Snapdeal general merchandise sales soar but it’s forced to conserve cash

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With a 50% growth in general merchandise (GM) sales, Snapdeal is closer to achieving its one stop shop goals. The etailer shared its annual sales trends for this segment during the period from 2016 – 2017 on Wednesday. The report showed a hike in overall sales of the GM category due to maximum purchases of home and kitchen products. The growth of sales in the kitchen category shot up by 200%.

Consumer shopping patterns on Snapdeal

Snapdeal’s senior vice president, Vishal Chadha said, “Our expanding general merchandise assortment ensures that we are able to provide for our consumers’ every need in this category. Coupled with the fastest delivery in the industry and a price range for every pocket, we are confident that this upwards trend will continue. Growth in this category is also strategic to our business — it ensures customer stickiness and more repeat purchases.”

Based on its annual sales trends one thing is certain, Snapdeal’s consumers are looking for energy efficient products that support a healthy lifestyle.

In metro cities it appears:

  • The purchase of LEDs grew by 50%
  • The sale of air fryers rose by 100%
  • The orders for juicers, mixers and grinders increased by 40%
  • The demand for furniture went 80% higher

Sale of religious and spiritual goods, pet products, plant and gardening supplies, paintings and home decor items also doubled over the course of 2016. These sales trends show that consumers prefer a wider range of product categories. The major contributors to Snapdeal’s successful sales are Tire II and II cities because of its array of product choices.

Another good performer is Snapdeal’s kid’s fashion category. The proceeds from this segment have tripled over time. Similar growth trends were experienced by Amazon in this department. As a result, the marketplace decided to boost this segment further.

Other best sellers on Snapdeal include, home decor, clothing and footwear, kid’s toys, power tools and water purifiers.

Snapdeal on cash conservation mode

Despite its new growth benchmarks, the ecommerce company is still in the midst of a severe cash crunch. For some relief, the etailer has hiked seller charges. According to reports, about 1,000 of its employees are likely to be laid off to conserve funds as the etailer struggles to obtain fresh funding. Snapdeal began saving it resources after speaking with SoftBank for a bridge round of funding, which was put off due to valuation differences.

A Snapdeal spokesperson mentioned, “On our journey towards becoming India’s first profitable e-commerce company in two years, it is important that we continue to drive efficiency across all parts of our business, which enables us to pass on the value to our consumers and sellers. We have realigned our resources and teams to further these goals and drive high-quality business growth.”

Some may argue that the etailer is on the verge of fading from the ecommerce scene. However, Snapdeal claims it is on the track to profitability. Being one of the most complained against online marketplaces hasn’t scored it many points, so will the lustre of its current sales disappear quickly? One can’t help but ponder.

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