Snapdeal To Pull The Plug On Its Handicrafts Marketplace Shopo.in 

Nearly three years after acquiring Shopo.in, Snapdeal will shut the online marketplace for Indian designer and handcrafted products, two people familiar with the development, including a seller on Shopo platform told BloombergQuint.

The decision to shutdown Shopo.in came as Snapdeal looks to aggressively cut costs and conserve cash as it struggles to raise fresh funds. The company is closely examining the investments it has made during the last three to four years, said one of the two persons mentioned above, requesting anonymity.

Shopo had sent an email to all its sellers telling them the platform will close operations by February 10, said the seller quoted above who has now moved to another marketplace, kraftly, following the company’s announcement.

Another seller on the Shopo platform had also written a blog post stating that the website is shutting operations by February 10.

Snapdeal had acquired Shopo in 2013 and relaunched it as a zero-commission marketplace. It allowed small and medium sized businesses to chat, buy and sell on the platform. In 2015, Snapdeal had committed to invest $100 million in the handicrafts marketplace over the next two years.

The first sign of trouble came when Snapdeal said the entire team of Shopo has been merged with FreeCharge in November and Sandeep Komaravelly, who was the senior vice-president in charge of Shopo, and instrumental in the merger quit in January to join a new venture.

According to his LinkedIn profile, Komaravelly has now joined Oben General Insurance Ltd. as chief marketing officer.

The platform has about four million products sold by 1,50,000 sellers, according to the company website.

Mounting Losses

The move to shutdown Shopo.in comes in the backdrop of mounting losses and fund crunch, the person said. Snapdeal had previously shut down its online platform for premium and luxury fashion goods, Exclusively.com in August last year and had integrated it with itself, the company had said in a media statement.

Losses at Snapdeal more than doubled to Rs 2,960 crore for the financial year ended March 2016, according to documents filed with the Registrar of Companies.

Due to the cash crunch, Snapdeal is aggressively in talks to raise fresh funds even at a lower valuation, one of the two people quoted above added. In a recent interview to Reuters, Snapdeal co-founder Kunal Bhal had said that e-commerce firm is looking to turn profitable in the next two years and does not need to raise funds unless it decides to make an acquisition.

Snapdeal was reportedly valued at $6.5 billion when it last raised $200 million in February 2016. SoftBank reported a loss of ¥39.3 billion ($351 million) from its financial instruments for the nine months through December 2016 and had marked down the value of its two Indian investments – Snapdeal and cab-hailing firm Ola.

Earlier this month, Snapdeal even suspended its incentive programme for customers that it employs through affiliates. However, the firm maintained that it is fine-tuning the program and will roll out new plans over the next few days

“The Snapdeal affiliate program is being recast to make it more effective and to drive higher RoI on the same. We have advised our affiliates about the same and the new plans will be shared over the next few days, after incorporating feedback received from the partners,” a Snapdeal spokesperson had said.

A company spokesperson did not respond to an email seeking a clarification and comment.