Snapdeal

Shortly after rival Amazon announced that it is building six fulfillment centres, ecommerce company Snapdeal has opened six logistics centres in Delhi-NCR, Lucknow, Hyderabad and Kolkata.

Snapdeal says that the hubs will provide one-touch facility to sellers as all processes from receipt of stocks, quality inspection, preparation for dispatch and return handling will be done for designated orders under one roof. It added that the investment in infrastructure will add 1 million sq ft space for the company. Snapdeal’s logistics hubs are a owned by Vulcan Express, a wholly owned subsidiary. This takes Vulcan’s total number of logistics hub in the country to 10.

Update: A spokesperson for Snapdeal clarified that the company has 69 logistics hubs in the country where Vulcan leases out space to third parties and manages them. But as of now, Vulcan owns 10 logistics centres entirely.

It added that 80% of its orders are shipped through its fulfilment centres, known as SD+ though it did not say how many sellers are on SD+. Amazon, on the other hand, says that more than 80% of its sellers use Fulfilled by Amazon.

Services on Snapdeal: Recently, Snapdeal has started offering services such as cab, hotel, flight and booking and food ordering on its platform in addition to ecommerce shopping. It has tie ups with Uber, Zomato, Cleartrip and redBus for these services and they are currently accessible through Snapdeal’s Android app under the “Services” tab, and not for desktop users.

Snapdeal primarly operates as ecommerce marketplaces, and as we had pointed out earlier, diversification is playing an increasingly important role in ecommerce as companies look to differentiate and offer more value added services. Additionally it lets ecommerce platforms explore other services as a means of income, since the margins on ecommerce are quite low.

Funding: In February, Snapdeal raised $200 million in funding from Ontario Teachers’ Pension Plan (OTPP), with participation from Iron Pillar and others. The company had said then that it would use the funds to build up its capabilities and for bettering consumer and seller experience. The company had also raised $500 million in August last year and $627 million in October 2014. It currently claims to have a delivery presence in more than 6000 cities, with more than 300,000 sellers registered on its ecommerce platform.