Profitability is a journey and we’re on the track to achieving it with massive scale: Snapdeal’s Kunal Bahl

Thursday October 01, 2015 , 3 min Read

While e-commerce majors often flaunt vanity metrics like GMV and GTV, Kunal Bahl of Snapdeal believes investment in future technologies will drive the scale and profitability for e-commerce companies. “Investment in technologies like Freecharge wallet, Shopo and FindMyStyle are major milestones for me rather than GMV. Growth of GMV will keep happening but these technologies will drive our growth in coming future,” Kunal said during an interaction with YourStory.

The Gurgaon-based company is betting big on Shopo. “Through Shopo, we are trying to empower small merchants, primarily homepreneurs who aren’t listed on bigger e-commerce platforms), to sell without hassle,” added Kunal. Softbank-backed Snapdeal launched mobile-only marketplace Shopo in July this year to sell fresh as well as used goods .

Snapdeal will invest over USD 100 million in Shopo over the next couple of years. “We are in the process of extending logistics and payment support to Shopo merchants soon,” Kunal said.

Hyperlocal is exciting segment for Snapdeal

The company recently led USD 38-million round in grocery-focused hyperlocal startup Peppertap that is currently piloting hyperlocal services at Snapdeal also.

“Hyperlocal delivery is a big pain to consumers in India and we see massive volume and unit economics in it. Besides investment in Peppertap, we’re also piloting Snapdeal Instant in select cities, and for ensuring hyperlocal deliveries, we’re partnering with various logistics players,” said Kunal.

According to an industry estimate, current market opportunity of the overall hyperlocal segment is about USD 16 billion, much bigger than e-commerce. This is expected to grow to USD 80 billion by 2020 as more and more people jump onto the mobile internet bandwagon.

E-commerce companies are looking at hyperlocal markets to accelerate scale.However, it’s a different game altogether and requires different approach and skill.

Profitability is a journey

We often see some experts question viability of e-commerce business as they don’t have strong focus towards profitability. When asked about plan for breaking even and possible timeline for prioritising profitability, Kunal pointed out, “We are building sustainable business with massive scale and profitability. Turning profitable with USD 20 million scale is very easy.However, for massive scale we need significant investment. Profitability is a journey and even global posterboys like Amazon and JD.com took significant time to break even.”

“The bigger question is to strike balance between scale and unit economics and we have been successful in maintaining that balance. We are on track of building business with massive scale and profitability,” added Kunal.

Snapdeal is open to invest in more startups and incubate technology-driven products in-house. “We will continue investing by organic as well as inorganic means to build technology-focused products for the future,” he said.