Snapdeal EBITDA up 40 per cent

Snapdeal expects to turn profitable in the next two years. Snapdeal’s EBITDA (earnings before interest, tax, depreciation and amortization) for the nine months of the current financial year has improved by about 40 per cent from a year earlier.

Marketplace providers like Snapdeal earn commissions from sellers on their platform as a percentage of value of goods sold. Snapdeal has a 12 percentage share of the gross merchandise value. Flipkart’s is 43 per cent and Amazon’s is 28 per cent.

Snapdeal’s focus is on getting good quality products and on-time delivery at the lowest possible cost. It has a captive logistics arm Vulcan Express. Vulcan has helped Snapdeal make inroads into the far-flung corners of India. Snapdeal, which also uses third party logistics services to deliver products to customers, has plans to allow Vulcan to seek external business in the coming months. The reasoning is that it isn’t viable to build a 500-city network in India with only one customer as a logistics company.

The value of goods sold online in India is expected to jump tenfold by 2025. But competition and discounting have meant most big online retailers are losing money.