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Snapdeal has some good news. And bad - The Ken

napdeal,onceaeriouchallengertofellowunicorn,Flipkart,inowjutafractionofit2015elf.Two-thirdtoeprecie.

TheKenentnapdealadetailedquetionnairelatweekutdepiterepeatedreminder,areplwanotforthcomingtill
thetimeofpulihing.
OnJanuar11,napdealroughtinJaonKotharifromHouing.Kothariwillnowethechieftrategandinvetmento cerinthe
compan.Thiiaigni cantappointment.Wellexplainwhinjutait.
Multipleourcecon rmthatthee-commerceellerrecordedaout30%dropinhippedrevenuein2016,comparedto2015.For
2015,napdealhadrecordedahippedrevenueofanwhereetweenR10,000-12,000crore.utfortheearendedDecemer
2016,thenumerdroppedtoaroundR8,000crore.
hippedrevenueequalookedrevenueminuulkorder.hippedrevenueinotGroMerchandieValue(GMV)utonetep
deeperthanGMV.
Now,thinggetalittletrick.IntheirumiiontotheMinitrofCorporateA air,marketplacedonotdeclaretheirgroale.
Thedeclaretherevenueearnedfromcommiion.napdealhantcompleteditumiionet.o,howhippedrevenue
tranlatetoactualrevenueinotknownaet.
utFlipkarthacompleteditumiion.Incompariontonapdeal,FlipkartgrewfromR10,000crorein2015toR15,000crore
in2016,thattooinnetrevenue.

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Snapdeal has some good news. And bad - The Ken

mailcirculatedwithinnapdealaftertheDiwalisale

Additionall,thedropinnapdealrevenuehacomeatthecotofcompetitiveneinthelucrativeelectronicproductcategor,
andmoilephone,inparticular.Therehaeenaigdropinphone.napdealhanoteenaletohifttheeproductanmore,
aaformeremploeewithacompetinge-commercecompan.Herequetedanonmitahewanotauthoriedtopeaktothe
media.Anotherlowtonapdealhaeentheaenceofexcluivemartphonedeal.ThelikeofAmazonandFlipkart,oth,have
etuparrangementwithrandlikeOnePlu,MotorolaandXiaomi.Iftheephonewerentrandearlier,thehaveecomenow.
Theinitialmarketingpaido ,andnowtheellthemelve,aoneofthepeoplequotedaove.Andthimiihurtingnapdeal
deep.TheaenceoftheedealmeanthatmotofIndia50millione-commercehoppertaawa.
Italotoppeddicountingheavil.Initiall,ouwouldeenapdealgiving30%or50%dicount.Itwoulddipintoitownpocket
utthatnowgone,aaource.Thecompanhatartedfocuingonproductthatgeneraterepeatuerwithanewfound
metriccalledrepeattranactinguer.Theentireweiteinowtunedtocateringtoproductthatcreatehait.
OnePluandMotorolamacreatetra ctemporarilutitiMicromaxandLavathatareringinginthevolume,aoneofthe
ourcequotedaove.Andfocuingonfat-movinggoodhameantthatthecompanurnmuchlethanuual.Therei
anotherreaonnapdealdidnotcompetewithAmazonandFlipkartontheeexcluivedeal.Noneoftheedealcomecheap,he
add.
napdealwouldhavetoupplementtheeexcluivedealwithfurtherdicountofitown.
o,tomakeupfortheloinigticketpurchae,napdealhatartedtofocuonproductthatcanemovedquickl.o,cheap.
oundfamiliar,doentit?

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Snapdeal has some good news. And bad - The Ken

Theemailnapdealsentalsospokeaoutfocusonuniteconomics

Withthi,napdealhaalotakenatepintohopclueterritor.Theentireuinemodelofhopclueretonellingcheap
goodatalowmarginandgeneratingvolume.
utthiiagamehopcluehaeenplaingforawhileandknowitcutomer.napdealfocuhaprimarileentheuran
market.
IntermofGMV,hopcluehaeeneeingthethirdpotforawhileandtheuncertaintihelpingu,aaenioremploeeat
hopclue.Hedidnotwanttoenamedahewantauthoriedtopeaktothemedia.
Thetakinowcutoutfornapdeal.Itwillnotonlhavetocompetewithhopclue(FlipkartandAmazonareclearlinadi erent
league,outofitreachnow)utalomaintainitpremiumdelivertag,whichithowo proudl.Itwillrealiethatplaingintier
twoandthreemarketianentireldi erentkettleof h,anditmanotealetoteamrollitwain,athehopclue
emploee.
ut,thereailverlining.
napdealigettingcloertoreakingevenonagromarginlevel.ThecompanloejutR10-20perunitafterlogitic,aida
formernapdealo cial,whorequetednotetoenamed.reak-eveniinlinewithwhatKunalahlhadtoldYourtorinan
interviewlatear.napdealiwellpoitionedtoturnpro taleinthenexttwotothreeear,heaid.
Yet,thipathtopro tailithacomeatacot:napdealinotonlloingmarkethareutalogrowthandtotalrevenue.Itiea
tohowgoodnumerwhenouarehrinkingquickl,aidanotherourcewhoinolongerwithnapdealuthaacceto
napdealdata.He,too,requetednottoenamed.venthoughagromarginpoitivecompanappeartolookgoodinthepre,
thidevelopmentwillnotimpreinvetor.Now,thiitroulingfornapdeal,addedtheperonquotedaove.Ita ectthenext
roundoffundraiing.Thevalueoftheronzeiundermined.Invetorwantreultandthi[volume]inotvanitforthem.

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Snapdeal has some good news. And bad - The Ken

Interetinglenough,napdealhadchangeditfocutouniteconomicin2016,afteritrealiedthatitwaloingtheGMVgameto
FlipkartandAmazon.incethen,napdealhatruggledtomakeupvolumeafteritreduceditmarketingpendforthe rthalfof
theear.ItturneduptheantejuteforetheigDiwaliale,whichpuhedthenumerupagain.napdealclaimedthatitpentR
200croreinmarketingjutduringtheigaleda.
Perhaptheetwatodivinenapdealcurrenttrategandoptionwouldefromtwotatementthatahlharedwith
YourtorinaninterviewinDecemer,Uptill2016,wecouldeithergroworhavegoodeconomic.In2017,wehavetoemartand
creative.
AndoftankmajuthaveuedtheircreativitandparachutedKotharifromHouing.HewaoftankmanatHouing,who,
eemingl,teadiedthehipandoldthecompan.Kotharimaeinforaimilartakatnapdeal.Hemaeoftankultimate
xer.

napdealcompetewithPatm.Vijahekharharma,founderandCO,PatmianinvetorinTheKen.

d a k 1
PatanjaliPahwa
ta Writer

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