Jan 2, 2019 · 37m · a16z
a16z Podcast | E-commerce, Payments, & More in India's Evolving Retail Landscape
Kunal Bahl · 12m spoken Rohit Bansal · 7m spoken Sonal Chokshi · 7m spoken Anu Hariharan · 7m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This episode of the a16z podcast explores the unique evolution of e-commerce, digital payments, and logistics in India through a deep dive into marketplace dynamics, consumer behavior, and technological innovation. Snapdeal co-founders Kunal Bahl and Rohit Bansal, alongside a16z partner Anu Hariharan, analyze how Indian retail leapfrogged traditional paradigms to build a tailored digital ecosystem.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 21.7% of the talking time here. How this is scored →
The host as informed peer 4.0 Guest teaching 4.1 Guest disagreement 1.1 The host pushing back 2.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:06 Kunal counters host's premise on postal theft
When Sonal suggests Indian logistics suffer from widespread package shrinkage and corruption based on her childhood memories, Kunal firmly interrupts to correct her framing: 'The India of today is very different from that India.'
Hardest push from the host ▶ 7:09 Sonal cuts through generalities to focus on fashionWhen Rohit attempts to answer a discovery question with a broad horizontal perspective, Sonal intervenes to redirect the conversation: 'Let's focus on fashion only because that's the most popular one...'
Biggest teaching moment ▶ 1:25 Kunal breaks down the 93% unorganized retail realityKunal educates the hosts on the fundamental structure of Indian retail, pointing out that 93% is unorganized local business lacking distribution chains, which dictates why B2C marketplaces operate entirely differently than in the US.
The host holds their own ▶ 26:07 Anu contextualizes FreeCharge acquisition using eBay/PayPal historyAnu demonstrates deep domain expertise by mapping Snapdeal's purchase of FreeCharge to eBay's acquisition of PayPal, explaining how eliminating transaction friction serves as a catalyst for overall e-commerce growth.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Unorganized Retail & India's Marketplace Opportunity | 3 | 5 | 1 | 2 | Sonal asks whether local Indian retailers lack the technical skill to build websites like WeChat merchants in China. Rohit and Kunal reframe the issue, explaining that 93% of Indian retail is unorganized and highly fragmented, which creates a structural need for infinite marketplace selection rather than individual websites. | |
| Designing for Discovery & Visual Shopping Experiences | 3 | 4 | 1 | 2 | Sonal inquires how platforms design for aspirational discovery without reliance on major brands. When Rohit gives a general answer about horizontal marketplaces, Sonal pushes back to narrow the focus specifically to fashion. | |
| Supply Chain Efficiency, Disintermediation, & Curation | 4 | 4 | 1 | 2 | Kunal illustrates supply chain inefficiencies by showing how a Gujarat saree costing $5 to make sells for $30 in Delhi stores but only $12 on Snapdeal. Sonal questions how marketplaces solve curation compared to US boutique concept stores, which Rohit addresses through user and seller collections. | |
| Building Logistics Infrastructure & Operational Control | 4 | 5 | 2 | 2 | Anu compares Indian logistics to Amazon's early days, while Sonal recounts childhood memories of package theft and corruption in the Indian mail system. Kunal directly corrects Sonal's outdated impression, noting modern tech-enabled logistics give marketplaces tight operational control. | |
| Market Dynamics, Local Competition, & Cost Advantages | 4 | 4 | 1 | 2 | Anu asks why India maintains multiple strong B2C e-commerce players rather than a single winner-take-all leader. Kunal explains that B2C retail accommodates segment specialization and highlights India's $1 nationwide shipping cost, though Sonal points out that cheap shipping benefits all local competitors equally. | |
| Mobile Payments, FreeCharge Acquisition, & Friction Reduction | 5 | 3 | 0 | 1 | Kunal explains how acquiring FreeCharge helped overcome friction from mandatory two-factor authentication and high cash-on-delivery rates. Anu adds expert commentary comparing Snapdeal's strategy to eBay's pivotal acquisition of PayPal. | |
| Mobile Behavior, App vs. Browser, & First-Time Internet Users | 4 | 4 | 1 | 2 | Sonal asks if Indian consumers prefer mobile browsers over apps due to storage constraints, referencing Myntra's reversed app-only move. Kunal and Rohit explain that while 75% of purchases occur in-app, Snapdeal maintains a lightweight mobile site for budget phones on 2G networks. | |
| Conversational Commerce & Foreign Investment Regulations | 5 | 4 | 2 | 3 | Anu drills into recent FDI guidelines capping single-vendor sales at 25% and restricting marketplace discounting. Kunal clarifies that the government issued policy clarifications rather than formal telecom-style regulations, which levels the field for pure marketplace models. |
Statements from this episode (22)
Bahl: India's retail market will hit $1 trillion by 2019
“In India India's retail market is about six hundred billion dollars. Going to a trillion dollars in the next three years.”
Bahl: Unorganized small businesses make up 93% of Indian retail
“Out of which only seven percent is organized. 93% of India's retail is small businesses.”
Bahl: Indian e-commerce mirrors China's marketplace ecosystem, not the US
“The Indian market is evolving much more similarly to the Chinese market than the U.S. Market.”
Bansal: Marketplaces do not need inventory ownership to deliver great experiences
“As marketplaces have matured, and what our viewpoint on marketplaces is, is that you can have a situation of having extremely fragmented and distributed supply, but still create a layer of marketplace and experience on top of it.”
Bahl: Snapdeal sells $30 Delhi retail sarees for $12 nationwide
“So to take an example of a sari that's made in Gujarat, it'll typically be made for about five to six dollars. It'll be sold for about 30 dollars in a market in Delhi. That same saree is sold on Snapdeal for about 12 dollars, including free shipping across the…”
Bahl: India's largest fashion brands cap out at $250M annually
“The largest fashion brand in India would be maybe two hundred fifty million dollars. There are a few that are at that scale, but that's the scale, even though the market itself is tens of billions of dollars.”
Hariharan: Amazon US delivery costs relative to transaction size are lower than India's
“Amazon itself says that their delivery costs, for example, as a percentage of transaction in the U S is a lot lower than in India.”
Bahl: E-commerce supply chain control does not require full asset ownership
“Controlling doesn't necessarily mean owning. You can choose to own and build certain parts of the supply chain, because there aren't existing high quality service providers, which is the case for some parts of the supply chain in India. But for certain parts o…”
Bahl: Logistics infrastructure deters hyper-competition in Indian e-commerce
“Also, I think that it's become a big deterrent. For new players, because unless you've built those capabilities, why would your service quality be better than someone who had? So it's actually become a deterrent for hyper-competition in India.”
Bahl: C2C e-commerce is winner-take-all globally, unlike B2C
“I think, at least as we've observed e-commerce around the world, we've seen that C to C tends to be a winner-take-all in most markets. Like, even in the U.S., you have one C to C player, eBay. In China, you have one C to C player, which is Taobao. Whereas B to…”
Bahl: Local Indian startups will out-execute distracted global players like Amazon
“Any big multinational company can't focus all their energy, all their resources, however vast those may be, only on one market. Our speed of execution is materially going to be higher and faster than any market player which has a very large global mandate.”
Bahl: Nationwide shipping in India costs just $1 per package
“It costs about a dollar to ship a product in India. Nationwide.”
Bahl: Low shipping costs guarantee strong long-term Indian e-commerce unit economics
“I think that's a structural advantage for the Indian market, which will ensure that in perpetuity, the economics of e-commerce in India will actually be quite good. Because as people buy more and more high margin stuff and more discretionary items online, the …”
Bahl: Cash on delivery once drove 80% of Indian e-commerce
“That's why cash and delivery was so high, like going up to 70, 80% at one point as a percentage of all transactions, because it was just very,”
Bahl: FreeCharge processes one million transactions per day
“Free charge processes you know, million transactions a day, which is a lot by Indian standards, and with very, very high retention of cohorts, and those users over a period of time are becoming transactors.”
Bahl: 75% of Snapdeal transactions happen on mobile phones
“75% of all our orders, transactions now happen on mobile phones.”
Bahl: 25% of Snapdeal orders still originate on 2G networks
“About a quarter of our orders are still coming through two G networks, right?”
Bansal: Mobile drives impulse purchases while research-heavy buys happen on PC
“Anything that is far more impulse driven, where you can just have a look and make a purchase decision, people are ok buying on the mobile. But there are many things which are very research oriented purchases where, hey, if you want to buy, let's say a laptop, …”
Bahl: Messaging will play a major role in commerce and payments apps
“But we do believe that within existing, let's say, commerce apps or payments app, chat will play a very big role, messaging will play.”
Bahl: Indian FDI rules rightly favor marketplace efficiency over capital scale
“We feel it's a very encouraging development. It's actually good for our market, because suddenly building the right and the most efficient marketplace Is far more important than how much capital you have to go and buy a bunch of product and stock it in your wa…”
Bahl: Indian e-commerce is unregulated and FDI policy was merely a clarification
“E-commerce in India is Not a regulated space. There are different laws, whether it's a consumer protection law or a labor law, different laws we have to adhere to. But when something is regulated, I would say telecom is regulated in India. There is an authorit…”