Snapdeal won’t survive in its current form of B2C marketplace, say sellers

Snapdeal is irrelevant as a marketplace, say sellers

Greek philosopher Heraclitus said, “The only thing that is constant is change”. And etailer Snapdeal is taking this quote a little too seriously because a lot is changing in the Indian ecommerce firm at a rapid pace.

From a cosmetic change of its logo, colour theme & tagline to changing its policies every other week, Snapdeal appears to be in a desperate need to find a change that will take the firm near profitability. It can mean two things: the etailer is blindly implementing ideas without a complete game plan or they have finally figured out a way to win against Amazon, Flipkart with a complete blueprint.

Change in look

Late last year, Snapdeal faced a lot of flak for brand ambassador Aamir Khan’s controversial statement. The marketplace’s market value was affected as customers started trending #AppWapsi, #BootoutSnapdeal hashtags.

If controversies were not enough, the ongoing war between Flipkart and Amazon has pushed Snapdeal into oblivion. So an image makeover was much needed.

Snapdeal spent Rs. 200 crore for shedding the old identity and revamping the look & feel of the company.

Change in policies

Let’s move on from cosmetic changes to internal changes.

The etailer has changed many of its seller policies in the last 9 months. And surprisingly, unlike other ecommerce firms like Flipkart, few changes made my Snapdeal are being well-accepted by sellers.

Indian Online Seller spoke to online seller, Arjun Arora about Snapdeal’s recent policy changes and if it has affected (positively/negatively) his ecommerce business.  

• Reduced returns period

Sellers’ Verdict – Happy

Snapdeal put an end to a 30 days return policy in July this year. The revised return policy stated that customer would have only 7 days to return products.

“It’s a welcome move that the return period has reduced to 7 days and this should help sellers avoid unwanted returns in long term. However, I feel for some categories such as ‘Beauty and Personal care’ returns need to be stopped. A “No Return” policy has to be put in place as these products cannot be accepted back for hygiene reasons. So different return policy is needed for different categories,” reasons Arora.

• ‘No questions asked’ returns policy no more

Sellers’ Verdict – Happy

Besides reducing returns period from 30 days to 7 days, Snapdeal also bid adieu to ‘no questions asked policy’ by asking buyers to furnish proof and give genuine reasons. This change was obviously welcomed by sellers but some claim that the etailer is yet to put this in practice.

Arora says,

“Unfortunately we haven’t seen any effect of it till now. Customers are still returning the product with absurd reasons and no proof is being provided to us beforehand. Snapdeal needs to follow Amazon India policy for returns where customer has to directly contact the seller and submit the proof and if the seller does not respond within a timeline or customer is not satisfied the case can be escalated to SD Team. In current scenario, this really has not made any difference to returns till now. And even SD team is reluctant to share proofs properly with the seller in case of refusal of claim.”

• Reformatted Seller rating framework

Sellers’ Verdict – Happy

IOS published a report last week on how unverified reviews on Amazon are ruining sellers’ business. This is why Snapdeal sellers are glad about the etailer changing the key features of the seller-rating framework on its platform. As per the new outline, rating will be refreshed daily, only verified customer ratings will be published, and customers can rate a product only after delivery.

• Charging for Returns

Sellers’ Verdict– Not Happy

This is one policy change that sellers are not happy about at all. Snapdeal started levying shipping charges for courier returns from July 2016. According to sellers, product returns are approximately 20% of total orders and irrespective of the reason of return, the etailer is charging sellers, which is unfair.

“Due to this I have delisted all my products from SD website. Technically speaking role of Snapdeal is to complete the sale before they charge anything to the seller. In this case seller is dispatching the product on time but if customer cancels the order the seller is being unfairly penalized for no fault of their,” shares online seller Arjun Arora with IOS.

• Revised weight calculation for certain SUPC(s)

Sellers’ Verdict – Not Happy

This is the biggest pain point for vendors (particularly medium/small size businesses) listed on Snapdeal. In June, the firm changed its weight calculation for the umpteenth time. The fluctuating rates have made it difficult for sellers to calculate their right dues while settling accounts. Not to forget, incorrect shipping charges have been eating away sellers’ earnings. Is the marketplace trying to extract more money by confusing sellers?

“They are charging Rs.130/- for just 200 Gms dress. I am fed up with snapdeal now & thinking to raise this issue in social media. These extra charged hurt me financially. More than 4 Lacs have been charged extra in last 6 months. I am sending them mails with the evidence but nobody is ready to reply,” wrote Sunil Kumar on IOS.

Irrelevant marketplace for sellers?

Snapdeal believes that the rebranding project will help to increase their market share in the ecommerce industry, which is currently dominated by Flipkart and Amazon. But sellers are of an opinion that instead of wasting money on logo and jingles, the etailer should work on its ethical policies.

Commenting on Snapdeal’s rebranding project, a seller wrote:

Many also believe that this image makeover will end up being an abnormal surge of energy before dying off eventually. The marketplace has not paid many sellers since November last year. As a result, several vendors have stopped selling on Snapdeal.

“We feel Snapdeal is now irrelevant as a marketplace and won’t be surviving in its current form of B2C marketplace for long. We at AIOVA have been trying since past 10 months to save Snapdeal by reaching out to many senior leaders including Kunal Bahl. Any policy change in Snapdeal doesn’t show any effect or change in business as they are not concerned with the actual problems that sellers are facing. As a result, even consumers have stopped coming to Snapdeal,” says All India Online Vendors Association’s (AIOVA) spokesperson while talking to IOS.

Or is it dark before the dawn?

The Indian ecommerce player recently made a switch from a pure marketplace to an inventory-based model by setting up a wholesale unit.

This model is unfair to thousands of sellers listed on a marketplace. But it has worked for etailers like Amazon, Flipkart, Jabong and Myntra that have their own sellers. It helps to gain better control over quality, quantity, sales, pricing and delivery of products.

Snapdeal used to proud of its ‘pure marketplace tag’. But it seems the piling losses, dwindling market share and degrading reputation has forced the etailer to adopt its rivals’ strategy.

The question is will it pay off? Can the changes made to brand’s identity, seller policies and business model help the online marketplace to sustain? Will Snapdeal fly high after taking this leap of faith or will it crash down?