Kunal Bahl is a man in a hurry. The 30-year-old’s short visit to Mumbai is chock-a-block with back-to-back meetings, but he is not complaining. “Many things on my hand,” he says . Bahl, who co-founded Snapdeal in 2010 (along with Rohit Bansal), refuses to call it an e-commerce company. Instead, he describes the four-year-old venture as an enabler for online commerce as it does not own any inventory.
Snapdeal, which had also raised about $200 million from the world’s largest online marketplace eBay and other investors, is now looking to acquire two Indian technology companies. In an interview to Business Line, he said there is no certainty that the talks could be conclusive. Excerpts:
We are not an e-commerce platform. We enable others to do e-commerce. We are looking at solving the problems of customers who don’t have stores nearby. Right now, about 60 per cent of our sales are from tier-II and beyond. Over 45 per cent of our orders are coming on mobile.
How has Snapdeal evolved in the last two years, especially after eBay came on board as an investor? How are you utilising these funds?
We have evolved for the better. eBay has a lot of institutional knowledge about e-commerce, and culturally there is a lot in common between our companies because both of us are trying to build a great eco-system. We are not a retailer, we don’t own any products, and that’s precisely eBay’s mission too.
There has been a lot of investor interest in Snapdeal. Are you evaluating any of those?
Financial investors are interested As we have 30,000 sellers now and will grow to about 1 lakh sellers in the next one year. It is very hard to grow a business this fast, and it’s very hard for the competition to get these kind of numbers overnight. There is no immediate need for capital. In case we need to raise money, we will look at equity financing. I don’t think we will do debt right now as debt has its own complexities.
What about an IPO?
There are certain discussions at the board level about whether an IPO should be considered or not, as soon as maybe next year. We will see how it goes. There are many moving parts; we have to decide whether there is any value in going public, whether the market condition is right and whether the regulation is conducive. It’s very hard to say when we will go public. It won’t happen in this calendar year, that’s certain.
We believe that you are also looking at acquisitions?
We are looking at two more companies right now and both are technology companies. They are start-ups, one is running a technology that helps buyers discover products easily and other provides technology to sellers, enabling them to sell better, sell more. These are very small companies with great technologies. These deals may or may not happen. I think with the next three months we will do something.
How do you see consolidation, especially early stage ones?
I think consolidation at an early stage is bad, because it destroys value. But competition is good, because to go from $3 billion to $70 billion, with only one player, would be extremely difficult. We want people who constantly raise the bar on customer services, seller enablement, technology and professional opportunities among others.
You are selling more than 1 lakh phones on Snapdeal? Which are the other categories where you see a greater traction?
Handsets are growing as many new customers are coming in and feature phone users are upgrading to smartphones. Another reason is that users are changing their phones a lot faster now. We are seeing a greater traction in other categories too. For example, we are selling more than 20,000 ACs, 10,000 TVs, 5,000 refrigerators, which is almost 10 times of what we did last year.
Fashion is 60 per cent of our total units sold. We are seeing great traction in apparels, shoes, home categories such as cushions, bed sheets and furniture. In furniture, which was launched six months ago, we will do ₹50 crore this year.
Entrepreneurs also want to sell off their companies? What are your plans?
We realised that as we got deeper and deeper into business, money became less relevant. We started feeling like we were on a mission. Our mission is to create life changing experiences for small businesses in India and that the mission is much bigger than whatever money can buy.