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  • Published on: 14th September 2019
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The Snapdeal Story

Flipkart's bid to take over Snapdeal

Group: S-21

S. No.

Name of Student

Mobile Number

Email id


Rajesh Kumar Sah


[email protected]


Gaurav Singh


[email protected]


Lt Col Himanshu Suryavanshi


[email protected]

The Snapdeal Story

Flipkart's bid to take over Snapdeal

"SoftBank is exasperated by repeated objections and delays triggered by Snapdeal's smaller shareholders. More recently, Snapdeal founders are possibly exploring alternative proposals to merge with other e-commerce firms like Infibeam. There's a sense that SoftBank won't pursue the merger even if 5% of the shareholders are unhappy with the revised Flipkart proposal".

Tuesday, May 2, 2017. Kunal Bahl and Rohit Bansal seem to be in deep thought ahead of the Board of Directors' meeting at their office in Okhla, New Delhi.  When they started out in February 2010 as a deals platform providing discount coupons to interested customers, their own aspirations may have been different than what they soon turned out to be. In a little over a year, they found themselves riding the e-commerce wave that the entire nation was soon going to ride too, albeit on different boards. Kunal Bahl and Rohit Bansal were going to be in the driver's seat. As their joint venture, Snapdeal transformed into a full-fledged e-marketplace from a deals platform in September-November 2011and they joined the likes of ebay, Alibaba and Flipkart in tapping the huge online marketing potential in India.

Getting investors to align with their vision was not daunting, if not out rightly easy. Homegrown Venture Capitalists Nexus Venture Partners were the first investors to see the spark in the young entrepreneurs and chose to invest $10 million in their e-marketplace adventure. Rounds of funding from other big investors followed and soon Snapdeal was the fastest growing startup in India with a total valuation of $ 1 Billion. The biggest venture capitalists and individual investors have all invested in Snapdeal at some point in time, including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital, Blackrock, Temasek Holdings, PremjiInvest, Alibaba Group, Foxconn and SoftBank. At one point, Snapdeal was growing at a rate of 600%, unparalleled in the Indian startup arena.

“Flexibility and nimbleness have marked Snapdeal's rapid growth. Kunal Bahl and Rohit Bansal need to maintain the sprint as competition intensifies”

-Forbes India, Feb 20, 2014

A good business thrives on good vision above all else. The success of any business is a direct outcome of the way its founders/managers can perceive future challenges and opportunities and make the most of both. Naren Gupta, co-founder and managing director, Nexus Venture Partners, describes Kunal Bahl as a “six sigma entrepreneur”. The Nexus team had met Kunal when he was working on the idea of the offline printed discount coupon. The team wasn't sure if this idea would be scalable, and did not seem very convinced of the offline model either. They suggested an online model instead, which is what Kunal did the next year.

“Once the model was clear, I knew that Bahl had the execution capabilities to make the business a huge success. We were thrilled to back him. We were convinced that only a marketplace of services will be able to achieve scale in India and expanding into products would be a logical extension.”

-Naren Gupta, Suvir Sujan, Co-founders, Nexus Venture Partners

The Snapdeal Story

Scripting success is not easy and growing at a faster pace is even more difficult. Kunal Bahl shares his interesting journey of founding Snapdeal and growing it really fast. “The hidden star behind Snapdeal's success is Vani Kola, MD of IndoUS Venture Partners,” says Kunal. Vani on the other hand says modestly, “This speaks volumes about Kunal and Rohit. They are smart and driven, as most entrepreneurs are. They have additional great leadership qualities, as you can see they are modest and humble, they attribute their success to me, their team and others, who were only enablers. They take responsibility for creating success, but shy away from the limelight.”

Founding and Early Days

Kunal and Rohit launched their first business offering offline discount coupons to customers in 2007-08. The business was doing fairly well. In order to attract more investment into their business, Kunal started approaching investors with their proposal. Among the first few investors that Kunal met was Vani Kola of the IndoUS Venture Partners. “That first meeting didn't go off too well and we thought we were never going to hear from IndoUS or Vani ever again”, recalls Kunal. However, IndoUS were back the other day sounding positive about the business stating they would want to know a little more about it. Subsequent meetings were fruitful and IndoUS decided to invest in Kunal and Rohit's business. Four months later, Snapdeal was launched.

A few merchants working with Snapdeal suggested a look at the online business option. All they knew about the online business model at that time was enough to register a domain. On the 4th of February, 2010, the duo launched in a brave move. Teething problems ensued and they made a lot of mistakes. What saved them from failure was their agility, the capability to adapt, and an obsessive effort to track customer preferences. Going in with a sense that they did not know what would work, they learned proactively and swiftly; a strategy that paid off well. Taking risks without fear of failure and leaning from mistakes saw them survive.

Growth, Scaling and Vision

“The only reason as to why we've made substantial progress over the last two and half years is because of our people. We are a business with no plants and machinery and our success and failure is dependent on the quality, focus and the motivation of our people; our speed, our sluggishness — everything is our people.”

-Kunal Bahl

Co-Founder, Snapdeal

There hasn't been much time to look back for Kunal and Rohit since their company started out. Apart from being thoroughly professional, Kunal, Rohit and IndoUS MD, Vani Kola's relationship is one of mutual admiration. While the school-time friend duo attributes most of their initial HR management at Snapdeal to Vani, the latter showers all the credit on to the two of them. As per Vani, they have a great ability to listen, learn and absorb like a sponge. They execute business with a quiet confidence with a mind open to everything. They consistently worked at enhancing the learning potential of the company while everyone in the company learnt from each other.

Hiring the right people for the right job is not an easy task, and hasn't been so for Snapdeal either. “All the mistakes that I've made are to do with hiring the wrong people,” Kunal says. It takes a bit of time to understand an incompatible hire and keeping that resource for too long damages the company's interest. Over time, Snapdeal has constructed a process where the fits or misfits are identified early. Culture at Snapdeal is characterised by speed, or “the ability to move very very fast”, in Kunal's words. Hiring at Snapdeal commenced soon after the funds started flowing and the business started growing. Within a couple of years Snapdeal grew from 30 employees to 1500 employees by 2012. The company hasn't looked back since, and today Snapdeal is offering more than 35 million products across 800 plus diverse categories from over 125,000 regional, national, and international brands and retailers. With millions of users and more than 300,000 sellers, Snapdeal is the online shopping site for Internet users across the country, delivering to 6000 plus cities and towns in India. Few of the initial employees part of Snapdeal's success story were Vijay Ajmera, VP Finance, K Sandeep, VP Marketing and Ankit Khanna, Product Head.

Key Investors

Investors are an important part of the start-up ecosystem. In a marketplace brimming with start-ups working in varied genres of business, the key to success doesn't revolve around innovating on the product or redefining the service that one wants to offer. Start-ups need to find the right strategic investors who share their vision and, ultimately provide the right capital to materialise the idea as well as make it a commercial success. Technology and innovation focussed magazine TechInvest, in their recent survey of start-ups have identified a big shift in the way start-ups are sourcing their capital. A paradigm shift in the entrepreneurs' understanding makes them realise that strategic capital is more valuable than idle capital. Start-ups are, in fact, teaming up with the right advisory groups to identify the right investors. Snapdeal attracted investments from few of the most influential investors in the Indian market.

SoftBank Group

SoftBank Group Corp. is a Japanese telecommunications company and Internet corporation established in September 1981 with its headquarters in Tokyo, Japan. The company started out in 1981 as a distributor of computer software. The company provides mobile telephony and mobile data communication services via 3G and 4G networks. It also provides content for mobile Internet and sells mobile phone handsets. SoftBank has entered into strategic alliances with Qustodio Technologies, Alibaba Group and Sumitomo Life Insurance Company in order to further its business interests in fields other than communications and software. The company was formerly known as SoftBank Mobile Corp. and rechristened itself as SoftBank Corp. in May 2015.

SoftBank first invested in Snapdeal in October 2014 with a USD 627 million financing round valuing Snapdeal at USD 1.2 billion. Currently, SoftBank is the largest investor in Snapdeal and own a 33% stake in the company.

Alibaba Group

Alibaba Group Holding Limited is a China based group that provides e-commerce solutions for Customer to Customer, Business to Business and Business to Customer sales services via web portals. It also offers electronic payment services, search engine for shopping and cloud computing services. Jack Ma founded the group by establishing the website Alibaba web portal, a Business to Customer e-commerce portal which connects Chinese manufacturers and foreign buyers. In December 1999, Ma and 17 other founders released their first online marketplace, named "Alibaba Online". In May 2017, Alibaba's market cap grew to USD$305 billion. Also, Alibaba went on to become one of the world's top 10 most valuable companies. In June 2017, Alibaba's market cap rose to USD$360 billion. The company surprised analysts by their sales growth forecast. At the same time it surpassed Tencent and went on to become Asia's most valuable company.

Alibaba Group first invested in Snapdeal in Aug 2015.

Foxconn Technology Group

Foxconn Technology Group is the trade name of Hon Hai Precision Industry Co. Ltd. The group was founded by Terry Gou, who is also the chairman of the group. Foxconn is a Taiwanese multinational electronics manufacturing company headquartered in Tucheng, New Taipei, Taiwan and is the world's largest contract based electronics manufacturing company. It is also the fourth-largest information technology company in terms of revenue and the largest private employer in China.

Foxconn first invested in Snapdeal in Aug 2015.

Ratan Tata and Azim Premji

Though the Tata Group has not formally invested in Snapdeal, Mr. Ratan Tata is said to have made a personal investment in the company and his name figures among the investors on the company's website. The size of this personal investment is not known. PremjiInvest, the investment fund by Mr. Azim Premji, Chairman Wipro is also a minority shareholder in Snapdeal.

The Competition

The market for online retail in India has grown phenomenally in the last few years. As per a recent Nasscom report, the Indian e-commerce industry is likely to touch USD 65 billion by 2020. This paradigm shift in the way customers shop has led to a rapid move to the online marketplace model for even established retail store based mega-retailers. Snapdeal being one of the unicorns in the e-marketplace category of start-ups faces tough competition from it's competitors Flipkart and Amazon.

Flipkart vs Snapdeal

With a valuation of USD 11.6 billion, Flipkart is undoubtedly the largest e-commerce company in India today as it rides high on a fresh round of investments amounting to USD 1.4 billion coming from Tencent, Microsoft and ebay in the month of April, 2017.

“This is a landmark deal for Flipkart and for India as it endorses our tech prowess, our innovative mindset and the potential we have to disrupt traditional markets. It is a resounding acknowledgement that the home-grown tech ecosystem is indeed thriving and succeeding in solving genuine problems in people's daily lives across all of India.”

-Sachin Bansal, Binny Bansal


While expectations around the size of India's e-commerce have significantly reduced from the heady estimates of 2015, it is still considered the last big e-commerce market left. Flipkart is the only local e-commerce start-up that is seen as serious competition to Amazon India over the long term. Since starting out in 2007, Flipkart has raised nearly $5 billion in capital, accounting for more than 45% of funds raised by all 10 Indian unicorns, which include Snapdeal, Paytm, Ola and Quikr. Amazon has committed $5 billion toward its Indian operations, of which it has already spent more than $2 billion. Snapdeal was founded in 2010, three years after Flipkart. Even six years after its inception, though, the company has failed to bridge the gap with its older rival. If anything, the gap has only widened in recent years.

Amazon vs Snapdeal

Amazon founder and CEO, Jeff Bezos has unequivocally stated his ambition to win the Indian e-commerce market at any cost. While Amazon has entered the Indian market failry recently in 2013, is already the largest e-marketplace in the US. With the current ambition, Amazon is willing to invest billions of dollars into its Indian subsidiary to gain market share. Currently, Flipkart is the leader in the Indian market with about 44% of the market share, Snapdeal is relatively close second at 32%, and Amazon India is at 15% of the total market share in the e-commerce segment.

The Situation

“The one thing I am very, very clear about right now is that I think we're going to be No. 1 (in terms of sales) by March 2016. I think we're going to beat Flipkart by then,” Bahl said in an interview with The Economic Times. “I'm very confident that whatever their (Flipkart's) numbers are, we will be ahead of them by March (2016).”

-Kunal Bahl

Co-founder and CEO, Snapdeal

In August 2015, Kunal claimed in an interview with an Indian newspaper that Snapdeal would topple Flipkart from its position at the top of the Indian e-commerce market. However, it was not to be. Instead, Snapdeal has spiralled into losses over the last couple of years with losses in excess of 200% at the end of March 2016 and now the company is in a desperate fight to get out of a near death situation. The founders of the company, Kunal Bahl and Rohit Bansal jointly own only 6.5% of Snapdeal and it seems safe to assume that the fate of the company is largely in the hands of the shareholders. Snapdeal's largest investor, SoftBank is now trying to mediate in a sale of Snapdeal to Flipkart which is the current leader in the e-commerce market in India.

Tuesday, May 2, 2017. The Board of Directors are settled for the meeting.

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