 "Rohit Bansal")
Snapdeal is already ahead of competition, says Rohit Bansal, co-founder and chief operating officer of the Gurgaon-based e-commerce company. Ahead of an industry event in Bengaluru, the city which houses the headquarters of both Amazon and Flipkart, Bansal spoke to Nivedita Mookerji and Raghu Krishnan on the slowing investment scenario, the vision to multiply the number of transacting users on the Snapdeal platform, profitability targets, fundraising, valuation, competition and acquisitions, among other issues. Edited excerpts:
What will be the core themes for 2016 at Snapdeal?
Year 2015 was all about scaling up the technology team and intensifying efforts on logistics and payments through significant acquisitions. While we'll remain focused on those themes this year, we want to go beyond to make the best of the emerging trends in e-commerce such as micro-consumption on a variety of things because of widespread use of smart phones. If earlier people were consuming internet like lunch, now they are snacking every few hours.
What exactly is your company trying to do while capturing the new internet trends?
Users should be able to re-order what they have been using often without having to type it out. The company's database should be able to fetch the best option for any user through predictive technology. We are running a pilot of that technology to bring in personalisation in e-shopping, and will make an announcement when we are ready with it. Also, the process of returning goods should be completely frictionless to give you an example. Besides, we are looking at several acquisitions of varying sizes in the technology and logistics space this year.
How will that translate into numbers?
Our vision and mission is to have 20 million daily transacting users by 2020. Currently, we are at one million daily transacting users, which means the number of transactions could possibly be more. That number, which includes transacting users on Snapdeal, FreeCharge and Shopo, is higher than Amazon and Flipkart put together.
How much fund is the company planning to raise and what will it invest to reach the goal of 20 million a day by 2020?
The vision is sacrosanct irrespective of investments. We are well-capitalised now, but people keep talking all the time for investment opportunity. But, future investment or fund-raising is not necessary to attain the 2020 vision.
Will you be profitable by that time?
Yes, most likely we will be profitable by 2020.
What about gross merchandise value (GMV) of products sold? When could your GMV be highest in the e-commerce sector?
GMV is an outcome of the vision we have. I'm sure it will be much higher than what it is today. I guess we will be the largest.
Snapdeal CEO Kunal Bahl had said in an interview a few months ago that by the end of this financial year, Snapdeal would be bigger than Flipkart. People want to know more on that. Your comment?
We believe we are the most successful as we have the highest number of repeat visitors. Sixty-five to 70 per cent of them repeat every 30 days. And, as I mentioned, our daily transacting user number is higher than Amazon and Flipkart put together.
Have you noticed any change in investor behaviour in e-commerce?
I think 2016 will be a slow year from an investment point of view. This will be the third time we'll see this happening after 2008 and 2012. While 2014 and 2015 were active years in investments, the sense one gets now is that this year will be slow. Although consumption is not declining, investment cycle is slowing. Perhaps things will pick up by the end of 2016.
Does that worry you?
I would say it worries many companies. As for us, we believe in prudence and we are here for the long haul.
In a scenario of slowing investment, excessive valuation of e-commerce companies could drop. Right?
I cannot talk about others, but we do not spend time thinking over valuation.
Do you see plenty of consolidation in 2016?
I think the companies that don't have the fundamentals right are in trouble. Consolidation of smaller companies is likely.
Amazon is seen as the one driving competition in India because they have deep pockets. Do you agree?
I don't think it's correct to say any one player is driving competition. That said, Amazon has been around much longer than all others. And, Amazon's experience is good for us and the market.
While Amazon has the resource to offer deep discounts, how long will other e-commerce companies funded by investor money continue to follow the same pattern and bleed in the process?
Discounts and promotions are not our top two areas of spend. If it is a perception that we are offering deep discounts, it suits us (Laughs).
Recently, Flipkart co-founder Binny Bansal was made the CEO of that company while Sachin Bansal took a larger role. Is there a similar possibility at Snapdeal, where you could become the CEO and Kunal Bahl takes a larger role?
Not at all. We are happy the way we are.
Is an initial public offering likely?
It will happen at some point, but not in the next 12 months.
