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Snapdeal loss jumps five times

The higher losses are on expected lines and due to long term strategic investments, says the company

Shutapa Paul
Published: Jan 21, 2016 03:43:03 PM IST
Updated: Jan 21, 2016 05:23:37 PM IST
Snapdeal loss jumps five times
Image: Shailesh Andrade / Reuters
Snapdeal has been aggressively ramping up operations, logistics and technology to close the gap with Flipkart, and keep Amazon at bay

Jasper Infotech Pvt. Ltd., that owns online retail company Snapdeal, has reported burgeoning losses of over Rs 1,320 crore for the year ended March 31, 2015 as against Rs 264.6 crore in 2013-14. The higher losses were revealed by the media after it accessed the company’s filing with the Registrar of Companies. The company however, is unfazed by the five-fold loss growth and said that it was expected given their growth trajectory. Snapdeal has been aggressively ramping up operations, logistics and technology to close the gap with market leader, Flipkart, and keep Amazon, its closest rival, at bay.
“The losses are on expected lines,” a Snapdeal company official told Forbes India. “We have been making acquisitions and investments in technology, supply chain, logistics and people. We are building the business and this was expected.” The online marketplace has been on a growth overdrive last year and has made acquisitions like Wishpicker, a gifting recommendation firm (December 2014); Exclusively, a marketplace for luxury and premium products (February 2015) and RupeePower, a marketplace for financial services (March 2015). Snapdeal’s heavy duty acquisition of online recharge (for mobiles) company, FreeCharge for USD 400 million, came only in April 2015, followed by buyouts of MartMobi, an m-commerce startup; LetsGoMo Labs, a mobility solutions company; and Silicon Valley-based adtech platform Reduce Data.
“Most of the larger players would have invested heavily in operational excellence/ logistics and enhancing customer experience this year. These may be one-time expenses,” said Sreedhar Prasad, partner – e-Commerce, KPMG. The company, founded by Kunal Bahl and Rohit Bansal in 2010, also entered into a strategic partnership along with a minority stake at logistics firm, GoJavas in March last year.

Snapdeal is in advanced stages of talks for three more acquisitions. “These are long-term strategic investments that will set us apart (from competitors) and this is where our customers will stay with us,” the company official said. “And we have seen the results in terms of positive customer experience, which is being reported to us from third party agencies.”
Snapdeal has increased it gross merchandise volume (GMV) from USD 1 billion in August 2014 to USD 4 billion in August 2015. Flipkart is marginally ahead with USD 4.5 billion. The company wants to turn profitable in 3-5 years. “We want to get to a GMV that makes the company profitable in 3-5 years; that number would be the $15 billion mark,” Bahl, co-founder, Snapdeal had told Forbes India in a recent interview.

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  • Sandeep

    How long will this self defeating show keep going on?

    on Jan 21, 2016