Online marketplace Snapdeal, one of SoftBank’s biggest bets in India, registered a slower growth in its gross sales for the year ended March 2016 as it fought rivals Amazon and Flipkart in a fierce battle for supremacy of the Indian e-commerce space.
Snapdeal’s gross sales, which exclude discounts and product returns, slowed to 90 per cent in the year ended 31 March from 301 per cent in the previous year, according to a presentation by SoftBank Group.
In the first half of last year, gross sales at Snapdeal grew by more than 220 per cent, previous presentations by SoftBank show. That implies sales growth slumped in the second half of last year.
Although SoftBank did not reveal the GMV figure of Snapdeal, estimates suggest that a 90 per cent growth in FY16 would imply total sales of $3.8 billion as on March 31, 2016, on its platform, far below the $10-billion mark it had aimed for.
Snapdeal co-founder and Chief Executive Officer Kunal Bahl, who had earlier claimed the company would surpass Flipkart’s planned GMV of $10 billion by March 2016, recently said his company was not chasing GMV but would want to add and retain high-quality users.
Snapdeal’s monthly revenues have declined since November, partly because the company has been forced to cut spending on discounts and advertising since then, Livemint reported on 14 April.
Snapdeal has held funding talks with several investors over the past six months, all of whom have refused to invest in the company at its preferred valuation of $6.5 billion, Livemint had further reported.
With sales growth slowing and investors souring on e-commerce, Snapdeal, which also owns payments firm FreeCharge, has been forced to conserve cash over the past few months. The company is trying to persuade its sellers to fund a larger part of the discounts on its site.
Snapdeal and bigger rival Flipkart have also been losing market share to Amazon India since the start of 2015.