Combi flights during nights required to tap e-commerce market
Snapdeal.com has more than 20,000,000 registered users from 4,000+ cities and towns. Its Online Marketplace has more than 6,000 brands with 4,000,000 plus listed products. Speaking to Cargotalk, Saurabh Goyal, Logistics and Supply Chain Head, Snapdeal; h
S napdeal.com was started in February 2010 as a daily deals platform, but expanded in September 2011 to become an e-commerce company via a marketplace model. The company was started by Kunal Bahl, a Wharton graduate and Rohit Bansal, an alumnus of IIT Delhi in February 2010. With 20 million registered users, Snapdeal is one of the first and largest online marketplace in India offering an assortment of more than 4 million products across diverse categories from over 20,000 sellers, shipping to 4,000 towns and cities in India.
In June 2010, Snapdeal acquired Bangalore-based group buying site, Grabbon. com. In April 2012, Snapdeal acquired esportsbuy.com, an online sports goods retailer based out of Delhi. In May 2013, Snapdeal acquired also Shopo.in, an online marketplace for Indian handicraft products.
Significantly, in the 3rd round of funding of $50 million, eBay came out as the largest investor in Snapdeal. The investment also includes a commercial partnership under which eBay will get access to Snapdeal’s 20 million registered users, logistics software and distribution network. According to the agreement, Snapdeal will offer a limited number of products on eBay India and eBay will list its merchandise on Snapdeal.
At present, 15-20 per cent of the sales on Snapdeal comes through m-commerce. Snapdeal.com expects its’ total sale of products to cross R2,000 crore in the 201314 fiscal helped by its robust growth.
Challenges and Solutions
However, there are some challenges related to smooth flow of goods and inventories. “To meet the demand side, the supply chain infrastructure is not ready in our country at present, though there are some efforts from various companies,” said Goyal. According to him, e-commerce market is becoming lucrative in Tier-II and Tier-III cities. However, proper connectivity and infrastructure is not suitable to meet the demand side. “The gap is mainly because the sudden spur of self-distribution model, because of the rise of e-commerce or m-commerce,” observed Goyal.
Currently, Snapdeal is utilising third-party logistics companies for all of its consignment delivery. “The logistics companies in India are unable to deliver the required services. This is happening mainly because of two reasons: their internal operational weaknesses and government policies, which are not industryfriendly,” Goyal said. He pointed out that the delivery pertaining to e-commerce is always express mode. However, the bottlenecks at the airports (viz, at the terminals) and surface network (viz, at the check posts) is deterring the potential growth of this emerging sector.
“To make the e-commerce venture a success, air connectivity from metros to Tier-II and Tier-III towns should be sufficient and convenient for shipments. There should be more night flights with ample space for cargo,” said Goyal. According to him, as e-commerce is growing very fast, the possibilities of flying more freighter flights are ripening. “In the meantime, airlines can follow a pragmatic model of night flights combining adequate cargo space and passenger capacity and by offering low fares for passenger tickets.