Why Snapdeal failed: Snapdeal’s Rise and Fall

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Snapdeal, once touted as India’s leading e-commerce marketplace, experienced a rollercoaster journey that ultimately led to its demise. This article sheds light on the untold story behind Snapdeal’s rise and fall, analyzing the factors that fueled its rapid growth, the challenges it faced along the way, the failed merger with Flipkart, and the consequences that unfolded. We also explore the lessons learned from Snapdeal’s mistakes and its lasting impact on the Indian e-commerce market.

The Initial Success: Snapdeal’s Promising Start

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Snapdeal burst onto the scene with a promising start, capturing the attention of consumers and investors alike. Its ability to offer a wide range of products at competitive prices was lauded, attracting a significant customer base. Snapdeal’s unique value proposition, coupled with its user-friendly interface, quickly propelled it to become a rising star in the Indian e-commerce landscape.

Factors Driving Snapdeal’s Rapid Growth

Several key factors contributed to Snapdeal’s rapid growth. First and foremost was its relentless focus on the Indian market. Recognizing the untapped potential in the emerging e-commerce sector, Snapdeal strategically tailored its offerings to cater to the diverse needs and preferences of Indian consumers.

Strategic alliances and partnerships played a pivotal role in Snapdeal’s growth trajectory. Collaborations with major brands, distributors, and sellers allowed the platform to expand its product catalog, offering customers a wider selection and boosting its overall appeal. Moreover, these partnerships enabled Snapdeal to establish a robust supply chain and streamline logistic operations, ensuring timely deliveries to customers.

The Highs and Lows of Snapdeal’s Journey

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Rise to the Top Snapdeal’s journey can be traced back to its humble beginnings. Founded in 2010 by Kunal Bahl and Rohit Bansal, the company quickly gained traction, raising several rounds of funding from prominent investors. With a clear vision to revolutionize the Indian e-commerce landscape, Snapdeal set out on its mission to provide customers with unparalleled convenience and access to a plethora of products.

Early Days: Snapdeal’s Founding and Vision Snapdeal’s founders, Bahl and Bansal, envisioned creating a marketplace where Indian consumers could easily purchase products across various categories, eliminating the need for multiple platforms. This vision resonated with investors, who saw the immense potential for growth in India’s vast and rapidly expanding consumer market.

Targeting the Indian E-commerce Market Understanding the unique challenges and opportunities in the Indian e-commerce market, Snapdeal tailored its strategies to cater specifically to the Indian consumer. By incorporating features such as cash on delivery and localized language support, Snapdeal overcame barriers to online shopping and attracted a wider audience.

Strategic Alliances and Partnerships Snapdeal realized the importance of strategic alliances and partnerships to fuel its growth. Collaborations with major brands and local sellers allowed Snapdeal to offer a diverse range of products, becoming a one-stop-shop for customers. These partnerships also helped build trust and credibility among consumers.

Scaling Operations and Expansion To keep up with its growing customer base and stay ahead of the competition, Snapdeal embarked on a journey of rapid expansion. It invested heavily in building a robust logistics network and warehousing infrastructure, ensuring efficient order fulfillment and timely delivery. This expansion further strengthened its position in the market and enhanced customer satisfaction.

Challenges and Struggles

Fierce Competition from Flipkart and Amazon Snapdeal faced fierce competition from industry giants like Flipkart and Amazon, who were also vying for dominance in the Indian e-commerce market. As these players aggressively expanded their market presence, Snapdeal had to continually innovate and differentiate itself to stay in the race.

Cash Burn: The Cost of Rapid Growth One of the biggest challenges faced by Snapdeal was the cash burn associated with its hyper-growth strategy. Aggressive marketing campaigns, heavy discounts, and deep-pocketed competitors put immense pressure on Snapdeal’s financials. While this strategy helped Snapdeal attract customers and gain market share, it also raised concerns about the sustainability of its business model.

Operational and Logistics Difficulties As Snapdeal scaled its operations, it encountered significant operational and logistics challenges. Managing a vast network of sellers, ensuring efficient inventory management, and seamless order fulfillment became increasingly complex. Snapdeal had to continuously invest in technology and infrastructure to streamline operations and maintain a high level of customer satisfaction.

Customer Service Issues Snapdeal’s exponential growth also brought forth customer service issues. The rapid increase in customer inquiries and complaints overwhelmed its support systems, leading to delays in response times and subpar customer experiences. This, coupled with the fiercely competitive market, threatened to strain Snapdeal’s relationship with its customers.

Attempted Solutions and the Failed Merger Facing these challenges head-on, Snapdeal sought solutions to sustain its growth trajectory. The company explored opportunities to merge with Flipkart, one of its main competitors, aiming to leverage synergies and create a stronger market presence. However, the merger talks eventually fell through due to founders’ differences and regulatory hurdles, leaving Snapdeal in a difficult position.

Snapdeal’s Downfall

Factors Leading to Failure Snapdeal’s downfall can be attributed to a combination of factors. A funding crisis coupled with mounting investor pressure created a challenging environment for the company. The economic slowdown in India further exacerbated the situation, leading to a decline in market share and revenue loss. Snapdeal’s business model limitations, lack of focus, and failure to differentiate itself from the competition also played a significant role in its downfall.

The Consequences The consequences of Snapdeal’s downfall were far-reaching. The company was forced to implement layoffs to streamline operations and reduce costs, resulting in a decline in employee morale. Moreover, the loss of faith from both customers and investors dealt a severe blow to Snapdeal’s reputation and long-term prospects. The once-promising startup was left grappling with the consequences of its failed strategies and decisions.

Lessons Learned and Future Prospects

Key Takeaways Snapdeal’s rise and fall provide valuable lessons for entrepreneurs and startups. Focused business strategies that account for the unique challenges of the market and prioritize differentiation are crucial for long-term success. Startups need to strike a delicate balance between growth and sustainability, paying close attention to financial viability and operational efficiency.

Importance of Focused Business Strategies Snapdeal’s inability to stay focused and differentiate itself from competitors ultimately contributed to its downfall. Startups must develop clear and focused business strategies that align with market dynamics, customer expectations, and their unique value proposition. This strategic alignment ensures that resources are allocated effectively and long-term growth potential is maximized.

Lessons from Snapdeal’s Missteps Snapdeal’s journey highlights the importance of sustainable growth and prudent financial management. While rapid expansion and aggressive marketing tactics may yield short-term gains, they can also lead to financial constraints and operational difficulties. Startups should learn from Snapdeal’s mistakes and approach growth strategies with a long-term vision and financial prudence.

Snapdeal’s Legacy and Impact on Indian E-commerce Snapdeal’s rise to prominence had a profound impact on the Indian e-commerce landscape. It paved the way for other startups, showcasing the potential of the Indian consumer market. Despite its downfall, Snapdeal played a crucial role in driving innovation, building trust, and expanding e-commerce adoption in the country. Its legacy serves as a reminder of the challenges and opportunities that exist in the Indian market.

Evolution of the Indian E-commerce Market Post-Snapdeal Following Snapdeal’s decline, India’s e-commerce market witnessed significant changes. The intense competition between Flipkart and Amazon intensified, forcing players to adopt more sustainable business models and sharpen their focus. The Indian government’s push for digitization and the rise of mobile commerce further shaped the market landscape. Post-Snapdeal, the Indian e-commerce market continues to evolve, with startups and established players vying for dominance.


Snapdeal’s meteoric rise and subsequent fall is a cautionary tale for the Indian startup ecosystem. While it once held great promise, the company’s inability to sustain its growth momentum, address operational challenges, and differentiate itself from competitors led to its downfall. However, Snapdeal’s story serves as a valuable case study, providing insights into the intricacies of the Indian e-commerce market and guiding future entrepreneurs in their quest for success.


  1. What made Snapdeal successful initially?
  • Snapdeal’s success stemmed from its ability to offer a wide range of products at competitive prices, coupled with its user-friendly interface and innovative features like cash on delivery and localized language support.
  1. What were the challenges Snapdeal faced in its journey?
  • Snapdeal faced fierce competition from market leaders like Flipkart and Amazon, struggled with operational and logistics difficulties, experienced customer service issues, and grappled with the financial challenges of rapid growth.
  1. Why did the merger with Flipkart fail?
  • The merger with Flipkart failed due to differences between the founders and regulatory obstacles, preventing the formation of a unified entity.
  1. What were the major factors contributing to Snapdeal’s downfall?
  • Snapdeal’s downfall can be attributed to factors such as a funding crisis, investor pressure, declining market share, revenue loss, business model limitations, and a lack of focus and differentiation.
  1. How did Snapdeal’s failure affect its employees and customers?
  • Snapdeal’s failure led to layoffs, impacting employee morale. The loss of faith from both customers and investors had a detrimental effect on Snapdeal’s reputation and long-term prospects.
  1. What can other startups learn from the Snapdeal story?
  • Startups can learn the importance of focused business strategies, sustainable growth, financial prudence, and differentiating themselves from competitors. Snapdeal’s story serves as a reminder of the challenges and opportunities in the Indian market.

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