Moving away from the usual practice of focussing on GMV as a growth parameter, e-commerce major Snapdeal is now aiming to enable 20 million users to transact on its ecosystem daily by 2020.
At a recent townhall, Snapdeal co-founder and CEO Kunal Bahl told employees that the new mission aims to pivot the entire organisation around the number of users transacting daily on its ecosystem (Snapdeal, coupled with acquired entities like Freecharge).
This would be a significant jump from the current over one million transacting users registered through Snapdeal’s ecosystem.
“The new vision of ’20 million daily transacting users by Year 2020′ focuses on driving the number of regular users on its platforms rather than a uni-dimensional focus on GMV alone,” he said.
The metric of daily transacting users has been adopted by Snapdeal as it is a good proxy measures of habit creation among its users, he said, adding that it is moving its strategy from customer acquisition alone and becoming a part of the daily life of its users.
Gross merchandise value or the total value of products sold through an e-commerce platform has been one of the metrics of measuring the success of the company.
Industry watchers have often complained that high GMVs cannot be used to reflect the health of a company as it does not indicate correctly the revenues or the profits of the company.
India is one the fastest growing e-commerce markets globally witnessing stiff competition among global and domestic players like Amazon, Flipkart and Shopclues as well as niche category players.
This becomes important as most e-commerce firms are heavily funded by investor money, which is used in discounting, consumer promotions and bringing more sellers and products on board.
“We are focussing on identifying and removing any points of friction, which may impede the seamless flow of users across its entire ecosystem,” Bahl told employees.
He added that investors have liked the strategy and is reflected in the company’s valuation that saw a 30 per cent jump in the last round of funding. The company has already completed the integration of its payments business, Freecharge on the Snapdeal platform.
Snapdeal is fully utilising the value of its marquee investors as it fast implements what has worked in other markets, including in China.
Snapdeal’s strategy is in line with global user centric tech organisations like Facebook (Instagram, Whatsapp, Messenger) and Google (Google+, Chrome, Google Office etc), which have multiple platforms for its users serving different use cases.
“Customer acquisition cannot be an end in itself, it is what you do with your users that creates long term value,” Bahl said.