The total addressable market for value lifestyle retail market in India was worth $88 billion in FY 2021, as per a RedSeer report. This market is expected to touch $175 billion by FY26. While the size of the market is huge, it is divided into three components – mom-and-pop stores, organized retail, and e-commerce. In the value retail segment, the largest component is the neighborhood mom-and-pop stores, which hold 75 percent of the market share, while organized retail is 17 percent, and e-commerce is 8 percent. Hence, the organized retail and e-commerce segments are the ones that are likely to grow in the next few years.

According to the report, the overall number of online shoppers is expected to grow from 150 million in FY21 to 350 million in FY26. Online shoppers from the emerging segment are expected to witness an approximately threefold increase, up from around 78 million in FY21 to around 255 million in the financial year 2026. Additionally, mid-income buyers will account for 73 percent of online shoppers by FY26 and will drive the growth of value e-commerce.

In tandem with this, Snapdeal plans to take over overall India’s value e-commerce segment. It has built a leadership position in this segment and rolled out multiple initiatives that make it easy for buyers to discover value-priced merchandise, and for sellers to tap this mega opportunity.

“Almost 72 percent of our customers are from smaller cities (Tier II and beyond) because our entire platform has been built for the value segment. Our metro contribution is only around 14 percent,” said Himanshu Chakrawarti, Chief Executive Officer, Snapdeal Marketplace.

Plethora of Options

Snapdeal is offering various product categories including fashion (men's wear, women's wear, kids wear), footwear, beauty and personal care, and home products - both soft and hard. It also sells general merchandise and small consumer electronics like wireless earphones, chargers, cables, etc. “The largest selling categories that we have are essentially fashion, home, and footwear,” asserted Chakrawarti.

Customer Experience is Everything!

The company is looking to solve the customer requirement in the value e-commerce space. In India, most of the merchandise that consumers get in the value segment is of erratic quality, and this is what makes the experience for the value lifestyle customers quite suboptimal in India compared to even developing countries worldwide. For instance, in China, the quality on average for the value segment is far superior to what we have here in India.

Therefore, customers are always going through this experience, which is not all that great in terms of buying value merchandise. Snapdeal has curated the assortment in a way that it only keeps high-quality merchandise. “To just give you an indication, we have a success rate for sellers getting onto a platform less than 1 percent. This means out of a hundred people who apply less than one gets through because of our stringent quality norms. So, therefore, our entire range is created for the customers to get good quality,” he stated.

Additionally, the e-commerce platform offers products only in the relevant price range, which is below Rs 1000. In fact, 95 percent of its range is below Rs 1000.

Going Live on ONDC

The company made its debut on ONDC and is the only e-commerce firm in India to integrate its buyer and seller platforms onto ONDC fully. Customers using ONDC can access Snapdeal’s catalogue of home and kitchen products. Snapdeal is also expanding access to its fashion, beauty, and personal care categories on the network.

“Essentially the entire concept of building both the supply side and the demand side, and allowing the interoperability or interchangeability between these, makes ONDC interesting. Any customer can go to any of his favorite interfaces or apps and can see not just the sellers that are there on the platform, but see the sellers across multiple platforms. This makes it exciting because the customers get a much wider array of choices and access to suppliers, which are our sellers, who are there on multiple other platforms. Therefore, ONDC is an exciting concept and the customer gets to choose everything in terms of how they want their products to be transported, where they want to buy them from, which app they want to access to make their purchase, and so on and so forth,” he further explained.

Focus on Building Brands

Snapdeal’s latest focus is creating mass brands in fashion and lifestyle for the value-conscious customer, through its subsidiary Stellaro Brands. Stellaro Brands houses seven brands including Rangita, Urban Mark, Hometales, Miyuki, Aragma, and Nord across categories like fashion, footwear, deodorant, beauty and personal care, and home lifestyle. Apart from the Snapdeal marketplace, these brands are available on e-commerce platforms like Amazon, Flipkart, Ajio, and TataCLiQ.

“Stellaro House of Brands has been created and crafted to serve not just Snapdeal, but the entire value segment market. These brands target the mid-income group from second and third-tier cities across India. Both Rangita and Urban Mark have been performing well and getting good responses from consumers. As of now, we are on four other platforms, but we will soon list these brands on other platforms as well,” Chakrawarti concluded.