Its employees are not the only ones Snapdeal has managed to tick off. Word is the online marketplace is going to lay off hundreds of employees to manage its expenses and earn profits. In its attempts to do this, the etailer has also rubbed its sellers the wrong way.
Many vendors have left Snapdeal because it shuts its eyes when it comes to reality. It has increased seller charges and added new brands to turn profitable and now it is accused of withholding seller payments. Payment defaults appear to be the last straw for quite a few on the platform as they have threatened to leave the marketplace stranded.
The online merchant group, All India Online Vendors Association (AIOVA), has informed its 2000+ members that Snapdeal is a credit risk and owes Rs.300 – Rs.400 crore to all its sellers as payment for orders completed. The group has advised its sellers to stop selling on the marketplace to avoid any further losses.
AIOVA stated in an email to the commerce minister Nirmala Sitharaman, “Our organisation estimates that on any given month, this company (Snapdeal) holds Rs 300-400 crore in the form of outstanding dues, and goods in transit or refunds. Our constituents are now having a sense of credit risk while dealing with this company due to the past experience in losing money and no immediate relief in case of Askmebazaar and other marketplaces. We are looking forward to your intervention or assurance from you in this matter. Until then, we have requested our constituents to immediately stop sales on this platform.”
Even the eCommerce Sellers Association of India has cautioned its 1,500 online vendors to stop selling with the etailer for the same reasons.
It appears not.
A spokesman for Snapdeal said, “There is absolutely no connect between the steps taken to rationalise the team and routine business operations, including regular payment of seller dues. All dues, including towards sellers, continue to be settled as per established processes and timelines without any change. Any apprehension in this regard is without basis. Business at Snapdeal continues to grow steadily towards profitability and all sellers’ dues continue to remain fully secure, as at all times. In case of any query, sellers’ partners are advised to connect with the company directly and not pay heed to baseless rumours, including unverified media reports.”
Snapdeal is sinking in losses which have increased by 125%. The online marketplace registered about three lakh sellers last year and now many of these claim to be facing payment issues.
AIOVA mentioned in its letter the commerce minister, “There is no law or regulation in the country which safeguards this money which is collected by the marketplace. This money can be easily siphoned off by the promoters, investors, founders etc in vanity activities which has led to the company’s downfall.
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