India’s Snapdeal E-Commerce Marketplace Expands

Snapdeal, an Indian e-commerce marketplace, continues to expand with the acquisition of luxury items seller Exclusively.in, continuing its pursuit of capturing $2 billion in the gross merchandising value of online fashion, reports TechCrunch. Snapdeal’s acquisition also keeps it in step with competitor Flipkart, which had a couple acquisitions of its own including Julong from Rocket Internet.

Exclusively’s history has been one of many hats. It was founded in 2010, raising $18.8 million from investors such as Tiger Global, Accel and Helion. It was taken over by Myntra, a high-end, online fashion retailer, but when Flipkart purchased Myntra in 2012, the company sold Exclusively back to the founders, who went back to raising capital as a newly independent company. Since then though, the company hasn’t gone back for additional funding from its investors due to its profitability, according to Snapchat CEO Kunal Bahl.

While the deal was not disclosed, Bahl maintains that Exclusively could be a “billion dollar business in the next three years,” citing the expected growth of the Indian luxury good market. According to analysis by KPMG, Indian luxury goods is a near $14 billion business, with additional growth of 30 percent year over year, following a trend also seen in China. Yet despite the expected growth, there are reportedly only shopping malls that cater to the high-end luxury market in India, which Bahl considers a “gap” in the market that Snapchat is hoping to exploit with online luxury goods sales. This is a tactic similar to American luxury startups like Rent the Runway and Moda Operandi, which use online networks to market luxury clothing to young, wealthy consumers.

Aside from the Exclusively purchase, Snapchat also recently acquired Wishpicker, a product recommendation service that could make it easier to increase luxury goods sales. Bahl’s plan is to get luxury goods out of the high-end retail spaces and into the hands of regular customers in an online-driven “democratization” of high-end retail.

“Contrary to what most thought, it’s not necessarily someone stepping out of a Mercedes but fairly normal people who want one Gucci bag,” says Bahl. “The meta-goal is to create the best ecosystem for brands and merchants to reach consumers in India. This is an expansion on the merchant base that will enable us to connect the dots on supply.”