E commerce industry

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  • European Business slow to go online
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  • E commerce industry

    1. 1. INDIAN E-COMMERCE INDUSTRY Swayam D. Faiz A. Reetu Y. Lavish S. Prakash s.
    2. 2. INTRODUCTION E-Commerce stands for Electronic Commerce Pertains to trading in goods and services through the electronic medium It is all about speed, connectivity, and sharing and exchanging goods, services and information Javalgi and Ramsey (2001) Ecommerce is the use of the internet “for exchanging information of value between firms and their trading partners, employees, and customers with the absence of geographical and time restrictions” Barnes-Vieyraand Claycomb (2001,p.13)
    3. 3. SCOPE India is showing tremendous growth in the Ecommerce With the middle class of 300 Million people, online shopping shows unlimited potential in India
    4. 4. GROWTH
    5. 5. E-COMMERCE IN INDIA Various Websites providing variety of goods and services such Flipkart, Home Shop 18, MakeMyTrip, Bigbasket, Bagskart etc. There are total 1938 e-commerce companies in India(Oct, 2012) Domestic e-commerce market has the potential to grow between $ 125 Billion and $ 260 Billion by 2024-25 In India E-commerce is facilitated by Information Directories and Banks (Net Banking, Phone Banking, Credit Card, Debit Card) Most difficult challenge for Indian e-commerce industry is : We still belief of touch and feel concept. People are not comfortable with online money transaction
    6. 6. SWOT ANALYSISSTRENGHTS Niche product selling Low barrier and overhead cost Direct customer communicationWEAKNESS High customer expectations Search engine unpredictability Govt. rules and regulations Indians are still believe in touch and buy concept Active internet users are very low in number
    7. 7. OPPORTUNITIES Global exposure 24/7 business Increasing network across the companies FDI in ecommerce has stopped, so Indian players have a good opportunitiesTHREATS Direct selling of the brick and mortar shops are increasing Chance of hacking: security issues Future legislations Less scope of innovation
    8. 8. INTRODUCTION TO FLIPKART Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka Founded by Sachin Bansal and Binny Bansal in 2007 Started with 4Lacs Then added two venture capital in 2009(Accel India) and 2010(Tiger Global Management) Flipkart focused on online sales of books but it later expanded to electronic goods and a variety of other products
    9. 9. A BRIEF HISTORY OF FLIPKART GROWTH Source: Flipkart Blog
    10. 10. Source: Flipkart Blog
    11. 11.  Source: Flipkart Blog
    12. 12. FLIPKART FUNDING Venture capital Private Equity Flipkart
    13. 13. OVERVIEW Bansals controls about 37% of flipkart equity,while Accel partners and Tiger Global controls 48%. Management holds remaining 15%. Total Revenue of the company Rs 500 crore in 2011-2012. As per the previous year Rs 50 crore in 2010-11. Largest online Book retailer in India with 80% market share. Two million customer base and total daily sales of Rs 2.5 crore.
    14. 14. WHY FLIPKART IS LOSING MONEY? MRP of Strategy Books Rs 499. Estimated cost at which flipkart gets it from Publisher Rs 299 (Assuming 40% Margin ) Cost of delivering it to a customer outside of eight cities Rs 344 ( Assuming Rs 45 for delivery cost) Charge levied by logistics partners Rs 379( Assuming Rs 35 on order size) Price at which sold to consumer :Rs 324.REMEDY OF THE PROBLEM Increase the price of the books Changing Consumption pattern: Increasing the ticket size In future their logistics will increase. Hence costs related to delivery will be reduced.
    15. 15. WHAT IS RIGHT WITH FLIPKART? Understanding Customer psychology Gaining Trust Expanding the market Diverse Product Categories Good use of SEO Good use of Social Media Optimization Outstanding delivery Introduction of new technologies in regular intervals.
    16. 16. OPERATIONS OF FLIPKART  Flip kart’s core competency lies in their Supply chain and logistics Process of Supply Chain 1. Building the Supplier Base 2. Building Infrastructure for Operations 3. Use of Information system Technological Overview  Round the clock operations.  Technology plays a critical role. Flipkart often refer to themselves as a technology company doing e-commerce  They use Linux as their implementation technology for resource management, task management and file management  Flipkart works with popular open source products such as Ubuntu, Mysql, Apache
    17. 17. MARKETING OF FLIPKART Word of mouth (initial marketing even now they want to satisfy customer so they come back for more) Good use of SEO “We DONOT sell old books or used books. All the books listed at Flipkart.com are new books. The books listed at Flipkart.com are NOT available for free download in ebook or PDF format” Good use of SEM Ads at proper places and use pay per click to pay for ads
    18. 18. STP SEGMENTATION1. All internet users and shoppers TARGET1. Flipkart concentrates on more Psychographic, which helps in deciding where to display ads online2. They target online shoppers and people who don’t online shop (thus TVC to encourage them) POSITIONING1. Customer delight (low price, free shipping, replacement)2. No kidding no worries3. Online megastore4. One stop solution
    19. 19. 7 P’S OF FLIPKART Product: Appearance –the ease in the website interface even for the first visitor Quality –checking of the product before packing (visual test) Packing –different packing(eg. Bubble pack for electronic items) Brands–all brands integrated in one website Warranty -one year warranty from the manufacturer’s side Service & support–guarantee delivery of undamaged product or else replacement in 30 days
    20. 20. Price: Special discount As shipping is within India the shipping cost reduces Seasonal discounts Free shipping For expensive products transit cost is borne by companyPlace: Tie ups with local vendors and courier firms (thereby avoiding octroi charges) Company owned warehouse in major cities near airport If the courier can’t delivery to the location the product is shipped through government post
    21. 21. Promotion: SEO and SEM Word of mouth marketing TVC lately to encourage non-online shoppers More online marketing like FB, Twitter, linkedinPhysical Evidence: Different packaging for different product to ensure safe delivery Flipkart the name goes with the online cart Design and packaging is common so customers can relate it to the companyPeople: Service people, Sales Clerks, Delivery drivers, Managers, Complaints department, Accounting, Warranty people, Technical people, all work for the customer ease, customer satisfaction and customer delight.
    22. 22. SWOT ANALYSIS OF FLIPKARTStrengths Top Indian ecommerce portal Diversified into electronic goods Two VC investment to build its own delivery system thereby reduce delivery time Cash on delivery which is making 60% of its incomeWeakness Coordination with suppliers and courier was tough Price biasing to maintain the margins ( eg. Low price for the best seller book and more price for the least wanted)
    23. 23. Opportunities Already working towards customer delight will obtain customer loyalty gradually Supplier database interface with Flipkart website for JIT procurement Mobile internet usage is increasing there by chances of increase in sales through mobile shopping.Threats Small players and emerging competitor Major players like Amazon In capabilities to manage certain costs like delivery cost, bank charges.
    24. 24. FLIPKART ‘S NEW TRIANGLE: RAISING THE BARKey Success factors:• brand loyalty Competencies: • User experience • large self owned delivery channels • Reliability • supplier network/ first to market• convenience • mobile shopping solution/ increased • delivery reach reach • delivery time • innovation in • mobile shopping services/payments/technology• availability • excellent customer services • product modes (printed/ e-books) • internet strategy (search engine • titlesThreshold factors: Brand awareness, price. optimization, platform advancement) • large loyal customer base. Value proposition: “Completely hassle free shopping experience with best services to everyone, everywhere and every time in India”.
    25. 25. PEST ANALYSIS FRAMEWORK
    26. 26. FUTURE PLANS OF FLIPKART By 2013-14, Flipkart plans to:-• Offer new categories on its website• Increase its footprint of warehouses• Expand operations into new cities(Tier 3)• Increase staff size from 2000 to over 10,000• Grow revenues 10 to 30 times over
    27. 27. FUTURE PROSPECTS OF FLIPKART IN INDIA:- Marketing is very important and it is generally believed that online people are easier to target. The savings in marketing costs can be passed on and prices can be reduced. Hence in future that helps Flipkart in reducing prices. FDI will help in improving the efficiency of supply chain. FDI will also help in boosting the confidence levels of the customers in which foreign player will play an important role. Hence in future by spending time on online by purchasing clothes and electronics goods will help Flipkart increase in future rapidly.
    28. 28. CHALLENGES  High inflator trend in the global and domestic economies  As capital expenses are being deferred because of huge increase of cost of capital  Then there is much pressure on existing asset to deliver operational performance  Government policies in most developed and developing countries have imposed very stringent norm for safety.
    29. 29. TRENDS AND OUTLOOK OF E-COMMERCE INDUSTRYIN INDIA Overall growth of Consumer & Supply side interest in e- Commerce in India - Brands & Manufacturers getting online Increase traction of Lifestyle categories and Women shoppers online Role of Social Media marketing in driving e-Commerce growth Potential from Tier 3 towns Impact of growth in Smart phones on e-Commerce Negative impact of rampant price cutting and couponing in the industry - how will players make money ?
    30. 30. Flipkart eBay Jabong Homeshop 18 Myntra Available Not Available Available Not Available Books Mobiles & Available Not Available Available Not AvailableAccessoriesComputers Available Not Available Available Not Available Available Not Available Available Not Available Cameras
    31. 31. Gaming Available Not Available Not Available Not AvailableMusic, Movies & Posters Available Not Available Not Available Not AvailableTV, Video & Audio Available Not Available Available Not Available Home & Kitchen Available Available Available Not Available
    32. 32. Pens & Stationary  Not Available Not Available Not Available Not Available Belts, Bags & Luggage Available Available Available Available Watches Available Available Available AvailableBeauty & Health Available Available Available Available Care Baby Care Available Available Available Not Available
    33. 33. Toys Available Available Available Not Available Not Car & BikesAvailable Not Available Not Available Not Available Not Footwear & Available Available AvailableAvailable Clothing
    34. 34. EBAY BUSINESS MODEL eBay Marketing Business Person Developers Buyers Sellers In this type of Model any body can buy or sell
    35. 35. THE PERCENTAGE BREAKDOWN BETWEEN EBAYS DIFFERENTEXPENSE GROUPS Chart Title Other Sales and 16% Marketing General 40% Administration 24% Product Development 20%
    36. 36. FLIPKART BUSINESS MODELWHEN COMPANY ORDER THE GOODS FROM VENDORS Vendors Flipkart Customers Agents
    37. 37. CONT…WHEN COMPANY HAS THEIR OWN WAREHOUSE Warehouse Flipkart Customers Agents
    38. 38. JABONG BUSINESS MODEL Customers Vendors Jabong Agents
    39. 39. HOME SHOP 18 BUSINESS MODEL Vendors Channel Partners Customers
    40. 40. Online Service Quality for Luxury PurchasesGood customer service 4.55Money-back guarantee 4.48Easy return or exchange of merchandise 4.46Control over use of personal data 4.43Site reliability 4.42Ease of use 4.33Wide product selection 3.99Fast site 3.97Information related to products/services sold 3.93Wide range of shipping/delivery options 3.88Brand name 3.65Site personalization 3.55Physical presence 3.49Discounts or coupons 3.24Personalized product recommendations 3.12Recommendations to complement previous purchases 2.95 Source: Forrester Research Inc., 2001
    41. 41. COMPARATIVE PERFORMANCE ANALYSIS :Key SuccessFactors Weight Flipkart Mynta HS18 Jabong EbayBrand Awareness 0.15 1 0.8 0.7 0.75 0.9Delivery Time 0.1 1 0.8 0.6 0.7 0.7Delivery Reach 0.1 0.9 0.8 0.7 0.75 0.8User Experience 0.15 0.85 0.9 0.8 0.8 0.7Reliability 0.15 0.9 0.8 0.7 0.7 0.7Availability 0.1 0.85 0.7 0.7 0.7 0.9Price 0.15 0.75 0.8 0.7 0.8 0.7website design 0.1 0.7 0.75 0.65 0.7 0.6Total WeightedScore 1 0.87 6.35 5.55 5.9 6Total MarketShare(%) 100 37 12 3 4 4Purely based on assumption and market understanding
    42. 42. REFERENCES [1] Sinha (April 2009), “Ecommerce in India – The Real Challenges” [2] Chaudhury, Abijit; Jean-Pierre Kuilboer (2002). EBusiness and e- Commerce Infrastructure. McGraw-Hill. [3] Frieden, Jonathan D.; Roche, Sean Patrick (2006), "Ecommerce: Legal Issues of the Online Retailer in Virginia", Richmond Journal of Law & Technology [4] Miller, Roger (2002), “The Legal and E-Commerce Environment Today”, Thomson Learning [5] Turban E, Lee J King D and Chung H M (1999),”Electronic Commerce: A Managerial Perspective”, Prentice Hall [6] Ubois, Jeff (1995), “Wheels of Commerce- an Interview with commerce”, pp 62-69 [7] Megna, Michelle (2008); “E-Commerce Trends for 2008 and 2009”. [8] Rastogi, Rajiv; “Country’s report on E Commerce Initiatives”. [9] Internet World Stats
    43. 43. CONT… [10] Overview of E-commerce in India [11] 20 Hot E-commerce startups in India [12] Indian e-commerce at inflection point? [13] India broadband penetration growth [14] E-commerce growth with 3G Models of e-commerce in India [15] India B2C E-commerce Market Size [16] Consumer E-commerce in India [17] “Asia Pacific Online Retail Forecast, 2011 To 2016,” Forrester Research Inc. Zia Daniell Wigder, with Steven Noble, Vikram Sehgal and Lily Varon. [18] Indian Retail Market Size and Growth Estimates [19] Written by Piper (2012-08-10). "Name the India’s Largest Ecommerce Company". Ecommerceforum.in. Retrieved 2012-08-14.
    44. 44. THANK YOU  
    45. 45. ANY QUERIES???

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