Why Snapdeal Failed ? | Snapdeal Failure Story : Business Case Study 🔥

Snapdeal, today valuation of which is $6.5 Billion this company was about to get bankrupt in 2017. It was on the verge of shut down. Now why and how all this happened? Such a well funded start up, despite of the $2 Billion funding, all this. I am going to share 5 important points of Snapdeal. How did the failure occur? And then how did they make a comeback? You will get many strategies of e-commerce business in this video. .

Before that let me tell you that there is a secret tip in this video which will save lot of your money. Now let us discuss that why Snapdeal failed? What were the reasons of its failure? Let me tell you the very first reason. It is Lack of Differentiation. They don't have any differentiation. You look at Flipkart and Amazon, people trust them because they have built the USP but .

Snapdeal don't have any USP. Flipkart & Amazon have Extreme Differentiation. What is there differentiation? See, if we talk about Flipkart, first of all is its Cash on Delivery. In 2007 no one was giving cash on delivery. Second is 70% exclusive rights, its example is Xiomi sale. What are the differentiation of Amazon? First is Amazon prime, they deliver in one day. They provide Prime video and Amazon exclusive .

Like Echo dot or Alexa. Along with that Amazon basics is there. Do you remember something from Snapdeal? No, because Snapdeal didn't have anything unique like this. Second is Unaimed vision, it is very important to have clear vision in business. If we have a goal then only its action plan is created. As there was no goal, so what action plan would they create? That's why they have developed a monkey mentality, .

First of all they wanted to be leader in e-commerce secondly they have created an ecosystem. They did both the things at a time and couldn't focus on one. Focus multiple Achieve none. If you focus on many things then you won't achieve anything. Because of all these things their market share which was earlier at 25% dropped to 4%. And company was nearing Bankruptcy. The third reason behind the failure of Snapdeal .

Is their Lack of Focus. Remember one thing in life that Things which you focus on they grow! This is called as Energy Flow State means where your energy is spent. Snapdeal neither had any clarity about what to do nor did they had any goal. Only earning money & raising valuation can't be the goal of any organization. In 5 years you will reach, but where? .

You should know this. Fourth mistake is Unrelated Acquisition. If we talk about the Flipkart's acquisition then they have acquired Jabong and Myntra and integrated them properly with itself. Look at the Snapdeal acquisition, they acquired Freecharge and gojavas. Freecharge was acquired with $400 Million but they couldn't run it properly and sold it at $60 Million to Axis Bank where they .

Had huge loss. Their fifth biggest mistake which is very important No Accountability & Lots of Greed They did not monitor their finances, did not keep an eye on what's going on in organization & were so greedy that both founders had Rs. 45 Crore as their annual salary. Brother, if you work like this then organization is bound to get bankrupt. Now there was a failure, no worries, everyone .

Commits mistake. Listen to comeback strategy. I will give 5 principles which are very powerful. First one is Understand the Consumer, brother. What does consumer need? They did consumer Analysis, now how did they do this? First of all understand two strategies, one is Market Penetration and other is Creaming. Penetration means you are entering into market, here you have to keep the low pricing, .

& volume is very high though profit margin is small. Creaming – like iphone. What does iphone do? It is sold to very elite customers, here what happens is volume is less but profit margin is very high. Now how did Snapdeal do this in their business? See, Snapdeal first studied market demographic. Only 8.8% people are wealthy in India, rest of the population is mostly middle class or poor. .

Now they kept the brands and integrated local items as well, which became the biggest reason of attraction for middle class families means those earning between Rs. 50000 to Rs. 100000. They observed that there is consumer behavior of Value for Money means everyone asks the price. Brother, I should get good quality at low price. Next principle – Quality Segmentation. How did Snapdeal do this? .

Snapdeal first observed that the sellers on its platform don't have any quality control which creates lot of problems. Because of that orders are returned, customer experience is poor so people return the order. What happens with that is customer started doing negative publicity like don't buy from Snapdeal they provide poor quality. To fix this they performed Seller De-boarding. Two types of sellers were de-boarded from platform. .

First those with poor ratings & second those having bad reviews and complaints. After that they followed the second principle which is called Review Analysis. In this they used something called Push & terminate. Those sellers who are having poor rating, they were terminated, those having good ratings were given a extra push, were promoted extra. With this good sellers were motivated. .

Now the next principle which is very powerful, first understand their business model. They follow M to C Flow business model. Now what is this M to C Flow? how it works? M to C means manufacturer to consumer. Snapdeal will directly provide the goods from manufacturer to consumers. What happens with this? What are the benefits of consumer? First is Great Product at Great Price. Products are .

At low prices since they are coming directly from manufacturer, 2nd is Counterfeit Protection no question of fake or duplicate products because manufacturer is directly supplying. Third is Access to Speedy Return. As the intermediate channels have reduced so returns are processed very fast. Apart from this what benefits did Snapdeal have with this M to C? First is they built the Credibility. .

Consumer now has the credibility that Snapdeal is providing goods from manufacturer. Second, their Inventory Cost reduced. Now their is no Inventory Cost since the products are directly delivered. Third benefit is Volume Commission, if you are selling in such a big volume then Snapdeal gets huge commission from it. Next principle that they used was Speed of Cashflows .

How does this work? And what is this? I will explain, e-commerce has a major problem of Loose Replenishment Cycle. I was purchasing a book which was out of stock. This happens mostly because seller don't have money to refill the stock as its huge amount is with e-commerce websites. They don't pay them. Now if there is no payment then there will be no manufacturing and no purchase of goods. .

If you have not followed me on Instagram yet then link is in the description, go and follow, I add good content over there. Now they increased the Speed of Cash-In and Cash-Out. How did they do it? First of all the customers makes the payment to Snapdeal that payment will be received by the Snapdeal and Snapdeal will quickly process this payment and forwards it to the seller. .

Where others make payment after 21 days, Snapdeal makes it within 7 days. Now seller has the money within 7 days so that he will produce goods if he is a producer or he will purchase goods if he is not a producer. Sooner he buys goods, sooner customers will get those products again. Next principle, it is very powerful, listen carefully Find Your Treasure .

Treasure is that which actually generates sale in business. For Hindustan Times the treasure is not the newspaper but the delivery boy who distributes because if he doesn't distribute then you will not read, if you don't read then you won't pay. Similarly let's take the example of Jio, their treasure is not their data or their service, their treasure is mobile phone, if its not there then how will you use the data? In the same way Snapdeal .

Has found its treasures. What are the treasures of Snapdeal? First is Sellers. They focused totally on Sellers, guided them, trained them so that they can perform well. Now you also have to deliver the goods so they focused on logistics & partnered with Valcan Ventures So that the goods are safely delivered to consumer. With that they built the Value Chain. Now the customer is very happy. .

Next principle, it is very important to understand. Today everything is governed by Artificial Intelligence, so they got improved Artificial Intelligence systems. You will find very strange to hear this but all the e-commerce website do one thing with you which is called inducing Impulse Buying Behavior. Has it ever happened that you bought something which you don't need? And then you are frustrated .

That your money is wasted. Don't worry, its not your mistake, AI plays with your psychology. You are forced to impulse buy. You search for any product on e-commerce website you will find other alternatives in the same price range which are at low price. Because it knows that you will purchase them. With this their sale will increase. Brother, this is alright, but you have promised pro tip or secret tip, .

Where is that? The secret tip is Day Count, what you need to do is before buying anything just wait for few days. How many days? 7 days, why? Because after 7 days, there are 98-99% chances that you will not buy that product. Because that product is not your Dire need. It was just a want, what happen with this is your impulse buying behavior, you can transform .

It into Informed Buying Behavior. You will buy only those things which are needed. Trust me you will save lot of money with this, try it. Along with that if you want to know about the failure of Hike then watch the video at the top if you want to know the success secrets of Cred then watch the video at bottom. If you are new to channel, don't forget to Subscribe.