Technology for logistics, buyer base instead of GMV; Is Snapdeal creating new trends?

Editor | Sep 10, 2020

Snapdeal is undertaking a modification in its operations and approach. The company is working on an online platform for its logistics. All the logistics partners of the ecommerce major will have to mandatorily integrate with the technology platform. This will help cut down the delivery time by a week.

Snapdeal is creating a plug and play model for it’s largely non-tech logistics partners. Jayant Sood, the company’s chief customer experience officer explains,

“We don’t have a single partner who covers the length and breadth of India and that is the reason why last-mile logistics still remains highly fragmented. As we plan to get to the depth of India, we need to partner with a whole lot of regional partners.”

Lack of transparency of consignments

Snapdeal has partnered with many local courier companies for delivering its consignments in Tier 2 and 3 cities. These companies invariably lack the technology to keep up with the times. This becomes a problem when Snapdeal wants to keep track of the consignment in its journey.

The integration will be done for free for all the logistics partners. It is expected to be completed in a few months.

Looking beyond GMV

Snapdeal’s CEO Kunal Bahl has declared that the company is not going to use Gross Merchandise Value (GMV) as a measure of its growth going forward. Branding GMV as an ‘outcome metric’, Bahl said,

“GMV by itself is not necessarily a good metric that demonstrates anything else outside the value of goods transacted.”

Bahl is not the only one; analysts have also denounced GMV. Sreedhar Prasad, partner of ecommerce and start-ups at KPMG feels that it was popular because it was a simple concept,

“It is a very trivial metric for companies in the etailing business but it used to help size up a company. Today, metrics to track average order value, growth in number of orders and cost of new customer acquisition are the three important ones that matter.”

Snapdeal is planning to work on its customer base, and work towards retaining the existing and creating new customers. With the funds slowly drying up, ecommerce is feeling the heat of draught-like situations. Is the growth rate on its downward trek? We hope not.

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