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Snapdeal’s loss not just Amazon’s gain, others reaping benefits too

Snapdeal’s market share was between 21 per cent and 23 per cent in 2015, and is expected to have fallen in the quarter-ended March 2016.

By: ENS Economic Bureau | New Delhi | Published: July 3, 2016 12:48:35 am
snapdeal, snapdeal shares, snapdeal losses, amazon, amazon india, amazon india profit, shopclues, shopclues profit, RedSeer, RedSeer survey, RedSeer e-retailer survey, India e-market, india news, business news RedSeer has estimated that Amazon has surpassed Snapdeal by March 2016.

A fall in market share of country’s second largest e-tailer Snapdeal in terms of gross merchandise value (GMV) during calendar year 2015 has benefitted not only the next ranked company Amazon, but has also proven advantageous for smaller e-commerce firms such as Paytm and ShopClues, a study by consultancy firm RedSeer showed.

According to the study, Snapdeal’s market share was between 21 per cent and 23 per cent in 2015, and is expected to have fallen in the quarter-ended March 2016. Compared with this, the market shares of Amazon, Paytm and ShopClues are seen growing in the same period from 17-19 per cent, 4-6 per cent, and 5-7 per cent during 2015, respectively.

RedSeer has estimated that Amazon has surpassed Snapdeal by March 2016.

Experts suggested that Paytm and ShopClues have been witnessing advance in their retail operations on back of the “flea market” strategy deployed by the two companies. As per the strategy, the companies have replicated the Sunday Market, which happens in various cities across the country. On Sundays, these e-commerce players sell products for as low as Rs 15.

According to the RedSeer study, a drop in GMV has been caused on back of reduction in discounting spends and significantly lower advertising spends, coupled with a change in category focus.

GMV is a key metric, industry analysts say, which e-commerce companies have used over time to justify their scale and valuations. However, a change in trend where smaller participants such as Paytm and ShopClues are biting into the market share of bigger companies such as Snapdeal, is likely to change the equation with which online retailers operate, an analyst with a leading consultancy firm said on condition of anonymity.

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