Selling Online Offers Significant Savings: Snapdeal

The year 2014 has been a blockbuster year for e-commerce companies in India. Billions of dollars flowed into the e-commerce sector as India is estimated to have surpassed the US in having the highest number of internet users after China. Consumers in India also benefitted as e-commerce companies added more products and expanded geographical reach into different parts of the country. Snapdeal, for example, began to sell automobiles through its platform. Besides getting access to more products, customers could check out for better bargains. Snapdeal's senior vice president Tony Navin told NDTV that the e-commerce route offers significant savings to sellers, who in turn can pass on the cost benefit to consumers. (Watch Video) "If a seller were to set up your own shop it requires huge investment and real estate cost is very high in India. Going online is the easiest way to reach out to many customers across India," he added. Snapdeal reaches out to 5,000 towns and cities across India. "We don't control the price of the products on our site. The sellers control it. We have developed apps where the seller can drop the price if the competitor drops the price," he added. Business Model Snapdeal operates a marketplace model as opposed to an inventory-led model in which an e-commerce company stocks the goods and sells to consumers. In a marketplace model, Snapdeal operates an online platform which enables sellers, both big and small, connect with buyers. "The marketplace model ensures to we can sell a wide array of products and we need not constrain ourselves by the capital required for a stock-and-sell model," he added. Currently, Snapdeal has 60,000 merchants selling over 500 categories of goods and it plans to increase the seller base to 1 million. Snapdeal makes money by charging a marketing fee on every sale from its platform. It does not charge an upfront fee to sellers. Snapdeal controls the delivery part by having tie-ups from third-party logistics service providers, who pick up the products from the sellers. "All the seller has to do is to pack the product and keep it ready. Someone will come to pick it up and deliver to consumers," Mr Navin said. Snapdeal also offers a service, called Snapdeal Plus, in which sellers don't have to go through the hassle of packaging the product. "The seller can keep products at our fulfillment centres," said Mr Navin. This also helps Snapdeal to cut the delivery time to customers. Snapdeal also works with third-party operators who have their fulfillment centres.

Selling Online Offers Significant Savings: Snapdeal

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