How Snapdeal's full-stack value lifestyle playbook is empowering India's value-conscious online shoppers

Ambika Sharma, who lives in Paradip, Odisha, enjoys browsing on her new smartphone. Every month, she spends a small amount of money on clothes for her neighbours' children ​​or her hobbies such as gardening and buying items for her house.


With the rapid rise of smartphones and accessible internet, India is witnessing a second wave of the e-commerce boom, which comes from ‘value lifestyle’ buyers like Ambika. These are shoppers who are on a budget, aspire to own quality products, and may not have access to them in the smaller markets of their hometown stores.


As per a RedSeer report commissioned by Snapdeal in August 2021, the total addressable market for value lifestyle retail in India was worth US$88 billion in FY 2021 and is expected to reach US$175 billion by FY 2026, growing at an approximate CAGR of 15 percent. Today, 75% of the value market is served by the unorganized, physical retail channels. The balance 25% is served by organised brick & mortar and value eCommerce channels. By FY 2026, the share of Value eCommerce alone will rise to 22% and is estimated to grow faster in the Tier 2+ cities.

Value e-commerce: The next big leap in retail

While overall online shoppers are projected to grow to a whopping 350 million in FY26 as per the Red Seer Report, value-conscious buyers from India’s smaller cities and towns will propel the growth of Indian e-commerce.


Value-focused platform, Snapdeal is leveraging this enormous opportunity to bring together good quality products, technology, and logistical intelligence to tap into this underserved market for buyers like Ambika who are speedily adapting to online shopping.


According to the Red Seer report, emerging shoppers will account for a majority of Indian online shoppers, up from 52 percent in FY21 to 73 percent in FY26. Although they are likely to be spread across all tiers of cities and towns in India, this price‑sensitive demographic is likely to be prominent in the Tier II+ cities.


Snapdeal has built a range of asset-light capabilities in a collaborative way including Power Brands, UniMove logistics platform, its private cloud Cirrus, and a partner-led expansion into omnichannel distribution, to work with the larger ecosystem and serve the value-conscious consumers.

Components of Snapdeal’s full-stack value play

i) Trendy, good quality merchandise at affordable prices from a network of quality-focused sellers


Snapdeal consciously works with a narrow base of reliable sellers experienced in e-commerce processes to deliver quality experiences to users. The sellers consistently list new products to stay on top of the latest trends and also typically offer low pricing throughout the year.


Snapdeal follows a six-point quality management system that seeks to improve the quality of products offered by sellers for better customer experience through multiple interventions, including review and quality control of listings, insights to the sellers on catalogue and content enrichment, analysis of feedback from customers, sample quality checks through mystery shopping, screening of products at source, and curation of assortment in partnership with sellers.


ii) Power Brands

..

Snapdeal’s ‘Power Brands’ program seeks to aggregate supply of affordable, good quality merchandise in a structured and scalable way. 13 Power Brands have been created across popular categories like apparel, fashion accessories, footwear, home and kitchen, health and wellness, personal grooming, etc.


These brands are licensed to a select network of sellers on the basis of their capabilities to offer good quality products at affordable prices. Snapdeal owns the brand IP, and the sellers and manufacturers who sell under the brand name, own and manage the inventory on their own. Snapdeal supports these sellers by providing appropriate design, quality and packaging guidelines as per their brand standards.


iii) Discovery-led, personalised buying journey


Snapdeal’s user interface is designed to encourage discovery-based shopping, replicating the offline journey of buyers. The discovery-based nature of its interface helps users find products that may interest them. During the six months ended September 30, 2021, 60.25 percent of the orders placed on its platform were made through discovery and without using a search term.


iv) Asset-light logistics platform


Snapdeal follows an asset-light logistics network and its deliveries are handled by several third-party logistics (3PL) networks, allowing it to accumulate large historical datasets on package tracking and courier performance at a pin code level. Using this, Snapdeal’s courier allocation engine selects the optimal 3PL for each shipment, based on the 3PLs’ past performance, cost, and speed of delivery.


For deliveries managed through the UniMove logistics platform, the specific legs of the transportation journey are allocated to different 3PLs in order to obtain better cost and operational efficiencies. The platform provides Snapdeal with operations control that is similar to a captive logistics arm, but without its necessary capital expenditure. It also allows Snapdeal to reduce fulfillment costs and offer a better user experience with faster and more reliable deliveries, including in smaller cities and towns.


v) High touch, easy-to-reach, and multilingual user support


Offering robust user experiences, Snapdeal’s customer support services include instant messaging with agents and chatbots on WhatsApp, telephonic conversations with live agents, self-help tips, FAQs and interactive voice response (IVR) menu or help-line number. Its user support caters to the needs of all users, including non-tech savvy shoppers, and provides user support in various Indian languages. For the six months ended September 30, 2021, 98 percent of WhatsApp queries were addressed within one minute.


vi) SD Cirrus powers its proprietary technology stack


Snapdeal has developed its technology stack, using open source technologies to tailor its platform closely to the needs and preferences of value e-commerce users as well as its own business operations. Its technology platform integrates its sales, user service, and fulfillment operations.


Snapdeal maintains its competitive advantage by continually automating tasks over time and utilising its data analytics capabilities to glean insights about user behaviour and preferences. Snapdeal’s own data infrastructure and cloud service, SD Cirrus, enables it to launch new features in a short period of time and has minimised the need for outsourced technological solutions and reduced operational expenditure.


vii) Expanding into omni-channel distribution


Snapdeal plans to expand into omni-channel distribution to expand its reach and complement its online offering. Snapdeal intends to create a distribution channel through offline stores, partnering with existing neighbourhood stores and new franchisees across the country.


Snapdeal believes that it can derive service and cost advantages from being closer to its users. The offline channels will also help increase customer trust due to their ability to touch, feel, and try products. This may also contribute to improved user engagement, through real-time and in-person interactions.

Sharp positioning, smart execution

Snapdeal’s positioning is very clearly defined as a destination for good quality merchandise at value prices. More than 95 percent of the products sold on Snapdeal are priced below Rs 1,000 with over 77 percent of its business coming from repeat customers.


It has more than 40 million monthly active users, a monthly average for the six months ended September 30, 2021 and has had over 550 million page views every month ​​between April 1, 2021, to September 30, 2021. Its delivered units have grown 86.3 percent over the last two quarters from 4.61 million in Q4 FY21 to 8.59 million in Q2 FY22 (Based on the count of units of shipped orders during the six months ending September 30, 2021).


Snapdeal’s growth is also accompanied by positive unit economics. Due to its focus on high-margin categories like fashion, home and general merchandise, beauty, and personal care and due to its low cost of fulfillment, Snapdeal has been consistently making positive contribution margins per delivered unit for the past 3.5 years.


Snapdeal’s differentiated business model with a full-stack value playbook is well-positioned and well-timed to serve India’s value-savvy buyers by catering comprehensively to their requirements of affordable pricing, good quality, high-quality customer experience and presence across digital and physical channels.


Disclaimer: Snapdeal Limited is proposing, subject to receipt of requisite approvals, an initial public offering of its equity shares & has filed a draft red herring prospectus (DRHP) dated 20.12.2021 with the Securities and Exchange Board of India, which is available at SEBI, BSE and NSE and the websites of the BRLMs at AXISCAPITAL, BoFA, CLSA and JMFinancial. Any potential investor should note that investment in shares involves a high degree of risk. For details, potential investors should refer to the DRHP, including the “Risk Factors”. The above article is sponsored by Snapdeal and is not an endorsement of Snapdeal by YourStory and/ or its affiliates and should not be construed as investment advice. This article is published on the Internet and is not intended as a specific/ targeted publication or distribution to persons in the United States (US), and is not an offer for sale within the US of any equity shares or any other security of the Company. Securities of the Company, including its equity shares, may not be offered or sold in the US absent registration under U.S. securities laws or unless exempt from registration under such laws.


Source :- https://yourstory.com/ Author :- Team YS ( ) Date :- February 08, 2022 at 12:37PM

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