The fight for market share in Indian online commerce is heating up. Hardly a week after India’s e-commerce king Flipkart launched ‘Flipkart Assured’ which followed Amazon’s flagship service Amazon Prime, their nemesis Snapdeal has launched an even more competitive service for their customers. ‘Snapdeal Gold,’ reports say, is a free service which needs no registration, while Amazon charges Rs 499 annually. Snapdeal is yet to announce it officially.
Under this offer the customer can get next-day free delivery in select areas, and standard free delivery everywhere else. Also, returns can be made in 14 days instead of the usual seven days. For every order placed, the algorithm will detect the orders for which payment is done online, and those orders are automatically upgraded. Orders placed with cash-on-delivery do not get this offer.
Two years ago, Flipkart launched ‘Flipkart First’—a subscription-based service modelled after Amazon Prime—for select sellers, products and pincodes, with standard policies on returns and replacements. However, it failed to make waves.
This year, all three marketplaces have had tiffs with their sellers, and Amazon’s $3-billion funding has disturbed the other two. In fact, rumours about Snapdeal and Flipkart merging have also been going around for a while, whereas reports of Flipkart in talks with Amazon for being bought out appeared a few months ago. All three companies have categorically denied these reports. Less than two weeks ago, it was reported that Snapdeal is looking to sell stake in the digital payments market leader FreeCharge, which they had acquired a year ago.
With Amazon’s rise in India, Snapdeal has seen its market share drop substantially. In good measure, they had cut down on commission from sellers a few months ago, so as to consolidate their position against Flipkart which had raised their commission, much to the displeasure of sellers.
After they got a jolt when Jabong—which they were in final talks with for acquisition—went to the Myntra-Flipkart alliance, Snapdeal seems to be taking the competition very seriously. In the run-up to Diwali, Snapdeal has announced Rs 200 crores for marketing campaign over the next 60 days. It had recently integrated fashion and lifestyle products marketplace Exclusively.in with its platform. Snapdeal Gold, which is applicable only for prepaid orders, is a good move in the direction of reducing CoD payments, which have always been a pain point for e-commerce due to logistics charges.