Sustainability of Inorganic Growth in Online Retail by Snapdeal: A Case Study
Keywords:
Sustainability, Snapdeal, Growth, Merger & Acquisition, StartupAbstract
This paper is meant to examine the impact of financing, rapid inorganic growth on the viability of e-commerce Start up. The inorganic growth strategy used by emerging start ups by acquiring firms to expand the goods and services offered and improve the gross merchandise value has been evaluated.
Snapdeal had been a contender for the top slot in online retail segment in India. Suddenly a company with 9000 employees had gown down to 200 employees. The case examines the journey of Snapdeal and the implications of aggressive growth and relying on few big investors. Snapdeal focused on a strategy of leaner organisation after failing in rapid expansion and acquisitions. The strategy has yielded positive results and the losses have reduced from Rs 4,638.9 crore in FY2016-17 to Rs. Rs 440.7 crore in FY 2017-18. It is found that aggressive inorganic growth fuelled by big ticket investments and relying on few large investors can lead to disastrous results if fast growth is not sustained and major financers back out. Snapdeal should focus on developing satisfied customer base, efficient operations, satisfied employees, diversified financing options and organic growth to become profitable and take on the market leaders with equity financing from stock markets.
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