Snapdeal's Power Brands to give wider choice to budget-conscious

Initial public offering (IPO)-bound Snapdeal, over the past three years, has pivoted from being an all encompassing e-commerce marketplace, to operating in a hyperfocused mode. This is to cater to value-conscious customers, with more than 90 per cent of products on its platform being under Rs 1,000.

As part of the same pivot, it has also built a ‘Power Brands’ programme, with more than 10 brands in under a year. Here, Snapdeal owns the intellectual property and licences to third-party sellers. This is across popular categories like apparel, fashion accessories, footwear, home and kitchen, health and wellness, personal grooming, and so on. “The inventory of Power Brands is owned and controlled by the sellers. These manufacturers/sellers are selected based on various business parameters. Suppliers, who have the capability to supply good quality products, are shortlisted. These Power Brands help systematically aggregate the supply of such merchandise on the platform. The branding support under Power Brands programme empowers the sellers to move up the branding ladder,” said a Snapdeal spokesperson.

The programme is different from private labels that other e-commerce companies own, such as Amazon, with its Solimo brand, in the way that Snapdeal does not control or own inventory.

Sellers have the option of either manufacturing or selling under their own brands, or use the brands created by Snapdeal for a licensing fee. In either case, Snapdeal does not compete with other sellers or brands. Some examples are men’s T-shirt brand David Miller, home and kitchen brand Hometales and so on.

The philosophy behind introducing Power Brands, added the Snapdeal spokesperson, is that they “bring structure, uniform look and feel to unorganised categories. They address the latent demand for products not offered by the current supply.”

The products are designed based on consumers’ demands that address real consumer needs, based on what they search for on the platform. For example, large coin pockets in wallets, large sizes in bedsheets and loops stitched in masks, among others. “The demand for Power Brands is growing within various categories and this is expected to scale up significantly as Snapdeal expands the products, categories and num­ber of sellers that it works with. Snapdeal is committed to growing the “Power Brands” portfolio by launching more “Power Brands” and increasing their sales,” said the spokesperson.

The needs and demands of value-conscious buyers collectively account for 70 per cent of Indian households, according to a recent research report by Kearney. The value lifestyle retail market, which caters to these segments, is expected to grow from $90 billion in 2019 to $215 billion by 2030. This includes categories like appa­rel, footwear, fashion accessories, cosmetics, small appliances and home and living.

By 2030, 19 per cent of value shoppers will be served online via value e-commerce, up from 4 per cent in 2019, the report added. Currently estimated at $4 billion, value e-commerce is expected to see fast growth at 26 per cent compound annual growth rate (CAGR) and is set to reach $40 billion by 2030.