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e commerce business models


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e commerce business model

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e commerce business models

  1. 1. E-Commerce Business Model
  2. 2. Contents:  History  What is E-commerce  E-commerce around us  How E-commerce works  Classification  Case study  Advantages  Disadvantages  References
  3. 3. History  1995: Birth of internet in INDIA  2002: IRCTC teaches India to Book ticket online  2003: Introduction of Low Cost Airline with Air Deccan  2005-06 : Make My Trip ( online flight ticket booking begins)  2007: The Deep Discounted model of Flip kart is launched  2008: Smartphone launched ( Steve Jobs launches I phone 3G)
  4. 4. What is E-Commerce:  If the trade of goods and services takes place on computer with the help of computer or payment is done electronically/COD, it is called E-Commerce.  It is a smart way of doing business.  Electronic commerce is generally considered to be the sales aspect of e-business.  This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business.  E-commerce requires the careful planning and integration of a number of technology infrastructure components.
  5. 5. E-commerce around us : Travel Booking Hotel Booking site Other sites Air ticket booking system : MMT Clear trip Bus booking site: Taxi : OLA Uber taxiforsure Expedia Oyo rooms Trivago (no.1 job site) Marriage alliances
  6. 6. Biggest giants in INDIA,,, Fashion & apparel: Kids Category: Furniture:      Glasses & spectacles:   FAB  URBAN LADDER  Pepperfry
  7. 7. How E-Commerce works: 1. Sourcing – Inventory 2. Catalogue – Display 3. Listing – Upload 4. Marketing – Adds 5. Packaging – Ready for delivery 6. Shipping - Delivery
  8. 8. Classifications may be according to : 1. On the basis of goods and services (i) E-travel (services) (ii) E-tailing (products & goods) 2. Interacting participants I. B2C (Business to Consumer) II. B2B ( Business to Business) III. C2C (Consumer to Consumer) IV. C2B ( Consumer to Business ) 3. Main theme, key processes 4. Customers’ role
  9. 9. B2C E-Business Models  Business-to-consumer (B2C) e-commerce: customers deal directly with the organization, avoiding any intermediaries Ex :-
  10. 10. B2B E-Business Models Business-to-business (B2B) e-commerce:  participants are organizations.  E-distributor  Private marketplaces  Industry-wide networks Ex:-
  11. 11. Consumer-to-consumer (C2C)  Consumer-to-consumer (C2C) e-commerce: participants are individuals, with one serving as the buyer and the other as the seller  C2C Provide a way for consumers to sell to each other, with the help of a online market maker. E.g. ,
  12. 12. Consumer-to-Business (C2B) Model  The C2B model involves a transaction that is conducted between a consumer and a business organization. In this kind of a transaction, the consumers decide the price of a particular product rather than the supplier. E.g.-  For example,, is a Web site on which a consumer can post his bio-data for the services he can offer.
  13. 13. On basis of B-plan (for e-tailers) 1. Inventory model 2. Virtual Marketplace(Space selling) model
  14. 14. Inventory Model  Company keeps inventory of goods and list them on their website.  Customer will order product and company will provide it from its existing inventory.  Inventory Management techniques are used with data analysis to manage optimum inventory levels.  Example – Roorkee delivers ( instieshop ) They buy all student essentials from local market and sells in IITR campus like broom , mug, Bedding items and many more through their website.
  15. 15.  Benefits :  Faster delivery  Assured Quality  Product Availability  Limitations :  Higher Inventory Cost  Government Regulations on investments (FDI)
  16. 16. Virtual Marketplace Model  A virtual marketplace, also called an ecommerce marketplace, allows third party sellers to sell their wares.  Virtual Marketplace is a type of e-commerce website where product and inventory information is provided by multiple third parties, whereas transactions are processed by the marketplace operator.  These third party sellers could be individual traders, large-scale manufacturers of goods, or any kind of trader.
  17. 17.  There is more than one operational model for marketplaces, but the most common method involves marketplaces being merely an order booking mechanism.  Marketplaces display the seller's wares, collect orders and payments, forward orders to the seller, track delivery, and release payment to the seller after deducting a fee.  E.g. – Snapdeal, Quiker, Flipkart, food panda
  18. 18. Advantages of a Marketplace Model  It can sell a large number of SKUs(Stock Keeping Units) without maintaining any inventory.  Operational efficiencies improve as some overheads are transferred to the seller.  Being a marketplace provider allows you to focus on developing ecommerce technologies.  Margins improve.
  19. 19. Disadvantages of a Marketplace Model  To begin with it is tough to differentiate your ecommerce business. In the marketplace model, the problem becomes still more acute as you are not even the seller of your own goods.  It is much tougher to implement product quality control in a marketplace model, as the seller is primarily responsible for the products.
  20. 20. Space Selling  It is an idea or invention to help sell or publicize a commodity in the market. In a website, there is some space which is specially meant to sell or for posting some advertisements regarding a particular project is called Space Selling.  Space selling-A space is provided to sell product or service of other organizations or business. It can be done through various mediums.
  21. 21. CASE STUDY (Flipkart )  Started as a book trader (buying books from local market and delivering to desired place).  Flipkart changed it’s business model with increasing demand. And maintained inventory of selected items.  W S Retailer came into existence as front end retailing solution to flipkart’s delivery needs and flipkart became full fleshed inventory model.
  22. 22. But ...  Till 2013 Indian government was not clear about it’s FDI policy in retail.  In 2013 Indian government came clear about it’s FDI policy and only allowed FDI in Marketplace model .  Hence Flipkart was forced to change it’s B-model from Inventory to Marketplace.  Flipkart sold W S retail in 2013 and it became an individual retailer.
  23. 23.  Now flipkart is a full fleshed marketplace model hosting 50000 vendors.  Because of this Enforcement directorate sued flipkart with 1400 crore penalty.
  24. 24. Advantages of E-commerce  It can help increase profits; it can increase sales and decrease costs.  It can help organizations do business 7 days a week and 24 hours a day.  It can help organizations have customers all around the globe and not be limited to a specific region.  It helps organizations bring higher return on advertisements, if managed properly.  It helps organizations identify new suppliers, partners and customers.  It increases flexibility and ease of shopping for the customer.  It can help in low operational cost.  It can provide personalized product and customer customization.  Shoppers are given a broader range of products to choose from online.
  25. 25. Disadvantages of E-commerce  The buyer cannot touch or feel the product online.  The customer has to wait for delivery of their product.  Perishable goods bought online can get spoiled during delivery.  It is difficult to know when an online site is safe to use
  26. 26. No model is perfect, but company has to follow rules of country in which it is operating to avoid legal complexities.
  27. 27. Refrences:  r6dm_yUhcqG79EKV1mgc&index=8    m_yUhcqG79EKV1mgc&index=1  Wikipedia
  28. 28.  A SKU, or Stock Keeping Unit, is a number assigned to a product by a retail store to identify the price, product options and manufacturer of the merchandise. A SKU is used to track inventory in your retail store. They are very valuable in helping you maintain a profitable retail business  a SKU is a series of numbers that track unique information related to that product.  SKUs are not universal. meaning that each retailer has its own set of SKUs for its merchandise.