Snapdeal sets $2 billion sales target for home and living business

Snapdeal sets $2 billion sales target for home and living business

Online marketplace Snapdeal is expecting its home and living business, one of its fastest growing categories, to reach close to $2 billion (around Rs.12,460 crore today) in gross merchandise value (GMV) or cost of goods sold, by the year ending 31 March 2017. The home segment contributes close to 20% of the overall volume and is likely to touch 40% by the end of the next fiscal year, said Tony Navin, senior vice-president (home and electronics) at Snapdeal. Snapdeal.com, promoted by Jasper Infotech Pvt. Ltd, is expanding its seller base in the category, increasing the assortment of products and launching exclusive products to meet the target. The company is expecting to close fiscal year 2016 with $1 billion of GMV for the home and living segment, which includes kitchenware, home decor, furniture, furnishing, toys and hardware fixtures. “Home and living is a good $35 billion industry growing at probably about 15% CAGR (compounded annual growth rate) year-on-year. Close to 90% of this category is highly unorganized, highlighting an opportunity to reach a massive scale online,” said Navin.

The company is looking to increase its seller base to 100,000 for the home and living category alone by March 2017. Snapdeal aims to expand the number of sellers to one million in the next three years from 100,000 merchants currently. Within home and living, furnishing and kitchenware are the biggest segments for Snapdeal as it sees healthy repeat buys. “Frequency of purchase is very high for these categories,” said Navin. Online retailers are trying to push sales of home-living and fashion products given the segment offers higher margins than electronics, which currently contributes 50% of revenues.

Home and living typically witnesses gross margins as high as 50-60%, according to industry estimates. Home furnishing accounts for about 4%, or Rs.1,059 crore, of the overall Rs.24,046 crore online retailing revenue by the end of December 2014, according to a March report by Internet and Mobile Association of India. As part of the expansion strategy, Snapdeal recently introduced services category on its platform allowing consumers to book and pay online for services such as furniture installation, home-cleaning, pest-control or even basic jobs such as electrical fittings or plumbing. “Overall home category has scaled up primarily because of getting more sellers, more assortments and ensuring that there is 360 degree coverage from product to services. Our idea is to help you find everything you would want to buy for your home and also get the services around it too,” said Navin. Given 99% of the services industry is unorganized, Snapdeal’s biggest constraint was to ensure that these services providers are trained and are verified by the police. To tackle these, Snapdeal has tied up with third-party partners such as Godrej HiCare (pest control services provider), blue-collar services provider EasyFix to order handyman services online. Snapdeal offers these services in close to 100 cities currently and is looking to expand them further. Delhi-based

Snapdeal will also aggressively promote its hardware and fixture segment in the home and living category. “We will be adding more assortments here as this is a large segment which is highly unorganized,” said Navin. The company will also introduce consulting services on home decor and interior designing, he added. Snapdeal, founded by Kunal Bahl and Rohit Bansal, claims to offer close to 10 million products across 500-plus categories on its platform with over 40 million registered users.