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Unboxing Diwali: How Snapdeal Prepared for the Year's Biggest Sale

Unboxing Diwali: How Snapdeal Prepared for the Year's Biggest Sale

By Gopal Sathe | Updated: 7 November 2016 15:01 IST

Highlights

The Diwali period accounts for around 30 percent of the annual business
It shifted to a private cloud this year to handle the load
The Unbox campaign puts the focus on the delivery experience

For most e-commerce companies in India, Diwali is the high point of the year. It's the country's equivalent of Black Friday and Cyber Monday, where the biggest sales take place and huge discounts are available on products. Instead of a single sale, we're now seeing multiple sales scattered across a whole month, with all the big e-commerce companies participating actively. To get a better idea about how companies prepare for the festive sales, Gadgets 360 caught up with Snapdeal co-founder and CEO, Kunal Bahl.

Funnily enough, according to Bahl, Diwali was actually the time when the team halted all the work it was doing. "We had to avoid new changes in the run-up to Diwali, because you don't want to risk breaking any function at a time when the traffic is the highest," says Bahl. "So the execution and delivery has to culminate weeks ahead, and the work and planning starts several months ahead." Now that Diwali is over and the customers are also taking a breather, Snapdeal is rolling out updates and new features, he adds.

For Snapdeal, the 'Diwali Season' accounts for 30 percent of the annual sales. This year was particularly interesting because the run-up to the Diwali season also saw some significant changes for Snapdeal - a month before the festival, Snapdeal underwent rebranding, launching it's 'Unbox' campaign. This continued through Diwali, with its sale being called the Unbox Diwali Sale, for example. It also rolled out a new consumer offering, called Snapdeal Gold, which provides free next day delivery, without any subscriptions - all you had to do was pay up-front instead of opting for cash on delivery.

It also launched Snapdeal Cirrus - it's own private cloud platform. This is something that leading e-commerce companies, in India and around the world, and it's something that Bahl says makes a significant difference, both financially, and in opening up technical possibilities around the consumer experience.

"For a small startup it obviously doesn't make financial sense," says Bahl, "but at our scale, it makes a big difference financially. But if that was the only reason - if all you could say is that you're saving 20 percent by doing this, then our time would be better spent elsewhere."

"More importantly, it offers the flexibility to handle surge, we had a record number of people shopping on the site this Diwali and there was no downtime," he adds, "and it also enables a lot of data analytics, machine learning, and artificial intelligence."

"Third-party cloud is great for a normal customer," Bahl explains, "but at our scale, even the performance is affected. Speed is very critical and this allows us to make more intelligent recommendations much more quickly, based on what you bought, or browsed, what others near you are looking at."

When the sale commenced on October 1, Snapdeal says it saw 700,000 concurrent users on its website within the first five minutes. Over 2,000,000 users logged in within the next hour, a 10x surge according to the company. And according to Snapdeal, the fact that it was able to stay live, and offer a personalised experience with recommendations curated in real time, was made possible by the switch to Cirrus.

"Once your platform is superfast, it allows you to enhance the consumer experience as well," says Bahl. "So we will serve more video going forward, which will be very useful for fashion, for example, where just seeing a flat photo doesn't tell you too much about the item. But if you have to wait 10 seconds to buffer the video, then it's a bad experience. So we need to be able to deliver in 1-2 seconds, so that you have a native experience."

Another area where speed is very important for e-commerce companies, according to Bahl, is search. Snapdeal, he points out, has 65 million products, with some selling out, others being updated, pictures being uploaded, and pricing changing in realtime. Search has to reflect all of this, and instantly, he says.

"[With Cirrus,] we can also go beyond personalised recommendation widgets, and serve up personalised search really quickly," he says. "So for example, if someone searches for a cooker, and his location is seen as North India, then we will show a pressure cooker. For someone in South India, we'll show a rice cooker. We process lot of different data points, to try and show you the most relevant results."

"On a scale of 0 to 10, we're still at 2," Bahl adds. "We're nowhere near where this can go."

What's interesting though is that for an e-commerce company, Diwali doesn't just represent a bumper month on the accounts. It's also a chance to prepare new technology, deploy it, and stress-test during its busiest time. The gains carry on through over the next year, until its time to repeat the cycle.

Before Diwali, services like Snapdeal Gold, along with technology updates such as Cirrus, and the new marketing campaign all flagged off, and according to Bahl, a combination of all these factors has led to an influx of consumers. In fact, Bahl believes that the rebranding - which includes not just a new logo and ads, but also all new boxes (which have small gifts along with the product you ordered), has been a big part of the growth that Snapdeal is seeing.

"We wanted to move away from functional messaging of discounts and fast delivery, and focus on the magic moment of the buying journey," he says, "and that is why our message is 'Unbox'. We want to make the delivery experience good for the customer, and we've seen, after Diwali got over, the traffic at the start of November is around 2x of September."

"You always get a spike at Diwali which leads to growth, but this is unprecedented," Bahl adds. "We've seen the impact of Diwali in the previous years, and the impact of the campaign is clear. We worked hard on things like changing the boxes, despite the fact that it added complexity, and cost. The red box is now synonymous with Snapdeal."

For Snapdeal, it's also a chance to break away from the reputation which dogged it for a couple of years, of being unreliable in deliveries. There were a few cases of people ordering phones, and getting stones, soap, or empty boxes, instead. The issues weren't unique to Snapdeal, but for many people, the association was made. A complete rebranding, along with a new focus on the delivery experience, sounds like a second chance for the company's image.

Bahl however insists that this never crossed the minds of the people within the company, and points out though the blame for these situations didn't lay with Snapdeal, yet it worked to resolve things to satisfy the customers involved. Regardless, the question remains as to whether this rebranding and campaign will give Snapdeal a fresh start in the minds of customers, in its competition with Flipkart and Amazon.

The rebranding and initiatives such as Snapdeal Gold do seem to have had a beneficial effect. Snapdeal says this year's Diwali sale was its biggest ever, with a surge of 25 percent before the actual sales began, and a sharp increase in prepaid orders, with just half the sales being cash on delivery. This was also probably helped along by the fact that Snapdeal was offering instant discounts to people using cards from a wide assortment of banks, including American Express, Axis Bank, Citi Bank, HDFC Bank, Kotak Bank, Standard Chartered Bank, State Bank of India, and Yes Bank.

All the three big e-commerce companies in India have claimed all sorts of milestones were crossed this Diwali. Different metrics have been measured, as usual, to prove that the festival was a huge success. The relative position of each brand in India, and the long-term impact of these big events, is open to interpretation, but it's clear, from talking to Bahl, that getting these big events into gear is a major undertaking for all the companies. The question is how the companies capitalise on this.

Going forward, Bahl says, Snapdeal is going to focus on logistics and technology. It is already changing processes and technology for sellers - something that it didn't want to do during the busy Diwali season. There's no doubt that the other companies are also now going to quickly roll out new features and experiment.

"You'll see us do many things around receiving and opening the box," says Bahl, "and in the supply chain. [After all,] people are not meeting me, but the delivery executive. We have much more to tweak, but we're focusing on the consumer experience."

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