Snapdeal, India’s second-largest e-commerce company, has stitched alliances with online food ordering firm Zomato, and online travel and ticketing firms Cleartrip and Redbus, but without investing in them.
Users will soon get a travel icon on Snapdeal, which will have bus tickets powered by Redbus. There will be similar icons of Cleartrip and Zomato.
The three companies have shared their application programme interface (API) with Snapdeal. APIs are tools that help in developing applications. With these APIs, Snapdeal users will be able to order food and book bus and flight tickets on its website and app.
E-commerce in India is facing a tough time, with valuations not keeping pace with expectations and funds drying up. The deal is expected to help Snapdeal and the three companies share users, get more orders, spend less on acquiring customers, and save them from spending huge amounts to build businesses organically.
“Getting the inventory and the price is a commodity business… But these are mega malls with many buyers. For Snapdeal, travel will never be its main business, for us, it is,” said Ashish Kashyap, founder and CEO of Ibibo Group, which owns Redbus.
Redbus also shares its inventory with Snapdeal’s rival Paytm.
“Snapdeal will have access to our flight inventory, and we will share a portion of our commission with them,” said an executive with Cleartrip, which makes 3-4% profit margin on flight tickets.
Deepinder Goyal, founder of Zomato, didn’t respond to calls from HT.
Zomato does 20,000 orders every day on its own platform. Snapdeal will help it grow a couple of times, experts said.
Snapdeal also did not respond to HT’s request for comments.
Kunal Bahl, CEO and co-founder of Snapdeal, had mentioned earlier that his company wants to build an eco-system over the Internet. Bahl’s vision is to get 10% of all consumption online, which is Rs 85 lakh crore, or 70%, of India’s GDP. Consumption is expected to go up to Rs 132 lakh crore by 2020.
As e-commerce goes beyond gross merchandise value and valuations, customers and profitability will be key. Snapdeal is looking to achive that through its recent deals.