Snapdeal to venture offline domain ahead of IPO

Ahead of its $250 million initial public offering (IPO) Softbank-backed e-commerce firm Snapdeal is all set to venture into the offline domain with the launch of partner stores across small cities of the country with an aim to attract and cater to 'Bharat', according to sources privy to the development.

The first Snapdeal partner store will be launched in January. The company plans to gradually expand the number to around 25 by the end of the next year.

Snapdeal will partner with existing or aspiring retailers for an asset light focused rollout under which the company will help retailers procure goods of its power brands through its very own sellers.

Power brands are Snapdeal's brands which it launched a year ago in partnership with select sellers. The IP of the brand is owned by Snapdeal but licensed to third-party sellers as laws in India do not allow marketplaces to hold inventory.

These brands are designed to cater to value-conscious customers who want to pay primarily for the features and functionality instead of brand premium.

Snapdeal has also hired former chief operating officer of Iconic Fashion, Priyaranjan Kumar to lead this initiative. Before that he was part of the leadership team at Aditya Birla Fashion and Retail and was involved in the ramp up of the physical stores network under the Pantaloons brand.

While online retail in India is rapidly growing, it still accounts for less than 10% of India's retail. Some categories and branded products have a deeper online presence, while others are even lesser than 5%.

Omni-channel approach in India allows e-tailers to cater to consumers who are still exploring online channels but conventionally do all the purchases offline. These are customers with hybrid habits who will take a while to get comfortable with online platforms.