Snapdeal, one of India’s largest e-commerce firms, is giving itself a brand makeover—the second time in six years.
The Rs200-crore makeover exercise is aimed at getting the next 100 million users on board, Kunal Bahl, Snapdeal’s co-founder and CEO, said in a statement.
For starters, the blue-and-white company logo will now be vermillion, with two arrows forming a box. The logo was designed by the London-based DesignStudio, the firm that also made Air BnB’s logo. Ahead of the year’s biggest festival season, the company will also be spending on other promotional activities.
A Snapdeal spokesperson, however, said that the exact breakup of the Rs200 crore expenditure can’t be provided.
This is the company’s second logo change since it was founded in February 2010.
Why now?
Snapdeal’s announcement comes at a sluggish time for online retailers in Asia’s third-largest economy. Of late, the sector has faced multiple issues—funds are drying up, there have been massive layoffs, and profitability is still not on the horizon.
The Gurgaon-based firm, which delivers in over 6,000 Indian cities and towns, meanwhile, lags its Bengaluru-based rival Flipkart on most metrics. Sellers in India recall Amazon and Flipkart better than Snapdeal, a study by Nielsen showed in June.
Increasingly losing relevance among customers, “Snapdeal has been having an identity crisis for the last couple of years,” Sanchit Vir Gogia, chief analyst at Delhi-based Greyhound Research, had said in July 2016.
So, the moot question is, will another overhaul help Snapdeal?
‘Lipstick on gorilla’
“For me, it (re-branding) is basically repainting the hull (body) of the Titanic. It will make the Titanic look better but it will crash anyway,” said Mahesh Murthy, an investor and marketer. “In the current environment, a logo doesn’t make the slightest difference. I agree that customer acquisition is key, but it is wrongly believed that advertising and marketing increase customer acquisition. There has to be a differential offering or a service that attracts customers,” Murthy explained.
Others say such spending makes sense only if it is accompanied by “a new and relevant promise” that could change the rules of the game. “Is the customer going to change behaviour because the box is red? She might change if you promise delivery faster than Amazon and Flipkart… Otherwise it is a wasteful cosmetic change,” said Kiran Khalap, founder of Chlorophyll, a Mumbai-based branding consultancy.
“The phrase used is ‘putting lipstick on a gorilla to pass it off as a hostess’,” Khalap said.
To be fair, most e-tailers splurge on branding and marketing at this time of the year with the festival season approaching. In October and November, India celebrates festivals like Navratri and Diwali. For instance, Snapdeal’s sales grew some 700% during this period in 2015, a company executive told CNBC last year.
But such heavy spending has a flipside. In the financial year 2015, for instance, Amazon India posted a loss of Rs1,724 crore as a result of such splurging. In the same year, Flipkart made a loss of Rs2,000 crore, while Snapdeal reported a loss of Rs1,328 crore.