GoJavas Suspends Its Operation
As per reports from Economic Times, GoJavas, the Logistics firm of Snapdeal is going through an overhaul which includes restructuring its organization and may also include layoffs. The news assumes significance because this comes at a time when the Snapdeal was considering to Buy GoJavas to regain market share.
Sources privy to this development without wanting to be quoted maintained that the Snapdeal is opting for a Franchise based model wherein it would incentivize payment based on Kilograms or number of packets handled by the company/person.
Gojavas has suspended the services since last week and it is not clear when it resumes its operation. The move seems to have affected the delivery of the orders placed by the customers of Snapdeal which is the biggest customer for Gojavas, and it is not very clear how the company plans to cope with this situation.
Although Gojavas still is continuing its quest for new investors even as Snapdeal which has 42 percent share in the company is considering a complete takeover.
Snapdeal is also having its in-house logistics arm which helps to deliver the products alongside Gojavas and in the absence of Gojavas, it seems to be burdened with additional work.
This development comes in at a time when you are Flipkart is being very aggressive to gain a strong foothold in the market and has made several developments including the acquisition of Jabong last month.
Snapdeal, which has been pushed to the 3rd position since the entry of Amazon to Indian Market and is reeling under tremendous pressure to regain the coveted Number 2 position which it once held. While the customers are slowly moving away from Snapdeal citing better pricing and services, it would be interesting to see how Snapdeal would respond to the ever-growing competition.