Ecommerce Master Class Course

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  • Ecommerce Master Class Course

    1. 1. Ecommerce Master Class.
    2. 2. Ecommerce Master Class :: Main Index. 1.Ecommerce---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3 1.a. Introduction to Ecommerce------------------------------------------------------------------------------------------------------------------------------------------------------------------------4 1.b. Ecommerce Business Models ------------------------------------------------------------------------------------------------------------------------------------------------------------------13 1.c. Ecommerce in India -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------23 1.d. Ecosystem -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------28 2.Online Retail -----------------------------------------------------------------------------------------------------------------------------------------------------------54 2.a. Introduction to Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------------------55 2.b. Online Retail in USA ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------60 2.c. Current Retail Industry in USA ------------------------------------------------------------------------------------------------------------------------------------------------------------------80 2.d. Online Retail in India ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------85 2.e. Online Retail Market Size ------------------------------------------------------------------------------------------------------------------------------------------------------------------------90 2.f. Challenges in Pure-Play Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------97 3.Online Retail Operations -------------------------------------------------------------------------------------------------------------------------------------------103 3.a. Building blocks of Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------------104 3.b. Technology ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------105 3.c. Content & Imaging -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------128 3.d. Online Marketing ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------146 3.e. Fulfillment ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------171 3.f. Customer Support --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------187 4. Key Lessons ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------219 5. Looking Ahead -----------------------------------------------------------------------------------------------------------------------------------------------------194 5.a. M Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------195 5.b. T-Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------208 5.c. Social Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------215 5.d. Innovations----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------216 DAY 1 DAY 2
    3. 3. Ecommerce.
    4. 4. Ecommerce Master Class :: Ecommerce :: Index. 1.a. Introduction to Ecommerce. a. Ecommerce Definition. b. Defining years of Ecommerce. c. Parts of Ecommerce. d. Advantages & Challenges of Ecommerce. e. Effect on purchasing decision. f. Successful Ecommerce Companies. g. Successful Ecommerce People..
    5. 5. Ecommerce :: Introduction to Ecommerce :: Ecommerce Definition. “Ecommerce, which is short for electronic commerce, is the process used to distribute, buy, sell or market goods and services, and the transfer of funds online, through electronic communications or networks” Source : Wikipedia Electronic commerce is commonly referred to as Online commerce, Web commerce, eBusiness, eRetail, eTailing, Ecommerce, ecom or EC
    6. 6. Ecommerce :: Introduction to Ecommerce :: Defining years of Ecommerce. Chronology of US Ecommerce. Source : Wikipedia 1979 • Online Shopping Michael Aldrich 1981 • UK’s First B2B online shopping Thomson Holidays 1984 • First B2C online shopping Gateshead SIS/Tesco 1990 • World Wide Web Tim Berners-Lee 1994 • Netscape releases the Mozilla browser. • Bezos launches Amazon.com. • eBay is founded 1998 Alibaba Group is established in China. And it leverage China's B2B and C2C, B2C(Taobao) market. 1999 • Business.com sold for US $7.5 million . • Napster launches. In 1979 he invented online shopping to enable online transaction processing between consumers and businesses, or between one business & another, a technique known later as e- commerce. The first business- to-business (B2B) computer network was created by Thomson Holidays in 1981 10 Jan 1984 Gateshead SIS/Tesco is first B2C online shopping. Mrs Snowball, 72, is the first online home shopper. He implemented the first successful communication between a Hypertext Transfer Protocol (HTTP) client and server via the Internet Jerry Yang and David Filo publish "Jerry's Guide to the World Wide Web" online, which will evolve into Yahoo. The first version of Netscape Navigator is also released. The company, is engaged in the provision of software, technology and other services on the online business-to- business (B2B) marketplaces. It was originally founded as a pioneering peer-to- peer file sharing Internet service that emphasized sharing audio files, typically music, encoded in MP3 format. The original company ran into legal difficulties over copyright issues
    7. 7. Ecommerce :: Introduction to Ecommerce :: Defining years of Ecommerce. 2000 • The dot-com bust. . 2002 • eBay acquires PayPal for $1.5 billion. • Niche retail companies Wayfair and Netshops are founded. 2009 • Zappos.com acquired by Amazon.com for $928 million. • RueLaLa.com, acquired by GSI Commerce for $180 million. 2010 • Groupon reportedly rejects a $6 billion offer from Google. 2011 • US eCommerce and Online Retail sales projected to reach $197 billion. • Diapers.com acquired by Amazon.com • GSI Commerce, acquired by eBay for $2.4 billion. Chronology of US Ecommerce. Source : Wikipedia By 2001 the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a ″net″ profit. Investors often referred to these failed dot-coms as "dot-bombs PayPal is an American-based global e- commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to paying with traditional paper methods, such as checks and money orders. In July 2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth about $1.2 billion. Since its founding in 1999, Zappos has grown to be the largest online shoe store Groupon is a deal-of- the-day website that features discounted gift certificates usable at local or national companies. As of October 2010, Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 35 million registered users In late 2008, Today, Diapers.com is the largest pure play retailer online for everything baby. Diapers.com expanded its selection into far- reaching baby categories, including clothes, car seats, strollers, and toys. GSI Commerce is an eBay company specializing in creating, developing and running online shopping sites for brick and mortar brands and retailers.
    8. 8. Ecommerce :: Introduction to Ecommerce :: The parts of E-Commerce. Online Travel Online Retail Digital Downloads Other Online Services Financial Services
    9. 9. Ecommerce :: Introduction to Ecommerce :: Advantages & Challenges of Ecommerce. Advantages • Being able to conduct business 24 x 7 x 365 • Access the global marketplace • Opportunity to reduce costs by cutting intermediaries. • Very easy access to information • Speed of Doing Business • Challenges • System And Data Integrity Issues • Physical product, supplier & delivery uncertainty • Limited and selected sensory information ( Touch and Feel ) • Online Frauds.
    10. 10. Ecommerce :: Introduction to Ecommerce :: Effects on Purchase Decision. Store 1 Store 2 Store 1 Store 1 Store 2 Search Engines Targeted Ads Store 1 Online Website Store 1 Online Website Purchase Decisions have got very informative but very complicated for retailers.
    11. 11. Ecommerce :: Introduction to Ecommerce :: Successful Ecommerce Companies. and many more…. YOU COULD BE ONE !!!
    12. 12. Ecommerce :: Introduction to Ecommerce :: Successful Ecommerce People. Larry Page Google Sergey Brin Google Jeff Bezos Amazon Pierre Omidyar Ebay Eric Schmidt Google Ronald Burkle Yahoo Mark Cuban Broadcast.com Jerry Yang Yahoo Omid Kordestani Google David Filo Yahoo Ram Shriram Google Todd Wagner Broadcast.com Peter Thiel Paypal Niklas Zennstrom Skype Janus Friis Skype Jack Ma Alibaba.com Mark Zuckerberg Facebook Simon Nixon MoneySupermarket Andrew Gower Runescape Reid Hoffman LinkedIn Zhang Chaoyang Sohu Steve Chen Youtube Elon Musk Paypal Chad Hurley Youtube Duncan Cameron MoneySupermarket Marc Andreesen Netscape You can be one of them. YOU COULD BE ONE !!!!
    13. 13. Ecommerce :: Ecommerce Business models
    14. 14. Ecommerce Master Class :: Ecommerce :: Index. 1.b. Ecommerce Business Models a. Internet Business Models. b. Business Models in Ecommerce c. Business Models Explained - B2B, B2C, C2C, C2B, G2C d. Case Study : Industry Structure.
    15. 15. Ecommerce :: Ecommerce Business models :: Internet Business Models. Brokerage Model Advertising Model Infomediary Model Merchant Model Manufacturer Model Affiliate Model Community Model Subscription Model Utility Model
    16. 16. Business-to-business (B2B) In this segment, companies conduct business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Ecommerce :: Ecommerce Business models :: Business models in ecommerce. Business-to-consumer (B2C) Here, businesses selling to the general public typically through catalogs utilizing shopping cart software. Consumer-to-consumer (C2C) Here, websites offer free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems. Government to Citizen This comprises G2G (Government-to- Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business- to-Government),G2C (Government-to-Citizen), C2G (Citizen-to-Government) are other forms of ecommerce that involve transactions with the government from procurement to filing taxes to business registrations to renewing licenses. Consumer to Business (C2B ) In this case, a consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project.
    17. 17. Business-to-business (B2B) In this segment, companies conduct business with each other such as manufacturers selling to distributors and wholesalers selling to retailers. Ecommerce :: Ecommerce Business models :: Business models explained. B2B. •Alibaba.com is the world's largest online business-to-business trading platform for small businesses. •The company was founded by Jack Ma and 18 people in 1999. • It claims it had more than 65 million registered users in more than 240 countries and regions as of March 31, 2011. •The company‟s serves to bring together importers and exporters from more than 240 countries and regions. •IndiaMART.com is India's largest online B2B marketplace for Small & Medium Size Businesses, connecting global buyers with suppliers. •The company offers a platform & tools to over 1 million suppliers to generate business leads from over 5 million buyers, who use the platform to find reliable & competitive suppliers. •The company has over 4500 employees located across 90 offices in the country.
    18. 18. Business-to-consumer (B2C) Here, businesses selling to the general public typically through Catalogs utilizing shopping cart software. Ecommerce :: Ecommerce Business models :: Business models explained . B2C. • Diapers.com, founded in 2005 by Marc Lore and Vinit Bharara. • It is the largest online specialty retailer for baby products. • Delivers consumables, such as diapers, wipes, and formula, to parents with free 1-2 day shipping and a focus on customer service. • In late 2008, Diapers.com expanded its selection into baby clothes, car seats, strollers, and toys. •Today, Diapers.com is the largest pure play retailer online for everything baby. • Flipkart.com is among India‟s largest online retailers. • Established in 2007 by Sachin and Binny Bansal, it is among India‟s largest eRetailers. • Started as an online bookstore, but has since diversified into media, consumer electronics, computers, healthcare and home appliances.
    19. 19. Consumer-to-consumer (C2C) Here, websites offer free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems. Ecommerce :: Ecommerce Business models :: Business models explained . C2C. •eBay.com is an American internet consumer-to-consumer corporation . • It manages an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. •Founded in 1995, eBay is now a multi-billion dollar business with operations localized in over thirty countries.
    20. 20. Government to Citizen This comprises G2G (Government-to- Government), G2E (Government-to- Employee), G2B (Government-to- Business), B2G (Business-to- Government),G2C (Government-to- Citizen), C2G (Citizen-to-Government) are other forms of ecommerce that involve transactions with the government from procurement to filing taxes to business registrations to renewing licenses. Ecommerce :: Ecommerce Business models :: Business models explained . G2C. •Whatever you want or need from the U.S. government, it's available on USA.gov. •Electronic filing of Income tax return and Fringe Benefit tax Return •Know your PAN-Enables a tax payer to ascertain his PAN •Bulk PAN Query-Enables registered institutions to query PAN in batch mode •Registration of e-Return Intermediaries •Refund status query
    21. 21. Consumer to Business (C2B ) In this case, a consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project. The consumer reviews the bids and selects the company that will complete the project. Ecommerce :: Ecommerce Business models :: Business models explained . C2B. •Elance is a global Internet platform where businesses hire independent freelance professionals. •Freelance professionals create online profiles and portfolios, submit proposals for jobs that interest them, and manage both work and receive payment through the site. •ApnaPaisa value proposition for consumers is their comprehensive customized comparison quotes, which are rendered in simple, user-friendly and appealing manner. •Consumers save time as they get a one-stop shop for researching, comparing and buying online from or contacting the service providers for virtually all the products in the market.
    22. 22. Industry Structure in Online Retail Michael Porter Ecommerce :: Ecommerce Business models :: Case Study.
    23. 23. Ecommerce :: Ecommerce Business models :: Case Study :: Porter analysis on Internet Industries. -+/- - - - - + - - + - - - - The game lies in understanding the threats of – & leveraging the + „.- +
    24. 24. Ecommerce :: Ecommerce Business models :: Case Study :: Case Study: Indian Market -+/- - - - - + - - + - - - - Market Leadership has been changing with new formats and players Travel is a Classical Case in Indian Market Indian Internet Consumers shifted the online proposition to Price. LTV management has been a Serious Challenge IndiatimesShopping to Fabmall to Flipkart to ???? Web Only Brands have been born in India as its easier to reach out to customers Smaller Brands would find it lucrative The game lies in understanding the threats of – & leveraging the + „.- +
    25. 25. Ecommerce :: Ecommerce in India
    26. 26. Ecommerce Master Class :: Ecommerce :: Index. 1.c. Ecommerce in India. a. Evolution of Indian Ecommerce Industry. b. A Typical Day in a Heavy Internet Users life in India. c. The Current Ecosystem.
    27. 27. Ecommerce :: Ecommerce in India :: Evolution of Indian Internet & Ecommerce Industry. 1995 VSNL introduces internet in India via dialup in 6 cities on Aug 14,1995 1996 • Rediff.com launched by Ajit Balakrishnan. • India‟s first cyber café called “Cybercafé” launched in a Mumbai hotel 1997 • First online banking site launched by ICICI Bank. • Naukri.com launched • Sabeer Bhatia‟s Hotmail sold to Microsoft for $400 million in USA. 1998 • VSNL‟s monopoly on internet ends • Sify becomes India‟s first ISP • Launch of Nasscom by Dewang Mehta, a chartered accountant by profession to promote IT industry • Cybercafés start mushrooming 1999 • Indiaworld sold to SIFY for $115 million • Webdunia, India‟s first and most successful Hindi portal launched 2000 • IT ACT 2000 passed by the Indian Govt. • Baazee.com launched based on the EBay model. • Indya.com launched with Rs 4.5 crore campaign blitz • Yahoo & MSN launch Indian sites Source : Wikipedia Rediff.com India (NASDAQ: REDF) is a news, information, entertainment, and shopping portal. It was founded in 1996 Ajit Balakrishnan, Chairman and CEO of Rediff.com Naukri.com is a job site operating in India founded by Sanjeev Bikhchandani in March 1997 Hotmail service was founded by Sabeer Bhatia and Manojit Rout. The name "Hotmail" was chosen out of many possibilities ending in "- mail" as it included the letters HTML ("HoTMaiL). Sify Technologies Limited (formerly Sify Limited and Satyam Infoway Limited) (NASDAQ: SIFY) is an Indian broadband internet provider established in 1998, based in Chennai, India Webdunia.com is a Hindi News Website which provides variety of news in hindi from India and International news, it has top stories on business, bollywood gossip, sports updates Baazee.com was an online marketplace started by Avnish bajaj on the lines on ebay.com in the US. Ebay eventually bought over the company in 2004. Tata Communications Limited (formerly VSNL), is a telecommunicati ons company located in Mumbai.
    28. 28. Ecommerce :: Ecommerce in India :: Evolution of Indian Internet & Ecommerce Industry. 2001 • Indian Railways launches online ticketing site, irctc.com • India‟s first cyber crime police station opens in Bangalore 2002 • HomeTrade fiasco– brokerage site launched with Rs 65 crore blitz goes bust . 2003 • AirDeccan becomes first airlines to offer online ticketing in India. 2004 • EBay buys out Baazee.com & Monster.com buys Jobsahead.com • First Indian Dotcoms IPOs are successful– indiabulls.com & indiainfoline.com Source : Wikipedia Indian Railway Catering and Tourism Corporation (IRCT C) is a subsidiary of the Indian Railways that handles the catering, tourism and online ticketing operations of the railways. Home trade modus operandi was really oversimplified. It claimed to be a professed fresh dealing in governing securities (Gilts) and would attractiveness the generalized unrestricted, brokers, sub-brokers dealing in Gilts. But the polity securities never existed. Air Deccan, is a low- cost airline brand. It is headquartered in Mumbai, India It was started by Captain G. R. Gopinath Air Deccan was the first airline in India to fly to second tier cities Indiabulls is an Indian company with its presence in the Real Estate, Infrastructure, Financial Services, Securities, Retail, Multiplex and Power sectors. CarWale.com services include new car research, on-road price of new cars, used car valuation guide and used car classifieds. CarWale also facilitates new car sale through tie- ups with manufacturers, dealers, financiers and in surance firms. 2005 • CarWale.is founded by Mohit Dubey and his three friends in October 2005 2006 • BookMyShow Launched in Aug 2006 Bookmyshow.com provides cinemas, event organizers and consumers a complete range of solutions through call centers, Internet ticketing, kiosk and a mobile ticketing platform. One of the major movie & events ticket seller in India.
    29. 29. Ecommerce :: Ecommerce in India :: Evolution of Indian Ecommerce Industry. 2007 • Flipkart went live in 2007 with the objective of making books easily available to anyone who had internet access . 2009 • Fashion and You is a private invitation only shopping club, based in Gurgaon, India Source : Wikipedia 2012 • PepperFry, the eCommerce startup from the ex-Ebay heads, Ambreesh Murty and Ashish Shah, has gone live Flipkart is among India‟s largest online retailers. It is an electronic commerce company headquartered in Bangalore, Established in 2007 by Sachin and Binny Bansal, Flipkart started as an online bookstore, but has since diversified into media, consumer electronics, computers, healthcare and home appliances. It was founded by Harish Bahl and Pearl Uppal in November, 2009 Fashion and You is a private invitation only shopping club featuring collections by top designers for men, women and children 2010 • Snapdeal launches. Company was founded by Kunal Bahl and Rohit Bansal. Snapdeal is a daily deals' website that features discount offers across lifestyle segments such as dining, health & beauty, entertainment and travel. It also offers discounts on products like electronics, perfumes, watches, bags, sunglasses and mobiles. 2008 • HomeShop 18 launches on 9 April 2008 HomeShop18 is the online & on-air retail marketing and distribution venture of Network 18 Group that was launched as India‟s first 24 hour Home Shopping TV channel on 9 April 2008. It is part of the Network 18 Group. Pepperfry focuses on Lifestyle segment that do not have an organized market or standardized pro ducts. The site currently hosts products in personal accessorie s and clothing, jewellery and furniture categories. 2011 • Zovi.com launches ZOVI.com is an apparel brand available exclusively online. Zovi sells premium apparel designed with top- notch components to our customers across men's and women's categories.
    30. 30. Ecommerce :: Ecommerce in India :: A Typical Day in a Heavy Internet Users life in India. Source : „India Goes Digital‟ - Avendus
    31. 31. Ecommerce :: Ecommerce in India :: The Current Internet Ecosystem. Source : „India Goes Digital‟ - Avendus
    32. 32. Ecommerce :: Ecommerce in India :: Ecosystem :: Access :: Internet Penetration. •80 million users, a long way to go •There are an estimated 80 million Internet users in India today • It represents only a penetration of 7% of the population (17% of urban population). •This is significantly lower than global benchmarks (average 31% of total population). Source : „India Goes Digital‟ - Avendus Source : „India Goes Digital‟ - Avendus
    33. 33. Ecommerce :: Ecommerce in India :: Ecosystem :: Access :: Internet Users in India •One report has suggested 70 million. •Google put out a number of a 100 million sometime back. Source : „India Goes Digital‟ - Avendus
    34. 34. Ecommerce :: Ecommerce in India :: Ecosystem :: Access :: Sources of Growth. •Number of PCs is not a constraint •Broadband availability and cost are the major constraints. •PC broadband penetration to reach 15.6% of households by 2015. •Mobile broadband to be the primary driver of overall Internet penetration - 3G to reach 22% of the population by 2015 Source : „India Goes Digital‟ - Avendus
    35. 35. Ecommerce :: Ecommerce in India :: Ecosystem :: Demographics. Tier I cities dominate, but penetration increasing fast across tier II/III cities and towns Source : „India Goes Digital‟ - Avendus
    36. 36. Ecommerce :: Ecommerce in India :: Ecosystem :: Demographics :: User profile and how it has changed over time. Source : „India Goes Digital‟ - Avendus Younger consumers driving growth & the number of Internet savvy people in higher age groups will continue to rise - improving the potential for commerce.
    37. 37. Ecommerce :: Ecommerce in India :: Ecosystem :: Demographics :: Customer Classification. Source : IAMAI Significant growth of internet in the middle income class, thus making internet more broad based.. Source : „India Goes Digital‟ - Avendus
    38. 38. Ecommerce :: Ecommerce in India :: Ecosystem :: Government Actions in ecommerce. •25% of income tax filings are now online •UIDs and the impact on electronic payments Source : „India Goes Digital‟ - Avendus Government Initiatives driving penetration as well as helping build trustworthy cyber environment . Cyber Crime, Online Payment Security and stronger consumer forums could help further
    39. 39. Ecommerce :: Ecommerce in India :: Ecosystem :: Venture Capital Action in ecommerce. •Growing entrepreneurship •Improved support systems •A whole lot of money Source : „India Goes Digital‟ - Avendus There has been growth in entrepreneurship and investments have followed
    40. 40. Ecommerce :: Ecommerce in India :: Ecosystem :: Online advertising market in India. Online Advertising eco-system is developing but a long way to go Source : Pitch-Madison Media Outlook 2011
    41. 41. Ecommerce :: Ecommerce in India :: Ecosystem :: Payment Credit and Debit Cards. • Credit card penetration in India has actually seen a decline of late. •This is due to the tightening of norms by banks for the issue of credit cards, after delinquency rates shot up in 2009. Source : „India Goes Digital‟ - Avendus
    42. 42. Ecommerce :: Ecommerce in India :: Ecosystem :: Payment Issues :: Cash On Delivery. COD. The Indian Innovation. •Eliminates consumer drop-offs which occur due to “LACK of TRUST” •Mitigates the primary disadvantage of e-commerce - „lack of touch and feel‟. •Transfers the risk from the consumer to the supplier. I think Indian ecommerce needs this to develop confidence in ecommerce Source : „India Goes Digital‟ - Avendus
    43. 43. Ecommerce :: Ecommerce in India :: Ecosystem :: Payment Issues :: Online Payment Facilitators in India. Source : „India Goes Digital‟ - Avendus Indian market has a strong appetite for new and innovative Payment Systems.
    44. 44. Ecommerce :: Ecommerce in India :: Ecosystem :: Ecommerce Supply Chain & Delivery. Ecommerce Industry due to its need to keep large assortment and multipoint delivery makes supply chain and logistics very challenging and different for retail
    45. 45. Ecommerce :: Ecommerce in India :: Ecosystem :: Ecommerce Supply Chain :: Comparison of different supply chain & Logistics options. Source : „India Goes Digital‟ – Avendus Supply Chain & Logistics
    46. 46. Ecommerce :: Ecommerce in India :: Ecosystem :: Ecommerce Supply Chain :: Delivery Examples. Delivery is becoming a differentiator in Indian Market. Supply Chain & Logistics Source : „India Goes Digital‟ - Avendus
    47. 47. Ecommerce :: Ecommerce in India :: Ecosystem :: Ecommerce Supply Chain :: Owned vs. Outsourced delivery. In the short to medium term, it seems increasingly likely that e-commerce companies will follow a two-pronged strategy: A ) Developing their own delivery channel for the metros. B) Relying on outsourced parties for tier 2 and 3 cities where they are subscale. Supply Chain & Logistics Source : „India Goes Digital‟ - Avendus Source : „India Goes Digital‟ - Avendus
    48. 48. Online Retail
    49. 49. Ecommerce Master Class :: Online Retail :: Index. 2.a. Introduction to Online Retail. a. What is Online Retail b. Why Online Retail
    50. 50. Online Retail :: Introduction :: What is Online Retail Online Retail is a form of electronic commerce whereby consumers directly buy goods or services from a seller over the Internet without an intermediary service. Source : Wikipedia An online shop, eshop, e-store, Internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping centre. The process is also called business-to-consumer (B2C) online shopping.
    51. 51. Online Retail :: Introduction :: Why E-Retail: The Reasons remain the same over years E retail Consumer Value Proposition.
    52. 52. Online Retail :: Online Retail in USA
    53. 53. Ecommerce Master Class :: Online Retail :: Index. 2.b. Online Retail in USA a. History of Online Retail US b. Proposition of Online Retail in US. c. Share of Revenues by Segments : US d. The Growth & Share story. e. Challenges faced initially by US. brick n mortar stores on Online medium. f. Top US. E-Retailers by revenues g. Retailers entering online space. h. Managed Services Companies. i. Case Study : Walmart Vs Amazon j. Current Retail Industry in USA some trends k. Top US Failures & Learning.
    54. 54. Online Retail :: Online Retail in USA :: History of Online Retail US. :: Online Retail boom started in 1994 in US. 2 41.6 % 17 6.0 % 18 16.0 % 29 5.6 % 118 4.9 % 24 8.9 % 20 8.4 % 57 11.6 % 53 7.8 % Source: Internet Retailer „10 Launched macys.com in 1997. Launched jcpenney.com in 1994. Launched gap.com in 1997. Launched toysRus.com in 1998. Starts victoriassecret.com in 1995. Launched staples.com in 1997.Launched ae.com in 1998.Launched staples.com in 1996. Launched staples.com in 1998. WEB SALES AS A % OF TOTAL SALES INTERNET RETAILER TOP 500 RANKING Within 4 years all major stores went online.
    55. 55. Convenience Hard To Find Price Online Retail :: Online Retail in USA :: Proposition of Online Retail in US.
    56. 56. Online Retail :: Online Retail in USA :: Proposition of Online Retail in US :: Convenience : The Consumer Proposition Convenience Books, Music, Movies,…. Sit @ Home and Get it Selection Deep Research Value Proposition , Categories and Formats.
    57. 57. Hard to Find Antiques, Coins, Radio Controlled Toys …. C2C Commerce Cannot get it Anywhere Get it here Local became National with second hand goods Online Retail :: Online Retail in USA :: Proposition of Online Retail in US :: Hard to Find: The Consumer Proposition. Value Proposition , Categories and Formats.
    58. 58. Inventory Clearance Discount Price Electronics, Computers, Price Discovery Auction, Volume Aggregation Online Retail :: Online Retail in USA :: Proposition of Online Retail in US :: Price: The Consumer Proposition. Value Proposition , Categories and Formats.
    59. 59. Online Retail :: Online Retail in USA :: Share of revenues by Segments. US Mass merchant does not include marketplaces like ebay.com
    60. 60. Online Retail :: Online Retail in USA :: Share of revenues by Category. US :: Detailed Category Division. US. Source: Internet Retailer.US 2011
    61. 61. Online Retail :: Online Retail in USA :: The Growth and Share Story….. “Lets hold the plans to open another two retail stores, lets invest the same capital to build a online web store for „GLOBAL‟ sales” …a top US offline store.
    62. 62. Online Retail :: Online Retail in USA :: Challenges faced initially by US. brick n mortar stores on Online medium??? How will we reserve Inventory ? How do we plan Supply for our store plus online ? We have no idea about Online Technologies ! How will we Integrate with our ERP ? We don‟t have a Online Merchandising Plan ! What is Online Marketing ? How do we ship Individual Orders? How do we Manage Returns? Does it seem like a same story everywhere ?
    63. 63. Online Retail :: Online Retail in USA :: Top US. E-Retailers by revenues. Online Sales: $34,200,000,000 2010 Growth: 39.5% Online Sales: $2,500,000,000 2010 Growth: 8.7% Online Sales: $4,095,000,000 2010 Growth: 17.0% Source: Internet Retailer US
    64. 64. Online Retail :: Online Retail in USA :: Retailers entering online space and dominating the online retail space. But Amazon still remains the market leader…. Source: Internet Retailer US
    65. 65. Online Retail :: Online Retail in USA :: Managed Ecommerce Solutions :: A Lot of Retailers opted with outsourcing it to Managed Service Companies A lot of retailers opted to outsource the area of non competence and left it to specialist GSI Commerce® is a leading provider of ecommerce and interactive marketing services for the world‟s premier brands and retailers.
    66. 66. Retail versus Online Retail. Online Retail :: Online Retail in USA :: Case Study.
    67. 67. Walmart. vs Amazon. Round 1. Market Performance.
    68. 68. Walmart. vs Amazon. Round 2. Products & Prices. Food For thought If the cost of monthly shipment and cost of trips to retail shops equals Amazon would always be cheaper and occupy the pricing proposition completely
    69. 69. Walmart. vs Amazon. Round 3. Brand Performance. Amazon by proving higher brand ranking and customer service has proven that this model can deliver to consumer expectations
    70. 70. Walmart. vs Amazon. Round 4. Expansion & Innovation.
    71. 71. Walmart. vs Amazon. Projected Revenue. Key Take Away •Amazon is projected to surpass Wal-Mart in sales revenues in the year 2024.
    72. 72. Online Retail :: Online Retail in USA :: Trends to Watch for :: Research it Anywhere, Buy it Anywhere Get it Anywhere….. “Multichannel is the New Reality”
    73. 73. A few category retailers in US. shut down stores as unable to compete with online retailers & competitors. Online Retail :: Online Retail in USA :: Trends to Watch for :: E Retailer have affected a few industry very hard…..
    74. 74. Online Retail :: Online Retail in USA :: Top US eRetail Failures :: Top US. eRetail Failures and Learning Webvan (1999-2001) Pets.com (1998-2000) Ideas that could not sustain the dot com burst. Pets.com : Online Pets Store •Pets.com was never able to give pet owners a compelling reason to buy supplies online. •When you need kitty litter, you need kitty litter. “TIMELY FULFILLMENT IS CRUCIAL in some Categories and is the Key Value”. Webvan.com : Online Grocery: To Fast To Soon. •In a mere 18 months, it raised $375 million in an IPO, •expanded from the San Francisco Bay Area to eight U.S. cities, •Building a $1 billion high-tech warehouses. Webvan touted a 26-city expansion plan. •But considering that the grocery business has razor-thin margins to begin with, it was never able to attract enough customers to justify its spending spree. •The company closed in July 2001, putting 2,000 out of work.
    75. 75. Online Retail :: Online Retail in USA :: Top US-UK eRetail Failures :: Top US. eRetail Failures and Learning Kozmo.com (1998-2001) Ideas that could not sustain the dot com burst. Kozmo.com : Online Mass Merchant. •On Kozmo.com order a wide variety of products & get them delivered to your door for free within an hour. •Kozmo expanded to seven cities, delivery cost was too much to deliver a DVD and a pack of gum. •Kozmo eventually initiated a $10 minimum charge, but that didn't stop it from closing in March 2001 and laying off 1,100 employees. “BEWARE OF Key COST Element before making it the key Value Proposition”. Boo.com (1998-2000) Boo.com : Online Fashion Retailer. •Founded in the United Kingdom as an online fashion store, Boo.com had a complicated Web site, relied heavily on JavaScript and Flash, was very slow to load at a time when dial-up Internet usage was the norm. • Boo spent wads of cash to market itself as a global company but then had to deal with different languages, pricing, and tax structures in all the countries it served. • Sales never reached expectations. Boo.com eventually burned through $160 million before liquidation in May 2000. “Too AHEAD AND Too BEHIND IN TECHNOLOGY ARE BOTH DANGEROUS”
    76. 76. Online Retail :: Online Retail in India
    77. 77. Ecommerce Master Class :: Online Retail :: Index. 2.c. Online Retail in India a. Traditional Retailing Scenario in India. b. Modern Retailing in India. c. Modern Retailer Issues. d. Indian Retailers Jumping to Internet E-Retail. e. Online Retail Market Size in India. f. Current Share of market size by segments. g. Products bought online within & across the world . h. Challenges in Pure-Play Online Retail. i. Indian Eretail Landscape.
    78. 78. Online Retail :: Online Retail in India :: Traditional Retailing Scenario in India. 3. The Product Advantage Though the range of products sold by them is only limited, they have the advantage of selling in small denominations which majority of the customers favor. This keeps them the most understanding retailer than the modern retail. 1. The Location advantage Grab it from the next door shop is always possible as the spread of traditional store is so strong. This is one advantage which the modern retailers would be interested in adapting. Almost every street in the country has a retail identity. 2. The Familiarity Advantage The traditional retailers are the familiar one to generations. Interestingly, this familiarity leads to building the strongest relationship as well as the trust mutually. 4. The Credit Advantage Another interesting area is that they offer monthly credit to the customers. “This not only helps the salaried class but also it relieves our worries for keeping the change ready every time we purchase”.
    79. 79. Online Retail :: Online Retail in India :: Modern Retailing. 1. Greater product assortment across categories 2. Technological advantage with modernization at its best. 3. Nation-wide large retail chains offering similar assortment in most of the categories. Modern Retail Market Share: Indian retail business values at around US$ 550 billion as of now. 4 per cent accounts for the organized sector. Source :ibef.org India‟s Challenge is that we are handling two revolution i.e. Modern Retail and Online Retail together where as in US it happened one after another
    80. 80. Online Retail :: Online Retail in India :: Modern Retailer Issues. Currently retail stores are facing a lot of hurdles in running their businesses And they are not too mature in comparison to E-Retail. We are looking at both Internet Retail and Modern Retail maturing together 2009
    81. 81. Online Retail :: Online Retail in India :: Indian Retailers getting into eRetail. fulfillmntcust carecontenttech mkting Offline Retail Online Retail Store retailers are now getting into online retail as consumers are moving online.
    82. 82. Online Retail :: Online Retail in India :: Online Retail Market Size in India. The market is growing significantly but early days. Online Retail is still very small percentage of the ecommerce pie and significantly under penetrated in comparison to US Market
    83. 83. Online Retail :: Online Retail in India :: Current share of the online market by segments. Niche Retailers have garnered significant market share in last 3 years.
    84. 84. Online Retail :: Online Retail in India :: Products Bought Online within and across the world. Source: Ebay Reports The Impact of E-retail is increasing across geographies and product lines
    85. 85. Online Retail :: Online Retail in India :: Challenges in Online Retail :: Security & legal challenges: The Road is Usual i.e. with Hiccups The Road is Usual i.e. with Hiccups
    86. 86. Avnish Bajaj Case : Bazee.com CC Avenue : Hacking caseET, Dec 21, 2004 May 05, 2011 Online Retail :: Online Retail in India :: Challenges in Online Retail :: Legal Issues :: Examples of Security & legal challenges.. Interpretation of marketplace is totally not known, and CYBER LAWS are not developed in India Security Challenges exists in all developing industry and E-retail is not away from it
    87. 87. Online Retail :: Online Retail in India :: Challenges in Online Retail :: Heavy Competition:: 429+ significant players now operating… and many more…. Source : Iksula Consulting
    88. 88. Online Retail :: Online Retail in India :: Challenges in Online Retail :: Taggle.com story :: “It Also Happens in India” Seems like a last man standing game has started in pure play internet retailers.
    89. 89. Online Retail :: Online Retail in India :: Indian E-Retail Landscape: A Summary. Vertical Source : „India Goes Digital‟ - Avendus
    90. 90. Online Apparel Industry in India: A peep Into the future. Online Retail :: Online Retail in India :: Case Study.
    91. 91. Online Retail :: Online Retail in India :: Online Retail Market Size in India :: Case Study :: Retail Category – Apparels Step 1: Market size estimation •Apparel Market will be Rs 28,880 Crore in size by 2015 •Rs 4,70,000 Crore ($104,450 million) by 2020 . Step 2: Estimation of online penetration in the sector Assumption: •China‟s 2010 penetration level (3.6%) by 2015 • US‟s penetration level (10%) by 2020. •20% by Market Share is also a fair Estimate Step 3: Share of the Market Leader Assumption: •Market leader commands 8-20% market share in west and in China, a few players have market shares in excess of 40%.We have assumed a conservative estimate of 15% market share for the market leader . •This translates into gross revenues (or GMV) of Rs 1600 Crore (~$350 million) in the year 2015. "This could be larger then a LOT of Large Retailers at that time also If you are the market leader ( Rs Crore) 15% 1575 Share of the market leader Potential Revenues Source : „India Goes Digital‟ - Avendus
    92. 92. Thank You Feel free to contact us for further queries samar@iksula.com +919867020005

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