Snapdeal hikes seller charges, adds new fashion brands, devalues self – all to enter profitable zone

Editor | Sep 15, 2020

Galloping losses have zeroed in on another casualty. Leading online marketplace Snapdeal is planning to take drastic measures to balance its financial situation. While the company has declared a 125% increase in its losses, it also confidently said it would turn profitable in two years. The company has now conveyed to its sellers that it will be hiking its commission received from sellers.

Sellers are obviously unhappy, as it will affect their earnings. One seller said anonymously,

“The net impact will set us back by 3-4% on the selling price of the product.”

The company is planning to increase the cost of products in its fashion segment as well. More worryingly, it might be firing nearly 1,000 employees due to the cash crunch.

The new rates

The commission charged is now 17% of the sale price (earlier 15%) and an increased packing charge of Rs. 17.25 per shipment. However, the logistics charges per shipment have come down to Rs. 46 (earlier Rs. 57.50).

Adding to the b(r)andwagon

To augment its 40% income from fashion, Snapdeal has introduced 120 more brands to its fashion segment. Vishal Chadha, senior VP business, said that they are working to be the go -to place for fashion shoppers,

“We realized that there is an ever growing demand for branded fashion among Indian consumers. And in line with our brand philosophy, Unbox Zindagi, we are always looking for ways to help our consumers fulfil these innate desires. The expansion of our fashion assortment is a major step in that direction.”

Brands like Steve Madden, Polo, Nautica and United Colors of Benetton will be part of the ensemble. Will this help reduce the number of customer complaints against the company?

The recent events indicate that Snapdeal’s planning might need some rework. The company had to devalue itself to raise capital, is looking at letting employees go, but has added more brands to its fashion segment. Given the current muddy waters, how will Snapdeal become profitable in the next two years?

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