Why Snap Deal Failed ?
Snapdeal is a popular online shopping website in India that started in 2010. It allows people to buy and sell various products like electronics, clothes, and home goods. It became very popular and grew quickly, making it one of the top e-commerce companies in India.
Snap Deal Failed Due To The Following Reasons:
Snapdeal faced tough competition from well-established e-commerce players like Amazon, Flipkart, and Paytm Mall in India. The company found it difficult to attract and retain customers in the face of such fierce competition.
Snapdeal’s original business model allowed third-party sellers to sell their products on the platform. However, the company later changed to a more inventory-led model, which resulted in higher costs and operational difficulties. This change created some challenges for the company.
High Burn Rate
Snapdeal spent a lot of money on advertising and discounts to attract customers, which resulted in a high burn rate. This means the company was spending more money than it was earning, making the business model unsustainable.
The company faced several management and governance issues, including allegations of financial impropriety and mismanagement. Additionally, many customers complained about having bad experiences with Snapdeal, such as receiving late deliveries, low-quality products, and unhelpful customer service.
Snapdeal received a lot of money from investors like SoftBank and Alibaba, but they couldn’t get more money in later rounds. This made it hard for Snapdeal to keep running and compete with other companies.
- Solving customer problems is one of the most important things to consider in business.
- Without proper management, no matter how well funded your business is, it will fail.
- Instead of providing discounts and coupons, provide values.