Snapdeal is an online marketplace for mobiles, clothes, consumer electronics and other accessories. Snapdeal was founded in 2007. It has raised $1.5B in 9 rounds. The latest round was in 2015. Some of Snapdeal’s investors include Alibaba Group, Foxconn and SoftBank Corp. Some of Snapdeal’s latest acquisitions include Reduce Data, Inc., LetsGoMo, etc

The Journey

In 2010, an offline couponing business named MoneySaver was established by two young budding entrepreneurs Kunal Bahl & Rohit Bansal. It was inspired by groupon.com and MoneySaver went on to sell a whopping 15,000 coupons over a span of just 90 days! The twist in the plot came in November 2011 when the founders were inspired by the success of Alibaba.com and decided to create an online marketplace on the similar lines. Kunal and Rohit decided to shut down the coupon business and a result of this Snapdeal was born. With the core value – Innovation, Change, Openness, Honesty and Ownership the company has gone to become a $4.8 Billion as of today.

Funding

Snapdeal has raised about $1.5 billion so far from 34 investors altogether.

Acquisition

Marketing Strategy

• Get your first deal free – Got a huge response from the customers.
• Referral Program – The Company paid a fixed amount to its user when they got a friend to sign up.
• Affiliate marketing – The Company paid started paying ₹30 on every lead generated to the affiliates however, it did not yield the desired results as it was found that the competitors were paying a better amount then Snapdeal. However, Snapdeal was quick with it response and increased the price by to ₹50-100 on per lead generated.
• Aggressive Email Campaign – Snapdeal has been doing quite an aggressive campaign to convert the leads into potential sales.

• Social Media – Snapdeal has tremendous followers on Flipkart & Twitter with a high level of engagement. The Twitter account has seen a 21,300 followers while the Facebook page has over 3,674,243 fans. The responses to the queries and complaints stand to max 5 mins from the time of post.
• Trolling Flipkart – Snapdeal has been taking its competitors head-on be it 2014 when Flipkart had its Big Billion Day Sale or in June 2015 when Flipkart had launched #achhakiya campaign.
• TV Commercials – Snapdeal has successfully utilized the television platform to drive in organic traffic. Many well-known Bollywood celebs like Pulkit Samrat, Alok Nath and Krishna Abhishek have endorsed the branding the past. Recently Snapdeal has hired Aamir Khan for the “Dil Ki Deal” campaign and it was been winning hearts of millions.
• TV-Shop – Snapdeal has its own TV channel, TV-Shop. The channel keeps running product offers 24*7, where the users can order products through a phone call, this is something very similar to tele brands ads but own an exclusive TV channel.

Future Plans

With Snapdeal sharing the second largest market share at 22% in India (Flipkart leading the market share by 44% and Amazon at 14%), Snapdeal plans to increase its market share and has also started gearing up for an IPO (Initial Public Offering). The IPO is expected in 2016-2017, this will help Snapdeal raise more capital for themselves & existing Investors.

It all started when 2 IITians sat down for a brainstorming session and came up with  OLA!

The brain behind Ola, Bhavish Aggarwal and Ankit Bhati decided to get started with the idea on 3^rd December 2010 in Mumbai which went to become the largest cab provider across the country, spread across 86 cities and with more than 40,000+ cabs registered under them currently. The key to success was the car options they provided their customers namely the Mini, Sedan and Prime, letting the customers pay through various modes for their rides.

 The Journey:

It all started when Bhavish was thrown out of a taxi while travelling to his destination when refused to pay extra money that was demanded by the driver. That’s when the idea of Ola was born and Bhavish started to develop a platform to address this problem that was faced by almost everyone on a daily basis. He sat down with his classmate Ankit Bhati and started ANI Technologies Private Limited, which later went on to be OLA. Bangalore and Mumbai are the major revenue contributors for the company.

The Funding:

   Ola has raised about $901.8 million so far from 21 investors all together.

• In April 2011, Ola went in for a seed funding of $330k from Kunal Bahl (Co-Founder, CEO – Snapdeal), Anupam Mittal (Founder, CEO – Shadi.com), Rehan yar Khan (Founder, CEO – Remindo).
• After a year in April 2012, Ola went in for a Series A funding and raised about $5 million by Tiger Global Management.
• In November 2013, a Series B funding of $20 million from Matrix Partners and Tiger Global Management.
• 8 months later, Ola raised $41.5 million in a Series C funding from Matrix Partners India, Tiger Global Management, in which Sequoia Capital and Steadview Capital took the lead.
• A major breakthrough came in when Japan’s SoftBank Capital invested a whopping $210 million in a Series D funding in October 2014.
• In April 2015, Ola went in for another rounding of funding Series E and raised $400 million from a bunch of 9 investors ABG Capital, Accel, Falcon Edge Capital, GIC, Mauritius Investments, SoftBank, Steadview Capital, and Tiger Global Management, in which DST Global took the lead.
• 7 days back on Sept 14, 2015 Ola raised another $225 million in Series F funding from 9 investors in which Falcon Edge Capital took the lead followed by ABG Capital, JS Capital, Softbank Telecom Corp, Dan Neary, FII LTR Focus Fund, Steadview Capital, Parkwood Bespin and Tiger Global Management.

Network & Revenue Model:

 The following analysis of Ola comes down from my personal observation and numerous interactions with the cab driver on a regular basis.

Network:

• Drivers with valid permits by transport authorities can sign up with OLA, while they do own a bunch of their own fleet of cabs, but major number of cabs are from individual or cab operator owners.
• A couple of drivers, said that Ola had provided them with the smartphone which was worth ₹8,000 on registering with Ola. The driver has to login in to the app and based on the location of the driver, the nearest customer is connected however once the driver logs out, he won’t get pings of his next ride. Ola provides flexibility on the login and logout timings of the drivers.
• Incentivises for the driver in Bangalore range from ₹500 to ₹750 on 12 and 14+ rides in a day, respectively.
• When a driver rejects a ride, and if the customer complaints to the support team then driver won’t get the incentive for that day.
• If a customer complaints regarding route taken by the driver or misbehaviour the driver is apparently barred for a day.

Revenue:

Raghunandan G and Aprameya Radhakrishna founders of Taxi for Sure, a company in the same domain said, that due to the heavy losses they had incurred over the years they were forced to sell-out the company and apparently they were bought by Ola for $200 million in cash and stock. So the question here is Ola making profits? Well I will let you think over it!

However

• Ola charges the drivers ₹4,000/- every month as registration charges.
• Every driver is liable to the company 20% of their fare charges on every ride.
• The discount coupons and the free rides provided by Ola are compensated with the commission money with the driver.
• Ola Money, a product that was launched by the company which enables customers to have wallet and lets people pay to multiple domains.
• Ola Grocery & Cafe is another segment in which Ola has ventured into which lets customers buy grocery & order food online which is later dropped at the residence of the customers.

Marketing Plan:

I believe the marketing plan of Ola revolves around “Today’s Luxury, tomorrow’s necessity”,  And Ola has actually lived up to this motto very well.

• Ola stickers: The major advertising push comes in from the cabs with the Ola stickers which boost up brand visibility.
• Word of mouth: The major trigger was the word of mouth in the metros when people started suggesting the website, app and call centre numbers to their friends and family, as they were charging cheaper than the rickshaw and the taxis.
• Ola Air Prank: On 1^st April 2015, social media was stormed by a video of Ola making air transport feasible for common man, however later the company announced it was a prank but the social media audience loved this prank and got people talking about the company and was also trending for almost 2 days on the social media.
• TV commercials with #Chaloniklo campaign did boost up brand visibility and the user base.
• Social Media: On Facebook Olacabs has 295,662 likes and with a 35k followers on twitter.
• Social Mentions: Ola has more often topped the list of social mentions at almost 90,000+ when compared to its competitors Uber, Meru Cabs, Easy Taxi, etc.
• Referrals and Free Rides: have been playing a very prominent role in the promotion of the company and also increased a loyal customer base.

Future:

     As the online cab market has been estimated $6 Billion with a growth of 25-30% every year, it has indeed become a hot spot of investment among the investors. I feel Ola will go on to be the biggest cab provider of the country with an estimated growth of 20% every year. They plan to have a deeper penetration into the 2 tier cities and also increase their cab density in each city through the referral programs for drivers. They also plan venture into the luxury car segment.