Snapdeal's new strategy leads to comparison with ShopClues

After deciding against a buy- out in July, Snapdeal’s new strategy that focuses on non- branded products has drawn comparisons to ShopClues causing Co- Founder Radhika Aggarwal to respond.

Snapdeal is rolling out a new business strategy but it has drawn some negative comparisons - Snapdeal- Facebook

Snapdeal’s board of directors decided at the last minute to reject a deal that would see Flipkart buy the company for between 4,700 crore rupees (approximately 700 million dollars) and 5,000 crore rupees (approximately 750 million dollars), a deal that would have been one of the largest yet in India’s e-commerce market. Since deciding to continue independently, Snapdeal has been trying to forge a new path that will see it turn profitable on its own but this has drawn negative comparisons.

One of the reasons Snapdeal was in difficulty was that they had a similar business model and customer base to e-commerce giants Amazon and Flipkart and was not able to keep up with them. For Snapdeal’s new business strategy, the company is concentrating on non- branded products and Tier 2, 3, and 4 cities, including non- metro cities. Whilst it is hoped that this new strategy will gain them new customers, the co-founder of ShopClues opined that they are stepping on his territory and may find it just as hard to establish themselves in this marketplace.

ShopClues’ Co- Founder Radhika Aggarwal said about Snapdeal: “They spent over two billion dollars trying to be Flipkart and now they are spending half a billion dollars trying to be like ShopClues. We will have to see where they land up.” Aggarwal went on to say: “If it was so easy to become ShopClues everyone else would have done it as well.”

Moreover, Mrigank Gutgutia, engagement manager at RedSeer Consulting opined on the topic “ShopClues is a good brand, especially in smaller cities, and it will be difficult for Snapdeal to break into the space.” Gutgutia went on to say that, whilst Snapdeal may have a logistics edge with their logistics arm Vulcan, this may not add much as, “For customers in smaller towns, a couple of days of wait is not very significant.”

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