The start of September marked just the beginning of Snapdeal’s festive season sales efforts. The etailer is adamant to regain its lost ecommerce popularity. After quitting the merger deal with Flipkart, the etailer focused on being smart with Snapdeal 2.0.
Apart from this grand scheme the etailer currently plans o use festive season demand to push sales and itsself into former glory. It has already reserved Rs.40 crore for festive sale promotions and invested in its logistics arm Vulcan Express.
3-4 rounds of festive sales round coming soon
Snapdeal already announced it will have multiple special promotions lined up for the festive period. And, it will avoid clashing sales events with ecommerce biggies.
Multiple people aware of the developments at the online marketplace stated that it is likely to conduct 3 to 4 festive sales from the last week of September. As a pure play marketplace, Snapdeal is expected to concentrate on non-branded products across few categories, the same sources revealed.
The chief executive of RedSeer Consulting, Anil Kumar said, “They are targeting an unbranded product market, along with the low-end of the income demographic, similar to what ShopClues and Naaptol are doing. The company still has great brand recall and their strategy will be to leverage that.”
Should Snapdeal limit customers?
For the ecommerce sector, the pre-Diwali period is the most lucrative. Competitors Amazon and Flipkart are attempting to derive maximum sales this month. Snapdeal, on the other hand, may be targeting 40,000 pincodes as it seeks to dominate in terms of logistics costs this season.
Sreedha Prasad, partner-strategy and operations, KPMG India mentioned that “Smaller companies should focus on specific geographies than look to cater to every possible pin code. If the core consumer base is in North India, they should focus on that part of the country, along with, maybe, 10 more primary cities like Bengaluru and Mumbai. If you keep adding pin codes you have to keep servicing them, and the cost of servicing gets higher.”
What should Snapdeal sell?
RedSeer reports show that Indian ecommerce firms made gross sales of approximately $2.2 billion (Rs.14,000 crore) during the last festive season. It is estimated that Snapdeal generated Rs.500-600 core gross sales during this period.
Experts in the ecommerce industry feel that Snapdeal should focus on high-margin categories like fashion apparel and accessories. Not, mobiles and white goods where big players, Amazon and Flipkart, have established a monopoly.
Prasad stated, “Accessories or private labels, for example, are rather high-margin segments and the burn is not very high. The major cost associated with these is the cost of logistics. Smaller players, if they could attack specific pin codes using their own logistics network, that could be a good ploy.”