Snapdeal Founders Emphasize Profit Visibility In Letter To Employees
Snapdeal wants to champion all sellers in India.
Snapdeal has a “clear visibility” of making a gross profit Rs 150 crore over the next 12 months and is already profitable on a net margin level, said founders Rohit Bansal and Kunal Bahl after the board rejected a takeover bid by rival Flipkart Online Services Pvt.
To that end, the company will have to keep a tight control on costs and aim for hyper efficiency, Snapdeal founders Kunal Bahl and Rohit Bansal said in a letter to employees.
Earlier in the day, the Jasper Infotech-backed Snapdeal rejected a takeover bid from Flipkart, bringing an end to over five months of negotiations. Snapdeal said that it will instead pursue an “independent” strategy in India's e-commerce market.
It added that it aims to become self-sustainable with the sale of non-core assets such as digital wallet FreeCharge, which it sold to Axis Bank in a Rs 385 crore all-cash deal.
With the ongoing streamlining of costs, Snapdeal is financially self sufficient and does not need to raise any further capital to reach profitability, the founders said.
Following the "intense speculations and uncertainity", Snapdeal will now move in a new direction, part of which will focus on it being the "champion of all sellers in India", the letter added.
This involves enabling anyone to setup a store online in a few minutes, and focusing on expanding the selection of products for consumers, the letter said.
So the decision is made. There is zero ambiguity. We will be running the company as we have been and rapidly moving ahead with our mission.Kunal Bahl and Rohit Bansal, Founders, Snapdeal
On India's $200 billion e-commerce market, of which the surface has "barely been scratched yet", the founders said that there is no single formula for success. Every market has multiple successful e-commerce business models but as long as the strategy is different, there is a great company that can be built, they added.
