SnapDeal: Snapdeal focuses on unit economics

MUMBAI: Unit economics, an euphemism for revenue, has taken entrance seat for e-commerce main Snapdeal in its new, leaner avatar, founders of the corporate stated on Tuesday.

The Delhi-headquartered firm was in shut competitors with south-based Flipkart on the peak of what was aggressive play by each firms for a bigger pockets share of shoppers, the place dimension is what mattered. It ultimately ceded house to the deep pocketed American e-tailer Amazon.

All the e-commerce gamers had deployed the “cash burn” mannequin to accumulate market share, helped by enterprise buyers’ cash. According to studies, Flipkart used to burn $150 million a month at its peak earlier than its acquisition by Walmart.

“Positive unit economics means the consumer is allowing you as a company to make money while serving them. Negative unit economics means you are having to pay the consumer to use your service. Our view for the last few years is that we made lot of errors to get to this realisation,” stated Snapdeal’s co-founder Kunal Bahl stated on the annual TIEcon occasion on Tuesday right here.

He added that buyers have run out of persistence and have turn into extra sensible over time.

“Today more VCs (venture capital funds) are talking about unit economics. GMV (gross merchandise volume) seems to be some word in some dictionary that used to exist long time back,” he stated.

“Part of it is the fact that even investors are now getting impatient. They are realising that there is slightly less correlation between GMV and building lasting enduring value for a company,” he added.

Snapdeal co-founder Rohit Bansal stated the important thing for Snapdeal now’s to have a “product market fit” whereby it grows profitably, somewhat than attaining merely scale.

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