Ecommerce marketplace Snapdeal has reportedly stopped the incentive programme for customers that it employes through affiliates, as the company struggles to conserve cash as fresh investments get tougher to secure in the recent times, reported ET.
The ecommerce company pays commissions to affiliates based on the number of people who transact on the marketplace. These affiliate network consists of coupons, cashback deal channels and blogs.
As per the reports, the news was informed to Snapdeal’s partners on early Friday that the ecommerce giant will not be able to pay for orders and additional installations of its mobile application routed through them, effective immediately.
If compared to other online ecommerce companies, Snapdeal’s spends les on its affiliate programme. Typically, large online retailers allocate 15-20% of overall marketing budgets for such incentive schemes, which tend to peak during the festival season in the final quarter. However, for Snapdeal, the company spent Rs 4-5 Cr. on its affiliate channels around Diwali in October out of an estimated Rs 200 Cr. it spent for marketing centred on the festival.
Swati Bhargava, cofounder of deals and cashback provider CashKaro (Snapdeal affiliate partner) said, “It is something routine that marketplaces do ahead of the close of the financial year or when the marketing budget for the channel is exhausted during the end of the month. Freecharge (Snapdeal’s digital payments arm) has also paused its affiliate programme with us effective February 3, though the marketing teams are independent of each other.“
Jasper Infotech-owned Snapdeal, started in 2010 by Kunal Bahl and Rohit Bansal, claims to have an assortment of 65 Mn plus products across 1,000+ categories from over 125,000 regional, national, and international brands and retailers. It has over 300,000 sellers, and delivers to 6000+ cities and towns in India.