‘Almost 95% of next 200-250 mn shoppers will come from value segment’

The Pitch CMO Summit Delhi 2023 saw an enviable collective of brand leaders, marketing mavens, industry thought leaders and others gather to discuss debate and discourse on ‘Reimagining Purpose In A Tech-enabled World.’

Himanshu Chakrawarti, Chief Executive Officer, Snapdeal, held a fireside chat with Shantanu David, Principal Correspondent, exchange4media on “Creating a Value-Driven Marketplace for Bharat” and the company’s new iteration of Snapdeal 2.0.

Chakrawarti brought home the reality of how much Snapdeal had evolved, keeping pace with an ever-growing value market by beginning the conversation by asking those in the Delhi audience who had recently shopped on Snapdeal to raise their hands. He mentioned he expected it to only be a handful, which it turned out to be.

“The first version of Snapdeal was all about being a marketplace for everything everywhere all at once. So, we were in all categories and, of course, we came to you at the cheapest possible price. So that was the earlier version of Snapdeal, what we are now on Snapdeal 2.0.”

Chakrawarti explained that Snapdeal 2.0 is about creating a ‘value lifestyle’ destination for Bharat. “So, give or take depending on what data source you are looking at, there are around 800 to 900 million people with internet access in India, and approximately out of that 200 to 250 million people who have transacted or shopped online. And the interesting part of this is that out of the 250-odd million, who have shopped on any of the e-commerce platforms, roughly around 50% of this is the value segment and 50% is are people who came onto e-commerce and internet long back people like you and me who probably have been on eCommerce for 10 years, 15 years, 20 years depending on age, and everything else. The other 50% is the value segment and a large number of these have come in post the Jio revolution, and a lot of them have come in during the COVID phase.”

Even more interesting, according to Chakrawarti, is that out of the 800 million, the next 200 million eCommerce shoppers will largely all come from the value segment, as the more well-to-do segments, whoever had to be on eCommerce, are already on eCommerce.

“Almost 90-95% of the next 200-250 million shoppers will come from the value segment. Now, therefore, we embarked on this journey of creating this destination for a value lifestyle. In the value lifestyle segment, the quality of merchandise is very poor. So how do you make a value lifestyle destination with good quality merchandise for the consumers? And how do you make it appealing to people who have not got too much money with them? That's really discovering the fortune at the bottom of the pyramid and how you can scale it up in a profitable manner. So that's Snapdeal 2.0,” he elaborated.

Chakrawarti then went on to break down the very different approach Snapdeal took in order to cater to its value-based clientele when compared to an Amazon or a Flipkart, which catered to largely (relatively) affluent customers.

“Do they cater to the Bharat customers? Yes, they reach out to the Bharat customers. Do they service those PIN codes? Yes, they do. But what's the difference? The difference is that the experiences on all the platforms are created for metro audiences. The experiences are created for people in this room. The experiences are not created for the market customer,” said Chakrawarti, adding, “It is an inbuilt assumption that the aspiration of the market customer is identical to the needs of the metro customers. And only the price range is different. This is the assumption. And this is actually not true.”

There were several differentiators between these customers, with regional languages versus English being the most obvious. But there were several more issues at play, including basics like first-time shoppers being unsure about how to fill out their addresses in the correct boxes and check out options and more.

 “One quick statistic for you on our platform 70% of the purchases take place without anybody keying in a search term or using any of the filters. What does that mean? That essentially means they're relying on the homepage feed and they're relying on the tabs. So go to men, T shirts, etc, etc. So you follow the tab. Now, this customer is quite different from the metro audiences who quickly want to shop and see what they want to see, he said illustrating, “The assortment that Divya sees is different from what Ramdin sees. How do you dynamically do that? So the role of data science in our case is significantly higher than the other platforms. What I show to you will make the difference between your buying and not buying.”

Chakrawarti added, “The checkout pages are so complicated in the other platforms, but they're easy for people like us, because we've been accustomed to that complication. Yeah, but for the first time customer it is complicated, so ours is quite easy.”

 You can watch the full conversation here.