Introduction

E-commerce or electronic commerce deals in the buying and selling of goods and services over
the internet. The e-commerce industry, in India, is one of the fastest growing industries. Since
2009, it has grown at a CAGR of 34%. The e-commerce ecosystem is characterized by the
presence of online ticketing, online retail, online marketplace, online deals, and online classified
portals.
SnapDeal
SnapDeal was established in 2008 as Jasper Infotech Pvt. Ltd. by Kunal Bahl and Rohit Bansal.
The company started as a couponing firm. It sold printed book of coupons called MoneySavers
in retail stores. The founders revamped in the discount couponing concept and launched
SnapDeal.in in 2010 as a deal/coupon website. The couponing business model did not work to
the founders expectation. Therefore, in 2012, Kunal Bahl and Rohit Bansal transformed
SnapDeals business model to an electronic marketplace for selling physical goods. Since then
SnapDeal has done six rounds of funding to attract global investors rasing a total sum of $972
million. The key investors of SnapDeal have been Temasek, PremjiInvest, SoftBank Corp.
Today, SnapDeal offers an assortment of around 12 million+ products, has around 150000
retailers and caters to almost 5000 cities across India.In 3 years SnapDeal has joined the major
players of this highly competitive industry. After changing its business model in 2012 SnapDeal
has always looked in control. It has the second highest market share after Flipkart in the
burgeoning e-commerce industry in India.
Vision
SnapDeal's vision is to create India's most impactful digital commerce ecosystem that creates
life-changing experiences for buyers and sellers.
Target Market
E-commerce companies, in general, target every customer who does online shopping. The major
segment of the market targeted by SnapDeal is the tier 2 and tier 3 cities. This can be derived
from the big decisions being taken at SnapDeal. Recently, SnapDeal acquired the recharge portal
Freecharge for $400 million. It also acquired 2 mobility based startups. This is in synchronous
with the increasing smartphone usage among the tier 2 and tier 3 cities. People in second and
third tier cities have a high internet usage through smartphones. Target market is discussed later
in higher details.
Organization Culture
Good organizational culture in a startup is very important. Technology startups dont have assets
like machineries. The success and failure of such firms depend on the people. SnapDeal is a very
entrepreneurial company. The employees are encouraged to achieve targets amidst the challenges

they face. The internal processes are designed in a way to foster bidirectional flow of information
in the organization.
There are 5 core values followed by SnapDeal as an organization:Innovation - SnapDeal believes in fostering creativity among its employees, each team and
individual are allowed to take their own decisions.
Change - SnapDeal believes in going for change and embracing each and every opportunity.
Openness - Sharing ideas and feedback is an important part of the culture of SnapDeal which
helps building a relationship based on trust and faith.
Ownership - SnapDeal believes in collaboration and individual accountability.
Honesty - Honesty for SnapDeal is doing the right thing always and under all circumstances.
The organizational structure is very flat. The minimal hierarchical structure present, ensures
mentoring and sharing of knowledge among the employees. The office has no cabins which
makes senior executives approachable. SnapDeal organizes

Industry Analysis
PEST Analysis
Political

The Government is striving to improve the infrastructure for digital services and
communication channels
Focus of the government is on increasing computer literacy
Focus on e-governance
FDI cap on Multi Brand retail
Increase in infrastructure budget which includes roadways and railways

Economic

Increase in purchasing power of the people

34% CAGR of ecommerce industry in period 2009-2014.
Volatile fuel prices which will have a deep impact on logistics
Increased number of smartphones users and increased internet access through mobiles
Increased use of plastic money such as credit & debit cards
Rise of virtual cash and e-wallet companies
High cost of Internet in India, at $61 per Mbps on a PPP basis, median costs in India is
one of the highest in the world

Social

Shortage of time and increase in the disposable income

Increasing trust in online shopping
Lack of computer literacy in rural India
The customer cannot touch or feel a product while online shopping

Technological

Increase in the number of Internet users

Increased use of social media platforms
Increased use of mobile apps.
Availability of cheaper data plans
Improvement of security in online payment methods
Improvement in 3G services and introduction of 4G services
Availability of Cheaper Smart phones
Emergence of Big Data & Predictive Analytics

The environment of India is conducive for e-commerce in the coming years barring a few
challenges.

Porters Five Forces Model

Supplier Power: MODERATE SnapDeal has over 150, 000 sellers on its web portal. In the ecommerce industry, suppliers are the manufacturers and wholesalers of finished products.
Suppliers who list their products on SnapDeal do not have a high bargaining power. This can be
concluded from the fact that switching cost of buyers is nil while comparing prices online. As a
result, e-commerce companies need to operate at extremely sensitive price points. Also, in its
previous business model of providing coupons and deals, SnapDeal had established a strong
supplier network. This large suppliers network reduces the bargaining power of a new supplier
willing to sell their product on SnapDeal. But at the same time, there are limited number of
marketplace based e-commerce companies in India. Therefore, suppliers can make a choice
based the benefit they get from the e-commerce companies.
Buyer Power: HIGH Buyers of this industry includes customers who shop virtually. Online
buyers can compare the product price available on multiple e-commerce channels like
marketplace, e-tailers. For buying a product, buyers have numerous options to choose from.
Also, the switching cost of buying from a competitors portal is nil. All these factors contribute
to the high bargaining power of the buyers.
Threat of new entrants: HIGH There are very less barriers to entry for domestic players to start
an e-commerce company in India. There is less amount of infrastructure required, products can
be displayed on a website, and tie up with payment gateway provider can be easily established to
start business.

On the other hand, government may plan to allow Foreign Direct Investment in the multi brand
retail which would apply in same effect to e-commerce as well. Currently, 100% FDI is allowed
in B2B e-commerce activities but not for B2C companies. In an event of the dilution of FDI
norms, domestic e-commerce companies would face tough competition from large global ecommerce companies.
Threat of substitutes: MODERATE The substitutes of e-commerce companies are brick and
mortar stores. Even though the share of e-commerce in the organized retail industry is minimal,
brick and mortar stores have seen tough competition from them. Many wholesalers and retailers
have put pressure on brands to help them compete with the e-commerce companies. The
penetration of e-commerce in the tier 2 and tier 3 cities is comparatively lower than the tier 1
cities. Though online marketplaces like SnapDeal are strengthening its distribution network in
tier 2 and tier 3 cities, the customer are slow in adapting to online shopping. Hence, the treat is
moderate.
Competition: VERY HIGH. The competition is e-commerce industry is very high with
numerous players in the industry. Substantial amount of the market share is distributed among
the top 4 companies (Flipkart, Amazon, Jabong and SnapDeal). Customers in this market cannot
be segmented on the basis of loyalty. Therefore, grievance against a company is strongly reduces
the brand value of the company.

INDUSTRY LIFECYCLE

Product Lifecycle Stage- Growth

The e-commerce industry is in the Growth stage of the industry lifecycle. There are a number
of new players like Amazon, shopclues etc joining the industry. The profit margins of the
industry are almost low or nonexistent, the demand is constantly increasing and due to the ever
increasing competition the players in the industry are either maintaining their promotional
budgets or raising them to give themselves an advantage. The quality of the products and

services being offered by these companies has also improved significantly. There has been a
tremendous increase in the distribution network and new segments have also been identified.
Companies are offering lower prices to attract buyers and are slowly focusing on customer
loyalty programs.

Industry Trend

The e-commerce sector in India has grown by 34% (CAGR). From 2009 to 2014 the sector has
grown to 16.4 billion USD and is expected to grow to 22 billion USD in 2015. Etailing the
segment of e-commerce which comprises of online retail stores and market places has grown at a
CAGR of around 56% from 2009 to 2014. The size of the etail market is pegged around 6 billion
USD in 2015.
Risks involved
A long term risk for the e-commerce industry will be a policy change in favour of FDI in ecommerce and multi brand retail. FlipKart & Amazon, with their physical delivery know-hows
and deep pockets are likely to kill all competitors who rely purely on marketplace model.

COMPANY ANALYSIS
SWOT Analysis
Strength

Cash On Delivery Service

A large network of retailers
Wide variety of Products
Strong Brand Value
Customer database management
Huge financial backing (Softbank has reportedly spent around 627 million on SnapDeal,
other major investors includes Alibaba and Foxconn)
Acquisition of Free Charge makes it the largest mcommerce company in India
Tie up with GoJavas logistics firm
Own logistics platform Safeship

Weakness

Focus is on increasing the customer base and not on increasing profits

Selling of products happens via the internet (Internet dependent)
Lack of customer loyalty

Opportunities

Global markets
Increase in the number of internet users in India- India to have 330 to 370 million users
thus becoming the Worlds second largest internet population
Growing Indian Economy and income level of individuals
Increase in m commerce market in India
Increased involvement of third party sellers (such as Chroma) for bulk selling of goods

Threats

A highly competitive market

Low or negative margins on sales
Rivals with enormous financial backing (Flipkart, Amazon)
Presence of large number of small e-commerce companies
Presence of large brick and mortar retail chains
Presence of large number of small retail stores which have higher customer loyalty

MARKETING STRATEGY
While adopting the marketplace model, SnapDeal executed on a zero marketing budget. In
focused on serving the merchants developed in the coupon business, and on developing a reliable
and user friendly marketplace website. Currently, SnapDeal is following an omni-channel
strategy. It is working on an India-specific software platform to help small local retailers go
online. In India, 99% shopping is done offline because customers want to touch-and-feel the
product, which can only happen at offline stores. SnapDeals plan is to capture this 99 percent
market by helping small time retailers earn more profits.
SnapDeal followed Flipkart in to e-commerce and to some extent occupied a drafting stance
behind FlipKart for most of its existence. FlipKart toiled hard to educate the customers and
created trust and an ecosystem for etail, SnapDeal unlike Flipkart always kept a low profile and
focused more on strengthening their business. In order to increase the presence among the seller
base, SnapDeal employed social media to share the success stories of small manufacturers and
distributors. With the focus on business, SnapDeal surpassed FlipKart in terms of assortment (at
least in count) and numbers of sellers on board. Unlike FlipKart, SnapDeal was designed to be a
marketplace from the very beginning. Therefore, SnapDeal had low capital involvement and easy
scalability. SnapDeals biggest challenge will be to maintain service standards while working
with a huge and diverse set of sellers.
SnapDeal has also used acquisition as a strategy to strengthen its presence in the e-commerce
industry.
Other Marketing Strategies Employed:

Customized email for each customer

Social media marketing
Use of online, print & media advertisements
Word of mouth advertisements
Shift to m-commerce with mobile apps

Points of Parity:

Uses an online market place model

Offers multiple payment modes such as cash on delivery, EMI
Allows shopping through mobile apps.

Points of Difference:-

Larger number of retailers present as suppliers

More focused on tier 2 and tier 3 cities
Largest mcommerce company in India

Segmentation Targeting Positioning

Demographic
On the basis of income, gender and age

Geographic Segment

On the basis of states

On the basis of Tier 1,2 & 3 cities

Behavioral Segment

Frequent users of the internet

Best price and discount seekers
People seeking to try new products & experiences

Target

SnapDeal is targeting all the internet users

Their primary targets are internet users in the tier 2 and tier 3 cities
Users who shop using via their smart phones

Positioning
SnapDeal is trying to position itself as the best online market place in India for both buyers as
well as sellers with respect to its rivals

Strategic Alliances
For a business to grow, firm needs to be on constant lookout for strategic partners. With a
business alliance, firms are able to reach new geographies, market segments and achieve higher
sales. SnapDeal has many strategic partners.
Launchpad - SnapDeal Launchpad intends to empower pioneers and creators the nation over
and give them a national reach for their product(s). It gives a stage to people/organizations to
share their most recent development, and the best ones get the chance to influence SnapDeal's
image and compass for making their advancement a business achievement. No more do sellers
need to scout for distributors in each geological area. SnapDeal gives them reach to 4000+ towns
& urban communities. This supports an just-in-time model among the dealers where there is no
worry of making substantial working capital investments and dead inventory. SnapDeal has
collaborated with IIM Ahmedabad Centre for Innovation, Incubation & Entrepreneurshipand IIT
Bombay Entrepreneurship Cell.
Den SnapDeal TV Shop- Den Networks Ltd. and SnapDeal entered a 50:50 JV to launch a TV
shopping channel. Even though, the concept of television shopping is not new, but creating a
channel dedicated for a single marketplace has never been seen before. This presents the sellers
with new offering by a marketplace, to reach more customers simultaneously.
Partnership with Croma- Jasper Infotech (SnapDeal) and Infinite Retails (Croma) entered into
a strategic alliance. Croma would now have a dedicated microsite (Flagship Store) on
SnapDeal.com to sell their inventory in Croma Retail outlets. This partnership would allow the
companies to synergize their presence both online and Offline.
Partnership with Indian Post- SnapDeal and Indian post partnered to jointly work to bring the
artisans and weavers on the platform. Through this initiative, small and medium entrepreneurs

would be able to reach a national audience. The post offices would be the drop point for artisans
and weavers, and India Post would deliver them to the buyers.

Aqcuisitions

Customer Buying Decision Process

Problem Recognition
SnapDeal through customized mails and messages is trying to influence the decision making
process of the customer in the problem recognition stage itself. It keeps the customer updated
about its huge line of products, their advantages, upcoming sales and events. Therefore if
suppose the customer feels the need to buy a product to satisfy his need SnapDeal is the first
market place the customer thinks off
Information Search
Through omni channel marketing SnapDeal strives hard to ensure that the customer knows about
its products and services so that SnapDeal is always present in the consideration or choice set of
the customer. The availability of the same product on lesser prices when compared to brick and
mortar stores also has a huge impact and influences customers to consider e-commerce sites in
their consideration set
Evaluation of Alternatives
Once the customer is online and looking for a product on SnapDeal the sites interface helps the
user to search various products according to their needs, for example filtering options such as
Low to High Price etc, this allows the user to search for a product with attributes that hold
greater significance in their minds. By providing a variety of products and giving the user the
flexibility to look for a products according to attributes that they deem significant SnapDeal tries
to ensure that the customer finds what they need on their online market place. Such features give
Online marketing sites such as SnapDeal an upper hand over conventional brick and mortar
stores, also features such as home delivery, flexibility of payment modes, 24x7 shopping facility,

customer service and the ease of shopping are other such features which place e-commerce at an
advantage over its brick and mortar rivals.
Purchase Decision
The sites of SnapDeal and other e-commerce sites are designed to provide various filtration
processes while looking for a product. These filtration features deal with the conjunctive,
lexicographic as well as the elimination by aspects heuristics used in the decision making process
by the customer. In short whatever may be the decision making process SnapDeal will come out
with a product for every customer.
Flexible customer oriented return policies along with a wide range of product availability also
helps in curbing the risk of various intervening factors.
Post Purchase Decision
Sites like SnapDeal encourage their users to return a product if they dont find a product
satisfactory, they also keep the customer updated on various offerings and ensure that the
customer loyalty is maintained through proper after purchase services.

Future growth (Forecast for 2015)

As per a report by Morgan Stanley the current market share of SnapDeal is 32% and the etailing
industry is expected to grow to $16 billion in 2015, therefore SnapDeal is expected to rake in
around $5.12 billion in 2015 alone.

Competitors

Flipkart
Amazon
Ebay
Market Share:- 44% Flipkart, 32% SnapDeal, 15% Amazon, 9 % others

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