Snapdeal PESTLE Analysis
Detailed PESTLE analysis of Snapdeal examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Snapdeal, being an E-commerce platform, faces a lot of political factors impacting its business operation. A lot of Indian Government policies for E-commerce on FDI norms and consumer data privacy have a major role to play in the operations and strategies formulation for Snapdeal. A number of Government legislations, funding along with its initiatives like ‘’Make in India’’ and ‘’Digital India’’ can affect E-commerce and IT as a whole including the company. Factors such as political stability, tax, labor policies affect the strategies making process for this company. This company has a lot of international competitors like Amazon, eBay and other national players like Flipkart, Shop clues. With the Government support of stable policies, lower taxes and other incentives in place, this E-commerce firm has an opportunity to increase its business. The political stability creatives a positive environment and enhances the business growth leading to further profits.
Image: company website
This concludes the political factors in the Snapdeal PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Snapdeal:
As economic factors such as rising inflation and interest rates, prices, labor and government monetary policies etc. varies, so do the E-commerce business model.
It suffers a lot of impact on its operating business because of consumer spending shrinking. All economic factors influence the level of production and demand for goods and services. Due to COVID-19 pandemic, many people lost their jobs and with rising unemployment and uncertainties, their consumption pattern got hit. The selling of major goods presents on E-commerce platforms such as Snapdeal has decreased. But with the situation getting controlled now, the disposable income has improved for people for affording products and services offered on Snapdeal. They tend to demand and buy more conveniently from E-commerce platforms. The brand has an opportunity to increase its market share with the right offerings and discounts. These macro and micro economic factors combined play a significant role in the performance and profitability of the company.
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Social Factors:
Following are the social factors impacting Snapdeal PESTLE Analysis:
The social factors such as culture, tradition, religion, beliefs, social classes, family size and structure impact the customer needs and the size of the markets. The brand being an E-commerce retail platform needs to understand all these factors to cater to the demand of different societies and markets. The demographics such as age, gender, education level, geographic location, interests influence the customer choices and their buying decisions. This company is required to focus on its strategies including marketing and promotions properly in order to attract more customers. With rapid migration to urban cities for better lifestyle and ease of comfort, people tend to order online. Snapdeal needs to have a competitive advantage with a wide range of deals and transactions to opt from. This can lead to cutting off the market share of its competitors and helping it to become the market leader.
Technological Factors:
The technological factors in the PESTLE Analysis of Snapdeal are mentioned below:
Technology is changing the consumers behavior and their purchasing decisions. With the advancement in technologies such as mobile app, ICT, use of virtual social networks, Snapdeal is working continuously to increase its operational efficiency and give a better shopping experience to all its customers. With the use of AI and IOT, personalized shopping experience is getting a lot of investments and boost over this E-commerce platform. As people are becoming much more tech savvy, the marketing promotions over various social media channels is becoming a growing trend. The online presence is helping to do the right customer service and improve their strategies accordingly. Even the Indian Government initiatives such as Digital India, promotion of ‘’Cashless economy’’ and BharatNet can increase the awareness about E-commerce.
The company has an opportunity to leverage growing internet connectivity in small towns and persuade online shopping over its mobile app and website.
Legal Factors:
Following are the legal factors in the Snapdeal PESTLE Analysis:
A number of legal rules and regulations exist in India for E-commerce platforms. Laws related to patents, intellectual, property rights, copyright, labor laws etc. influence the operations and overall business for Snapdeal. Even the consumers data protection laws, FDI model policies, foreign exchange rules are important legal factors that need to be considered. Moreover sales, shipping, labelling, packaging, refund and return policies are crucial from a business point of view. Laws related to any fraud need to be taken care of to avoid selling any illegal item on its platform. According to new Consumer Protection Rules 2020, E- retailers need to compulsory display all required information such as exchange, guarantee, warranty, shipment, delivery and grievance redressal mechanism for consumers. It is important for Snapdeal to abide by all legal factors properly to avoid any lawsuits and hampering its brand image. By following all legal matters judiciously, it can gain word of mouth marketing both offline and online and gain customer loyalty.
Environmental Factors:
In the Snapdeal PESTLE Analysis, the environmental elements affecting its business are as below:
There are a number of positive and negative implications of environmental factors in the E-commerce industry. Although with the advent of the Internet, online marketing for E-commerce goods and services is beneficial for the environment. But there are a lot of negative environmental implications as well such as logistics transportation of products to different locations which leads to high fuel burning and causing pollution. The direct environmental effect of the IT infrastructure such as PCs, energy consumption of PCs etc.
and the associated E-waste are points needed to be taken care by the company. This online firm is reducing waste by being paperless and the reduced need for inventory, electricity and warehouse space. It is a big opportunity for Snapdeal to increase its market share by leveraging digital technology and Internet communication technology to reduce its carbon footprint and help the environment.
To conclude, the above Snapdeal PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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