Calcutta, Nov. 14: Online marketplace Snapdeal plans to invest $100 million in the fashion segment over the next one year.

"In the next few months, we will make some big moves in fashion. We will not limit ourselves to selling other people's products only and will spend $100 million in building capabilities in fashion," said Kunal Bahl, co-founder and CEO of Snapdeal, at the Distinguished Alumnus Awards Ceremony & Institute Foundation Day Lecture at IIM Calcutta campus here today.

"Investments will be made across technology, logistics, partnership with brands and marketing," Bahl added, while speaking to reporters on the sidelines of the event.

"Today's online fashion segment is driven by people selling others' brands," he said. However, the model does not help to make money.

"I am not the judge of right or wrong. But all I can say is that the current business model is not sufficient. The purpose of doing fashion online is to make money. If you are selling brands at a loss, why sell them in the first place," he said.

He added that there was a huge mismatch in online and offline apparel segments as non-branded products comprise 90 per cent of offline sales, while branded items constitute 90 per cent of the online segment.

The e-commerce player expects a surge in the use of digital payments solutions and is focusing on promoting its mobile wallet Freecharge.

"We are asking people to use Freecharge to make their payments."

Following the government's demonetisation drive, Snapdeal's cash-on-delivery (COD) mode of payment has taken a "marginal hit".

"Previously, 70 per cent of our total sales comprised COD, which has now come down to 50 per cent. This demonetisation drive will now help in making many customers opt for the prepaid mode," Bahl said. "However, this is a temporary phenomenon and things will take a turn soon," he added. Bahl maintains that e-commerce players will benefit from demonetisation in the long run.

"Once a customer opts for prepaid mode of payment, he usually never returns to the COD mode," he said.

Other e-commerce players such as Myntra, Amazon and Flipkart have asked customers who have opted for COD to pay through debit and credit cards after demonetisation.

However, online purchases have still not gained the trust of most consumers who prefer COD over other modes of pre-payment.