E-commerce Companies Will Turn Profitable, Says Rohit Bansal
Snapdeal co-founder and chief operating officer Rohit Bansal on his company’s performance in 2015, tapping 130 million consumers by going regional and the key focus area for the company in the upcoming year
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Snapdeal co-founder and chief operating officer Rohit Bansal believes that the required investment in building infrastructure and technology is done with, e-commerce companies will start posting profits. He says that initial losses incurred by companies are a common phenomenon seen in every developed economy. In an interview with BW | Businessworld's, Bansal talks about his company’s performance in 2015, tapping 130 million consumers by going regional, the key focus area for the company in the upcoming year.
How was 2015 for Snapdeal? Can you list out three major achievements by Snapdeal in 2015?
2015 has been a very significant for us. Snapdeal multiplied its presence and consumer in the present year. At present, we have over 2 lakh sellers selling over 15 million products. We have expanded in 5,000-plus cities and have a consumer base of around 100 million users.
In 2015, we made several successful acquisitions, expanded our operations in different segments and gained high success in technology.
The three major achievements in 2015 are: Snapdeal’s success in reducing the average delivery time by up to 70 per cent, starting our own payment business (via Freecharge) and selling over 10 million wallets.
Though the revenue and valuation have grown tremendously for e-commerce companies, profit is still a concern. When can we see companies becoming profitable?
At present, our main objective is to bring every consumer into the e-commerce platform and make them shoo online.
You have to understand that e-commerce industry in India is still in early days and it requires huge investment in technology and building infrastructure as a result it’s nearly impossible for us to become profitable.
In the long run, of course, we are very sure to post super normal profit.
Any timeframe on this?
Currently, we haven’t set any timeframe (though he gave a sign that in less than 10 years e-commerce will become profitable).
When can we see consolidation taking place in Indian e-commerce industry? Your comment on this since Snapdeal merging with Paytm is also doing the rounds.
At present, we are not in a position to comment on the news of our merger with Paytm. In the long consolidation is something which is unavoidable. But again I would like to say everyone goes to the same college doesn’t get married.
Opportunities in India’s e-commerce industry are massive. We will see many company’s merging with each other, new companies making their way, MNCs coming among others. At present e-commerce accounts only 2 per cent of the total retail consumption and in the next 7-8 years it is going to touch 10 per cent mark which will make the e-commerce some $ 100 billion industry.
Which will be the key focus area for Snapdeal in the upcoming year?
We will continue to increase our consumer base. On 26th January, we will lunch multi-lingual platform Project Bharat where in Snapdeal shoppers can surf and shop in 12 different languages. It will be a big move since 130 million people who have internet accessibility are not very fluent in English. This will help us to tap the full potential of the market.
We will also continue to invest in technological innovation, smooth supply chain/infrastructure and increasing our overall consumption.
This year Snapdeal entered into a variety of segments, from real estate to automobile, which segment has been the most successful one?
When we talk about which segment was more successful than other it’s kind of bias, as example a father cannot be biased towards one child. But yes, sales in particular segment going up depends on seasons. In some season, sales in auto segment will go up and some announcement may boost real estate sales. As a whole, the overall response from every segment has been very magnificent.