Jan 17, 2016

E-tailer Clash: Snapdeal to Invest More in Logistics to Rival Flipkart, Amazon

The e-commerce competition in India may well succeed or succumb in the last mile. One of the giant online marketplace Snapdeal, which is backed by Japan’s SoftBank Group and others is planning to invest more on Logistics and technology to speed up the delivery process. Logistics is complex in a large, diverse country with inadequate infrastructure. One of the founders of Snapdeal has made this announcement on Monday. 

As online shopping is growing in a rapid way in India due to the increasing usage of low-cost smartphones. On the other hand, the E-commerce firms are striving hard to cope with the increasing demand and make quick deliveries in different parts of the country. The e-commerce market in India is anticipated to grow to $220 billion in the value of goods sold by 2025, up from an expected $11 billion this year, Bank of America Merrill Lynch said in a recent report. 

Snapdeal rivals Flipkart ad Amazon

Snapdeal has flushed with $500 million from a funding, led by China’s Alibaba, SoftBank and Foxconn round in August, now the e-commerce firm is looking to expand its services. Snapdeal is planning to focus in one area to cut delivery times by investing in large data analytics and demand forecasting, co-founder Rohit Bansal told Reuters.
“We have done over 10 acquisitions and investments in the last one year, almost all of them in the field of technology or supply chain and payments,” he said. “With all these investments we have been able to reduce our delivery times by 70 per cent in the last one year.”
Snapdeal to Invest in Logistics to Speed Up Delivery Snapdeal has come to this decision so as to speed up its delivery process. The main aim of the E-commerce tailer is to deliver the products to its customers in a faster way. Quick and cheap delivery is highly essential to be worthy enough to win over custoSnapdeal Planning to invest More in Logisticsmers in a competitive business wherein companies are throbbing through substantial investments to grow.

Snapdeal, which had $4.5 billion in Gross Merchandise Volumes (GMV), a measure of the value of goods and services sold, by August, bought mobile wallet company FreeCharge in April for around $400 million. The company also spent around $35 million to acquire about 50 percent stake in logistics services company GoJavas. Bansal said that Snapdeal had gained interest in the share of its stake in FreeCharge to boost funds for the mobile wallet company, but rejected to comment further. 
“Our view is that in five years from today 10 per cent of India’s consumption will happen online, not just products, but all consumption, and we want to build a technology ecosystem for that,” Bansal said.
In the month of October, the Economic Times newspaper said that FreeCharge thinks to raise $300 million as the mobile wallet seems to increase its product range after collecting specialised payments bank license from the Reserve Bank of India.

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