Growing Advantage for Snapdeal as Chinese e-tailers pack their bags – Upcoming startups in India

 

Looks like an opportunity for upcoming startups in India, As Chinese e-commerce platforms like Shein, Club Factory and Romwe out of the image thanks to the recent ban on 59 Chinese apps, homegrown e-commerce companies like Snapdeal targeting the value-conscious customer may be within the gain.

The SoftBank-backed company, together with upcoming startups in India, has been witnessing a rise in traffic, said three sources. per them, the void created after the exit of Chinese e-commerce apps is anticipated to be filled by the likes of Snapdeal, Meesho, GlowRoad et al. Sources emphasized that Snapdeal has started witnessing a spike in volume in categories like fast fashion, home decor and lifestyle accessories. Over the last two years, Shein, Club Factory and Romwe had managed to create a clear scale in these categories collectively.

“When the lockdown was lifted in June, Club Factory accustomed process about 30,000 daily orders while Shein and Romwe collectively shipped 15,000 to 20,000 orders. Since they aren’t operational, these volumes will gradually move towards Snapdeal and other fashion-focused e-commerce companies,” said one among the sources on condition of anonymity. “Snapdeal may grab 40-50% of the collective scale of the three Chinese e-commerce firms.”

At present, Snapdeal does about 150K to 170K orders each day. Market analysts also believe that the ban on the Chinese e-commerce marketplaces would shift a major chunk of their business towards Snapdeal and upcoming startups in India. “As the Chinese players exit the market after an aggressive bout of high spending, Snapdeal seems poised to emerge as a major beneficiary. It’s now the sole large, independent horizontal e-commerce company in India with a sole target Bharat,” said Satish Meena, forecast analyst, Forrester.

But, why is Snapdeal in an exceedingly position to grab the market share of Club Factory, Shein and Romwe and other upcoming startups in India? Let’s gain some background on Snapdeal and also the status of the unorganized e-commerce segment. About three years ago, caught during a bruising battle for market share and investors trying to drive a merger with Flipkart, it almost gave the look of the top of the road for Snapdeal. However, the firm decided to interrupt far away from traditional high-burn e-commerce business models and reinvented itself as Snapdeal 2.0.

During the 2018-19 periods, Paytm Mall and ShopClues and other upcoming startups in India stood a solid chance to say the third spot within the fast-growing value e-commerce segment. Unable to lift funds and shrinking scale, ShopClues lost the plot and consolidated with Singapore-based Q0010 during a fire sale. Paytm Mall kept changing goal posts without a long- term and consistent plan. While both companies were within the position to go away Snapdeal behind, the Kunal Bahl-led company cleared all distractions to target cracking the value-seeking segment.

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