The Rise and Fall of Snapdeal: A Case Study
Founded in 2010, Snapdeal was initially focused on deals and discount offers. Over the next few years, it evolved into India’s largest e-commerce site, with more than 50 million monthly active users at its peak. However, over time, Snapdeal began to lose traction and market share to competitors like Amazon and Flipkart. By 2017, Snapdeal announced that it would shut down all of its operations; and it subsequently entered into an agreement with Flipkart to sell its assets and brand name.
Aimless vision
In the early days, Snapdeal was very focused on its customer base and offered significant discounts to customers. However, as the company grew, it shifted its focus to becoming an online marketplace like Amazon and eBay. This change in focus led to a loss of sight of what made Snapdeal successful in the first place: its customers. By the time Snapdeal realized this, it was too late and customers had already begun to desert the platform.
Cash Flows Quickness
Snapdeal was once a rising star in the world of e-commerce, but it failed to maintain its momentum and ultimately fell behind its competitors. One of the main reasons for its decline was its inability to generate positive cash flows quickly enough to keep up with its rivals. This case study will examine the reasons behind Snapdeal’s fall, in hopes that other companies can learn from its mistakes. It will first explore how Snapdeal went about generating revenue before looking at some of the factors which led to its eventual downfall. It will then identify key lessons which should be learned by those in charge of making decisions at other companies, concluding with an analysis of what could have been done differently by either company. The following are some of the key takeaways this case study aims to illustrate make sure you do not overspend on fixed assets; when entering new markets, make sure you have the right team in place; know your market inside out; and think long term rather than just focusing on quarterly results.
Snapdeal, the hottest ecommerce startup
In February 2016, Kunal Bahl, the CEO and co-founder of Snapdeal, was riding high. His company was India’s hottest ecommerce startup. It had just raised $500 million from investors including SoftBank, Alibaba, and Foxconn. And it was valued at $5 billion. But by March 2017, Snapdeal was in trouble. It had to lay off hundreds of employees and give up its office space. Its valuation had fallen to $1 billion.
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What Went Wrong?
In 2016, Snapdeal was India’s largest online marketplace. But by 2018, the company was struggling to stay afloat. So what went wrong? There are many factors that played a role in the rise and fall of Snapdeal. One of these is Indian rival Flipkart. When it launched its mobile site, Snapdeal lost access to some of its most valuable customers. Another key moment for the company came when two of its biggest investors, SoftBank and Alibaba, decided not to make any further investments in the company. It’s important to note that this decision didn’t have anything to do with finances; rather, they felt that their involvement would only complicate matters. And then there were external factors such as demonetization and tax issues – both of which hurt Snapdeal’s bottom line.
Another factor contributing to the company’s failure was an inability to adapt quickly enough to the changing market landscape and ever-changing customer needs. For example, after Amazon entered India, Snapdeal saw its market share drop from 40% in 2015 to 10% just three years later.
Greed and a lack of accountability
In its quest to become the top e-commerce player in India, Snapdeal made a number of fateful decisions that led to its downfall. The company was plagued by greed and a lack of accountability, which resulted in it making a number of poor decisions. As a result, Snapdeal is now struggling to stay afloat. It has been looking for investors for a few months but has not been able to find any yet. It has also sold some of its stake to larger companies like Amazon, eBay and Alibaba but this may not be enough. Many believe that without the aggressive bidding process and no clear direction from founders Kunal Bahl and Rohit Bansal, Snapdeal would have still been an e-commerce giant.
What Have We Learnt From This Case?
We have learnt that a business needs to have a solid foundation in order to be successful. This means having a clear idea of what the business is, who the target market is, and what the USP is. Furthermore, it is important to have a plan for how to acquire customers and how to scale the business. Additionally, we have learnt that it is important to monitor cash flow carefully and keep costs under control. Finally, we have learnt that it is important to always be adapting and evolving as the market changes.
Conclusion & Analysis
In conclusion, Snapdeal’s fall was due to a number of reasons. Firstly, they were late to the game and could not compete with the likes of Amazon and Flipkart who had already established themselves in the market. Secondly, their expansion plans were too ambitious and they ran into cash flow problems. Lastly, their relations with their investors soured, which led to a lack of funding. While it is possible that Snapdeal could have made a comeback, it ultimately failed due to these reasons. Had they been able to raise more funds from investors or establish themselves as early as others did, then there might be a chance for them to bounce back.
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