Snapdeal slipped up against Amazon, Flipkart. Here’s how it plans to redeem itself.

Snapdeal, India’s third biggest ecommerce site, is in a tight spot. Once the second biggest after Flipkart in India’s ecommerce race, it lost that place to Amazon gradually, and is now broadly considered a distant third in the running.

Whispers of its being sold to rivals (Snapdeal denies these) often make the mainstay of India’s startup huddles these days. Recently, it got snubbed by Flipkart as it pipped Jabong from right under its nose.

The Softbank and Alibaba-backed marketplace, however, isn’t giving up, despite its misfortunes. It just got US$21 million as part of a previously announced funding round, and in good time.

This year’s festive season, which starts in October and culminates in Diwali, is expected to be a key test for e-commerce players in the industry.

Founder CEO Kunal Bahl went the “customer experience” route earlier this year, stressing how that was a better measure of ecommerce success than counting gross merchandise value. That move was quickly copied by Flipkart, potentially marking a change in the country’s ecommerce path.

See: Snapdeal beats Amazon, Flipkart on delivery time promise: report

To fight back, Snapdeal has invested about US$300 million in building its logistics and supply chain capabilities and develop innovations at each leg of the delivery cycle. As of May, it had added 2 million square feet of warehousing space across 25 cities, and built 63 fulfilment centers.

Will Snapdeal catch up? Photo credit: Wikimedia.

More critically, Snapdeal is taking its back-end technology more seriously than ever. That shift in focus is critical for the company’s future, as Amazon keeps upping the bar. Snapdeal established a data science team in California in May to crunch more data than the company has ever done, predicting customer behaviour, sales patterns, and trends. That team is now the “headlights of the company,” chief technology officer told Tech in Asia.

See: Amazon is closing in on Flipkart. Jeff Bezos describes how he got there

Investments

Snapdeal bought tech marketing company TargetingMantra in May in a bid to get better access to customer needs and desires – the mainstay of ecommerce marketing these days.

The result? A 15 percent rise in conversion rates, and a 45 percent rise in visits to pages listing various products, Rajiv said.

Results