As if there wasn’t enough bad news already, Snapdeal has just received another blow.
On Feb. 21, Govind Rajan, the CEO of the company’s mobile payments arm, Freecharge, quit. Rajan was just nine months into the job. He was the Freecharge COO between August 2015 and May 2016. Earlier, Rajan had also served as the Snapdeal chief strategy officer and Airtel Money CEO.
Snapdeal acquired Freecharge in April 2015 for $450 million.
Rajan’s resignation comes at a time when Snapdeal and its subsidiaries are plagued by negative developments, including senior-level exits, job cuts, shutdowns, and a reported funding crunch.
“Top-level attrition is always bad news. It causes a stir among the employees and has a bad impact on a company’s relationship with external dealers or partners,” said Yugal Joshi, practice director at management consulting and research firm Everest Group. “No matter who comes in as a replacement, he or she will take some time to settle in and bring about a positive change.”
Over the last year, several senior executives have quit Snapdeal, including the company’s prized Silicon Valley hire Anand Chandrasekaran, who was its chief product officer. Among others who quit are the head of corporate development, Abhishek Kumar, head of partnerships and strategic investments, Tony Navin, and senior vice-president Sandeep Komaravelly, in charge of the customer-to-customer marketplace, Shopo.
Some of these exits could be linked to underperformance, said Arvind Singhal, chairman and managing director of management consulting firm Technopak.
“A lot of Indian e-commerce companies hired people at crazy salaries over the last few years and these individuals were expected to work miracles. But that didn’t happen, so now these people are leaving and new ones are coming in,” Singhal said. “It’s become a revolving door. But there’s no guarantee that the new person will work out.”
Freecharge will now be headed by Jason Kothari, who joined Snapdeal in January as chief strategy and investment officer. Kothari was earlier the CEO of Housing.com, which was merged with PropTiger under his leadership.
Both Housing.com and Snapdeal are backed by Softbank. So Kothari’s increasing control over Snapdeal has further fueled the belief that Softbank is now in charge.
“The Indian e-commerce industry is clearly seeing a churn where investors are taking the driving seat and founders are gradually easing out. This trend is evident in large companies like Flipkart and Snapdeal, and even in smaller players like Zivame,” said Singhal of Technopak.
Over the last year, the industry has been in turmoil, and Snapdeal is in a particularly painful spot. Once a close competitor to sector leader Flipkart, it now trails its Bengaluru-based rival by a wide margin. It has also lost its second position in the market to Amazon.
The company made some poor bets. For example, after acquiring Shopo in 2013, Snapdeal shut it down in February this year. Shopo allowed small and medium-sized businesses to chat, buy, and sell on the platform on a zero-commission model.
While top-level exits and shutdowns will help Snapdeal save costs and get itself into shape amid a funding crunch, analysts are struggling to see a silver lining.
“Snapdeal has not managed to create a niche for itself in any space, whether it’s logistics or payments. It does not have any unique identity of its own. It’s neither an action hero nor a romantic one,” said Joshi of Everest Group.