Online marketplace Snapdeal, backed by Japan's SoftBank Group Corp and others,
will spend more on logistics and technology to better compete with Flipkart and
Amazon's Indian unit, its co-founder said recently.
Shopping
online is becoming more popular in India due to the rising use of cheaper
smartphones and e-commerce firms are struggling to cope with the growing demand
and make faster deliveries in different parts of the country.
The
e-commerce market in India is expected to grow to $220 billion in the value of
goods sold by 2025, up from an expected $11 billion this year, Bank of America
Merrill Lynch said in a recent report.
Flush with
$500 million from a funding round in August, led by China's Alibaba, SoftBank
and Foxconn , Snapdeal is now looking to expand its services.
One area
Snapdeal will focus on is to cut delivery times by investing in better data
analytics and demand forecasting, co-founder Rohit Bansal told the media.
"We
have done over 10 acquisitions and investments in the last one year, almost all
of them in the field of technology or supply chain and payments," he said.
"With all these investments we have been able to reduce our delivery times
by 70 per cent in the last one year."
Quick and
cheap delivery is important to be able to win over customers in a competitive
industry in which companies are burning through substantial cash to grow.
Snapdeal,
which had $4.5 billion in Gross Merchandise Volumes (GMV), a measure of value
of goods and services sold, by August, bought mobile wallet company FreeCharge
in April for around $400 million.
It has also
spent around $35 million to buy about 50 per cent stake in logistics services
company GoJavas.
Bansal said
that Snapdeal had received interest in part of its stake in FreeCharge to raise
funds for the mobile wallet company, but declined to comment further.
"Our
view is that in five years from today 10 percent of India's consumption will
happen online, not just products, but all consumption, and we want to build a
technology ecosystem for that," Bansal said.
Agencies
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