New Delhi: Online marketplace Snapdeal.com on Wednesday introduced Snapdeal Motors, a dedicated platform for automobiles, nearly 10 months after it started selling two-wheelers online.
Snapdeal, run by Jasper Infotech Pvt. Ltd, said it was witnessing strong growth in demand for automobiles and has already sold close to 300,000 bikes since December. The company, which has already crossed gross merchandise value (GMV or cost of goods sold) of ₹ 1,500 crore in the auto category, said it is targeting a GMV of $2 billion or about ₹ 12,000 crore in the next two years.
Snapdeal Motors users can book automobiles and get assistance for instant loans through Snapdeal’s finance platform RupeePower.
The company, which currently offers two-wheelers from Hero MotoCorp and Piaggio, said it will introduce Nissan Motor India Ltd’s Datsun cars, besides two-wheelers and four-wheelers from Mahindra and Mahindra Ltd and Suzuki Motorcycles. India Pvt. Ltd.
“With the introduction of Snapdeal Motors, we are aiming to take this to the next level and provide our customers a holistic buying experience, marrying online and offline retail channels," said Tony Navin, senior vice-president, partnerships and strategic initiatives at Snapdeal. “Snapdeal was the first online marketplace to introduce the automobile category and we have witnessed tremendous growth with over 300,000 bikes sold since launch basis our successful partnership with Hero MotoCorp and others," he added.
According to the company, about 60-65% of these orders came from non-metros, indicating the poor network of dealers in small towns as the trigger for online adoption. “57% of the purchases came from users who were buying their first vehicle," he added.
The platform allows customers to connect with dealers on the basis of their location and estimated delivery date. Consumers will have to pay a nominal booking amount. They can do a test drive or get the product delivered at their doorstep.
Snapdeal makes money by keeping a small percentage of the transaction value as its share. According to Navin, the margins vary from company to company and the business model continues to evolve as the category grows. Navin did not divulge the details of margins the company gets from the automobile category.
“With Snapdeal Motors, we are bringing together the benefits of e-commerce, including convenience and deep assortment. With industry-specific content and features including auto loans and exclusive auto partnerships, we will move the needle on how e-commerce impacts our users’ lives," said Anand Chandrasekaran, chief product officer at Snapdeal.
Snapdeal was founded by Kunal Bahl and Rohit Bansal as a daily deals platform, selling coupons to groups of customers. It was converted to a marketplace in 2011, first offering services and then adding a wide range of products including apparel, books and electronics through third-party merchants. The company is backed by investors including Japan’s SoftBank Corp., Foxconn, Temasek, Blackrock and Premji Invest, among others.