Indian e-tailing is growing rapidly but still makes up a small portion (1.5%) of the overall Indian retail market. E-tailing provides advantages like eliminating middlemen and allowing 24/7 shopping, but also faces challenges like security concerns, high startup costs, and difficulty building relationships without physical stores. While the Western e-tailing market is more mature, the Indian market has greater growth potential due to its large population, rapid internet growth, and low starting point. For e-tailing to increase its scale in India, barriers will need to be removed through regulations and infrastructure improvements while adapting to trends like increased mobile usage. Success will depend on factors like improving the customer experience through localization.

1. Indian e-tailing versus the West – What
has worked, what will not work, will it
increase in scale?
BY - DERRICK KEITH MONIS
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2. What is E-tailing?
Electronic retailing (e-tailing) is a buzzword for any business-to-consumer (B2C)
transactions that take place over the Internet. Simply put, e-tailing is the sale of goods
online.
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3. Steps involved in E-tailing
•Customer Visit
•Choice of Product
•Payment Online
•Product Delivery
•Product acceptance
or return
•Customer Feedback
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4. Advantages of E-tailing
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Eliminate middlemen Secure payment
system
Workflow automation A 24 hr. anywhere –
anytime store
Economical Unlimited market
space
Collect customer info COD
Higher Margins Variety Likely to spend
more(trends/
suggestion)
Deals
(combo/season/sale)
Quick Comparison Shopping Better Customer
Service
Cash back Send gifts

5. Disadvantages of E-tailing
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Security , System and
Data Integrity
High Risk Of Internet Start–up
(funding risks)
System Scalability Products People
won't buy online
Luxury/furniture
etc.
Difficulty in the return
of goods
Hard to build customer
relationship/loyalty
High advertisement
expenses
Can’t feel the
product
COD – high returns Social Media complaints Limited only to online
users
Complex taxation
system
Poor last-mile
connectivity
Impulsive shopping reduces Lack of Skilled manpower High customer
acquisition cost

6. Scenario of Western E-tailing
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10. Scenario of Indian E-tailing
•The current market size of the Indian retail industry is around $520B
•India has 14 million outlets . highest in the world
•Estimated to grow about $1.3T by 2020.
•The current market size of the Indian e-tailing market is around $2.3B ~ 1.5%
•Estimated to grow about $32B by 2020.
•More than 90 percent of shopping is done at informal roadside shacks and in bazaars
•The organized market is estimated to grow from the current 8% to 26% ($46B-$186B)
•Mobile penetration is one of the highest i.e. 60%
•Mobile is indeed expected to be the game changer for the Indian online shopping space. Major players like
Snapdeal, Myntra are already clocking more than half their transactions through mobile.
• The Flipkart-Myntra combined entity already holds 50% of the Indian market share and is likely to capture
70% in the next two years.
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13. Comparison – Maturity vs Introduction stage
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WEST (US)- 2015 JULY INDIA- 2015 JULY
Population 322M 1.26B
Internet users 86.75% i.e. 279M 27% i.e. 354M
Mobile penetration among
Internet users
26% i.e. 72.5M 60% i.e. 213M
Growth rate (Internet Usage) 7% 14% (25% since past 4 months)
Ecommerce Sales $280B $7.7B

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15. RANK
(Internet Usage)
COUNTRIES POPULATION INTERNET
PENETRATION
TOTAL INTERNET
USERS
GROWTH RATE %
(Internet Usage)
1 CHINA 1.4B 46% 641M 4%
2 INDIA 1.26B 27% 354M 14%
3 US 322M 86.75% 279M 7%
9 UK 63M 89% 57M 3%
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Growth rate
INDIA has the highest growth rate 14% and is estimated to increase to 25% in the next 5 years,
whereas US,UK and China have a stagnated growth rate.
Market size (Internet users)
INDIA has the second highest market size i.e. 354 million beating US this year.
Projected to be 500 million by 2017.
MARKET ATTRACTIVENESS

16. What has worked ?
(Growth Drivers adopting etailing)
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Low pricing Increasing penetration of technology
Flexibility in delivery and payment Increase in social media
Connectivity Increasing disposable income
Opportunities – growing market Multiple payment options
Low operation cost Variety of brands
globalization Changing demographics
High real estate cost for Brick & Mortar Economy

17. What will not work?
(Barriers in adopting etailing)
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Uncertainty over business model Bandwidth
Security Law and legal frameworks
Funding Lack of Capacity – Poor forecast/Poor
supply
Less popularity for high margin goods
– as no touch and feel factor
Last mile connectivity
Poor supply chain Poor infrastructure facilities such as
logistics and storage

18. Will it increase in scale?
Indian markets are currently
operating in quadrant 1 and 4
mainly. Challenge going forward is
to add more and more product
categories in these quadrants and
also to sell categories in other
quadrants
•Internet penetration
•Increasing broadband Internet
usages (growing at 35% MoM) and
3G penetration.
•Smartphone sales growth
•Fall in smartphone prices.
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•Increase in organized retail from 8 % to 26 % . Surveys predict that it will have a phenomenon
growth by 2020
•Poor penetration of Organized Retail leading to a gap in the market due to unfulfilled needs of
consumers, especially in lower tier cities
•Rising consumer confidence in online business
•Rising standards of living with high disposable incomes
•Busy lifestyles, urban traffic congestion and lack of time for offline shopping.
•The enhanced security measures introduced by the Reserve Bank of India
•Winning in India will probably mean Indian companies have to evade the paths where the large US
players are Who are deep pocketed and are not investors driven, and build new ones.
•But we now see strategic M&A and VC funding
1. Future group- Amazon
2. Croma- Tata group.
3. Flipkart- Myntra

20. Indian Scenario
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21. Trends
•Many of the current brick & mortar retailers (both traditional and corporatized) will succeed
in viewing e-tailing not as an extension but as an important business growth driver
•Ambient intelligence
•Omni channel
•Increase in organized retail.
•India has the 3rd largest number of Facebook subscribers (fb selling and end to end selling)
• Mobile wallet is gaining prominence
• Similarly, many consumer brands will also build e-tailing businesses as a direct go-to-market
approach
•Rising internet connectivity and IOT
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22. •Cluster the greater income places and also highly populated places and understand the trends
and behavior
•There is going to be less of breakthrough innovation but more of incremental change
•Integrative boxes
•Pay to neighbor
•Click and collect
•Gift wrap
•Amazon dash , prime
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CONT…

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Why burn cash?
Most b2c ebusiness models have relied initially on an intensive effort to generate a large enough
customer base (market share) – Michael porter
E.g. Flipkart – They have actually not made any money – but valuation is huge (unicorn company)
 They lose Rs1.7 for every rupee earned
 Tradeoff between Growth and Profitability
Why app only ?
•Dedicated app
•No third party cookies or ads – focused shopping
•No quick comparison
•Push notification
•Customized offers
•ios 9 has ad blockers

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Critical factors
SIC
Customer experience etailers have to come up with a completely localized strategy-Dilligrocery.com
Tapping the potential of Indian villages (infra , connectivity , transport )
Collaborative model – etailers must collaborate with the best reputed manufactures , suppliers ,
vendors (probably those who have reached EOS)
People are less forgiving – Flipkart BBD
Customized promotions for certain groups
40% of digital advertising is consolidated with two big players - Google and Facebook.
Retaining the e-customer ( 80% comes from repeat customer)
•convenience,
•customization,
•selections,
•service and delivery
•pricing.

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27. Research to understand whether etailing importance
differs across product categories or across countries
Hypothesis
H1 ; etailing importance differs across countries.
H2 ; etailing importance differs across product categories.
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H1 COUNTRY WISE
1. Country characteristic influencing etailing
It penetration
GDP
Education level
Age
Unemployment
E commerce regulation
Credit card holders
Trade liberalization
2. Categories by countries
BRIC
Developed
Transition counties
Asian countries

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H2. PRODUCT WISE
1. Product characteristics influencing etailing
Price
Perishability
Time spent to choose the item
2. Categories by products
Convenience
shopping
Specialty
Conclusion of the test (Method of least squares)
H1 was supported i.e. etailing importance differs across Countries.

30. Conclusion
Success Factors
Removing Barriers, focusing on Critical factors, adapting to trends, Pest Analysis along with
•EOB
•GST
•Digital India
•Better regulatory framework
•Analytics (Homeshop18, Jabong, Wipro use Hadoop, SEO, Market basket analysis effectively)
“There is nothing permanent in this world except change”
- Heraclitus
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31. Bibliography
Journal of Academy of Marketing Science, 30(4), pg.no:296-312.
Michel Levy, Barton A Weitz & Ajay Pandit - Retailing Management, sixth edition(2008), Tata McGraw
Hill, New Delhi.
Zeithaml V.A (2002), “Service excellent in electronic channels”, Managing Service Quality, vol. 12, no.3,
pg no:135-138.
http://www.e-tailing.com/content/?p=1465
http://www.mergers.net/index.php?id=1833&tx_ttnews[tt_news]=2171&cHash=a1551c9cc3cd14bca7c63
05611375dc7
http://www.indiaonestop.com/retailing
http://indianecommercestory.blogspot.in/2010/01/etailing-market-in-india.html (accessed on 10.03.2012, 9.10 pm)
http://www.24dunia.com/english/search/Bata-stores.html
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