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GROUP 1

E-COMMERCE

SUMITTED TO:
Dr. Vasanth Kiran

INDUSTRY INTRODUCTION
The trend of online shopping is set to see greater heights in the coming years, not just because
of Indias rising internet population, but also due to changes and growth in the supporting
ecosystem .The industry has attracted millions of online consumers by creating a secure online
transaction environment, facilities such as Cash-on-delivery (COD), and a strong focus on
customer service that led to Indian consumers placing their trust in online shopping.
The major challenges for the online industry till date remain logistics & fulfillment and cash
on delivery dependency of new customers. The logistics part remains an external challenge
which retailers cannot overcome in a short span of time.
The industry is reaching a phase of consolidation as many multi-category players such as
Flipkart and SnapDeal have started acquiring niche players in order to widen their offerings
and about.
KEY DRIVERS IN E COMMERCE INDUSTRY
Increasing broadband Internet services and growing 3G penetration in India
Rising standards of living and a burgeoning, upwardly mobile middle class with high
disposable incomes
Lower prices compared to brick and mortar retail model driven by disintermediation,
reduced inventory holding and real estate costs
Busy lifestyles, urban traffic congestion and lack of time for offline shopping
Evolution of the online marketplace model with websites such as Flipkart, Snapdeal,
ebay etc. has come a full circle with marketplace models taking center stage.

1. Online Travel Largest Segment


The growth in Indias travel and tourism industry is the second fastest worldwide and India is poised
to be among the top five civil aviation markets in the world over the next decade. Low entry barriers
in the online travel market have resulted in a number of small players entering this space. The market
is now cluttered with a mix of large Indian Online Travel Agents (OTAs), as well as several small
players and international players
2. E-Tailing Fastest Growing Segment
The online retail/E-Tailing industry clocked revenues of US$ 1,292 Mn in 2012, growing at 68%, a
rate faster than any other ECommerce segments. Players that emerged as category leaders were those
that were able to penetrate their target market deeply to offer a large range of products by spreading
their operations beyond the top cities
3. Classifieds
The classified market in India will be driven by the growth in the services sector, favorable
demographics and growth in advertising. There are two segments
Online Classifieds & Offline Classifieds.

TRENDS IN E COMMERCE INDUSTRY

Paid Premium Delivery Service


Rise of Fashion category
Exclusive Launches
In House Brands- Private Label Brands
Niche Stores
CoD
Retailers own logistics
Improving customer experience with varied offerings and options
Mobile
Brand loyalty

CONCLUSION
Indian e-commerce and online shopping are set to witness greater heights in the coming years,
not just owing to the increasing internet population, but also due to the changing dynamics of
the supporting ecosystem. The key players in the market are undertaking rigorous efforts to
further
enhance
the
areas
like
payment
structure
and
logistics.
Moreover, the Indian consumers perception of online shopping has experienced a substantial
change and for the good. In view of these developments, both the investors and the aspiring ecommerce players have been granted numerous opportunities, who were thus far limiting
themlves to the sidelines. Today, they are all taking a keen interest in the countrys e-commerce
market.

Headquarters: San Jose, California, United States


Founders: Pierre Omidyar
Year: 1995
Business: Online auction and e-retailing
Revenue: US$16.05 billion
Users: 155.2 million

EBay Inc. is an American multinational corporation and e-commerce company,


providing consumer-to-consumer & business-to-consumer sales services via Internet.
It is a multi-billion dollar business with operations localized in over thirty countries.
The company manages eBay.com, an online auction and shopping website in which people and
businesses buy and sell a broad variety of goods and services worldwide. In addition to its
auction-style sales, the website has since expanded to include "Buy It Now" shopping;
shopping by UPC, ISBN, or other kind of SKU (via Half.com); online classified advertisements
(via Kijiji or eBay Classifieds); online event ticket trading (via StubHub); online money
transfers (via PayPal) and other services.

PESTLE ANALYSIS
POLITICAL
(i)

(ii)
(iii)

(iv)

Globalization
- Able to break into a new market which previously closed
- Challenges from foreign competitors.
High government investment on ICT infrastructure
- Faster, better and more reliable internet access user.
Marketplace Fairness Act
- US state sales tax
- Increase the price of a product or service
- People would probably stop buying
- Internet retail sales could decrease by up to 24%.
Government Intervention
- Chinas internet regulators have made it difficult for foreigners to participate
fully, giving local Chinese e-retailers an advantage from the offset.

ECONOMIC
(i)
(ii)

Exchange Rate
Conduct significant business outside US but profitability is reported in US Dollar.
Global Economic Condition
- Weak economic condition would limit the growth of revenue
- Change in consumer purchase pattern

SOCIAL
(i)

(ii)

Lifestyle and attitude vary from country to country


- They have set different target, product or consumer categories.
(Ebay failed to break into China market, the hottest market as they did not
localize their service)
Increase in online social networking
- People rely on internet
- Can get everything easily from online shopping
- An opportunity to increase market share.

TECHNOLOGICAL
(i)

(ii)
(iii)

Growth of Internet
- Lower the barriers of entry
- More competitors
- Growth of internet users will increase public online consumption.
Rapid development of high-speed network service
Third party online payment system
- PayPal
- Provide safe, safe and secure way to make and receive payment
- Reduce the risks of transactions

LEGAL
(i)

Strategy developed which have to comply with different legal obligations


domestically and internationally
- The European Sales of Goods Act
- Data protection act in UK
- Federal Trade Commission in USA
- EU Electronic Commerce Directive
- The Electronic Signatures Law

ENVIRONMENT
(i)

Global Warming and Pollution awareness increase globally


- More online shopping
- Have to be greener to attract customers.

PORTERS FIVE FORCES


(i)

(ii)

(iii)

(iv)

(v)

BARGAINING POWER OF CUSTOMERS


- High bargaining power
- Other options
- Professional buyers
- Price Comparison
THREAT OF SUBSTITUTES
- Search engines and price-comparison websites moving into online retailing and
auctions.
- eBay is more convenient
- Increasing number of fixed price sales over online auction sites.
BARGAINING POWER OF SUPPLIERS
- High
- Low fees and Commission
- Hobbyists and collectors.
THREAT OF NEW ENTRANTS
- High
- Low Entry Costs
- Depend on individual interests.
RIVALRY AMONG COMPETITORS
- High
- Competitors from different backgrounds entered in the market.

PORTERS VALUE CHAIN

From the value chain model, following can be said:


COMPETENCIES
-

Biding site
Conversion rate
Peer review

IMPLICATIONS
-

Platform for both consumers and businesses


Way of handling product is less capital intensive
Value addition by bringing buyers and sellers together.

SWOT ANALYSIS
WEAKNESS
- Technology Malfunction
- Product Description Lacking
- System breakdowns could affect the
trading activities.

STRENGTH
- Global Research
- Brand Name
- Wide variety of products
- No Inventory Holdings
- Generic term for online
auctions

SWOT
THREATS
OPPORTUNITIES
- Critical Foreign Market not penetrated
- Growth through acquisition

- Fraud
- Increased Competition
- Old and new technology
- Some costs like credit card charges
cannot be controlled by eBay.

ANSOFFS MATRIX

MARKET
PENETRATION
- Protect market
share

PRODUCT
DEVELOPMENT
- Technological
development
- Maintain global
growth initiative

MARKET
DEVELOPMENT
- Maintain global
growth initiative
- Reinforce
marketing

DIVERSIFICATION
- Step ahead
- Maintain global
growth initiative

KEY SUCCESS FACTORS


The key success factors in the online auction industry that have impact on future competencies
includes:
-

Product attributes
Competencies
Competitive capabilities

For this industry, the main key success factors of eBay are:
-

Expertise in technology
Talented workforce
Innovation
Marketing activities
Accuracy
Gaining a large subscriber base
Retain existing customers
Security

PERCEPTUAL MAP
Looking at eBay and the various competitors, there are success factors that show the presence
of various players in the online auction industry.

CONCLUSION
-

EBay must keep maintaining its market share in global and also maintain its
growth initiative as well.
It should maintain its brand image and add more advertising efforts.
EBay must identify and make a selection on what company could they take over
to create a vertical integration.
It must support the information through internal communication such as
newsletters for customers, buyers and sellers.
It should also try to support multi languages platforms.

Headquarters: Gurgaon, Haryana, India


Founders: Mr. Deep Kalra
Year: 2000
Business: Online Travel Bookings
Revenue: US$255.37 Million
Make My Trip is an online travel company. The company provides online travel services
including flight tickets, domestic and international holiday packages, hotel reservations, and
rail and bus tickets. In 2011 and 2012, MakeMyTrip made strategic acquisitions in pursuit of
growth through new channels and markets in the South-East Asia region. Recently, it launched
Travel App for mobile devices. The company has been consistently recognized as one of
Indias best travel portals. In addition to a full-service online portal, the company also operates
through 59 retail stores across 37 cities in India along with international offices in New
York and Sydney.

BUSINESS MODEL

10

STP
Segmentation:
Indian Travelers having access to Internet
Target:
Internet savy families who are deal hunters.
Positioning:
It has positioned itself as a single portal for all travel and accommodation needs. It appeals
reliable travel booking with excellence.
Make My Trip has also positioned itself as a total solution provider with convinence as a key
strategy.

SWOT ANALYSIS
STRENGTHS
- Presence in the international business scenario
- Secure and trusted channel for payments
- Attractive brand name and convenient website
- Many services like International and Domestic
Air Tickets, Holiday Packages and Hotels,
Domestic Bus and Rail Tickets, Private Car and
Taxi

WEAKNESS
- General Reluctance in customers to use
internet for financial transactions like
booking tickets online

SWOT
OPPORTUNITIES
- Customers currently using traditional
methods of bookings
- Offer better travel packages in line with
customer expectation
- Untapped sections of international tourism
market

THREATS
- Possible lack of co-ordination with tourism
entities
- Present competitors having substantial
market share
- Newly emerging online booking portals
with better offerings

11

MARKETING MIX

STRATEGIES
-

Expansion of hotels and business packages.


Expansion of service and product portfolio to enhance cross-selling
opportunities.
Expansion of travel agents network.
Enhancement of service platforms by investing in technology.
12

More market coverage.


Pursue selective strategic partnerships and acquisitions
The advertising strategies are based on: Convenience, Reliability and
Competitive pricing.
MakeMyTrip anticipates periodic analysis on customers behavior and critical
market strategy.

CONCLUSION
Following points can be concluded-

There are greater potentials to be covered in the Indian travel Industry.


MMT should keep looking forward to innovative packages, convenient offers
and lucrative deals.
The company needs to do research on a larger basis to meet the needs of the
wider customer base.
A better understanding of the travelers behavior and stricking the right move
would benefit the company.

REFERENCES
-

http://www.mbaskool.com/brandguide/it-technology/1284-makemytrip.html
http://www.slideshare.net/SushilRai2/make-my-trip-slideshare
http://www.slideshare.net/shivam_01/make-mytripservicemarketing
http://en.wikipedia.org/wiki/Makemytrip

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Headquarters: New Delhi, India


Founders: Vijay Shekhar Sharma
Year: 2010
Business: Online payment and e-retailing
Users: 20 Million

Paytm is Indias largest mobile commerce platform. Paytm started by offering mobile recharge
and utility bill payments and today it offers a full marketplace to consumers on its mobile apps.
In a short span of time Paytm has scaled to more than 15 Million orders per month.
Paytm is the consumer brand of Indias leading mobile internet company One97
Communications. One97 investors include SAIF Partners, Intel Capital and SAP Ventures.
Paytm strives to maintain an open culture where everyone is a hands-on contributor and feels
comfortable sharing ideas and opinions.

STP
Segment:
Internet Users
Target Group:
Students and service-class who use internet for mobile payment.
Positioning:
Positioned as a trusted online payment portal which is accessible, convenient and credible

14

SWOT ANALYSIS
STRENGTH
- Early Mover Advantage
- Simple Business Model
- Credibility
- Simple process of payment
- Availability of Paytm app

WEAKNESS
- Overloaded site
- Unsuccessful payments

SWOT
OPPORTUNITIES
- Increasing internet usage
- Increasing application awareness by
people
- Other feilds such as shopping,
bookings, etc.
- Bargaining facilities.

THREATS
- Connectivity problems
- Large number of increasing competitors.

STRATEGIES
-

Paytm focuses on order flow, payment and customer care whereas merchant
takes care of item and pricing. For merchants, mobile is a puzzle and they are
looking at somebody who can solve their problem.

Presently, they have more than 100,000 items from 250 merchants in men,
women, kids fashion and home furnishing categories.

They are focusing on trusted merchant who has done online order acceptance
and not offline in the first phase and plans to add mobile to their portfolio. They
are focusing on retailers in a big way and has signed up with Croma, Spice,
Lotto, YepMe, Zovi, FirstCry and others.

Increasing the customer base by retaining the existing customers and attracting
new ones.
Increasing customer loyalty by giving them the e-wallet services.
Giving delighting offers by coupons. For example, extra benefits for payment
of a certain amount using Paytm.

15

CONCLUSION
In 2015, Paytm plans to cross 50 million wallet users and touch $2.5 to $3 billion of gross
transaction volume on Paytm platform. The company also aims to bring one million SME
merchants on mobile commerce platform and reach one million transactions on a daily basis
by the end of 2015.
Surpassing IRCTCs transaction volume has always been the dream of e-commerce companies
in India. And Paytm achieved it owing to its superior consumer experience over mobile and
web. Wallet has also widened the scope of Paytm. The company registered 100% growth in
terms of wallet users over the past six months and besides phone wallet seems to be a major
driver in Paytms growth.

REFERENCES
-

http://www.slideshare.net/maddycoupons/save-money-for-all-your-purchaseon-paytm-using-paytm-coupon-codes-discount-vouchers?related=3
https://paytm.com/about
http://economictimes.indiatimes.com/magazines/panache/education-is-overrated-says-paytm-founder-vijay-shekhar-sharma/articleshow/45894015.cms
http://yourstory.com/2014/12/mobile-payments-panel-mobilesparks/
http://yourstory.com/2014/11/paytm-raise-funds/

16

Flipkart is an Indian E-Commerce company established in 2007 by Sachin Bansal and Binny
Bansal, alumnus of the Indian Institute of Technology Delhi. They had been working
forAmazon.com previously. It operates exclusively in India, with headquarters
at Bangalore, Karnataka. Flipkart has launched its own product range under the name
"DigiFlip" with products including tablets, USBs, and laptop bags. Flipkart has also launched
its own range of personal healthcare and home appliances under the brand "Citron". Flipkart
allows payment methods such as cash on delivery, credit or debit card transactions, net banking,
e-gift voucher and card swipe on delivery.
In May 2014, Flipkart received $210 million from DST Global and in July it raised $1 billion
led by existing investors Tiger Global and South Africa's media group Naspers. Flipkart
acquired myntra in an estimated rupees 2,000 cr deal.

SWOT ANALYSIS
Strengths:
Strong Brand value
Own Logistics Arm e kart
Own Online payment
solution Payzippy
Own Marketplace model

Weaknesses:
Investor driven organization Or lack
of Independent board
Secretive and Political Culture.
gateway
Excessive focus on expanding
customer base rather than pulling
profits

Opportunities:
Threats:
Online fashion and apparel business
From competitors like Amazon,
Snapdeal, Infibeam, Indiaplaza,
Providing logistics services to its
Homeshop18 etc.
competitors.
Growth in online retail sector in India

Reasons for Strengths:

Flipkart is a company which has entered into online E-Commerce industry very early.
It has strong brand value in India.
Flipkart has developed its own logistics arm E-Kart, which has been initially used for
in-house deliveries.
Recently, it has developed its own payment gateway solution provider, where
customers can save their credit card details, Payzippy.
17

Flipkart has its own marketplace model where sellers need to register in this platform
and buyers can negotiate with the sellers on varied service levels and it also helps
company to reduce its own inventory. Flipkart will just deliver those products.

Reasons for Weaknesses:

Most of the money has been invested by Venture firms like Tiger global and Accel
Partners. SO, most of the decisions that are taken by founders of firm have to been
approved by Investors.
Secretive and political culture is followed in this company while they are recruiting
hires which is creating problems in this company.
Flipkart is excessively focusing on expanding customer base rather than pulling profits
in the process having cash burn.

Opportunities:

Flipkart can venture into online apparel and fashion business, where the gross margins
are higher.
Flipkart can offer its logistics services to its competitors in online retail sector with its
logistics arm E-kart. With online commerce sector going to boom in the coming years,
online transactions are going to increase. So, if Flipkart offers its logistics services to
its competitors, it can gain money from those transactions.

Threats:

Flipkart is facing a lot of competition from some of the online retailers like Amazon,
Snapdeal, Indiaplaza, Homeshop18 etc.

PORTERS FIVE FORCES FRAMEWORK


Supplier power:
In this industry, suppliers are the manufacturers of finished products like Nike, Dell, and Apple
etc. Online retail companies sell various products ranging from books to computer accessories
to apparels to footwear. Since there are many suppliers for any particular category, they cant
show power on online retail companies. For example, if you take computers category, there are
many suppliers like Dell, Apple, Lenovo, and Toshiba who wants to sell their products through
these online retail companies. So, they wont be having power to control the online retail
companies. Online customers can select the products on their own and the switching costs in
this case is zero. It is very difficult for manufacturers of finished products to come into this
industry because of challenges in Logistics. Online retail industry is important to suppliers
because it acts as one of the channel to sell the products. Now, with most of the customers in
India purchasing online through online retail companies, they cant afford to lose this channel.
So, they cant dictate terms with online retail companies. So, in this industry the supplier power
is low.
18

Buyer power:
Buyers in this industry are customers who purchase products online. Since this industry is
flooded with so many players, buyers are having lot of options to choose. Switching costs are
also less for customers since they can easily switch a service from one online retail company
to other one. Same products will be displayed in several online retail websites. So, product
differentiation is almost low. So, all these factors make customers to possess more power when
compared to online retail companies.
Threat of New Entrants:
Threat of new entrants is very high in this online retail industry because of following reasons:
Indian government is going to allow 51% FDI in multi-brand online retail and 100% FDI in
single brand online retail sooner or later. So, this means foreign companies can come and start
their own online retail companies.
There are very less barriers to entry like less amount of money required to start a business, less
amount of infrastructure required to start business. All you need is to tie up with suppliers of
products and you need to develop a website to display products so that customers can order
products, and a tie up with online payment gateway provider like bill desk.
Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by 2021. Industry
is going to experience an exponential growth rate. So, obviously no one wants to miss this big
opportunity.
Threat of substitutes:
Substitute for this industry as of now is physical stores. Their threat is very low for this industry
because customers are going for online purchases instead of going to physical stores as it will
save time, effort, and money. With the advent and penetration of internet and smart phones,
future in retail belongs to online retail.
When we compare relative quality, relative price of product that he/she buys online with
physical store, both are almost same and in some cases, online discounts will be available which
makes customers to buy products online.
Rivalry with in Industry:
Competition is very high in this industry with so many players like Flipkart, Myntra, Jabong,
Snapdeal, Amazon, Indiaplaza, Homeshop18 etc.

STRATEGIES
Flipkart's business model is much deeper and much expansive that could possibly elaborate
here.
However,
a
few
points
as
follows-

Rationalized supply chain - Inbound logistics


Strategic warehousing and distribution capability Operations
Well aligned fulfillment process - Outbound logistics

19

All the three processes are extremely well integrated - first by a sound strategy, around which
the organizational structure is built (Strategy drives structure - Chandler)
So they have a strategy, and a complementing structure to support their strategy. The third
critical success factor for Flipkart is the technology as an enabler. A strong information
systems is at the core of the organization, which drives visibility and end-to-end integration
across their supply chain processes (inbound - operations - outbound) resulting in a well
lubricated efficient machine.
Flipkart, must be seen as a logistics company rather than a retail business. Although it sells
products to consumers, and hence is academically classified as a B2C business, the core of
the business lies in its efficient logistics, which allows it to sell products at attractive prices.
However, its competitive advantage is not in its retailing capabilities. Infact that aspect of the
e-commerce business is easily imitable and hence not sustainable. The sustainable
competitive advantage of Flipkart, lies in its logistics and operations infrastructure - which
has a very high barrier to entry: owing to its extensive capital investment and difficult to
replicate strategy-structure-culture mix.

STP
Segmenting:
Flipkart segments market on the basis of

Internet users
Shoppers
Young generation
Educational institutes

6%

3%

18%

34%
39%

15-24
25-34
35-44
45-54
55+

Internet user w.r.t age


Targeting:

Youth generation
Current buyer
Educational institutes
20

Socially connected people


Internet friendly people
Shopaholic (discount keen people)
Positioning:

Cash on delivery
EMI option
30- Days replacement policy
E wallet and e Vouchers
User friendly interface
Marketing campaign like no kidding no worrying
Using Google Ad Choices
Promo coupons
SEO
One hour sale

MARKETING MIX

Product
Place
Price
Promotion

Product:

Wide range of products categories:


Electronic good
Apparels
Home and kitchen appliances
Mens and womens accessories
Computer peripherals
o Software's
o Hardware's
Books and media
Sports store
Baby and kids section
o Wear outs differentiated on the basis of age.
Girls
Boys

Place:

All major inventory are located near to the airports.


Major warehouses are located in Bengaluru(headquarters), Chennai , Delhi,
Hyderabad, Mumbai, Noida, Pune, Kolkata
Biggest advantage- Nationwide reach to all sellers of different sizes
21

Covers all tier-1 tier-2 tier-3 cities.

Price:

Much less price then other e-commerce websites


Availability of E wallets and E-Gifts
EMI option for specific products
Discounted coupons
Free shipping facility
Special discount and promotional codes for the loyal customers.

Promotion:

Above the line promotion:


o TV Advertisement
o Radio jingles
o Print ads
o Below the line promotion:
o Word of mouth
o Bulk mailing
o In app push notification
Through the line promotion:
o Social media marketing/ campaign

ACTIONS RECOMMENDED FOR FLIPKART

Flipkart has not been into fashion and apparels business in online retail. Since the
margins are very high in this space, Flipkart can cash this opportunity by venturing into
this space. Currently, only Myntra and Jabong are leading players in this space. Flipkart
can venture into this space either by starting on its own or by merging with one of these
firms.
Since online retail is going to boom in the coming years, it is necessary for this industry
to have logistics support. So, since Flipkart is already having its own logistics arm Ekart, it can provide this logistics service to its competitors in online retail industry.
In this type of industry, price matters a lot to customers. If same product is offered by
two e-tailers at two different prices, customers will go for the lowest price. So, Flipkart
should try to offer the products at lower prices. This can be done by optimizing its
logistics services. Since logistics cost plays an important role in determining the price
of the product. Filpkart should try to optimize its supply chain in such a manner that its
supply chain costs should be very less and try to offer products at lower price compared
to its competitors.
Flipkart can also employ relationship marketing into it. Instead of mainly focusing on
customer acquisition, it should also focus on customer retention. Because loyal
customers are more profitable when compared to new customers.

CONCLUSION
22

One of the leading E-commerce portals of India.


Customer satisfaction is the major concern
Distribution and supply chain is very strong
As e-commerce market is booming up rapidly we all are going to see some more
companies like Flipkart in the near future.
Provide more higher discounts on products than competitors
Enter into the global market and have global reach
Provide more brick and mortar outlets like FLIPTOMANIA
Increase reach in rural area
Educate people about online purchase & security

REFERENCES
http://www.quora.com/What-is-Flipkarts-business-strategy accessed on 29th Jan 2015
http://flipkartforbusinessstrategy.blogspot.in/2014/02/strategic-analysis-on-flipkart.html
accessed on 30th Jan 2015
http://www.flipkart.com/ accessed on 30th Jan 2015
http://forbesindia.com/article/boardroom/can-flipkart-deliver/33240/0 accessed on 31st Jan
2015
http://www.business-standard.com/article/companies/flipkart-changes-business-modellaunches-flipkart-marketplace-113040600051_1.html accessed on 31st Jan 2015

23

Industry: E Commerce
Founded: Bangalore, India(August 2006)
Founders: Phanindra reddysama, Sudhakar Pasupunuri, Charan Padmaraju
Headquarters: Bangalore, India
CEO: Prakash Sangam
Revenue: 600 million (March 2013)
Website: redbus.in
Bus Routes: 67,000
Bus Operators:1800
Number of tickets sold: 3,00,00,000+

INTRODUCTION
The Tickets used to be booked through the traditional brick-and-mortar agents till 2006. That
is when BITS Pilani alumni Phanindra Sama, Sudhakar Pasupunuri and Charan Padmaraju
started Redbus, to sell bus tickets online. The idea emanated from an experience that Phanindra
had in the winter of 2005 in Bangalore, when he struggled to book bus tickets to make it home
for Diwali and spend the vacations with his family. Diwali is one of the peak times in the year
and every single bus agent in the city seemed to be booked and he could not make it to home
in time. Phanindra realised the need for a convenient, hassle-free portal where customers could
book their tickets from the comforts of their home. An additional benefit of RedBus was the
fact that you could book your ticket for the return journey in advance without having to travel
to the destination with the uncertainty of securing a ticket looming over your head. Seedfund
was the organisation which was one of the very first investor of redbus. Mahesh Murthy, a
founding partner of Seedfund, writes about why he thinks redbus is innovative. Mahesh has
been kind enough to let us reproduce his article, on our blog for the benefit of our network. It
has been an honour for E-Cell to be associated with him.
RedBus, also known as redBus.in, is Indias biggest online bus ticketing company. The
company was recently acquired by ibiboGroup for an estimated 600-700 crore, the biggest
overseas strategic acquisition of an Indian internet asset.

STP
Segment:
Internet Users and Travellers

24

Target Group:
Travellers who use internet for online transactions
Positioning:
Positioned as a trusted online booking portal as well as travelling consultant offering cheapest
fares in bus, hotels etc.

SWOT ANALYSIS
Strengths:

Early Mover Advantage


Simple Business Model
Large network of Bus Operators
High Levels of Customer Satisfaction

Weakness:

Entrepreneurial culture
Needs external funding for Capital intensive projects
Seasonal disturbances in demand
Less reliability on Online Payments

Opportunities:

Vertical Integration with procurement of Buses


Horizontal Integration with venturing into airline Booking
Global Expansion into Overseas markets

Threats:

Increasing no. of players in the Online Booking segment


Seasonal disturbances in demand
Un organized market in Non-Metro cities

PORTERS FIVE FORCES


Threat of new Entrants: Low

Reach, Credibility, Visibility


Low Profit Margins
Require continuous innovation
Background in services

Threat of Substitutes: High

25

Threat of substitutes is high in smaller cities where the availability of internet is


low

Bargaining Power of Suppliers: Medium

The Bus operators are dependent on Red Bus for getting the customers
Red Bus needs to associate with larger number of operators

Bargaining power of buyers: High

Low product differentiation


Indian Middleclass: price conscious

Threat of Competitors: Medium

redBus is the biggest player in the online bus booking segment, but faces
continuous threat from bigger players, travel agents and OTAs

STRATEGIES
Attract New Travelers and Increase Customer Base:

Winning the Confidence of travelers is important to attract new users.


Needs Marketing Efforts to Generate Nation Wide Awareness ( PRIORITY)
Marketing will help explain its Credibility & Convenience it provides to travelers
Conduct Low Cost Marketing Campaigns like
Viral Marketing using YouTube
Form Informative Pages on Facebook displaying its services and range.
Use Creative Bill Boards and Hoardings

Increase their Network by Attracting New Bus Operators:

To Penetrate the market RedBus needs to Expand its Network of Bus Operators
Attract new Operators by showcasing them the advantages they will avail.
Explain them the benefits by showing the results of their partner operators

Increase Customer Retention by Increasing Customer Satisfaction:

Bus Lounges for RedBus Travelers


Travelers will be relieved from the extreme weather of India. Travelers
satisfaction with the services will help in winning their Loyalty
It will also improve Visibility of RedBus helping in increasing its
awareness

RECOMMENDATIONS

Launch loyalty programs to retain existing travelers.

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Quality of bus and safety features should be checked while choosing a bus
operator.
Provide rebates for loyal customers so that they can retain them further.
Launch its own private buses
They can also diversify from bus tickets to flights tickets.
They also keep kiosks at malls and public gathering places.

CONCLUSION
Its a leader in online booking for bus tickets. It has 1800 bus operators and its operated in
67000 bus routes. Redbus sold 3,00,00,000+ bus tickets. They are also providing hotel
booking services. Recently it was recently acquired by ibiboGroup for an estimated 600-700
crore.

REFERENCES
http://www.redbus.in/ accessed on 29th Jan 2015.
http://forbesindia.com/article/work-in-progress/redbus-has-the-hot-ticket/32382/1 accessed
on 29th Jan 2015.
http://www.mbaskool.com/brandguide/it-technology/7784-goibibo.html accessed on 30th Jan
2015.

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INTRODUCTION

Founders: Shashank ND and Abhinav Lal

Reach: 75,000 doctors registered

Investment: 25 cr from VC firm sequoia Capital

500 appointments/day and 1 cr appointments booked through Practo.

Recently VC again invested 125 cr for market development and diversification

Subscription based revenue model

About four years ago, a young IT student was literally struggling to cope with a medical crisis
that had befallen his family. His father had to undergo a knee-replacement surgery at a short
notice and he was left with the arduous task of finding the best doctor, getting an appointment
and finally, sending all relevant documents in the digital format (not an easy task either,
considering the pile of medical reports all on paper to be scanned and mailed).
For Shashank ND, that was the turning point and he went on to set up Practo Technologies, a
Bangalore-based startup offering clinic management software solutions to help enhance the
operational efficiency of dispensaries, clinics and even small hospitals. Practo is currently
operating in eight Indian cities, looking to expand pan-India and has opened a branch in
Singapore only last week with further plans to enter mature overseas markets like the US.
The start-up's flagship product, Practo Ray, is a software-as-a-service (SaaS) tool hosted
online, which helps doctors schedule appointments, track a patient's medical records and send
out follow-up reminders to them.
Doctors pay a monthly fee to utilise the services provided by Practo Ray, but it goes a long
way in solving their problems, and ensuring that their patient records are free from any damage
or loss,. It is a model that has gone on to capture the attention of risk capital in India.
All things start small. Practo started as a tool for doctors, but has now evolved into something
far bigger and with wider reach.
Sequoia, with its investment focus on healthcare and consumer-facing businesses, found Practo
fitting in well in its portfolio.
The fact that Practo has managed to straddle three sectors - Healthcare, Consumer and
Information Technology - that have traditionally received a majority of private capital in India,
makes it a unique proposition for investors.

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In India, markets evolve very differently than they do in the west. Practo could be defined as a
healthcare SaaS company, but it has also evolved into a consumer company.
However, the co-founders prefer not to slot the venture into a particular slot. Practo is, and will
always be, a patient-facing start-up. That was and remains the core philosophy of the company.
We cater to them using B-2-B software. But it is a B-2-C company.
Apart from Practo.com and Practo Ray, the company has also rolled out Practo Hello, a cloudbased, smart logic software solution that allows patients to reach their doctors at any given
point. Users can find, connect and share details with their doctors through a dedicated online
interface.

SWOT ANALYSIS
Strengths:

Unsatisfied clients of the competitors


Dedicated sales team with short term sales cycle monitoring
Customized software to meet patient and doctor needs
Innovation with software service diversification
Strategically planned sales cycle
Cloud based easy to use software interface

Weakness:

Lack of concrete well established network


Weak brand and software service awareness

Opportunities:

The IT health care market is niche


Need of superior quality, precise and relevant on-time information availability
Improvement in mobile technology and rise of m-healthcare
After sales service on monthly basis
Limited features offered by Helpingdoc, Healcon and SARAL software
An aggressive and focused marketing campaign
Participation in health care expo and other community building platforms

Threats:

New marketing strategies and tactics by established companies


Neutral or no brand image
Current IT infrastructure
Hesitation of healthcare professionals to leverage technology in current systems
Unawareness about SaaS models and the payment options.

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Headquarters: New Delhi


Founder: Deepinder Goyal
Year: 2008
Revenue (Profits): 36.11 Cr (2014)

Zomato.com also known as Foodiebay.com previously is Indias biggest online food & lifestyle
guide. The site lists around 18000+ restaurants with different menus, their ratings along with
their contact details with additional features like maps and visual images of the restaurants. The
site caters to more than 1.5 million users every month and presently they are in 130 cities and
19 countries and are growing rapidly.

BUSINESS MODEL
One person in each city to gather the data; a centralized team is based out of the NCR, which
would process that data and another team would pitch the idea to advertisers.
Zomato model is still very much ads. Main focus was on getting as many listings as possible
with maximum accuracy. Introducing Mobile application reduce the dependence of Zomato on
google. It currently contributes 35%, and Social 12%.Current traffic was 8.5 million visits on
the web, with a 50% repeat visit rate.

REVENUE MODEL
Restaurant advertising accounts for 100% of their regular revenue, they also have other one
time revenue streams: NYE ticketing and print guide sales.
Four revenue streams:
1) Restaurant advertising: This is when banner ads for restaurants are placed on the website.
This accounts for ~75% of Zomatos revenue.
2) Event advertising: This is when specific events promote an event on Zomato - this revenue
primarily comes from restaurant based advertisers. Typically, tickets for these events are also
sold on Zomato. This accounts for ~5% of the revenue.
3) Event ticket sales: Commissions on ticket sales through Zomato; primarily for restaurant
venues; accounts for ~15% of the revenue.

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4) Consulting services: Restaurant chains ask them for advice on where to open their new
business also.

SWOT ANALYSIS
Strengths:
Innovative Culture
Financial Leverage
Cost advantages
Technology

Weaknesses:
Dish Database
Work Inefficiencies
High Staff turnover
Bad acquisitions

Opportunities:
Online Market
Emerging Markets
New Services
International Expansion
New market & technology

Threats:
International Competition
Intense Competition
Substitute Products

Reasons for Strengths

An innovative culture helps Zomato to produce unique products and services that meet
their customers needs

Financial leverage allows Zomato to use their balance sheet to expand their business
and increase their profits. "Financial Leverage (Zomato)" has a significant impact, so
an analyst should put more weight into it. "Financial Leverage (Zomato)" will have a
long-term positive impact on the entity, which adds to its value. This statements will
have a short-term positive impact on this entity, which adds to its value

Lower costs lead to higher profits for Zomato. A low cost leader can undercut rivals
on price. "Cost Advantages (Zomato)" has a significant impact, so an analyst should
put more weight into it

Superior technology allows Zomato to better meet the needs of their customers in ways
that competitors cant imitate.

Reasons for Weakness

Dish Database" has a significant impact, so an analyst should put more weight into
it. "Dish Database" will have a long-term negative impact on this entity, which subtracts
from the entity's value.
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An inefficient work environment means that Zomatos goods and services are not being
utilized properly. Work Inefficiencies (Zomato)" has a significant impact, so an
analyst should put more weight into it. This statements will have a short-term negative
impact on this entity, which subtracts from its value.

High staff turnover can hurt Zomatos ability to compete, because replacing valuable
staff is expenses

Bad acquisition can hurt Zomato by increasing their costs and reducing the value of
their combined businesses. Acquisitions can also distract from the core business and
merge cultures that dont complement each other. Bad Acquisitions (Zomato)" has a
significant impact, so an analyst should put more weight into it.

Reasons for opportunity

The online market offers Zomato the ability to greatly expand their
business. Zomato can market to a much wider audience for relatively little expense.

Emerging markets are fast growing regions of the world that enable Zomato to quickly
expand.

New technology helps Zomato to better meet their customers needs with new and
improved products and services. Technology also builds competitive barriers against
rivals.

New markets allow Zomato to expand their business and diversify their portfolio of
products and services.

International markets offer Zomato new opportunities to expand the business and
increase sales.

Reasons for Threats

International competitors are numerous and difficult to combat, because they can have
many competitive advantages that give them an advantage over Zomato.

Intense completion can lower Zomatos profits, because competitors can entice
consumers away with superior products.

The availability of substitute products hurts Zomatos ability to raise prices, because
customers can easily switch to another product or service.

FEATURES PROVIDE BY ZOMATO


1.

Get to customize your landing page / profile page on Zomato. You can add a
background image similar to the cover photo feature on Facebook.

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2.

Display your Facebook feed, activity happening on your Facebook fan page on the right
hand side of the profile page to increase user engagement.

3.

Paid members have an option to advertise services related to their restaurant on the right
hand side of their Zomato account. The banner ad in the red color permanently sticks no
matter where you scroll which thus gets maximum attention. See below

4.

Paid members have an opportunity to track the details of their calls routed through
Zomato system. They can listen and understand what kind of customer service is being
provided by their staff. The calls can be tracked for quality purposes.

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5.

Businesses can place a banner advertisement on Zomato if they wish to. Usually, new
businesses avail this option to get noticed amongst target audience. Established
businesses also advertise to generate more sales. Zomato generated 10.88 crore in FY13
from ads. This accounted for 95.7 per cent of the total operational revenues of the
company. Business owners regularly get updates about the number of clicks from ad.

SOCIAL MEDIA MARKETING STRATEGY OF ZOMATO


Zomato aims to be the place where Foodies hangout. In fact, it had rechristened itself as a
Food Network last year. It is leveraging 3 primary platforms to power its own Food Network:
Facebook, Twitter and Pinterest. It revolves around food and restaurants but the efforts look a
little half-hearted.
Platform Wise Strategy

Facebook

Though Zomato has a 269k strong Facebook community, it is seriously lacking in engagement.
The page doesnt have regular updates going out. Only a handful go out each month. But
whatever content they share, they do a stellar job at it. These content pieces get amazing traction
and response from the community. Which is why it surprises me when I dont see a lot many
of such awesome content being shared.

Twitter

Twitter is where Zomato shines. Twitter is primarily being used as a conversation platform and
the brand is doing an excellent job at engaging in conversation with the people.
They are keeping a close tab on all the mentions of Zomato and are responding to each and
every one of them. Even people are tweeting questions to them asking for restaurant
suggestions.

Blog
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The Zomato blog is the companys mouthpiece where it shares all the latest updates about the
brand and its initiatives. Though the posts are written very well, there is no regularity here as
well.

Pinterest

A visual treat and a foodies true delight, the content shared on their Pinterest channel is simply
amazing! Though the account doesnt boast of a huge follower count, the content is simply
amazing.
They should work hard on promoting it.

Comparison with Competitor

With the might of Network 18 behind it, Burrp.com still cant give a tough fight to Zomato. I
mentioned how Zomato is low content and it has low engagement, but Burrp is worse. Even
when it is adding content twice a day, there is still not enough engagement to mention about.

CONCLUSION

One of the leading E-commerce food portals of India.


Customer satisfaction is the major concern
As e-commerce market is booming up rapidly we all are going to see some more
companies like Zomato in the near future.
Provide more detail information on products than competitors
Capitalize the global market and have global reach and create a brand like
Google of Food.
Increase restaurant entries
Educate people different cuisines and best food in the world.

REFERENCE
- http://www.socialsamosa.com/2013/01/social-media-strategy-review-zomato/
- http://www.quora.com/What-is-Zomatos-revenue-model
- http://www.wikiwealth.com/swot-analysis:zomato
- http://www.indiainfoline.com/article/research-leader-speak/deepinder-goyal-founderceo-zomato-113111404451_1.html
- http://www.quora.com/Zomato/What-are-the-features-you-provide-for-your-payingcustomers
- http://yourstory.com/2012/07/zomoato-cofounder-pankaj-chadda/

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Headquarters: Bangalore
Founder: Hari Menon, V.S Sudhakar, Vipul Parekh, Abhinay Choudhary
Year: 2011
Users: 40,000

BigBasket.com is Indias largest online food and grocery store, with over 10,000 products and
over a 1000 brands. Big Basket sells products in categories such as fresh fruits and vegetables,
grocery and staples, meats, personal care, and home and kitchen products. Big Basket operates
in four cities including Bangalore, Mumbai, Hyderabad and Pune.

BUSINESS MODEL
BigBasket, which is already present in Bangalore, Mumbai and Hyderabad, delivers the same
day if the order is placed before 1 pm. The e-grocer, which plans to expand to NCR, Pune and
Chennai. BigBasket has its own, end-to-end logistics. From procurement to warehousing to
supply chain and finally delivery, everything is managed in-house by a fleet of 500-plus people.

PRODUCT MIX

Fruits and Vegetables


Rice and Dals
Spices and Seasonings
Packaged products
Beverages

Meat
PROS & CONS OF BIGBASKET.COM
Pros

Shopping for groceries is highly convenient. Customers are happy on the time it saves
to do shopping.
Cash on delivery.
Friendly return policy - no questions asked Such occasions were very few, though

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Delivery guarantee - fix a time slot delivery, they deliver promptly. If delayed, they
return10% of the order amount
Vegetables are fruits are very fresh. Bread and Dairy products are always within the
expiry date.

In terms of product provided

Very easy-to-use, no clutter, no ads


Organized catalog of products with the breadcrumb display.
Notifications are perfect. An email and an SMS is sent as soon as an order is placed.
When the order is to be delivered on a particular day, a SMS notification is sent again
which is useful.

Cons

Multiple items in the list is not delivered at the same time on a single address when an
order is placed.
Search box - doesn't give the items the user is looking for, though the items are available
when you navigate through the menu..
Product names do not support multiple languages
The SMS doesn't contain the amount that is needed to pay with the order details which
would have been good to keep the cash ready by user during the time pf delivery.
Ability to edit/modify order placed. There can be a cut-off time before which an order
can be edited.
Order status - orders which have been delivered weeks ago still show as "Ready to
ship".
The plastic trays they use for packing vegetables and fruits look trendy and neat but
also a serious concern to the environment.

TARGET SEGMENT

Students (Foreign and other state)

Foreigners who lack to communicate with local vendors during purchase can use the website
and get it delivered at the door step. Also targeted to customers who are staying in hostels and
PGs.

Family

Customers with baby in their family are also targeted and family with many members staying
together are also focused on.

Corporates & Professionals

Working professionals and Working parents are also targeted as they have less time to buy
vegetables personally from the market due to their jobs. Convenience factor plays a major role
in this target segment.

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DELIVERY STRATEGY

Own fleet of GPS enabled vans


Use of Hub & spoke model.
All goods are bought and stocked in warehouse
10% refund if they are late

COMPETITION FOR BIGBASKET.COM


Zopnow, localbaniya.com, etc.
Comparison between Zopnow & BigBasket
1. User Interface (UI) - Zopnow has a slightly decent UI when compared to BigBasket.
However, both of them are functional, let you add items to the cart, search and
navigation taken care of.
2. Product range - BigBasket wins here hands down simply because of availability of
fruits and vegetables (along with the variety).BigBasket has a slightly better catalog of
products than Zopnow.
3. Searchability - The search-ability or search feature pretty similar and searches at both
of them were effective at least, so no clear winner here.
4. Ordering Process - Order management or work flow is pretty simpler at Zopnow and
Zopnow has more practical delivery times during checkout unlike BigBasket which
takes a day to deliver (depending upon availability).
5. Payment Methods - I use Credit Card or Debit Card (in worst cases), so pretty similar.
But BigBasket is more mature here because they have ensured some best practices
including using HTTPS on checkout
6. Delivery at home - BigBasket has a better delivery procedure because items are
delivered in crates (blue ones) where as Zopnow just stuffs the items in a bag (ecofriendly). BigBasket arranges the normal items (edible/non-edible) and separately
keeps the items that require more attention or cold storage during transport.
7. Ease of return - Non-delivery due to OOS (Out Of Stock), both of them have a pretty
streamlined process. ZopNow gives extra Zoppies at times (but usually peanuts).
8. Customer Service - BigBasket because they are pretty fault tolerant, Zopnow on
making an item unavailable usually calls once or twice to update about the order status.
A SMS/ Email updates is preferred.
So, overall, BigBasket is better at Product Range, Payment Methods, Delivery at Home.
While Zopnow is better at UI, Ease of return and Customer Service.

PROBLEMS FACED BY BIGBASKET.COM

Cybercrimes
Waiting Period
Quality of the Product
Competition
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Delivery time
Minimum Order

RECOMMENDATION

Try to achieve one day delivery efficiency


Introduce loyalty programs
Improve website & social presence
Include bundled offer system a customer can make and save for future use
Make website more user friendly
Expand geographical reach
Increase awareness through advertisements
Share consumer experience on their website.

REFERENCES
1. http://techcircle.vccircle.com/2013/05/29/how-bigbasket-is-breaking-out-of-thepack-in-grocery-e-tailing-and-whats-next-on-cards/
2. http://www.quora.com/Which-online-grocery-store-in-Bangalore-is-betterBigBasket-or-ZopNow-Why
3. https://venkysundaram.wordpress.com/2013/05/29/why-i-stopped-usingbigbasket-com/
4. http://www.quora.com/What-has-been-your-experience-of-online-groceryshopping-in-India
5. http://www.zdnet.com/article/indian-online-grocery-startup-plans-15m-expansionacross-nation/
6. http://www.financialexpress.com/article/industry/companies/the-big-challenge-ingrocery-e-tailing-is-last-mile-delivery-high-attrition-hari-menon-ceobigbasket/9082/

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