DEPARTMENT OF BUSINESS ADMINISTRATION

UNIVERSITY OF LUCKNOW

ECOMMERCE
PROJECT ON

SUBMITTED TO PROF.SANJAY MEDHAVI

SUMITTED BY: MOHD.FRAZ FAROOQUI KARISHMA

3. 4.4. INTRODUCTION Objectives Limitations RESEARCH METHODOLOGY COMPANY PROFILE Key players Growth Internal structure Supply chain MARKET ANALYSIS Overview Key drivers Consumer analysis Demographics Psychographics Competitor analysis SWOT ANALYSIS RECOMMENDATION CONCLUSION BIBLIOGRAPHY 5 5 6 6 6 7 8 8 9 9 9 10 11 12 12 13 15 17 17 17 2 .2.2. 4.3.4. 4. 3.1. 3.1. 5. 2.3. 4.2.3.3.1.1. 7. 8. 3. 6. 4. 4. 1. 3.Contents 1. 1.2. 4.

Fashion and You Supply Chain FNY Customer Psychographics SWOT Analysis 9 13 15 3 . 2. 3.List of Figures 1.

Acknowledgement Hereby I express my gratitude for the assistance and valuable guidance provided by my Mentor Mr. My thanks and appreciations also go to my fellow classmates in developing the project and people who have willingly helped me out with their abilities. Mohd . I am highly indebted and thankful to Divam Jain at Fashion and You for his guidance and providing for necessary information regarding the project & also for his support in completing the project.Fraz Farooqui Karishma 4 . Sanjay Medhavi also towards my entire faculty member who helped me in understanding the module and applying the learnt knowledge in the project.

According to an American Research firm.com. 1. shoppersstop. both US and European online retail will grow at a 10 percent compound annual growth rate from 2010 to 2015.com) and brick and click companies are existing companies that have added an online site for information or online selling (Futurebazaar. To gain familiarity with a phenomenon of online apparel retail 5 .1. reaching $279 billion and €134 billion. Studying the competition is equally important because companies react to decision made by their rivals – attack or defend. 2000 crore growing at an annual rate of 35 percent. For the same purpose. Pure click companies are those which have launched a website without any previous existence as a firm (Fashionandyou. ASSOCHAM (Associated Chambers of Commerce and Industry of India) believes that Indian online retail industry could grow to Rs. who the consumer really is and why does the consumer react the way he does. one must know what the consumer wants. in 2015. impact of technology on retail has made shopping more comfortable for the consumer. 7000 crore by 2015.1 Objectives of the Study The purpose of research is to understand the online apparel retail market in India and further comparing it with the concerned company – Fashion and You. Studying the consumers is important because to study a company. The easy availability of information on products and competitors. Introduction Consumers these days are very aware as compared to a couple of decades ago. a key learning into the current market scenario is very important – finding out who the consumers and competitors are. The scope of online retailing is also tremendous. respectively. Forrester. Filling in a few details and a couple of clicks is what it takes to shop these days. “They further categorize e-businesses into two types: Pure click companies and Brick and Click Companies. The current Indian Online Retail market stands at Rs. hereafter FNY – an online fashion retailer. Kotler et al describe E-Commerce as companies or sites that offer to transact or facilitate the selling of products and services online. Online Retail prospects both nationally and globally seem bright and one firm taking proper advantage of this fact is Fashion and You. Similarly.com &Myntra. The impact of World Wide Web is tremendous in e-commerce. 1.com)”.

1. home décor. company. Co-Founder and Chariman of FNY. there is not enough data available about the market. Yahoo India) and Harish Bahl. Further research needs to be done in this area to make these things more clear. Harish Bahl is the Indian Investor. jewelry. 2. etc in full detail. Sales. Harish is the founder CEO of Smile Interactive and has incubated and grown several successful leading online businesses like Quasar (WPP Digital & Smile JV).com at prices up to 80% off. which partners with high fashion and luxury brands across fashion apparel. the players. Most of research is based on secondary data – reports and press releases and from an interview. former Director. companies are very secretive about certain matters such as the supply chain and do not easily disclose this information. Zoomtra and Zumtra. Guess. To portray accurately the characteristics of this phenomenon – market. Blackberry. Calvin Klein Jeans. competitor analysis 3. Company Profile Fashion and You is a by invitation-only private sales club. Fashion and You is a pure click company formed in early 2010 by Pearl Uppal (Ex Sales Director.fashionandyou. kids. Ritu Kumar Manish Arora and Tarun Tahiliani. Escada. share. Therefore. no questionnaire was prepared as it was a telephonic conversation. Dolce & Gabana. watches. Also. fragrances. the research is an exploratory research. Rediff and GE. To determine the concerned company’s strengths & weaknesses and to see if any opportunities or threats exist. and holds private sales events for these brands on www. footwear.and achieve new insights into it 2. Gucci. consumer. accessories. Pearl Uppal. CEO Pearl Uppal is an internet industry veteran and has extensive experience at companies such as Yahoo. She Graduated from IIT Delhi and is also a gold medalist from Delhi College of Engineering. Research Methodology As this research is not conclusive (no hypothesis developed). 6 . Ed Hardy. 3.2 Limitations of the Study The market for online apparel retail in India is very new compared to other developed and developing countries. Yahoo India is Fashion and You’s Co-founder & CEO. is casual and the problem is not clearly defined (nothing to prove as no hypothesis is constructed). FNY has over 400 partner brands such as dunhill. Tyroo (Smile & Yahoo JV). designer wear. For the interview.

something that the Indian consumer has not witnessed yet. • Intel Capital.He is also the chairman of the Digital Agencies Committee of the Internet and Mobile Association of India. Intel Capital has currently invested more than US$10. This is touted to be the highest investment in e-commerce space in the country.1 Key Players • Norwest Venture Partners (NVP) is a global venture and growth equity investment firm that manages more than USD 3. was the Senior General Manager. Fashion and You raised its first round of funding during its inception — from European and Indian private investors. Fashion and You reason of success is its hugely experienced team and its early mover advantage. it raised $8 million from Sequoia Capital India in December 2010. DLF Retail Developers. Narverkar has over 15 years of experience in retail and media. Rahul Narverkar is Fashion and You’s Director of Sourcing who prior to joining Fashion and You. For the company. In the second round.7 million registered users and are the country’s most well funded e-commerce website. fashionandyou. Fashionandyou. 3. The ideology seems to be working as currently. Fashion and You are following in the footsteps of Google’s Gmail that was also offered to consumers by invitation only. Mumbai & Bangalore.165 companies in 51 countries. With Fashion and You.2 billion in over 1. The website was operational in November 2009 and was offered only to a few people who kept on inviting others. With 7 .7 billion in capital. Intel's global investment organization makes equity investments in innovative technology start-ups and companies worldwide. The website company is owned by Goldsquare Sales India Private Limited. Of course Gmail then was offering a 1 GB inbox when others were only offering 4MB so the whole invitation only concept makes sense. it was the third round of investment -.com has been growing at a tremendous pace. the invitation only concept also seems relevant because they have a very unique selling model – sales events.com employs more than 450 people spread across offices and distribution centers in Gurgaon. Since its inception. Fashion and You raised $40 million (Rs 201 crore) from a group of investors led by Norwest Venture Partners and Intel Capital in 2011.and also saw participation from Sequoia Capital India and Nokia Growth Partners. Fashion and You has over 2. • Nokia Growth Partners (NGP) is the premier venture investor focused on growth stage companies in the mobile industry.

4 billion and invests across venture.2 Growth In an interview in early 2011. Every 6 minutes they have a new member registered.00. They started selling apparel products but are now selling even consumer appliances and lifestyle products such as bed linens etc. within 15 months. As mentioned earlier. 3. the company is growing at tremendous pace. CEO Pearl Uppal was asked what the five year plans for FNY were. Sourcing. It takes a long term view on investments and plays the role of an active. • Its founder & CEO. Supply Chain and CRM. They are working with over 400 brands and have an outreach in over 550 cities.000 members logging on everyday at exact 11AM (start time of a sales event). NGP invests in companies and people that are changing the global face of mobility. 3. The company’s Headquarters lie in Gurgaon while its sourcing offices are in Gurgaon and Bangalore and Mumbai. • Sequoia Capital currently manages US $1. business families and management teams. Chairman is Harish Bahl and Director for Sourcing is Rahul Narverkar. e-commerce infrastructure. They also have more than 11. 8 . FNY has been growing at a rate of 35% since its inception. Yahoo! (Tyroo) and ScanGroup (sQuad).$350M under management.000 page views per day with 75. In-depth information about the role of each department and office is not available easily therefore not mentioned. She said she wanted FNY to be the global leader in online apparel retail and wanted to be responsible for the 10% of sales for major apparel brands. growth and late stage opportunities in India.3 Internal Structure Functioning FNY has an employee base of 250 employees working in different departments FNY has four major departments – Marketing. CEO of the company is Pearl Uppal. the company had over 1. Harish Bahl is a serial entrepreneur and has several successful ventures to his credit with large global players like WPP (Quasar).8 million member. Decision making in FNY is centralized which means all departments and offices report directly to the HQ and receive orders from there. Presently. According to a report by the company itself. value added partner to entrepreneurs. • Smile Group is India's largest privately held group of ventures focused on the digital industry with extensive holdings in digital media. communications and the Internet.

though Fabmall was the first online retailer in India (it set up an online shop in the late 1990s). Market Analysis 4. Shoppers Stop followed by its etailing venture in late 2008 and so did the Anil Ambani-owned ADAG 9 . in a company report for the suppliers and prospective suppliers. an e-catalogue is produced in FNY’s in house studio. the company tallies up all orders and a purchase order is issued and sent to the supplier.4 Supply Chain Management Similar to topic 3. The supplier then sends the products ordered and these are delivered directly to FNY’s processing unit where they are sorted and packed in FNY’s packaging.3. At the end of the sales event. FNY’s Supply Chain (SC) is an 7 step process. FNY signs an agreement with the supplier – the brand for sale of its product. its suppliers are the brands itself. However. hints about its supply chain are provided. If the catalogue is approved by the reviewers. it is send to the customer – the product’s final destination. As the company is not into manufacturing and only into retailing. After this. promotions to all members via Email/SMS and social media are delivered about the sales event. FNY’s supply chain remains a mystery as the company is very secretive about it. Figure 1: FNY Supply Chain 4.3. Then.1 Overview Online retail is catching up its pace slowly but the future seems promising as many offline retailers are eying to hop on online platform to ensure sale over the internet. It was the Future group’s foray into online retail in 2007 that started the trend. In its first step. At the same time retailers are also looking online medium as an integration of their offline presence. After the product is prepared. the sales event is launched at 11AM and lasts for 3 straight days.

210 crore. A report released by the industry body ASSOCHAM said that the online retail industry could grow to 7000 crore by 2015. The overall scene of online retail is getting better and better every year. Research Firm Forrester estimates that both US and European online retail (representing 17 Western European nations) will grow at a 10 percent compound annual growth rate from 2010 to 2015. 10 • . 4.05% .group. The current market size stands at 2000 crore and is growing at an annual rate of 35%. with growing internet penetration and access to high speed internet on multiple low cost devices India is set to have the third largest group of Internet users after US and China in the next 2 years. ASSOCHAM states that booming economy and rising disposable incomes have contributed to the evolution of online shopping.com the same year. Furthermore. comparison shopping and competitive pricing Mounting prices of merchandises– escalating fuel prices (petrol @ Rs.High speed internet connections and high performance PCs and Laptops available to consumers at reasonable prices) • India’s middle-class is escalating. • Increasing demand from tier two and three cities • Social networking sites are very much influencing in driving online retail in India. growth will be driven in both regions by new business models such as flash sales and group buying. etc. respectively.4 million) coupled with a growing young population (315 million) who spend significant time online (21 hours per week). The Internet and Mobile Association of India (IAMAI) has pegged the e-commerce market in India at Rs 9. • Increasing usage of credit cards (18.67/liter) and at the same time online retailers are offering merchandises on discounted rate and extreme climatic condition especially unbearable summer heat across the India. which launched RelianceMoneyMall. as well as improved merchandising to provide a broad selection of products available online. Convenience of online product research. with growing purchasing power and limited personal time – 288 million people. sales events. in 2015.2 Key drivers for online retail in India: • Internet and PC penetration (6. Furthermore. • Different modes of selling – daily sales.3 million) and debit cards (181. reaching $279 billion and €134 billion. Many retailers are using it as a potent tool to get marketing and sales leverage India retail is witnessing the growth in online retail and online retailers are trying to experiment by inculcating new and fresh strategies to edge out others.

35-40% of online purchases are made in tier 2 and tier 3 cities. this is the target market – the influencers. the small towns and even rural India. credit cards. According to a 2007 report by McKinsey & Co. people clearly seem to be spending more and the consumer seems to be everywhere. COD or Cash on Delivery is offered by a few websites and this concept is quite popular amongst consumers from Tier 2 and Tier 3 cities. These days. towns and even rural areas. creating consumer loyalty is now a whole new challenge. Also.. a growing economy. decisions such as buying a refrigerator is not just the parent’s but the 5 year old child’s opinion is also heard. In this scenario. Higher disposable incomes. Buying power has also expanded to new consumer segments — be it the youth or the urban woman. people in the most remote of places in the country can purchase products online.• • • • Online Retailers offer in-trend products at heavily discounted prices. The vast rural hinterland of India is beckoning and the sheer numbers make it impossible to ignore. The Indian consumer is not just in big cities and metros these days. India is set to grow into the fifth largest consumer market in the world by 2025. Free gifts with purchases or a lucky draw system.ability of credit — all of this has given rise to new consumer segments and a rising acceptability of debt. 4. the 11 . Free and Next or Same day delivery. the emerging new cities. the development of modern urban lifestyles and an increase in consumer awareness have affected buyer behavior — in cities. Whether it is mobile phones. apparel or organized retail. Rising incomes in the hands of a young population. expansion in the availability of products and services and easy avail. According to a report by ASSOCHAM. what is certain today is that there has been a genuine uptake in consumption. While consumerism has seen a gradual build-up. A young population of 288 million and a below 18 population of 310 million means that for most online retailers. Online retailers are offering products to consumers in these areas. The Indian consumer story is one that has caught the attention of the rest of the world.3 Consumer Analysis The Indian consumer market has never had it better. Due to the widespread availability of Internet. High disposable income in the hands of the young and growing trend of credit has made these impulsive people shop more online. whether it be the large metros.

4.fact that they want their product now and customized has increased the demand for online retail. Coach. etc. 14% are above 35 years and 1% are below 18. FNY Customer Demographics According to a report released internally by FNY. well educated. 12 . watch Bond movies and are sports enthusiasts.3. between the ages 25 – 35. 48% male • Amongst the 52% female. They also believe their Male shoppers are ferociously ambitious. 4% from Chennai and 15% of the shoppers are from over 300 other cities across India. 32% between ages 18-25. are financially independent and sound but don’t have much shopping time therefore prefer to shop online. 53% are between the ages 25-35. FNY shoppers are also found in tier 2 & tier 3 cities. 34% lie between ages 25-35. would shop for products by designers like Armani and Ferragamo and also like casual weal like Abercrombie and Fitch. Dido and Rihanna and watch TV serials Sex and the City and How I Met Your Mother. 39% of the shoppers are from Delhi/NCR. 19% from Mumbai. 42% of the shoppers are above 35 years of age. 6% from Hyderabad. also have a large social network and are financially sound.3. like to experiment with their style. 4% from Pune. However. 23% between ages 18-25 and 1% of them is below 18 years of age. these are some of the consumer Demographics: • 52% of FNY’s shoppers are female. • Apart from big cities. would shop from designers such as Versace.1. FNY Customer Psychographics According to a report released internally by FNY. these are some of the consumer Psychographics: FNY believe their female shoppers to be highly ambitious. • Amongst the 48% male shoppers. listen to music by Coldplay.2. have a large social network. between 25-35 years of age. are self-made hard workers. 13% from Bangalore. 4.

com).com. Myntra. Exclusively. Their product repertoire includes merchandise from some of the world’s most popular brands and spans across all categories from clothes to shoes to accessories. FashionandYou.com and futurebazaar. IDG Ventures and Accel Partners for geographical and 13 . www.4 Competitor Analysis Nationally. the online shopping portal is today one of India’s leading players in the online fashion industry and seeks to expand their customer base even further with a advertisement campaign (bestmediainfo.com competitors is shown below: I. formal wear and even ethnic wear for consumer.Figure 2: FNY Customer Psychographics 4. Providing access to the best domestic and international brands to people outside the reaches of metropolitan and mall culture.com received a first round of investment of $5 Million in 2008 from NEA – IndoUS.com .in.Myntra was started by a group of IIT/IIM graduates in early 2007 and is headquartered in Bangalore with regional offices in New Delhi. Mumbai and Chennai.com faces stiff competition from a lot of established and emerging online apparel retailers such as Myntra.com. In terms of funding. A brief analysis of a few of FashionandYou.myntra.com. What started off as B2B setup has ventured into quite many apparel product categories such as casual wear. bestylish. Online Apparel Retailers are a mix of both pureclick and brick-and-click companies. shoppersstop.

flash sale site offering luxury brands in fashion apparel.com. www. It is primarily targeted at NRIs and has been catering solely to the USA market so far but now has plans to roll out to various new markets in 2011 including UK. According to a report by exchange4media. V. Founded in 2010. shoppers stop ventured into online retail in 2007. www. It offers up to 90 per cent discounts on branded merchandise. Info Edge runs the recruitment website Naukri. www. In a second round of investments.exclusively. Exclusively. 14 . III. The latest campaign “Ramp it up” is targeted at potential customers focusing on how high fashion feel is for anyone who believes in good fashion. www.in will reach 15 markets including India.99labels.in offers a variety of products including jewelry.com: 99labels. which sells all. crafts. 2011 Info Edge Ltd invested $3. lifestyle products.com and Real estate portal – 99acres. Exclusively.com one of the most well funded E-commerce companies in the country.5 million in the concern for an undisclosed share.shoppersstop.8 million from Accel and Helion (2010). Been in the market for over a decade now as a brick and mortar retailer. For an Indian customer.in is backed by another private equity firm – Tiger Global who have invested a staggering $16 milling in the business.futurebazaar. shoppers stop is no alien. IV. fragrances and home décor. private equity firm Tiger Global and IDG Ventures and Indo-US Venture Partners invested a further $14 Million in the business in 2011. Matrimonial website – Jeevansaathi. accessories and footwear. handbags. watches. By the end of December 2011.II.in: A mere six months after raising $2.com: A brick and click company.com: the Company that owns Pantaloon India entered the online marketplace around the same time as Shoppers Stop. typed of consumer products from apparels to electrical appliances etc.com is a members-only. In May. Myntra. The funds provided by Info Edge to 99labels.in announced its official launch into the UK market. exclusively. which was a brand awareness campaign.com had rolled out its first television commercial in July-August. Exclusively. portfolio expansion. These investments have made Myntra.com. jewelry. which is a large consumer market for Indian fashion.com. paintings and wedding attire.com will be used to increase the number of international brands on the website as well as invest in ERP (enterprise resource planning) and CRM (customer relationship management) systems.

15 .com – Yebhi has a very easy and user-friendly category list and search program. Chairman and Director for Sourcing are all well established and know in the industry.1 Strengths • Very Well Funded ($48 million) – As mentioned earlier.2 Weaknesses • Website not as easy to operate as others like yebhi. • Excellent investors to add more experience in the pot . • Early Mover Advantage – the fact that FNY set up shop in 2010 and gained tremendous pace in a short span of time while others were still in their infant phase attracted a lot of interest from investors and generated a lot of interest amongst consumers.5. SWOT Analysis Figure 3: SWOT Analysis 5. Their expertise can be of great value to FNY 5.FNY’s list of investors incorporates both Indian and foreign investors who have invested in some of the world’s most famous companies. • Board with a lot of experience in the area – Their CEO. FNY is one of the most well funded online retailer in the country.

• Mobile Application – use of internet on mobile phones increasing drastically and FNY can really benefit from a mobile application which allows customers to purchase products from their mobile devices. Pakistan. They are • • 16 . 5.3 Opportunities • Entry into neighboring countries – Entering or launching their web-site in Bangladesh.com new campaign of Television Commercials is swooping the Indian Commercial space • Indian customer still not confident enough to shop online – Indian citizens are still wary of online retailers disclosing confidential information such as credit card details.com.This entry will happen in 2012 and is a major threat to FNY as Amazon have a global reputation and are a global leader in all product categories.com’s entry into the Indian Market in early 2012 – Amazon. many pure click companies are receiving heavy investments from both national and international investors. • Indian Handicrafts – India has a massive handicrafts industry and there is a strong demand for it. Nepal and Bhutan to attract more customers. This can be a major threat to FNY. FNY can focus more on Gujrati products to a person from Gujrat. • Different Website Versions – FNY can have different website versions for different states or regions of the country catering to the local market by selling local products. FNY does not involve in a lot of Television Commercials. • Rival websites advertising heavily – Myntra.Consumer doubts over authenticity of products Slow deliveries – FNY’s supply chain has a bit of a flaw where they can never be sure of how many products are available with the supplier as the Purchase Orders is issued after the sale event ends.4 Threats • Amazon. • Rival websites getting equal interest from investors – As mentioned above. Sri Lanka. • Global Presence – Entering more countries around the world will be a good idea as their business model of sales events is very unique. • List of products not very well defined – FNY’s category does not • Not enough TVC – Like Myntra.com the world’s largest online retailer announced its plans of entering the Indian online market in early 2011. 5. For example. Selling handicrafts on their websites can be a good opportunity.

more and proper research needs to go in this area in the Indian context to get fair and accurate results. It is a young and growing company and has a lot of ground to cover before it becomes one of the biggest players in the market. as long as this good phase in the market isn’t like the dot com bubble. Conclusion The future for both FNY and the online apparel retail market in India seems very bright indeed. 7. its only fair to say that the scope for online retailing in India is pretty good. Most online retailers globally deliver within a week. there is a shortfall in supply. This process also delays delivery time as through this process. Incase. FNY cannot deliver the product to the customer and will have to cancel that order. Purchase orders are issued only after the sales events are over. The area that FNY should be most concerned about is their supply chain. store them in their warehouses and then set up a sales event. deliveries are made after 3-4 weeks. they can take care of both these situations at once. What FNY needs to do is to buy products from suppliers in bulk. 6. a lot of recommendations come in mind for FNY. This leaves the customer angry and he loses faith in the company. If FNY buys products before hand and stores them. With more and more websites coming up everyday and attracting an equal amount of investment from the world over. 17 . This way they have complete track of how many products have been ordered and how many remain. The fact that FNY sends a PO after the sales event is over has led to a lot of cancellations and has also left many customers disheartened. However. In FNY’s case this is hazardous. Recommendation From the SWOT analysis.also not confident in the quality of a product ordered through electronic channels as they still believe in touch and feel.

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