Snapdeal’s losses increase; long-term plan in place

Online marketplace, Snapdeal has reason to worry, with its losses increasing. The company’s mother ship, Jasper Infotech, has recorded a loss of Rs. 1,328.01 crores. The company’s losses have increased by nearly five times the amount recorded in the last financial year.

Overzealous tactics to keep up with competition

Snapdeal’s problems are not due to drop in sales, but an over the top spending to keep abreast with leading competitors like Amazon and Flipkart. Flipkart’s woes are not so far behind either. The company has recorded a loss of Rs. 2,000 crores; a surge from Rs. 715 crores in the previous year.

Advertising and huge discounts are eating up a major chunk of the profits of ecommerce companies, in spite of getting a good inflow of resources through foreign investments.

Counter measures in Snapdeal’s sleeve

Snapdeal’s Chief Product Officer, Anand Chandrasekaran maintains that things will start looking up for ecommerce in the next ten years. He says that India’s consumption GDP will stand at $2.5 trillion, and ten percent of this will come from ecommerce. He says ecommerce companies will have to prepare for improved performance by focussing on profitability, customer satisfaction, and business scalability and reduced friction.

He says, “Businesses will have to ensure bringing in innovative consumer-centric solutions to provide an enhanced experience for all stakeholders. In the process of laying the roadmap to create the most impactful digital commerce ecosystem, there are four focus areas which will require special attention – Digital payments, O2O & Omnichannel, Vernacular interfaces, and predictive analysis.”

Chandrasekaran also stresses on the importance of digital payments. “Focusing on improving customer experience, 2016 will see introduction of more efficient digital payments solutions,” he says.