NEW DELHI: Less than two weeks after raising $500 million, Snapdeal Chief Executive Kunal Bahl has thrown down the gauntlet to Flipkart, asserting that his company is on course to topple the Bengaluru firm as the country's largest electronic marketplace.
The Snapdeal cofounder said the company achieved $4 billion (about Rs 26,000 crore) in total value of goods sold, or gross merchandise value, this month, about a year after it crossed $1 billion in GMV.
"The one thing I am very, very clear about right now is that I think we're going to be No. 1 (in terms of sales) by March 2016," Bahl said in an exclusive interview with ET. "I think we're going to beat Flipkart by then."
Snapdeal is India's largest marketplace in terms of merchants, with about 2 lakh sellers on its platform, while Flipkart has the biggest market share and is the country's most valuable ecommerce company.
Snapdeal's challenge to Flipkart is emblematic of the battle for dominance in India's ecommerce market, fuelled by record capital infusion this year that Internet companies are using to expand and acquire firms in uncharted areas that will bolster sales. While India's top ecommerce firms have been locked in an attritional battle for pole position the past three years, this is the first time one of the big guns has unveiled an outright challenge to its rivals.
Flipkart in June adjusted its GMV target to $10-12 billion in 9 months to a year, a slight bumpup from its earlier forecast of $8 billion for the year to March 2016 and more than double the $4 billion it achieved in 2014-15. It recently closed a funding round of $700 million from existing investors — New Yorkbased hedge fund Tiger Global andSteadview Capital.
Amazon has announced plans to invest $5 billion in India to turn the country into its biggest market outside the US.
Flipkart spokespersons declined to comment for this article.
"It took us two-and-a-half years to reach GMV of $1 billion, a milestone that we reached on July 31 last year. This month we've crossed $4 billion. It took us only a year to go from $1 billion to $4 billion. We hit $3 billion about three-odd months back. The acceleration has been very significant," said Bahl, 32, asserting that in about six months Snapdeal will be "decisively ahead" of Flipkart in terms of GMV.
Snapdeal Got $500 million Funding
Bahl's assertion comes barely weeks after Snapdeal closed a $500-million funding round led by Taiwan's Foxconn, China's Alibaba Group and existing backer Japan's SoftBank.
The entry of two strategic investors is expected to give a massive boost to Snapdeal in its bid to emerge as the country's largest ecommerce firm, given that both Foxconn and Alibaba are seen as long-term investors, unlike private equity and hedge funds that have shorter redemption windows.
Flipkart currently commands 44% market share of India's ecommerce market, followed by Snapdeal at 32%, according to a recent report by Morgan Stanley. Amazon's India unit accounts for 15% of the online retail pie.
In a separate report, Goldman Sachs estimated that India's online retail industry would grow at 47% compounded annual growth rate to $47 billion over the next five years.
Bahl declined to give a projection of Snapdeal's total sales for this fiscal year, but credited the company's recent $400-million acquisition of payments platform FreeCharge and its undisclosed investment in logistics venture GoJavas as being prime drivers of growth. Snapdeal's investments have been part of its ambitious strategy to build a comprehensive ecommerce ecosystem offering everything from products to financial services and having the infrastructure to meet demand — crucial especially as the festive season kicks off, providing a major battleground for online retailers. "This Diwali our plans are mega," said Bahl.
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