Snapdeal aims to overthrow Flipkart, says CEO Kunal Bahl

India’s eCommerce market is undergoing an interesting phase. They are raising million dollar findings, trying out innovative ways to win customers, offering ‘unbelievable’ deals and what not. Amid all this, they are also trying to overthrow the competition and become the leaders in the eCommerce market place. Snapdeal, is one such brand. Recently it was in news for raising $500 million funds with help from Taiwan's Foxconn, China's Alibaba Group and existing backer Japan's SoftBank. And now, Snapdeal CEO Kunal Bahl has openly declared war against Flipkart. In an exclusive interview to Economic Times, Bahl said that he is looking forward to overthrow Flipkart and become India’s largest online electronic marketplace.

The co-founder of Snapdeal thinks that the company can become No. 1 (in terms of sales) by March 2016. While this sounds way too overambitious, the company’s performance in the recent month suggests that the e-tailer is on the right path. According to Bahl, Snapdeal pulled off $4 billion (about Rs 26,000 crore) in total value of goods sold, or gross merchandise value last month.

Flipkart officials refused to comment on the matter. Snapdeal’s challenge is a testament of the growing competition in the Indian eCommerce market. The record capital fusion that Internet companies in the country have received this year is further taking the competition to new heights.

While India's top eCommerce firms have been locked in an attritional battle for pole position the past three years, this is the first time when one of the big guns has openly challenged its rival.

Flipkart, in June adjusted its gross merchandise value (GMV) target to $10-12 billion in 9 months to a year, a slight bump up from its earlier forecast of $8 billion for the year to March 2016. It recently closed a funding round of $700 million from existing investors — New York-based hedge fund Tiger Global and Steadview Capital.

Amazon, on the other hand has announced its plans to invest $5 billion in India and to turn the country into its biggest market outside the US.

"It took us two-and-a-half years to reach GMV of $1 billion, a milestone that we reached on July 31 last year. This month we've crossed $4 billion. It took us only a year to go from $1 billion to $4 billion. We hit $3 billion about three-odd months back. The acceleration has been very significant," said Bahl, 32, asserting that in about six months Snapdeal will be "decisively ahead" of Flipkart in terms of GMV.

The entry of two strategic investors is expected to give a massive boost to Snapdeal in its bid to emerge as the country's largest ecommerce firm, given that both Foxconn and Alibaba are seen as long-term investors, unlike private equity and hedge funds that have shorter redemption windows.

As per a recent report by Morgan Stanley, Flipkart at present commands 44% market share of India's ecommerce market, followed by Snapdeal at 32%. Amazon's India unit accounts for 15% of the online retail pie.

In a separate report, Goldman Sachs estimated that India's online retail industry would grow at 47% compounded annual growth rate to $47 billion over the next five years.

Bahl declined to give a projection of Snapdeal's total sales for this fiscal year, but credited the company's recent $400-million acquisition of payments platform FreeCharge and its undisclosed investment in logistics venture GoJavas as being prime drivers of growth. Snapdeal's investments have been part of its ambitious strategy to build a comprehensive ecommerce ecosystem offering everything from products to financial services and having the infrastructure to meet demand — crucial especially as the festive season kicks off, providing a major battleground for online retailers. "This Diwali our plans are mega," said Bahl.
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