Unbox Diwali Sale: A festive sale at Snapdeal, even amid reboot

A private security gurad stands at a gate of Snapdeal headquarters in Gurugram on the outskirts of New Delhi, India. (Photo: Reuters)
Going through its fourth pivot in its seven years of existence, the rebooted Snapdeal 2.0 has again gone back to having yet another festive sale. However, this time around it claims to be targeting specific groups of mass market customers and is not competing with the major players.

 

According to sources close to the company, even as it goes through the process of transforming its business model, which includes cutting down on office space, employees and focusing on a new revenue model, the company is organising festive season sales where lesser-known economical brands take precedence over their high-end counterparts.

 

Last month, Kunal Bahl, co-founder of Snapdeal, charted out the new path for the company after looking at the business models of everyone starting from Amazon, eBay, Rakuten, Yahoo Japan, Lazada and Tokopedia.

 

After almost five years of running a pure-play online marketplace, Bahl decided to change to an open marketplace model. The pivot was triggered after Snapdeal called off a merger deal with Flipkart orchestrated by the SoftBank Group in July this year.

 

However, Snapdeal has again launched a six-day ‘Unbox Diwali Sale’, offering massive discounts going up to 70 per cent on a wide variety of popular categories. In addition to the discounts, Snapdeal is bringing offers through multiple partnerships with service providers such as Yatra, HOOQ, BookMyShow and SpiceJet. “We have curated an assortment of best-selling products that are favourites of our shoppers and have worked closely with our sellers,” said Vishal Chadha, chief business officer, Snapdeal.

 

According to industry insiders, Snapdeal is trying to target a specific segment of customers. “Snapdeal is focusing on the value segment. They are focusing on full HD TVs priced at Rs 17,000 and five-seater sofa sets available for Rs 16,000, among other things. They know that a person looking for a Rs 70,000 smart television might head straight to Amazon or Flipkart. So they are focusing on lesser-known brands. The company, however, is staying away from the unbranded flea market segment,” said a source close to the company. Sources claimed the transition of the business model was happening in the background and most of the work around it would be complete after Diwali. The company’s rebooted version plans to cater to the long-tail seller market.

Just like earlier, co-founder Rohit Bansal will handle all the operations while Bahl will oversee the working of the company. They plan to target the small and medium enterprises’ base, bringing as many companies on board as possible and making them advertise on the new portal. It will be from these advertisements that they will earn revenue. “Existing business-to-consumer players such as Flipkart and Amazon do not cater to the needs of the long-tail of sellers. There will be greater focus on enabling small businesses as even now it is a complicated onboarding, listing and payments process for them. Preference will be given to local unbranded products that are available only with local sellers,” sources said.

 

The company plans to earn revenues from advertorials placed by sellers. “The plan is under way. Even this festive season sale is being done at a scale that it is profitable for the company,” added the source.


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