Online marketplace Snapdeal, one of SoftBank’s biggest bets in India, registered a slower growth in its gross sales for the year ended March 2016 as it fought rivals Amazon and Flipkart in a fierce battle for supremacy of the Indian e-commerce space. Numbers shared by SoftBank in its earnings presentation on Tuesday said Snapdeal’s gross merchandize value, or GMV, grew 90% at the end of the financial year 2015-16 against 301% in the previous fiscal. This comes on the back of Amazon weaning away marketshare from domestic players, more so from Snapdeal.
GMV is the overall sales done by merchants on an e-commerce platform, without factoring discounts and returns, out of which e-tailers get between 5-20% as margin depending on the category. GMV has been a key metric to determine the lofty valuations of e-commerce companies in India but Snapdeal’s founder & CEO Kunal Bahl recently posited he no longer sees it as the only metric worth chasing. But that wasn’t the case always – Bahl had said last year that Snapdeal would top Flipkart’s GMV at the end of 2015.
SoftBank holds around 32% in Snapdeal, which closed last year with $3.5-4 billion in GMV as reported earlier.
The country’s largest online retailer Flipkart too has been grappling with growth slowdown in the backdrop of Amazon’s aggressive moves. The Bengaluru-based e-tailer is expected to have closed December 2015 with a GMV of $4.5-5 billion while Amazon’s India unit grew 250% in terms of GMV against 2014, albeit on a smaller base. None of the e-commerce companies officially share GMV numbers.
When contacted, a Snapdeal spokesperson said in an emailed response, “Rapid growth year on year, followed by a doubling of business on a much larger base, is an indicator of the pace at which we are growing. Our shipment volumes have grown rapidly and in the period Jan-March 2016, our shipment volume was 1.96 times of the volume in the same period last year. All our growth initiatives are aligned with our vision of having 20 million daily transacting users (DTUs) on our platform by the year 2020.”
Earlier in February, Snapdeal closed a $200-million financing round, majority of which saw secondary transactions. It got a primary capital infusion worth Rs 335 crore during the same time, valuing the company at $6.5 billion. SoftBank, which is also a major investor in app-based cab aggregator Ola, reported that the company has improved its expected time of arrival by 55% and has the largest network of cabs in the country. Ola competes with San Francisco-based Uber which has been playing aggressively in India.
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