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Why Snapdeal failed

Why Snapdeal failed

From unicorn to disaster. From largest market share after Flipkart to minor market share. Check how India's largest ecommerce startup went down.


Written By: Naman Raj Singh
Views: 365
16/11/20
By InfoBite

INTRO

Snapdeal is an Indian e-commerce website which was founded on February 2010 by Kunal Bahl and Rohit Bansal. Snapdeal was second larget e-commerce portal as claimed by them only. So what happened to Snapdeal suddenly. The e-commerce whose valuation dropped to less than 1 Billion USD from 6.5 Billion USD. Let's check few reason why and how this happened..

 

NOTHING UNIQUE AND EXCITING

Snapdeal was doing nothing new in e-commerce market. They were doing exactly same thing which was already being done by Amazon and Flipkart. One side Amazon launched prime feature with fastest delivery and on the other side Flipkart launched COD feature and Mobile Phones flash sale. Amazon and Flipkart partnered with top brands to make their website successful. But Snapdeal couldn't match these two and failed to bring something new and exciting.

 

UNNECESSARY ACQUISITIONS AND CASH BURN

Snapdeal acquired many unnecessary startups and burnt hell amount of cash. They acquired Freecharge  at a valuation of 400 Million USD. They also acquired many startups like Exclusively, GoJavas, Smartprix and many more. They did unnecessary hiring from IIT's, IIM's and other top and prestigious institutes. All these hiring and acquisitions not worked for snapdeal and burnt huge amount of cash from their inventory.

 

NOTHING LIKE TEAM WORK, ONLY AUTOCRATIC SYSTEM

The founders of Snapdeal kept all control in their hands. No one was allowed to participate in decision making. Even the most experienced exectuives were not allowed to speak and act. Soon, many good professionals and executives started leaving Snapdeal.

 

NO FOCUS ON PROFITS

Snapdeal not at all focused on profits from starting. They were only focusing on Acquisitions, Expansions and Valuation Increament. All above factors burnt huge amount of cash from Snapdeal inventory, which resulted as SoftBank their main investor, stopped their funding and told Kunal and Rohit to sell Snapdeal to PayTM or Flipkart. But nothing happened like that.

 

CONCLUSION

These were the main reasons why snapdeal failed and turned into disaster. Now founders of Snapdeal has bounced back with a new version by selling few assets. But now it seems tough to compete with big giants in Market. They should expand their inventory in Grocery and Daily Products to sustain in market with profits.

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