Home / Financial News / Snapdeal aiming to race past Flipkart by year-end

Snapdeal aiming to race past Flipkart by year-end

E-commerce company Snapdeal is aiming to surpass rival Flipkart’s gross merchandise value (GMV) by the end of this year, said a senior in the company. The Delhi-based five-year-old e-tailer is targeting $ 10 billion (about Rs 62,000 crore) in GMV. Sources said last week the Bengaluru-based seven-year-old Flipkart planned to double GMV to $ 8 billion by December.

By December, Snapdeal’s GMV will jump more than four times from about $ 2 billion now. “Electronics, one of the largest contributors to Snapdeal’s sales, is estimated to become a $ 5-billion business, followed by fashion at $ 2 billion. The remaining will come from other categories put together,” said the executive.

GMV in e-commerce means total sales value of the merchandise sold through the marketplace in a period. Most e-commerce companies refrain from sharing their revenues, owing to which the GMV run rate is often used to gauge their financial health. Revenues are a small proportion of GMV.

While Flipkart targets to ship a billion units a month and serve 100 million customers by 2018, Snapdeal is focusing more on its 40 million connected users, 70 per cent of which come from tier-II cities. Industry sources said Amazon India’s GMV was about $ 1 billion.

“Focus on tier-II cities, rather than just metros, worked for Snapdeal very well. In tier-II cities, e-commerce is a ‘need to have’, while for the tier-I and metro cities, it is ‘nice to have’,” said the executive.

Flipkart, the poster boy of Indian e-commerce, has been on a fund-raising spree in the past year, with its total cash infusion at about $ 2 billion. In the same period, Kunal Bahl-led Snapdeal has decided to stay conservative, raising about $ 1 billion, most of which came from Japan’s SoftBank ($ 627 million).

While Flipkart is reportedly going for its next round of funding, Bahl’s Snapdeal, the executive claimed, was “comfortably” funded till the time when it would turn cash-positive. “Well, there may be fresh funding if the company decides to go for more strategic partnerships. However, the company is yet to zero in on a timeframe for turning it into operating cash-positive,” pointed out the executive.

Snapdeal founders have preferred funding from strategic investors even at lower valuations, rather than from financial investors offering much higher valuations, said the executive.

Indian e-commerce sector is in a hyper-growth mode, mainly because of fast-growing numbers of smartphone users with internet access in the past year. On the other hand, 2014 was a major breakthrough for a handful of e-tailers, with investors infusing fresh cash at higher valuations.

Consulting firm Technopak estimates Indian e-tailing will be worth $ 32 billion by 2020, more than 10 times its value of $ 2.3 billion in October last year.


  • Snapdeal expects to grow gross merchandise value (GMV) by about 4 times to $ 9-10 bn by December
  • Flipkart, on a fund-raising spree, aims to double GMV to $ 8 bnby December
  • Electronics and fashion businesses to be worth $ 5 bn and $ 2 bn for New Delhi-based Snapdeal in 2015
  • Snapdeal has crossed $ 2 bn in GMV, set to touch $ 3 bn by March-end
  • Flipkart raised close to $ 2 bn last year, Snapdeal $ 1 bn
  • Kunal Bahl-led Snapdeal also closing in on acquisitions to topple Bengaluru-based Flipkart, valued at $ 12 bn


Check Also

Debate on Article 370 marked by posturing, says RSS

The Rashtriya Swayamsevak Sangh (RSS) is recalibrating its discourse on its demand ...

Street cautiously positive on JSPL post coal mine

Jindal Steel and Power (JSPL), which witnessed its lowest point in the ...