With e-commerce already on shaky ground, the report that Snapdeal, a major player in the business, plans to burn a massive Rs200 crore on rebranding and marketing has caused a flutter. The e-commerce company launched its re-branding exercise with an expensive splash in the largest print daily. The irony of this seems lost on those making the funding Snapdeal's ambitious agenda to woo around 10 crore potential online buyers with a new logo. The company, which was set up in 2010, has changed its logo twice in its short six-year existence.
Kunal Bahl, chief executive and co-founder of Snapdeal is quoted by media as saying, "There are about 5 to 6 crore online buyers in India currently and for e-commerce to become larger, the next 30-40 crore people coming online would be very important... Things like discounts, fast shipping, functional benefits are already there, but going ahead, e-commerce brands will have to stand for something of a higher order". It is not clear how re-branding is going to help any of it.
Mahesh Murthy's acerbic tweet calling it a "Rs 200 crore for a new paint job on the Titanic" probably captures the sentiment best. Murthy, founder of Pinstorm and venture capitalist triggered a storm of comments suggesting that this was Snapdeal's last hurrah. Some even compared it to housing.com funded by the same venture capitalist, which has all but sunk.
The re-positioning by Snapdeal comes ahead of the festive season. Other big players and Snapdeal's competitors like Amazon and Flipkart are also lining up offers to woo customers to shop on their platform.
Snapdeal has done away with its blue and red logo, replacing it with a Vermello (red)-coloured box.
The rebranding campaign of Snapdeal is conceived by Prasoon Joshi and his team at McCann while Shankar, Ehsaan and Loy have worked on the jingle.
A tweet about a quartz India articles says, Snapdeal needs more than just cosmetic surgery.
Basically, it asks how a change in logo is going to attract new customers to the e-retailers' growth, which appears to be flagging across the industry.
Earlier in February, Snapdeal, in fresh funding, raised $200 million from investors led by Canada-based Ontario Teachers' Pension Fund, venture capital fund Iron Pillar and others. Last year, it had raised $500 million from Chinese e-commerce Alibaba group, Foxconn Technology group and Softbank group, its existing investor.
Snapdeal is promoted by Delhi-based Jasper Infotech Pvt Ltd, and have over 2.75 lakh sellers who sell more than three crore products on the online platform.
According to a report from Live Mint, Jasper Infotech reported losses widening to Rs1,328.01 crore for the year ended 31 March 2016 from Rs264.6 crore previous year as it spent heavily to maintain its market share amid growing competition from Amazon and Flipkart.