Thought drives Snapdeal, but what sustains the company and ensures that it grows at a very, very fast pace is a fierce dedication to innovative thinking. At Snapdeal, we believe that if we are able create a great buyer experience and a great seller experience, we would have built an extremely large and successful enterprise. And, in order to be able to do so in this fiercely competitive, ever changing Indian e-commerce industry where multiple buying options for consumers open up every other day, it's being innovative and having a problem solving approach that has helped us power through and emerge as the largest online marketplace in India.
From a strategy standpoint, our hypothesis that the real problem that e-commerce can solve in India is connecting the theoretically infinite demand and infinite supply, paid off handsomely. Unlike traditional e-commerce companies, who were buying everything that they were going to sell eventually, our secret to rapid scale has been our zero inventory business model. When you don't have to own everything you will eventually sell, then the velocity at which you can increase your assortment is incredibly fast, given you don't need to deploy significant working capital into inventory. As a result, we are now adding a new product on Snapdeal every 20 seconds. Having infinite shelf space was key to solving the problem of lack of organized selection that offline retail presents to Indian consumers.
Trust is one of the key limiting factors for users doing business transactions over the internet in India and thereby, the biggest challenge for an e-commerce company. Buyers are worried about their payments in case of bad shopping experience in terms of delivery timelines, product quality/size/ fit etc. Sellers are worried about their payments - whether or not it will happen on time, consumer frauds over the internet etc. Snapdeal's TrustPay - a buyer/seller protection service, is our attempt at solving this challenge. TrustPay provides consumers a complete guarantee on all their purchases on Snapdeal.com by placing the consumer's money in an escrow for 7 days during which if a consumer presents an issue, they can get their entire money back and sellers get the product back. Consumers who interact with the TrustPay brand become three times more likely to buy the product on Snapdeal. TrustPay also assures clear payment timelines and protects sellers from consumer fraudulent activities for the internet.
Logistics is another key function in any e-commerce company. At Snapdeal, we realised that we can't possibly create everything - we are essentially a technology company and if we were to start concentrating on non-core but critical functions like deliveries, we would probably have more control on this function but it would certainly not be scalable or sustainable in the long run. We thus launched Safeship - world's first ever fulfillment technology platform for sellers. All of Snapdeal's 30,000+ sellers are covered under Safeship,80% of the orders on Snapdeal get shipped within 24 hours, with 100% trackability for buyers and sellers.
Sellers get access to best in class courier pricing through the Safeship platform given Snapdeal is now the largest customer of most e-commerce focused logistics companies in India. We now have sellers shipping products from 200+ towns and cities to consumers in 5000+ towns and cities across India.
Further, given the wide variety of brands we were going to work with, from a category, expertise and scale standpoint, we realized early on that some of the brands will not have the intent or the ability to fulfill orders directly. This is where we introduced a fulfillment service for brands selling on Snapdeal, called "Snapdeal Fulfilled". A seller can consign his products to the closest Snapdeal Fulfillment Center, from where the products get packed and shipped out in less than 120 minutes after the order comes in. This has enabled an explosive growth in terms of the number of brands who want to sell on Snapdeal as it reduces the complexity for each individual seller to create fulfillment infrastructure to service e-commerce customers.
Realising that are numerous individuals/groups around us who probably have created a great product solving a real need, but have no resources or know-how to market and sell their innovation nationwide, Snapdeal recently introduced a new platform 'Launchpad' for innovators and inventors across the country to bring forth their ingenious creations. With this, we aim to bring forth the creativity of individuals and smaller groups of innovators whose products address the needs of end consumers, but don't have access to nationwide distribution. Through this platform, Snapdeal will accompany new innovators on their journey to making their brain child a commercial success. This will also provide consumers with new, innovative and cutting edge products which could fulfil/ answer a currently unfulfilled need/ problem.
Technology is central to any e-commerce company and the same is the case at Snapdeal. Our innovative approach towards technology has been the key factor fueling the company's rapid growth - 500% y-o-y. While the current catalog size is 4 million, the Snapdeal platform can easily support upwards of 50 million. We are the largest and most sophisticated user of cloud technology in the Indian e-commerce industry. Most of the technology implemented at Snapdeal has been built in-house. Our content management system has been created in-house and is extremely intelligent. It allows our sellers to upload product content in their respective format as opposed to a Snapdeal standard format. The content is then translated into Snapdeal's standard format before going live. The system also allows reconciliation of reconciled content from multiple sellers listing the same product. These powerful features reduce entry barriers in terms of on boarding vast number of sellers with varying technical skills thereby making it super efficient to list and update product content. It will be as easy to list products for a seller who sends content in email as it would be for a seller who wants xml integration of Snapdeal systems with their systems.
Further, given the increased penetration of smartphones, increasingly higher consumption of data on mobile phones and mobile being the first and possibly, the only point of entry to the internet for millions of consumers in India, the next wave of digital commerce customers will come from this medium. Having said so, it has been our constant endeavor to provide our customers with a seamless shopping experience whether they are shopping through the web or through their mobile phones. Factors like our ability to build browser and device specific experience as well as the rapid introduction of user experience enhancement features on our mobile platforms have enabled us to tap this medium early on with 50% of the sales on Snapdeal now happening through mobile based transactions - a twenty five fold growth as compared to last year.
The spirit and culture of innovation should manifest itself even in how a team is built and managed. The average age of a Snapdeal team member is 25, and it is this group of 25 year olds who in a couple of years have built a platform that has created life changing experiences for millions of consumers and tens of thousands of small businesses. We ensure every candidate goes through a very rigorous process of recruiting during which they are asked to prepare a presentation and a business plan for how they would manage their work if given the role they are interviewing with us for. This is a great sieve that filters out those can't think creatively when given a blank canvas, and ensures homogeneity of intellectual and inter-personal abilities within the company. Most importantly, it ensures we can sustain one of the key tenets of Snapdeal's culture - humility.
At Snapdeal, we employ an innovative approach at every level to not merely survive but thrive in a business environment brimming with challenges and opportunities. It is our focus on innovation that drove us to create "Launchpad" and, the foresight that innovation naturally leads to helped us understand and master the mobile shopping experience. To create new experiences and make life easier for the Indian shopper we realize that new thought and approaches are essential. It is this realization that drives our efforts and the way we build a company and its culture.
The author is CEO, Snapdeal
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