Anda di halaman 1dari 18

introduction

OVERVIEW OF THE INDUSTRY


Retailers in India have taken a long time to realize the impact of e-players on their business.
Traditional retailers under significant pressure with many are seeing as much as a 50% drop in
foot falls at their stores.
Internet penetration across the world:-

Indian e-commerce sales in 2014 is $2.3 billion which is 0.4% of total retail & expected to reach
$32 billion which cover up 3% of total retail.
At present internet is growing at an annualized rate of 34% and now has 3 billion users
worldwide. Due increased reliance of www, e-commerce will continue to grow in next few
decades.
One survey pegs that by 2015 India will have 30 million online buyers and consumers adapting to
e-commerce sites compared with the 2.5 million online buyers at present.
India is the third largest internet market in the world with more than 243 million users. As
per BCG (Boston consultancy group) more than 580 million people in India to use
internet by 2018.70-80% of them are accessing the web on mobile phones. Below
shown is the image of globally contribution e-commerce industry.

Impact of e-commerce has mainly affected on four perspectives:1) Impact of e-commerce on Indian economy
2) Impact of e-commerce on market
3) Impact of e-commerce on customers
4) Impact of e-commerce on brick and mortar business model
1) Impact of e-commerce on Indian economy-

Indian e-commerce has grown at a compounded annual growth rate (CAGR) of 30% since
FY09, and is expected to be $18 billion (around Rs 1, 116, 00 crore) opportunity by FY15. May
reach $70 billion by 2020.
High growth rate on rising internet population, over 300 million middle class populations,
increasing mobile penetration and low levels of e-commerce activity.

E-commerce contributes only 0.6% of the countrys GDP vs 1-3% for other countries, with
only 12% of Indias online population transacting online vs 64% for the US and over 50% for
China, said Atul Soni and Nitin Mohta in the report.

The nature of Indian e-commerce is also different. Travel has the lions share of 71% of
Indian e-commerce, but e-tailing has grown the fastest, at a 59% CAGR between FY09-13E, to
reach 16% market share.

Overview of contribution of e-commerce to Indian GDP


Year
2009
2010
2011
2012
2013
2014*
2015*
2016*
2017*

% of gross domestic
product
0.13%
0.12%
0.14%
0.15%
0.16%
0.18%
0.18%
0.2%
0.21%

2) Impact of e-commerce on marketMarket share of E-commerce companies in India :-

E-commerce business in India is expected to reach around $50-70 billion by 2020 on the
back of a fast growing internet-connected population and improvement in related infrastructure
like payment and delivery systems.
The size of Indias e-commerce market in 2013 was around $13 billion, according to a joint
report of KPMG and Internet and Mobile Association of India (IAMAI). The online travel
segment contributed over 70 percent of the total consumer e-commerce transactions last year.

E-commerce industry Category wise distribution (2014)

Consumer mentality and shopping patterns are changing very fast. Online shopping is
going to become main stream in the coming five-six years.
Smart phones would be the biggest online shopping driver in the coming years.
Over half a billion Indians will switch to smart phones in the next five-six years. Thats
going to be a big driver of e-commerce in India,
Online shopping is becoming increasingly popular in smaller cities.Tier-II and Tier-III
cities are opening up very rapidly. By 2020, e-commerce will penetrate everywhere, whether it is
smaller cities or rural areas,
Sachin and Binny Bansal co-founded Flipkart in 2007,they claim the company now controls
nearly one-third of Indias online retail business and has over 1 crore (10 million) registered
users.By 2020, Flipkart target is to be a $20 billion company. E-commerce companies are
investing a lot on technologies, especially on mobiles and the supply chain,
11 | P a g e

3) Impact of e-commerce on customers


Due to enormous benefits of e-commerce customers skewed towards e-commerce. Brick and
mortar stores have faced 50% drop in their footfalls.
The age-wise analysis revealed that 35 per cent of online shoppers are aged between 18 years and
25 years, 55 per cent between 26 years and 35 years, 8 per cent in the age group of 36-45 years,
while only 2 per cent are in the age group of 45-60 years. Besides, 65 per cent of online shoppers
are male while 35 per cent are female. With India poised to become youngster, with about 64% of
the population by 2020 in the age group of 15-35, the potential of e-commerce is all set to rise.
4) Impact of E-Commerce on brick and mortar business model
Traditional business has been impacted because of following reasons which brick and mortar
business model are not offering to customersNon-Cash Payment E-Commerce enables use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website and other modes of electronics payment.
24x7 Service availability E-commerce automates business of enterprises and services

provided by them to customers are available anytime, anywhere. Here 24x7 refers to 24 hours of
each seven days of a week.
Advertising / Marketing E-commerce increases the reach of advertising of products and

services of businesses. It helps in better marketing management of products / services.


Improved Sales Using E-Commerce, orders for the products can be generated anytime,

anywhere without any human intervention. By this way, dependencies to buy a product reduce at
large and sales increases.
Support E-Commerce provides various ways to provide pre sales and post sales assistance

to provide better services to customers.


Inventory Management Using E-Commerce, inventory management of products becomes

automated. Reports get generated instantly when required. Product inventory management
becomes very efficient and easy to maintain.
Communication improvement E-Commerce provides ways for faster, efficient, reliable

communication with customers and partners


OBJECTIVE
To study the impact of e-commerce on Indian economy, markets, customers.
To assess impact of e-commerce on brick and mortar business.
To study future of e-commerce industry in India.
To develop how to overcome competency of e-commerce against brick and mortar business.
To assess factors driving the growth of e-commerce.
To assess current efforts taken by e-commerce firms to sustain into competitive market.
To study & evaluate penetration of e-commerce into Indian market.
Tostudy & evaluatethe customers preferenceof shopping.
To study challenges & opportunities of e-commerce.

SCOPE
The scope of study is as wide as an ocean and thereby the implementation hurdles. When one
thinks of impact of e-commerce business through final goal remains the same as that of
traditional business, but the way in which they function in order to improve the performance is
different. As information sharing is the major part of the corporate industries, networking has
given boos to e-commerce business. This change in view-point has opened door for new
opportunities.
This study is helpful in exploratory research accordingly development of a strategies and
future forecasting of brick and mortar business.
This research provides powerful, real time brick and mortar business to help improve service
standards of retail stores and come up with new strategies to be sustained into market.
It helps the brick and mortar business to do lot work on customer loyalty program and
customer engagement activity.
It helps to improve new method of selling for brick and mortar business.
It would help to focus on the productivity of sales force. The sales force would be able to
work in proper direction. A well-educated sales force would develop. The sales force then will be
able to provide information to the consumer and guide them. This would add to the profitability
of the company.
This study will give tremendous benefits to brick and mortar companies a new way to create
awareness among customers about the benefits of shopping experience through physical stores.
This study will mainly help in how brick and mortar companies can enhance their focus on
logistics department, presence over market & service standards to compete with e-commerce.
19 | P a g e

This research is very much useful to get the lifetime value of your customers based upon
their acquisition source and increase your expenditures on source that generate the best customers
over lifetime.
It helps to determine whether online competitors can significantly harm your business by
providing some of the value you currently offer customers in the traditional way.
It helps the managers to improve the business by enhancing their functionalities as compared
with their competitiors.

THEORITICAL PERSPECTIVE
SWOT ANALYSIS
STRENGTH:24/7 business.
Industry condition- Very high potential but is at its nascent stage lot of scope for growth
High growth rate (Recently claimed to have doubled every quarter)
Has confidence of their investors
Not heavily dependent on courier services. Own their delivery network
Customer services & exception warehouse delivery system.
Variety of payment option, making it convenient for customers to order.
Concentration on customer satisfaction, logistics and distribution.
Wallet (Prepaid) feature is introduced to make online shopping easy and increase the
customers switching cost.
Low barriers and overhead cost.
Direct customer communication.
WEAKNESS:Still not operationally profitable. Allegros analysis states that in the year ended March 2014,
Snapdeal reported a loss of Rs. 264.6 Cr. On revenue of Rs. 168 Cr. Flipakrt shows a loss of Rs.
281.7 Cr. On sales of Rs. 1180 Cr, for the year ended March 2013.
CoD(Cash on delivery) option is not as successful as anticipated
22 | P a g e

The size of business is still very small as compare to foreign counterparts. This might create
problems if entry of foreign competitors is allowed in the Indian market.
It takes time to build confidence among the customers.
Average transaction value is low as the customers prefer traditional stores for expensive
purchases.
Customers are not yet comfortable with the concept of online payment.
Indians are still believes in touch and buy concept.
Coordination with suppliers and courier is tough.
Price biasing to maintain the margin. (e.g.: Low price for the best seller book and more price
for the least wanted).
OPPORTUNITY:M-commerce is the next development in the related market to reach higher customer base.
Increasing internet penetration and high speed mobile internet connection opens up
interesting opportunities for expansion.
Spending behavior of the new generation is favorable.
Targeting the younger customer base through social media.
Favorable regulation by Government.
No FDI in B2C internet market. Hence, sheltered from foreign competition.
Already working towards customer delight and it will obtain customer loyalty gradually.
23 | P a g e

THREAT:Indian customers are not yet comfortable with the concept of online payment.
There is too much competition in every product category by different sets of players, in addition
to fight for market share among competitors of comparable sizes.
Early starters in M-commerce field can poach the customers.
100% FDI in B2B internet market and pressure on government by Amazon for similar steps
in B2c Internet market.
Entry of Google in online E-books and movies market.
Competitors capturing alternative market through innovative strategy ( e.g. Build a Bazaar
by infibeam)
In capabilities to manage certain costs like delivery cost, bank charges etc.
Chance of hacking: security issues.
Future legislations.
24 | P a g e

PEST ANALYSIS FRAMEWORK


Political:Government support for increasing internet penetration in India.
Tax benefits to corporate.
2012 increasing stock holding % for foreign investors in companies.
Resistance against foreign retailers.
Economical:Booming Indian economy.
Increasing spending power.
Base of internet users multiplied by 10 to 11 times in last 6 years.
Social:Better comfort level and trust in online shopping.
High priority on time and convenience.
Improving uses of broadband and high computer literacy.
Technological:Advent of mobile shopping.
Increasing penetration rate of Broadband and wireless internet.
Better manage E-commerce sites for ease privacy and advancements in net banking.

7 Ps OF E-COMMERCE
Product:Appearance- the ease in the websites interface even for the first visitor.
Quality- checking of the product before packing( Visual test).
Packing- different packing( e.g. bubble pack for electronic items)
Brands- all brands integrated in one websites.
Warranty- one year warranty for the manufacturers side.
Service & support- guarantee delivery of undamaged product or else replacement in 30 days.

Price:Special discount
As shipping is within India the shipping cost reduces.
Seasonal discount.
Free shipping.
For expensive products transit cost is born by company.

Place:Tie ups with local vendors and courier firms (thereby avoiding octroi charges).

Company owned warehouse in major cities near airport.


If the couriers cant deliver to the location the product is shipped through government post.

Promotion:SEO and SEM


Word of mouth marketing.
TVC lately to encourage non- online shoppers.
More online marketing like FB, Twitter, LinkedIn.
26 | P a g e

Ad-spend are growing by e-commerce companies year on year at 50% rate. 49,000 Cr
estimated Ad-spend across all media in 2015 & Rs.500 Cr likely Ad-spend by e-commerce
players in the present IPL 8.Below is the list of information of Ad-spend through e-commerce
companies.
E-commerce Players
Flipkart
Snapdeal
Amazon

Ad-spend (2014)
Rs.160-170 Cr
Rs.170-180 Cr
Rs.140-150 Cr

Physical Evidence:
Different packaging for different product to ensure safe delivery.
Company name goes with the online cart.
Design and packaging is common so customers can relate it to the company.

People:Service people, sales clerks, delivery drivers, managers, complaints departments, accounting,
warranty people, technical people, all work for the customer ease, customer satisfaction and
customer delight.

7 Cs OF E-COMMERCE

STP OF E-COMMERCE
SEGMENTATION:A) Customer persona:
Economical customers.
Bargain customers.
Big spenders.
Evangelists.
Highly engaged, infrequent purchasers.
B) Behavioral:
On site engagement.
Chanel preference
Device preference
Email engagement.
Abandoned baskets.
C) Customer life cycle stage
New customers
One time purchaser
Repeat customers
Loyal customers
Churning customers.
Lost customers.
D) Purchase history
Share of wallet
In-store or online preference
Purchase frequency
Average basket size
Product or category interests.
Buying cycle.
29 | P a g e

E) Demographic:
Gender
Age
Geographic location
Size of wallet
TARGET:E-commerce concentrates on more psychographic, which helps deciding where to display
ads online.
They target online shoppers and people who dont online shop ( TVC to encourage them)
Digital natives, families with children & busy professionals
POSITIONING:Customer delight ( low price, free shipping, replacement)
No kidding no worries
Online megastore
One stop solution

Research methodology

INTRODUCTIONThis report is based on primary data& secondary data. However secondary data
collection was given more importance since it is overhearing factor in study of impact of
e-commerce. One of the most important users of research methodology is that it helps in
identifying the problem, collecting, analyzing the required information data and providing
an alternative solution to the problem .It also helps in collecting the vital information that
is required by the top management to assist them for the better decision making both
day to day decision and critical ones.
DATA COLLECTIONData sources:
Primary data: Research is based on secondary data. Primary data can be used only for the
reference. Research has been done by primary data collection, and primary data has been
collected by interacting with various people, and it was constructed in a manner of getting
maximum information from the customers.
Data tools:
1. The study was conducted based on questionnaires to collect the necessary data: question were
asked and the necessary information was filled on the basis of the respondent answer.
2. The questionnaires are in the structured form, the research study was done with the structured
personal interview.

SAMPLINGSampling procedure:
The sample was selected of them who are the household consumers/working people(M/F). It was
also collected through personal visits to persons, by formal and informal talks and through filling
up the questionnaire prepared. The data has been analyzed by using mathematical/Statistical tool.
Sample size:
The sample size of our project is limited to 100 respondents

DATA INTERPREATION & ANALYSIS


Questns

left

FINDINGS

By research it shows that males are doing more shopping through online compare to
females.
Age groups between 26 to 35 do more shopping through online.
The maximum people prefer to do shopping from malls as compare to online.
People prefers to shop through online in which 35% people shops once in two weeks, 22%
people shops once in a month, 43 % people shops rarely and no one shops once in a week through
online.
People prefers to shop through retail stores in which 55% people shops once in two weeks ,
15% shops once in a month, 30% rarely shops and no people found who shops once in a week.
The factors influence for shopping through online is mainly because of price and discount
offer which is on 55% and follows by busy lifestyle is on 20%.
The factors influence for shopping through Physical format, major is 45% because of look
and feel factor and 30 % due to salesman advice/assistance.
65% people trust on retail shopping while 35% trust on online shopping.
If a product is price equal in online as well as in retail stores 70% customers prefer to shop
through retail stores.
The most effective way to attract customers for a new brand launch in which 53% customers
suggest on retail stores or mall while 47% people suggest on

CONCLUSION

The penetration of the internet in firms is high; however the use of ebusiness is still limited.
E-commerce business is attracting customers only because of price discount
but still brick and mortar model has wide scope to work on their service
standards to reach up to their customer satisfaction level.
Brick and mortar business has to come up with a click and mortar model to
sustain long enough into the market & to overcome competition.

RECOMMENDATION
Great retailers can boost of many advantage such as brand consistency, high customer awareness
and rewarding relationships.
Retailers need to create more awareness among customers about benefits of buying products
through stores. For example by more focusing on service standards.
Get into click and mortar business model.
By offering a niche product.
Mainly focus on size availability of merchandise on floor. For that we can collect a database
of size requirement by customers from each store and should be operated by central warehouse to
deliver the right product to the right customer within a limited period of time to overcome loss
opportunities.
Enhance customer engagement plans. This type of engagement activities will be completely
different from the simplistic likes buttons and vanity badges currently seen in many ecommerce
sites. It has to be more value-driven engagement plans.
Open up the new stores across cities.
To create separate shopping experience zone for customers we can place a kiosk on the shop
floor to give digitalization feels to customers.
Empowering sales people with product knowledge.
Work on web-sites, social media marketing plan and mobile app. For example, by displaying
of season collection on social media channel we can sell products also through web-sites or
mobile apps. As well as we can place a highlighter on web-sites and on mobile apps TO GET
EXCLUSIVE COLLECTION VISIT OUR STORE.
By differentiating our offerings by adopting different styles for online and offline selling.
Such as on e-commerce there should be limited options display and create customer awareness
that if they want to browse more collection they need to visit retail stores.
As retailer to overcome competency we can come up with a click and mortar business
model.
50 | P a g e

There is a trend of digitalize market and customers are looking for use of digital medium in
their shopping. For that we can provide i-pad to each concept in which there would be enormous
information of exclusive season collection.
Turn every shopping assistant into a personal shopper who remains socially connected with
the customer even after the sale. For example Apple which
markets its associates as geniuses able to offer expert guidance, and Whole Foods, which also
boasts its reputation as having a knowledgeable employee force.
Encourage shoppers to involve their peers and friends in the process of making in-store
purchasing decisions by leveraging mobile devices. Most people are hesitant to make choices.
Socializing decision-making opens a three-way conversation between the customer, her friends,
and the sales associate. To clarify, this doesnt mean a two-way communication such as a shopper
making a phone call to ask a friend whether to purchase something. The customer and the sales
associate need to converse and simultaneously engage remote friends via new forms of
interactions on mobile devices.

Anda mungkin juga menyukai