SNAPDEAL: A NIGHTMARE OR A BENEFIT

IN REVERSE LOGISTICS?

Submitted To

Prof. Saroj Koul

Submitted To

B Vamsee Krishna Vyas

20142116

IBM’14

O P Jindal Global University

Jindal Global Business School

Sonipat
 Contents

1. Introduction

2. Functions of Reverse Logistics

3. Types of Reverse Logistics

4. Snapdeal: Introduction

5. Logistics in Snapdeal

6. Reverse Logistics in Snapdeal

7. The NEXT Step

8. Conclusion

9. Citations
 Introduction

Reverse logistics was traditionally defined as the process of moving a product from its point of

consumption to the point of origin to recapture value or ensure proper disposal. It is one of the

fastest developing fields of business logistics, with the result that it is continuously changing in

scope and significance. Reverse logistics includes activities to avoid returns, to reduce materials

in the forward system so that fewer materials flow back, and to ensure the possible reuse and

recycling of materials.

Shippers generally do not initiate reverse logistics activity as a result of planning and decision

making on the part of the firm, but in response to actions by consumers or downstream channel

members.

Functions of Reverse Logistics

Remanufacturing – Rebuilding or repairing the product with reused, repaired or new parts. This

will help them to serve another customer.

Refurbishment – Repairing the returned product and increasing the life cycle of the same.

Servicing – In reverse logistics they serve the suppliers, customers, insurance and other key

stakeholders who are effected by the reverse logistics transaction.

Returns management – The returned goods are either shipped back to the supplier or placed in

the warehouse to serve the future customers

recycled. If the product is totally destroyed or of no use it would be sent to waste management

centers to dispose it in environmental friendly manner.

Warranty management – The supplier is entitled with few warranty right of the product he is

supplying and the e – market player is held responsible to pay the insurance to the supplier.

Warehouse management – When goods are shipped pack the inventory should be stored in

warehouses according to the availability and adjustments should be done for the same.

Image Source: http://cerasis.com/2014/02/19/what-is-reverse-logistics/

 Reverse logistics can be classified into different types according to different activities,

they are as follows

 Movement of goods to the nearest response unit / warehouse

 Sorting the containers and packaging materials

 Destruction of spoiled food items and other perishable goods.

 Return of rejected goods to the suppliers.

 Movement of excess or over-supplied goods to warehouses or suppliers.

Snapdeal

Snapdeal is an e commerce marketplace located in India. The company was founded by Kunal

Bahl and Rohit Bansal. It started off as a daily deals platform but later on in 2011, it expanded

into e commerce market player. It has grown as a huge market place with 4+ million products. It

ships its products to 4000 towns with a supplier capacity of 50,000.

Snapdeal has received several rounds of funding by Nexus Venture Partners, Alibaba, Softbank

etc. Freecharge was originally acquired by Snapdeal for $400 million making it one of the

biggest acquisitions in Indian startup space. But later on it was sold for $60 million.

It mainly serves, electronic items, home appliances, apparels, large appliances, vehicles etc… to

its customer base. The customer segment of snapdeal mainly includes of rural population.
 Logistics of Snapdeal

Snapdeal has a one of the best logistics wing in the e-commerce segment. takes the minimum

time to refund money and for a reverse pick-up, by beating its rivals Flipkart & Amazon.

Snapdeal usually takes 2.3 days to refund the money and 26.4 hours to pick up the item from the

customer from the time the return request is initiated by the customer, according to a study by

Channel Play.

It currently has 63 warehouses across 25 cities that manage over 80% of its deliveries.

Source: http://www.financialexpress.com/industry/snapdeal-fastest-in-refunds-beats-flipkart-

amazon/328761/

Reverse Logistics in Snapdeal

Snapdeal is facing a few problems in its reverse logistics wing. Due to the high amount of costs

increasing and the company financial situation is also not in a good state. Snapdeal has to deal

with few important questions, to tackle the logistics problems it is facing right now. The

following are the issues in snapdeal regarding reverse logistics.

Should snapdeal not a give a chance to customers to return the product?

No, the company should give the customers the option to return the product as it would

encourage the customers to do business with the company in future and also increase the faith on

the company. Return policy is very important as it gives the customers to choose again and for

the company to serve the customer once again in a better manner without any mistakes.

Should snapdeal have connected organizations and retailers with the customers and

derived feedback from them?

At the present state snapdeal should itself handle the feedback system. To connect the retailers

and other important organizations with customers requires a complete new set up of information

systems, which would be a financial burden to the company.

It also becomes unnecessary because customers are already giving feedback in the snapdeal

website itself and also the suppliers are interacting with the customers if in any case they face

any problem, so, building another feedback system is unnecessary at this stage.

Would snapdeal need to alter it’s product return policy in favor of a “no question asked”

return policy?

No, snapdeal should drop the policy of “no question asked”, as it is one of the most important

ways of getting feedback from the customers and also to identify faulty customers whose return

rate is higher than expected levels. This policy of “no questions asked”, will de motivate the

suppliers, as they will get goods returned in a good or bad state and decreases their profit margin.
Supplier base will decrease due to this method. At least this method should not be introduced in

large appliances, vehicles, electronics etc. as these are normally the most consumed items.

Would corrective action have required for the e-commerce industry?

Yes, there should be predefined rules in the reverse logistics segment as it is a very time

consuming and costly process to be done by the organizations. In the E-Commerce industry,

more alliances should be made amongst the logistic providers and the ecommerce companies.

The government should increase more investments in logistics sector and should develop more

intermodal transport station across the country which will help in the reverse logistics process to

efficiently transport the goods across the country and increase the transactions between suppliers

and customers.

Could snapdeal create a recall value for its services for customers such as Vaishali who had

purchased a saree for her mother?

In the case of Vaishali, snapdeal can create recall value of the saree as it is not being used by

Vaishali mother and it is not damaged, so once the product is received at the warehouse. It can

again pack the saree and store it until further purchase order from a different customer.

It also can serve Vaishali in future like, Snapdeal can do data analysis and again produce the

recommendation during the same time of the year (previous year order date), and by provocating

her to buy again the product thus by creating future revenue.

From the above questions, we can see that Snapdeal is at the top in reverse logistics segment

when compared to its, competitors. It should carefully build the customers confidence and

increase its profits. It should also expand its logistics base more in rural areas also as it is the

most important customer segment for the company. As snapdeal invested in Vulcan Express

recently, it would reach to every segment of customers in a more efficient manner.

Citations

http://www.thehindubusinessline.com/info-tech/snapdeal-parent-posts-2638cr-loss-in-fy-

2016/article9485557.ece

http://dlca.logcluster.org/display/LOG/Reverse+Logistics

http://searcherp.techtarget.com/definition/reverse-logistics

http://cerasis.com/2014/02/19/what-is-reverse-logistics/

http://www.financialexpress.com/industry/snapdeal-fastest-in-refunds-beats-flipkart-

amazon/328761/