Chas­ing Buy­ers, Not the Value of Goods Sold: Bahl

Snapdeal boss says etailer will now fo­cus on on­board­ing and re­tain­ing qual­ity users

The Economic Times - - Front Page - Biswarup.Gooptu @times­group.com

New Delhi: Snapdeal will no longer rely on Gross Mer­chan­dise Value — a proxy for sales — as its met­ric of choice, its chief ex­ec­u­tive of­fi­cer said, as the com­pany re­ori­ents its strat­egy for a time when the money from in­vestors used to drive up GMV is prov­ing hard to come by.

In­stead, Ku­nal Bahl said, Snapdeal will aim to add and re­tain high-qual­ity users, de­fined as fre­quent shop­pers pur­chas­ing high-mar­gin prod­ucts. Bahl, who fa­mously de­clared that his com­pany would de­throne Flip­kart by GMV in fis­cal 2016, is now say­ing that his new goal is to grow the num­ber of daily users on his mar­ket­place 20-fold in five years.

“We be­lieve that GMV (the value of goods sold) is an im­por­tant met­ric. But it’s an out­come met­ric. It’s not what you chase as a com­pany,” Bahl told ET. “GMV by it­self is not nec­es­sar­ily a good met­ric that demon­strates any­thing else out­side the value of goods trans­acted.”

Bahl’s shift in pri­or­ity comes at a time In­dia’s ecom­merce in­dus­try is see­ing a marked slow­down in GMV. THIS IS THE FIRST TIME AN IN­DIAN ECOM­MERCE MA­JOR HAS MADE THIS SHIFT

GMV, typ­i­cally, has been the pri­mary barom­e­ter used by the in­dus­try and in­vestors to de­ter­mine the health of ecom­merce com­pa­nies glob­ally

In­dian ecom­merce’s an­nu­alised GMV run-rate plunged to about $15 b in March from about $20 b in Oct

Tyagi did not de­pose be­fore the Ital­ian court and is cur­rently fac­ing in­ves­ti­ga­tion at home by both the Cen­tral Bureau of In­ves­ti­ga­tion and the En­force­ment Direc­torate.

On April 8, the Mi­lan Court of Ap­peals — equiv­a­lent to an In­dian high court — had ruled that the Rs 3,565-crore Agus­taWest­land con­tract in­volved pay­offs to In­dian of­fi­cials. Over­turn­ing a lower court judge­ment that said cor­rup­tion could not be proved, the court of ap­peals found Giuseppe Orsi, the pow­er­ful for­mer chief of Fin­mec­ca­nica, and Bruno Spag­no­lini — who headed chop­per divi­sion Agus­taWest­land — guilty of in­ter­na­tional cor­rup­tion and money laun­der­ing.

In its de­tailed or­der, the Ital­ian court said pay­ments in cash as well as through wire trans­fers were made to the Tya- gi fam­ily — three of the for­mer air chief ’s cousins — and a part of them were des­tined for the of­fi­cer him­self. Tyagi was IAF chief in 2005-07, when the VVIP chop­per deal was be­ing pro­cessed by air head­quar­ters.

Re­ly­ing on tapped con­ver­sa­tions that in­volved the al­leged mid­dle­men for the deal — Guido Haschke and Carlo Gerosa — the court of ap­peals ruled that there were at­tempts to hide the Tyagi con­nec­tion and even de­struc­tion of po­ten­tial ev­i­dence by the duo.

“From the an­a­lysed con­ver­sa­tions we can get un­equiv­o­cal in­di­ca­tions about the cor­rup­tion of an In­dian pub­lic of­fi­cer, iden­ti­fied as the cousin of the Tyagi broth­ers. In this re­gard, the ex­plicit con­tent of the di­a­logue is suf­fi­cient to es­tab­lish the ‘rea­son­able be­lief that cor­rup­tion took place’,” the court or­der said.

Be­sides re­ly­ing on a Comptroller & Au­di­tor Gen­eral re­port that de­tailed the VVIP chop­per deal and showed that de­vi­a­tions were fa­cil­i­tated by In­dian of­fi­cials in favour of Agus­taWest­land, the Ital­ian court re­ferred to con­ver­sa­tions be­tween Haschke and Gerosa in March 2012 in the for­mer’s car on pay­ments sent to Mau­ri­tius and “cash pay­ments in favour of the In­di­ans”.

On one key al­le­ga­tion that was ini­tially raised by the pros­e­cu­tors — that Tyagi helped change the flight ceil­ing spec­i­fi­ca­tions to favour Agusta — the court said there was no proof that the move was against pub­lic in­ter­est.

How­ever, the court has ruled that “his be­hav­iour re­mains il­le­gal be­cause he made him­self avail­able to col­lab­o­rate with Agus­taWest­land for a fi­nan­cial op­er­a­tion and be­cause he re­ceived large amounts in re­la­tion to his in­sti­tu­tional role and as he also helped (Agusta) dur­ing the RFQ/RFP (ten­ders) for­mu­la­tion so that the com­pany could par­tic­i­pate and win”.

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