Snapdeal could get on even footing with Flipkart, Amazon after SoftBank investment

SoftBank investment could get Snapdeal on even footing with Flipkart, Amazon

Snapdeal could get on even footing with Flipkart, Amazon after SoftBank investment

I have an interesting relationship with Snapdeal.com, which in my personal opinion is India’s third most-respected e-commerce player. But the gap for me between the first two (Flipkart.com & Amazon.in) and Snapdeal is a massive one. And the one between Snapdeal and Ebay.in is even greater. I buy lots of products online—from diapers to books, toys, mobile phones, tablets, white goods, etc, but while I almost always compare prices between Flipkart.com and Amazon.in (and mostly lean towards Amazon.in even if Flipkart pricing is slightly lower), I almost never check Snapdeal.com. Though I prefer Amazon for its customer service and fulfilment, I also check Flipkart because I love great deals–if the price difference is significant I go with Flipkart.

But I can count my Snapdeal purchases on my fingers. Interestingly, my biggest-ever online purchase–that of a washing machine costing close to Rs 50,000, was through Snapdeal. But the reason I did it around a year ago was because then Flipkart.com and Amazon.in didn’t carry washing machines, or perhaps the particular model wasn’t available — I’m not exactly sure. Even my latest purchase on Snapdeal.com was that of a smartphone available exclusively through Snapdeal. So, as I go through my purchase history it’s clear that I use Snapdeal only when something is not available elsewhere and I don’t do price comparisons too because Snapdeal isn’t on my preferred list.

And why is that? Well, Snapdeal did mess up delivery of my washing machine, and when you spend nearly Rs 50,000, that does give you the jitters. But that’s not it really. One bad experience doesn’t mean Snapdeal is not as good as Flipkart or Amazon. And Snapdeal did send me a gift voucher to make up for the 7-day plus delay in delivery.

The reason is best illustrated by something I tried yesterday. I was looking for a cover for a mobile phone. A low-end Nokia model and hence not exactly very easy to find. While Amazon showed me one option and then showed me options for similar model number (just in case I had typed wrong), Flipkart did the same, first showing me options for similar model numbers and then a listing for the specific model, but none of which were in stock. On Snapdeal, right in the search option there was an auto-complete string with my specific model number and I was thrilled that finally I had found something, but to my disappointment, nothing came up when I clicked. Tried other search options and still nothing. Just a blank products listing space hanging in the middle of the page. No attempt to figure out whether I perhaps typed in wrongly and wanted a similar model number. No attempt to cross-sell.

Clearly, in my experience, Snapdeal’s user experience and technology is nowhere as good as Amazon’s or Flipkart’s. And which is why I don’t bother with Snapdeal unless absolutely necessary, because user experience is critical when it comes to online shopping. Which is why news that part of SoftBank’s $627 million investment in Snapdeal will be used to ramp up technology is great news. In a press release Snapdeal said that it will open more technology centres across India and double its technology team to 1,000 people soon. Technology investments will improve user experience, ensuring that users don’t get disappointed like I did yesterday when I thought I found a perfect match on search auto-complete on Snapdeal only to see no actual product show up on the screen. In a cut-throat market, users don’t return when that happens. Unless you offer an amazing deal, but which you may be doing at a loss or by taking an unviable hit on margins.

Then there’s the matter of actual fulfilment. While both Flipkart and Amazon have their own logistics arms, Snapdeal seems to use only third parties. What happens is that when a user faces a case like I did earlier this week when a Flipkart order made in the afternoon was delivered less than 24 hours later (on normal delivery basis) there is a wow factor that you tend to associate with the e-retailer. And with Amazon that’s happened with me multiple times. The reason is simple–when products are shipped from their Mumbai fulfilment centres, both Amazon and Flipkart impress. So of the two brands of diapers I ordered this week from Amazon, the one shipped from Mumbai is delivered double quick and far exceeds delivery date promised while the one from Bangalore only comes just within the deadline.

With Snapdeal, that’s never happened with me, and perhaps that is one reason why Snapdeal isn’t my preferred choice. I don’t believe this means Snapdeal should go the Flipkart and Amazon way of setting up their own logistics agency, but it’s clear that Snapdeal will use part of the SoftBank investment to improve supply chain and logistics. The company has announced that will expand fulfilment centres from 15 cities in India currently to 30 while also expanding its merchant base. A local fulfilment centre means that at least on some items customers can expect very quick delivery and that should help Snapdeal come on par with Flipkart and Amazon.

And the big piece is of course mobile. With smartphone usage exploding in India, and nearly 150 million smartphones already in use, the storefront on a mobile screen will be the next big battle in the ongoing war between e-retailers in India. With real estate on a mobile screen far lesser than on a desktop or laptop, user experience, design and back-end analytics will be more important than ever. There’s also the challenge of different Operating System flavours, each requiring focused developer attention and a zillion different screen sizes and versions on just one mobile operating system like Android. And with Android the numero uno in India with over 90 percent marketshare, e-retailers have their work cut out when it comes to mobile. Why is why spending part of the SoftBank infusion on mobile technologies, and a public announcement that Snapdeal.com will look to make 3-4 strategic acquisitions in the area of mobile technology, besides setting up an incubation centre in this space, is welcome news. There’s also the fact that SoftBank has tremendous strengths in this space since it owns US carrier Sprint. And Nikesh Arora, CEO of California-based SoftBank Internet and Media Inc, also brings in tremendous mobility expertise having been Chief Business Officer at Google prior to his SoftBank role.

If Snapdeal gets its technology and logistics right and also manages to deliver innovation in shopping on mobile screens.

Original Source: Firstbiz Firstpost

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