Until January last year, Wharton graduate Kunal Bahl and his IIT batchmate Rohit Bansal could be spotted across restaurants and retail outlets in Delhi suburbs trying to sell discount coupons to both owners and their potential customers.
When a restaurant owner told the duo earlier last year that he had got five customers from their website Jasper Infotech, it became an inflection point for Bahl. He launched Snapdeal.com — now popularly called India’s answer to Groupon, the world’s biggest provider of daily online deals.
About 400 packages to Kerala were sold in February. Our model is to go after unsold distress inventory,” says Bahl who along with Bansal had to shell out $3000 for buying the Snapdeal.in domain name — an investment that’s paying off well.
Along with Taggle, MyDala and Koovs.com, Indian e-commerce is now seeing a rise of young companies attempting to woo customers online with lucrative deals. The model is quite similar to how Groupon makes revenues (or losses at the last count). Snapdeal.com charges about 35% upfront for any deal.
The rest has to be paid directly to the merchant on delivery of service or good. The employees job is to get discount deals from mer-chants. They also handle customer calls and delivery of products. With 400 staff on the payroll, Bansal and Bahl want to get a share of India’s $500 billion retail market, of which nearly 18% is services business offered by sites like Snapdeal.
Globally, Groupon created waves earlier this year when it was valued at around $1.35 billion. Snapdeal too attracted attention of the legendarySilicon Valley investor Vinod Dham in February last year. Both Dham and Bazee.com co-founder Suvir Sujan invested nearly $12 million.
The website plans to close at over Rs 100 crore in revenues by December, within a year of its starting up. “It’s the two years we spent slogging at small shops in Delhi, trying to persuade them to buy our scheme is what is helping us. After all discount and group buying sites existed before we came in,” says Bahl, his hair uncluttered, as if not slept in days. Right now, Dealoftheday.com, Letsbuy.com and Groupon owned Sosasta.com, are all competitors.
But Snapdeal claims to have 70% share. “Our first priority was to make our brand felt across India,” says Bahl. Mumbai local trains are now painted with Snapdeal ads. In Bangalore, government buses which ferry IT workers are covered head to toe with Snapdeal banners. The multi-storeyed CyberCity towers in Gurgaon have large Snapdeal hoardings too. “The eight-lakh strong jungle of IT workers in Cybercity in Gurgaon is just the audience we need,” he says.
In the middle of the floor, just outside Bahl’s cabin is an LCD screen, which shows a seven-digit number moving faster than the clock. The company just crossed five million registrations this month. “Our target audience is between 18 and 35 years who loved to spend on the nice to have things like a good restaurant dinner, a soothing spa, or a pair of luxury sunglasses.
The distributors who are not able to sell directly sell at rock bottom prices through our medium,” he says. The discounts are heavy — up to 90% on the maximum retail price. Snapdeal charges upfront about 35% of the amount of the deal, for which the user has to pay online. “Even if a user is not able to avail the service or product due to any reason, at least he has not paid the whole amount,” says Bahl.
The company has now overtaken LivingSocial in last three months in terms of number of visitors, as per Alexa.com, to become the most visited group buying site just behind Groupon.com. “We are now getting offers for acquisition running into amounts so high, that we won’t have to work a single day in our lives,” says Bahl who together with Rohit and the management team owns 50% of Snapdeal.
Websites like MakeMytrip have partnered with Snapdeal to sell unsold inventory, for instance unsold seats on a chartered plane to Bhutan, which it can’t do on its own website. “I have already made it clear that even if I wasn’t owning the website, I would rather enjoy working for it as it’s so exciting,” says Bahl, just back from a trip to Darjeeling. Bought from Snapdeal, where else?
Filed under: Discount Stores, Food Court, Luxury Stores, Marketing, News & Articles, Online Shopping, Restaurant, Retail Formats, Retail Management, Retail Verticals | Tagged: $500 Billion, Discount Coupons, Groupon, groupon.com, ilvingsocial, luxury sunglasses, makemytrip, online deals, restaurant., Retail market, Snapdeal, snapdeal.com, soothing spa |