E-commerce venture Snapdeal.com, run by Jasper Infotech Pvt Ltd, has recently introduced a mobile recharge service on its site. The new feature was added last month and the company tied up with the popular recharge site Rechargeitnow to facilitate it.
"Around August 2011, we had introduced the mobile recharge feature for a very brief period (2-3 weeks), but the response was tremendous. The traffic we had at that time was fairly significant and we decided to start it full time now," said Tony Navin, vice-president (business development) at Snapdeal.
"The rationale is simple. Why lose the potential recharge customers when we can actually monetise the service on the Snapdeal site itself," he added.
You can find the new feature at the top right corner of the site (under My Account). Click on it and you will be redirected to a recharge page, powered by Rechargeitnow. The recharge process itself is fairly simple and requires only four steps. A user has to select his/her mobile operator and the recharge amount. Next, one has to choose the mode of payment and enter a few details like name, number, e-mail id and gender. Once the recharge is done, the user gets an SMS and an e-mail confirmation of the same.
On the partnership with Rechargeitnow, Navin said, "We felt it would be better to get into a partnership with someone who has been in the business for a while and understands it well as it is a completely new domain for us. This way, we could take it off the ground much faster than it usually takes to build the mechanism and the technology in-house."
But considering that the margins in the recharge business happen to be very low, does it make sense to do a revenue share with a partner?
According to Navin, although the margins are low, that should not affect the business as it is just an added service and not the core focus of the company. "Secondly, even with low margins, it is still money in the pocket and I don't think anyone will have a problem with that," he said.
The latest move is in line with Snapdeal's strategy of cashing in on the traffic it generates on the site. The company, which pivoted from a deals site to a product e-commerce firm via a marketplace model (zero inventory), has, in effect, allowed Rechargeitnow to gain access to a wider base of potential customers with the help of this partnership.
Although the margins for both Rechargeitnow and Snapdeal would be lower than, say what competitors like Paytm would enjoy (or, for that matter, what Rechargeitnow pockets through its own platform), it expands the product offerings for Snapdeal without much additional cost of operations while Rechargeitnow now reaches out to a larger potential client base.
As of now, users can only recharge their mobiles on the Snapdeal site. But by the end of 2012, the company will also add DTH and data card recharges to the mix, added Navin. He also claimed that the company is doing an average of 1,000-plus transactions (recharges) on a daily basis.
Interestingly, another e-commerce portal Saholic.com, owned and operated by Spice Online Retail Pvt Ltd, has also started providing mobile and DTH recharge services. Other key players in the recharge space include Freecharge, Paytm, JustRechargeIt, MobiKwik and Spice Deck.
(Edited by Sanghamitra Mandal)