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BW Businessworld

E-tailer Snapdeal Snaps Out

Will the Indian e-commerce giant manage to recover or succumb to testing times? The war has only just begun. And one of the first ones to bear its brunt has been India’s 3rd largest e-commerce giant, Snapdeal

Photo Credit : Tarun Gupta


Indian E-commerce giant, Snapdeal is going through a tough time. From facing losses to the amount of Rs 3,316 crore in the FY ending March 31, 2016 to shutting down its newly acquired fashion portal, Snapdeal is finding it increasingly difficult to sustain itself.

According to sources, the company has been asked by existing investors to let go off 25 per cent of the work staff within the coming quarter. It is also learnt that Snapdeal’s digital sales team has been asked to go and downsizing of ‘off-role’ employees at Freecharge has also taken place. With problems surmounting for the e-commerce giant and no fresh investments, rumour has it that Snapdeal might soon be up for grabs.

When we spoke to Snapdeal, they categorically denied all reports of acquisition and restructuring of employee pools. BW Businessworld’s online platform, broke the story first on February 3.

Tremors are already being felt by Indian home-grown unicorns with Amazon increasingly becoming bullish with its expansion. Recently, Alibaba also laid the base for its formal entry into the Indian marketplace after a fresh investment of Rs 1,700 crore in Paytm. Interestingly, PayTm’s current biggest competitor, Freecharge is under the tutelage of Snapdeal.

As reported earlier, Alibaba was rumoured to have been in the bid to buy out Snapdeal for $2.2 billion, a fact which was clearly denied by Kunal Bahl, co-founder and CEO of Snapdeal. However, the rumours surfaced since both companies find a common investor in Softbank Group. Since then, Alibaba has reportedly been in touch with Flipkart and Shopclues as it looks to merge the market place for Paytm and also to consolidate its position in the Indian markets against the existing reign of Amazon.

In the cobweb of Indian e-commerce market place, competitors are finding it increasingly difficult to sustain the onslaught of foreign multinational giants. Reacting to the pressure, Indian home-grown companies are trying to counter the competition through mergers and acquisitions. Flipkart and Myntra shaking hands, Myntra buying Jabong among many others are perfect examples to show the sense of urgency among the Indian giants to consolidate their position against the global giants.

The war has only just begun. And one of the first ones to bear its brunt has been India’s 3rd largest e-commerce giant, Snapdeal. With dried up investments, closing down of non-core yet essential businesses and vanishing employees, it seems that Snapdeal is already being seen on the losing side. Whether or not we see a turnaround, the passage is increasingly becoming difficult for the Indian e-commerce giant. But will we see a turnaround? Only time will tell.