Snapdeal aims to lead the market in sales by March 2016

After getting a funding boost of 500 million dollars (over Rs 3,300 crores), Snapdeal Chief Executive Kunal Bahl is certain that his company would grab the top spot sales overpowering Flipkart, by March 2016. The company claimed that it achieved 4 billion dollars (about Rs 26,000 crores) in total value of goods sold, or gross merchandise value, this month, about a year after it crossed 1 billion dollars (over Rs 6,600 crores) in GMV.

However, Snapdeal’s annual losses escalated five times from Rs 270 crores in March 2014 to around Rs 1,350 crores in March 2015. The main reason behind this is heavy discounting strategies adopted by the company. Media report suggests that the company spent almost 25 million dollars (over 150 crores) a month on offering discounts and marketing expenses.

However, Snapdeal is not the only company to have reported such a huge loss, other leading ecommerce firms are facing the brunt of discounting. Amazon India, for instance, registered a net loss of about Rs 320 crores after its first year of operation (2013-14), while Flipkart reported a loss of Rs 400 crores in FY14, according to filings with Registrar of Companies (RoC).

But capital boost by two strategic investors Foxconn and Alibaba is what Bahl is banking upon to race ahead in the competition. The company also acquired payments platform FreeCharge and invested in logistics venture GoJavas to build effective supply chain to drive growth.

Flipkart currently commands 44 percent market share of India's ecommerce market, followed by Snapdeal at 32 percent, according to a recent report by Morgan Stanley and Amazon's India unit accounts for 15 percent.