at approximately Rs 4,00,000 crore and is projected to reach around Rs 9,00,000 crore by FY26, driven largely by customers from tier-II and beyond. According to a recent report by Redseer, the number of online shoppers in India is expected to grow by 50% in the next three years, surpassing 30 crore by FY26. This growth is primarily attributed to the ‘aspirational’ consumer market, comprising middle-class individuals who prioritise affordability in their purchasing decisions.
The biggest challenge facing the industry today is striking the right balance between serving the diverse population of Bharat and offering exceptional services in a financially sustainable manner. With a large consumer base encompassing varying income levels, ethnic backgrounds and geographic areas, meeting the diverse requirements of Bharat while remaining profitable is a complex task. The sector needs to address infrastructural limitations, affordability issues and changing consumer preferences to maintain diversity, accessibility and affordability, without compromising on quality.
Snapdeal has been making significant progress moving closer to profitability with positive unit economics.
ET: How does Snapdeal plan to differentiate itself and compete with other brands operating in a similar space?
HC: Snapdeal has carved its niche as India’s leading value e-commerce company by specifically catering to the needs of consumers across Bharat. The platform focuses on simplifying the shopping experience for value-conscious buyers by offering the most relevant products that fit their functional needs while ensuring high quality. By delivering personalised, multilingual interfaces and leveraging cutting-edge technology, Snapdeal delivers true value to its customers.The company’s strategy revolves around pricing most of its listed items below Rs 1,000, appealing to budget-conscious shoppers who seek both value and quality.
ET: What is Snapdeal’s perspective on discounts and loyalty programmes within the e-commerce industry?
HC: Snapdeal places a strong emphasis on providing value to its customers through competitive pricing and a relevant assortment of products. The company strategically prioritises the customer, aiming for long-term success in the highly competitive market.
While discounts can be effective in attracting shoppers, Snapdeal is cautious about relying too heavily on them, so as to maintain profitability for sellers. The company strives to keep a dynamic balance between enabling attractive prices to customers and also ensuring the sustainability of its business model. Additionally, the decision to eliminate shipping fees enhances clarity during the shopping experience, as there are no hidden charges on the check-out page.
ET: How is Snapdeal’s business performing currently in terms of revenue and growth?
HC: Snapdeal’s business model centres around value e-commerce, targeting price-conscious middle-income users predominantly in tier-II and beyond cities. The company’s annual transacting customers have shown positive growth, increasing from 13.9 million in FY21 to 17.7 million in FY22. Moreover, over 86% of its orders come from outside metro cities, with over 72% of orders originating from buyers in smaller cities and towns.
With over 250 million app installations and over 25 million active users each month, Snapdeal has demonstrated sustainable growth.
ET: What are Snapdeal’s views regarding technological advancements, particularly in the context of AI?
HC: Snapdeal acknowledges the significance of technological advancements, particularly in the realm of artificial intelligence (AI). The platform caters to a considerable number of new internet users, with a significant portion of them relying on category and subcategory tabs or the home feed for product browsing, rather than using search or filters.
To accommodate this browsing behaviour, Snapdeal leverages advanced AI and machine learning algorithms to analyse user actions and preferences. This enables the platform to offer personalised product recommendations, enhancing the overall shopping experience for users.
Snapdeal’s technological capabilities also extend to address verification and validation, ensuring accurate and hassle-free delivery for buyers.
ET: How does Snapdeal intend to support and uplift MSMEs in the country?
HC: Snapdeal is committed to supporting and uplifting MSMEs in India. By providing MSMEs with a robust and accessible marketplace, Snapdeal enables them to reach a larger customer base and expand their businesses. We empower MSMEs to offer competitively priced products that align with the needs and preferences of Bharat’s diverse population. This helps MSMEs grow their revenue and create sustainable livelihoods, contributing to the economic development of the country.
