Snapdeal Said to Reassure Staff With Promises of Profit

In India, SnapDeal is in the top 3 rank in the E-commerce market. Seeking to calm employees rattled by reports of a cash crunch, the founders of Indian online retailer Snapdeal have gone directly to them with a string of town hall meetings in past weeks, according to sources, promising profit and brushing off takeover talk & the sources, familiar with the group, declined to be named as the meetings were not public. To keep the rank SnapDeal gives lots of discounts.

Founders Kunal Bahl and Rohit Bansal delivering motivational speeches, One of the sources said there had been at least five town halls in recent weeks.

“It was only profitability and profitability,” one source said, describing answers to questions from employees whether the company was a takeover target.

In India, the market leading company Flipkart gives a good competition to SnapDeal. Also, there is a huge competition from massive us company Amazon. Snapdeal sought funding support in China, from Chinese funds and Alibaba Group Holding Ltd, already an investor, sources with knowledge of the matter said. But the China setback and a valuation that has dropped from a peak of $6.5 billion (roughly Rs. 42,282 crores) last year have unsettled some staff.

“Investors in our industry need to understand that driving indiscriminate growth at any cost doesn’t create long-term value,” Bahl wrote in the letter.

A spokeswoman for SoftBank in India declined to comment while other Snap deal investors – Nexus Venture Partners and Kalaari Capital – did not respond to Reuters queries. Alibaba has not commented on Snapdeal.

Snapdeal clocked up losses of Rs. 29.6 billion ($456.5 million) in the fiscal year to March 31, 2016. Flipkart’s wholesale unit and its online marketplace made a combined loss of Rs. 28.5 billion in the same period.

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