India has an internet user base of about 243.2 million as of January 2014.[1][2] Despite being third largest user base in world, the penetration of Internet is low compared to markets like the United States, United Kingdom or France but is growing much faster, adding around 6 million new entrants every month.[3] The industry consensus is that growth is at an inflection point.[4] In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities.[5] Demand for international consumer products (including long-tail items) is growing much faster than in-country supply from authorised distributors and e-commerce offerings. As of Q1 2015, seven Indian e-commerce companies have managed to achieve billion-dollar valuation. Namely, Flipkart, Snapdeal, InMobi, PosterGuy,[6] Quikr,OlaCabs, and Paytm (wing of, One97).[7]

1. 1
CASE STUDY ON GROWING SAGA OF E – COMMERCE
GIANT SNAPDEAL IN INDIA WITH SPECIFIC REFRENCE TO
INDIAN E- RETAILING INDUSTRY
Varun Kesavan, Research Scholar, Palakkad, Email Id – varunkesavan@yahoo.com
INTRODUCTION
India has an internet user base of about 243.2 million as of January
2014.[1][2] Despite being third largest user base in world, the penetration of Internet is
low compared to markets like the United States, United Kingdom or France but is
growing much faster, adding around 6 million new entrants every month.[3] The
industry consensus is that growth is at an inflection point.[4]
In India, cash on delivery is the most preferred payment method, accumulating 75%
of the e-retail activities.[5] Demand for international consumer products
(including long-tail items) is growing much faster than in-country supply from
authorised distributors and e-commerce offerings.
As of Q1 2015, seven Indian e-commerce companies have managed to achieve
billion-dollar valuation. Namely, Flipkart, Snapdeal, InMobi, PosterGuy,[6]
Quikr,OlaCabs, and Paytm (wing of, One97).[7]
Marketsize and growth
India's e-commerce market [8] was worth about $3.8 billion in 2009, it went up to
$12.6 billion in 2013. In 2013, the e-retail segment was worth US$2.3 billion. About
70% of India's e-commerce market is travel related.[9] According to Google India,

2. 2
there were 35 million online shoppers in India in 2014 Q1 and is expected to cross
100 million mark by end of year 2016.[10] CAGR vis-à-vis a global growth rate of 8–
10%. Electronics and Apparel are the biggest categories in terms of sales.
According to a study conducted by the Internet and Mobile Association of India,
the e-commerce sector is estimated to reach Rs. 211,005 crore by December 2016.
The study also stated that online travel accounts for 61% of the e-
commerce market.[9]
By 2020, India is expected to generate $100 billion online retail revenue out of which
$35 billion will be through fashion e-commerce. Online apparel sales are set to grow
four times in coming years.[10]
India's retail market is estimated at $470 billion in 2011 and is expected to grow to
$675 Bn by 2016 and $850 billion by 2020, – estimated CAGR of 10%..[11]According
to Forrester, the e-commerce market in India is set to grow the fastest within the
Asia-Pacific Region at a CAGR of over 57% between 2012–16.[12]
As per "India Goes Digital",[13] a report by Avendus Capital, the Indian e-commerce
market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel
constitutes a sizable portion (87%) of this market today. Online travel market in India
had a growth rate of 22% over the next 4 years and reach Rs 54,800 crore ($12.2
billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore
(US$800 million) in 2011 and estimated to grow to Rs 53,000 crore ($11.8 billion) in
2015.
Overall e-commerce market had reached Rs 1,07,800 crores (US$24 billion) by the
year 2015 with both online travel and e-tailing contributing equally. Another big

3. 3
segment in e-commerce is mobile/DTH recharge with nearly 1 million transactions
daily by operator websites.[citation needed]
A new sector in e-commerce is online medicine, selling complementary and
alternative medicine or prescription medicine online. There are no dedicated online
pharmacy laws in India and it is permissible to sell prescription medicine online with
a legitimate license.[citation needed]
Online sales of luxury products like jewellery also increased over the years. Most of
the retail brands have also started entering into the market and they expect at least
20% sales through online in next 2–3 years.[14]
Key drivers in Indian e-commerce are:
 Large percentage of population subscribed to broadband
Internet,[11] burgeoning 3G internet users, and a recent introduction of 4G across
the country.[12][13]
 Explosive growth of Smartphone users, soon to be world's second largest
Smartphone user base.[14]
 Rising standards of living as result of fast decline in poverty rate.
 Availability of much wider product range (including long tail and Direct Imports)
compared to what is available at brick and mortar retailers.
 Competitive prices compared to brick and mortar retail driven
by disintermediation and reduced inventory and real estate costs.
 Increased usage of online classified sites, with more consumer buying and
selling second-hand goods

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 Evolution of Million-Dollar start ups like Jabong.com, Saavn, Makemytrip,
Bookmyshow, Zomato Etc.
India's retail market is estimated at $470 billion in 2011 and is expected to grow to
$675 Bn by 2016 and $850 Bn by 2020, – estimated CAGR of 10%...[citation
needed]According to Forrester, the e-commerce market in India is set to grow the
fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012–16.[15]
As per "India Goes Digital",[16] a report by Avendus Capital, a leading Indian
Investment Bank specializing in digital media and technology sector, the Indian e-
commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011.
Online travel constitutes a sizable portion (87%) of this market today. Online travel
market in India is expected to grow at a rate of 22% over the next 4 years and reach
Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated
at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000 Crore
($11.8 billion) in 2015.
Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$24 billion)
by the year 2015 with both online travel and e-tailing contributing equally. Another
big segment in e-commerce is mobile/DTH recharge with nearly 1 million
transactions daily by operator websites

5. 5
SNAPDEAL’S PENETRATIONINTO INDIAN E – RETAILING
INDUSTRY
It is never easy to start a business. You need to work on your ideas, find capital
and investors and then you need to work hard to get results. Ask those who have
succeeded, they tell you it is the best feeling ever when an idea takes off to
places. Snapdeal set a niche for itself in the sphere of e-commerce in India. In
2010, when Kunal Bahl and Rohit Bansal wanted to start their own business,
they chose an offline couponing business and named it Money Saver. 15000
coupons were sold in three months and it was time to take the business to the
next level.
It was after they met investor Vani Kola that the venture really took off. The first
meeting did not go well but after another round of discussion, Vani Kola’s
venture capital firm decided to invest in Snapdeal. Initially started as an offline
business, Sneapdeal went online in 2010. It was a bumpy ride in the first few
months. Mistakes were made, but lessons were learnt. It is this kind of hard work
and diligent attempt to offer the best to the customers that gave Snapdeal its
initial success.
However, the biggest decision of the founders came in November 2011. Inspired
by the success of Alibaba.com, Rohit and Kunal wanted to create something on
similar lines. The deals business was shut down and an online marketplace was
opened instead.It was a make or break decision. Snapdeal had a huge market
share in the deals business at that time and starting something new was very

6. 6
risky and the move surprised the investors too. At that point of time, eBay was
the only marketplace in India.
It was a decision that was not for the short term. When Rohit Bahl managed to
gain the nod the board, the present form of Snapdeal took shape. The very fact
that Snapdeal is valued at a billion dollars today is a testimony to the vision of its
founders. Currently, more than 50,000 sellers sell around 5 million products on
Snapdeal. The company’s phenomenal growth in a short span has been a
remarkable journey. The company began to concentrate on building scale and
improving speed. When eBay invested in Snapdeal, they brought immense
experience to the table.
Snapdeal is one of the fastest growing e-commerce companies in India today
with the largest online market place. In just two years, the company went from
scrapping their group coupon business and starting an online marketplace to
become a billion dollar company. Its year on year growth is almost 600%.The
average age of the workforce at Snapdeal is 25. Their values – Innovation,
Change, Openness, Honesty and Ownership drive them to press for greater
success. The company’s growth had been phenomenal but it is their continued
effort to bring the best to the market and their zeal to succeed as the best B2C
(Business to customer) marketplace is what sets them apart. Great ideas might
be important for a business, but it is the confident implementation of those ideas
and the right effort which are more important. It is action and not mere thought
that gives results.

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KEY MANTRAS OF SNAPDEAL ARE AS FOLLOWS
1. Never start a venture or business by one self.
2. Entrepreneurs need to be active in recruiting.
3. Getting back feedback of business and feedback from people who are external to
the company.
4. The feedback on company mainly what it Is standing for
5. It is tremendous to be a shameless entrepreneur.
6. Building strong brand by following cultures.
7. Building strong homogeneous cultures.
8. Building a right business in India the sense of vision objective and the usage
9. Selling the products according to customer’s needs and wants.
10. Creating a strong brand into the life of customers.

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11.Providing and doing servicing the society in the form of CSR activity.
12.Enhanced call centre capacity by creation of jingle by an independent banks.
13.A Services Oriented Architecture: What has allowed us to run the business,
and grow ten times in two years, has primarily been the technology that we built.
Our entire technology infrastructure has been built in house. It’s custom-made.
That’s a mighty feat considering that we are a full-fledged e-commerce site. The
vast majority of this technology has been built in two and a half years by 120
engineers. One of the primary things that allowed us to do this is the architecture.
We have a fully distributed service-oriented architecture made up of mostly
standalone subsystems.
14.Engineers as Recruiters: One of the biggest challenges in building this complex
system very fast is building a team that is able to deliver. We grew from 20
employees to over 200 in a little over two years with a very young field of
engineers. Hiring in India is incredibly difficult because a lot of the good
engineers leave for Europe. So, we did a couple of cool things. First of all, we
have an HR team that specializes in technical recruiting, and are themselves
engineers. We also have managers who are very hardcore techies, a lot of them
are engineers too. That helps attract people because they look forward to the
learning experience, and they know they will make a real contribution to the
company. “We are able to convince people that once they join a company like

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Snapdeal, as opposed to a very big multi-national company, what they are
building directly affects their life and the lives of people around them”.
15.Engineers as Entrepreneurs: Every team member is encouraged to be an
entrepreneur. Teams do not own technology deliverables, they own business
metrics. Metrics as in how many clicks, in how many scrolls can people get to the
search results that they’re looking for? Things of that nature, things that directly
impact the business.
16.Stand-ups: We align business priorities in a very effective manner. One of the
key things that we have done to make it more effective is the interaction between
teams is very informal. All of the decision making in terms of technology, road
map planning, decision making, what needs to go in, what doesn’t need to go in,
how much you get from other teams – all of this interaction is very informal. A lot
of the meetings happen in the corridors. We stand there, make a decision in five
minutes flat, we make the call, then we move on.
17.Divide and Conquer: Each team has complete freedom on the technology
choices that they make in terms of adopting a technology that appeals to them. A
very small team, like two or three people, can rapidly explore a whole bunch of
technologies that are out in the market and then apply them with very effective
results.

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Funding
Snapdeal has received 7 rounds of funding:
 Round 1: In January 2011, Snapdeal received a funding of $12 million from
Nexus Venture Partners and Indo-US Venture Partners.
 Round 2: In July 2011, the company raised a further $45 million from Bessemer
Venture Partners, along with existing investors Nexus Venture Partners and
Indo-US Venture Partners.
 Round 3: Snapdeal then raised a 3rd round of funding worth $50 million
from eBay and received participation from existing investors – i.e. Bessemer
Venture Partners, Nexus Venture and IndoUS Venture Partners.[8]
 Round 4: Snapdeal received its 4th round of funding of $133 million on Feb-2014.
The 4th round of funding was led by eBay with all the current institutional
investors, including Kalaari Capital, Nexus Venture Partners, Bessemer Venture
Partners, Intel Capital and Saama Capital all participating.[9]
 Round 5: Snapdeal received its 5th round of funding of $105 million in May-2014.
The 5th round included investments by Blackrock, Temasek Holdings,
PremjiInvest and others.[10] The round valued SnapDeal at $1,000,000,000.[11]
 Round 6: Snapdeal received its 6th round of funding in Oct-2014
from Softbank with investments worth $627 million in fresh capital. This makes
Softbank the largest investor in Snapdeal.[12]
 Round 7: Snapdeal received its 7th round of funding in Aug-2015 from Alibaba
Group, Foxconn and Softbank with investments worth $500 million in fresh
capital.[13]
 Round 11:One of the world's largest pension funds, Ontario Teachers' Pension Plan,
and Singapore-based investment entity Brother Fortune Apparel have led the 11th

11. 11
round of funding in online marketplace player Snapdeal. The latest investment is
$200 million (Rs 1,367.6 crore) in Jasper Infotech-owned company.
Acquisitions
 In June 2011, Snapdeal acquired Bangalore-based group buying site,
Grabbon.com.[14]
 In April 2012, Snapdeal acquired esportsbuy.com, an online sports goods retailer
based out of Delhi.[15][16]
 In May 2013, Snapdeal acquired Shopo.in, an online marketplace for Indian
handicraft products.[17]
 In April 2014, Snapdeal acquired fashion products discovery site,
Doozton.com.[18]
 In December 2014, Snapdeal acquired gifting recommendation site,
Wishpicker.com.[19]
 In January 2015, Snapdeal acquired a stake in product comparison website
Smartprix.com.[20]
 In February 2015, Snapdeal acquired luxury fashion products discovery
site, Exclusively.in.[21]
 In March 2015, Snapdeal acquired 20% stake in Gojavas.com.[22]
 In March 2015, Snapdeal acquired ecommerce management software and
fulfillment solution provider, Unicommerce.com .[23]

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 In March 2015, Snapdeal entered into the financial services marketplace by
acquiring a majority stake of RupeePower which provides a digital platform for
financial products to customers. Mr. Tejasvi Mohanram, the founder of
RupeePower would continue to be the MD&CEO of the company. [24][25][26]
 In April 2015, Snapdeal acquired mobile-payments company FreeCharge.com.[27]
 In September 2015, Snapdeal acquired Reduce Data, a programmatic display
advertising platform. [28]
RECENT NEWS ON SNAPDEAL
Snapdeal to invest $100 m in Shopo
E-commerce major Snapdeal will invest $100 million (Rs.665 crore) in Shopo as it
looks to build up the venture into a one million seller-strong platform. Shopo is a
mobile-only platform, which aims to bring small and medium businesses (SMBs) that
cannot register on bigger e-commerce portals.
Business results
In the year 2012-13 Snapdeal had said that it expected revenues of
about ₹600 crore (US$91 million). Betting big on the growth of mobile commerce,
Kunal Bahl, the CEO, said at the time that 15-20 per cent of the sales on Snapdeal
came through m-commerce. Snapdeal.com expected the total sale of products
traded on its platform to cross ₹2000 crore (US$300 million) in the fiscal year 2013-
14 helped by its robust growth in the past two years and the growing popularity of e-
commerce in India.[29] In June 2014, Snapdeal announced that it had achieved the

13. 13
milestone of 1000 sellers on its platform getting sales of over Rs 1 crore.[30]Snapdeal
is the fastest growing e-commerce company in India with gross sales over 3 billion
dollars annually.
Awards and recognition
 eRetailer of the Year & Best Advertising campaign of the year - Indian eRetail
awards 2012 organized by Franchise India in Feb,2012.[31]
 Winner of Red Herring Asia Awards 2011.[32]
 E-commerce site of the year at WAT awards that took place in Jan 2012,
Mumbai.[33]
 Voted amongst the Buziest brands of India in afaqs's annual buzz-making poll.[34]
Trivia
 In June 2011, Shiv Nagar, a village located in Muzaffarnagar district in Uttar
Pradesh, India, became SnapDeal.com Nagar (nagar means town), after
Snapdeal had installed 15 hand pumps for drinking water. The villagers voted to
name their hamlet after Snapdeal to express their gratitude.[35][36]

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QUESTIONS
1. What are the various challenges present for KELLOOG’S CORN FLAKES?
2. Which kind of technology can be adopted for SNAPDEAL in near future?

15. 15
REFERENCES
1. http://www.thehindu.com/todays-paper/tp-business/snapdeal-to-invest-100-
m-in-shopo/article7623047.ece
2. https://en.wikipedia.org/wiki/E-commerce_in_India
3. https://en.wikipedia.org/wiki/Snapdeal
4. http://successstory.com/companies/snapdeal
5. http://www.aerospike.com/blog/snapdeal-keys-ecommerce-success/
6. http://www.ibtimes.co.in/indias-top-e-commerce-firms-billion-dollar-
valuation-photos-635739
7. http://techcrunch.com/2015/08/03/snap-to-it/

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