In a world where every e-commerce platform is turning tables on a regular basis, here comes another interesting story doing the rounds. Shopclues is looking towards Snapdeal to help them out with a share swap arrangement, with the existing shareholders only having a small share from then on. Snapdeal, just a year and a half ago, was on the verge of selling their own stakes to Flipkart but now has come a long way in reaching a position to acquire other companies.
Shopclues has seen a rapid decline in its number of orders placed per day, now at an all-time low of just 30,000/day. The major funders of Shopclues like Nexus, Tiger Global, GIC and Unilazer Ventures have run out of patience and no longer see potential in continuing with the funding. However, it is important to note that Shopclues did try for a similar truce a year ago but Snapdeal was busy with its own operations and bringing themselves back in the business. Snapdeal declined the offer then but it will be interesting to see how they respond this time, given that they are doing quite well now.
We should not forget that Snapdeal itself was on the brink of no longer being an independent entity, as Flipkart was about to buy them. Look how the tables have turned with Flipkart ending up selling the majority of its stakes to Walmart in the year gone by. Snapdeal’s comeback from the ashes to become the only e-commerce platform in India to be cash positive is just commendable. The company managed to increase the number of orders to 2,00,000 orders/day in the same period. Furthermore, it managed to reduce their spending by 90%, leading to more revenue generated than the expenditure.
Experts believe that Shopclues lost their market share and the users when they decided to promote the unbranded products on their platform. This benefited Snapdeal immensely when they were going through a rough patch themselves. It is fascinating to see how Shopclues’s one bad move helped Snapdeal and now Snapdeal is on the verge of buying Shopclues. In the last 20 months, Snapdeal has managed to stay low and increase its growth steadily to reach the Number 3 spot in the e-commerce market in India. Snapdeal buying Shopclues would be a huge move on their part and one of the best comeback stories in the recent past in the e-commerce world. In addition, it can also affect the dynamics of the e-commerce market in India as well.