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Snapdeal now fulfilling 60% of orders from own centres

30 December 2015

Snapdeal, India's largest online marketplace in terms of sellers, is now fulfilling 60 per cent of the orders from its own fulfilment centres, compared to just 7 per cent at the start of 2015, said its vice president-operations Ashish Chitravanshi.

In the past one year, Snapdeal has also added 1.3 million square feet of warehousing space spread over 25 cities, Chitravanshi said.

Earlier this year, the company, backed by japanese telecom firm SoftBank, and Chinese contract manufacturer Foxconn and ebusiness giant Alibaba Group, had introduced a service 'Snapdeal Instant' to allow delivery of packages to customers within an hour of placing the order. It also launched four-hour delivery, card-on-delivery and 90-minute reverse pickup to improve customer experience.

Snapdeal, which competes with the country's largest e-commerce firm Flipkart and Amazon India, also invested heavily in supply-chain logistics this year.

"By the end of 2015-16, we would have invested $150-200 million in our supply chain logistics. A major chunk of this is our investment in GoJavas," he said.

The company's logistics team has grown five-fold to more than 1,000 people.

The investment in logistics and supply chain has enabled Snapdeal to cut short delivery times 70 per cent by moving a bulk of sales to Snapdeal Plus, its fulfilment centres, said Chitravanshi.

 Snapdeal, which closed a $500-million funding round in August that valued the five year-old company at about $5 billion, plans to keep investing in supply chain logistics next year as well (See: Snapdeal raises $500 mn in fresh funding, takes valuation to nearly $5 bn).

"Next year, we will continue to strengthen our network and fulfilment channels. We are looking to leverage big data analytics in a big way to further improve our customer experience," said Chitravanshi.

The rising demand from tier-2 cities and beyond and expectations of speedy delivery from metro customers are making innovation in delivery services imperative for e-commerce firms.

India's e-commerce market is expected to grow to $220 billion in the value of goods sold by 2025, up from an expected $11 billion this year, Bank of America Merrill Lynch said in a recent report.

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