Kunal Bahl and Rohit Bansal saw the growing number of people online, their large amounts of disposable income, the willingness of the retailer to use internet for sales and marketing. And their gut instinct told them, if they leveraged these, they could hit a jackpot. Thus was born Snapdeal.com.
Snapdeal.com features one attractive deal daily, with discounts of up to 90% on dining, health and beauty, recreation, entertainment, travel, sports and more. The site, which has 4 million subscribers, with a new subscriber signing up every second, was recently ranked the 21st most trafficked site in Asia by web usage tracking firm Alexa.
On April 25, Snapdeal.com sold 30,000 deals on a single day, one of the highest transactions on any e-commerce site in India. That day, it sold pre-paid recharge coupons of Rs 100 for half the price for leading telecom service providers like Aircel, Vodafone, Tata Indicom, Idea and Virgin. At one point in the day, almost 100 deals were being sold per minute.
Snapdeal.com features one attractive deal daily, with discounts of up to 90% on dining, health and beauty, recreation, entertainment, travel, sports and more. The site, which has 4 million subscribers, with a new subscriber signing up every second, was recently ranked the 21st most trafficked site in Asia by web usage tracking firm Alexa.
On April 25, Snapdeal.com sold 30,000 deals on a single day, one of the highest transactions on any e-commerce site in India. That day, it sold pre-paid recharge coupons of Rs 100 for half the price for leading telecom service providers like Aircel, Vodafone, Tata Indicom, Idea and Virgin. At one point in the day, almost 100 deals were being sold per minute.
Struggle for funds
Kunal Bahl traces the idea of Snapdeal to January 26 last year, when he received a call from a couple of retailers, one running a restaurant and the other salons. They said they had featured deals on some small websites and it helped their business. "Within 8 days of that, on February 4, we launched Snapdeal."
Bahl and his friend Rohit Bansal started operations from Bahl's bedroom, and then moved to a rented basement of a house. This made it extremely difficult to hire people. Prospective employees didn't turn up for interviews when they realised the office was in a residential area.
The toughest part for the founders was convincing investors on the viability of an e-commerce website in India. Out of 15 investors who were approached, just one agreed to put in some money. "One investor rejected my proposal within 5 minutes of presenting it. His reasoning was customers didn't want coupons as they loved to haggle. He spent an hour trying to convince me to go back to my job," says Bahl.
Snapdeal.com this year received $12 million from Nexus Venture Partners and Indo-US Venture Partners. It has begun a strategic partnership with Visa that offers exclusive privileges to the cardholders. It also signed a partnership with Microsoft whereby users of Internet Explorer 9 would be able to track the deals right from the taskbar by pinning the site.
Customer is king
Many risk-averse Indians think twice before leaping into a heavily discounted deal. Many ask: how do retailers gain if they give out products and services at such discounts? Snapdeal's clients are able to do it because they receive far more customers through the channel than through traditional channels. "Many of our brands have over 1,000 customers coming to them on a single day. Merchants spend only on prospective clients rather than spending upfront on traditional forms of media that do not guarantee any return on investment or customers. And retailers pass on the customer acquisition cost in the form of a discount offer." Bahl has focused on creating customer delight . "For instance , all customer emails to the Snapdeal helpdesk are responded to the same day they are received. The 100% growth month-on-month since inception is mainly because of our customer centricity."
They manage the brand through Facebook, Foursquare, Twitter and blogs. "There we have discussions and contests. We have over 3.5 lakh followers on Facebook who see and receive updates on deals daily. We have noticed that a good number of customers come to Snapdeal after seeing the deals on Facebook."
The company plans to extend its footprint to 100 cities by the end of this year, and add new categories. It is also planning to make smallsized acquisitions. "We have a target to seal two deals in the range of $1 million each in the next 3-6-months , and we are looking at small companies which are riding on innovations and great ideas," says Bahl.
Kunal Bahl traces the idea of Snapdeal to January 26 last year, when he received a call from a couple of retailers, one running a restaurant and the other salons. They said they had featured deals on some small websites and it helped their business. "Within 8 days of that, on February 4, we launched Snapdeal."
Bahl and his friend Rohit Bansal started operations from Bahl's bedroom, and then moved to a rented basement of a house. This made it extremely difficult to hire people. Prospective employees didn't turn up for interviews when they realised the office was in a residential area.
The toughest part for the founders was convincing investors on the viability of an e-commerce website in India. Out of 15 investors who were approached, just one agreed to put in some money. "One investor rejected my proposal within 5 minutes of presenting it. His reasoning was customers didn't want coupons as they loved to haggle. He spent an hour trying to convince me to go back to my job," says Bahl.
Customer is king
Many risk-averse Indians think twice before leaping into a heavily discounted deal. Many ask: how do retailers gain if they give out products and services at such discounts? Snapdeal's clients are able to do it because they receive far more customers through the channel than through traditional channels. "Many of our brands have over 1,000 customers coming to them on a single day. Merchants spend only on prospective clients rather than spending upfront on traditional forms of media that do not guarantee any return on investment or customers. And retailers pass on the customer acquisition cost in the form of a discount offer." Bahl has focused on creating customer delight . "For instance , all customer emails to the Snapdeal helpdesk are responded to the same day they are received. The 100% growth month-on-month since inception is mainly because of our customer centricity."
They manage the brand through Facebook, Foursquare, Twitter and blogs. "There we have discussions and contests. We have over 3.5 lakh followers on Facebook who see and receive updates on deals daily. We have noticed that a good number of customers come to Snapdeal after seeing the deals on Facebook."
The company plans to extend its footprint to 100 cities by the end of this year, and add new categories. It is also planning to make smallsized acquisitions. "We have a target to seal two deals in the range of $1 million each in the next 3-6-months , and we are looking at small companies which are riding on innovations and great ideas," says Bahl.
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