Professional Documents
Culture Documents
CHAPTER: 01
INTRODUCTION
1.1 INTRODUCTION:
The cutting edge for business today is E-Commerce. E-Commerce stands for
electronic commerce. It means dealing in goods and services through the electronic
media and internet. On the internet, it relates to a website of the vendor, who sells
products or services directly to the customer from the portal using a digital shopping
cart or digital shopping basket system and allows payment through credit card, debit
card or EFT (Electronic fund transfer) payments.
The effects of E-Commerce are already appearing in all areas of business, from
customer service to new product design. It facilitates new types of information based
business processes for reaching and interacting with customers like online advertising
and marketing, online order taking and online customer service. In now days E-
Commerce uses the WWW at least some point in transaction lifecycle.
It can also reduce costs in managing orders and interacting with a wide range of
suppliers and trading partners, areas that typically add significant overheads to the
cost of products and services. For developing countries like India, E-Commerce
offers considerable opportunity. In India it is still in nascent stage, but even the most-
pessimistic projections indicate a boom. There has been a rise in the number of
companies’ taking up E-Commerce in the recent past. Major Indian portal sites have
also shifted towards E-Commerce instead of depending on advertising revenue.
Many sites are now selling a diverse range of products and services from flowers,
greeting cards, and movie tickets to groceries, electronic gadgets, and computers, etc.
With stock exchanges coming online the time for true E-Commerce in India has
finally arrived.
In addition to that, there isn’t any detailed recent study about of E-Commerce in
India incorporating latest factual data and trends relating to its various aspects at all.
So, I have proposed to study this area to investigate the extent of India’s involvement
with E-Commerce applications, its detailed conceptual framework, evolution, stories
of top Indian players in this field and find a set of guidelines or recommendations on
the best practices of E-Commerce adoption which might help the Indian E-
Commerce firms.
India has an internet user base of about 250.2 million as of June 2014. The
penetration of E-Commerce is low compared to markets like the United States and
the United Kingdom but is growing at a much faster rate with a large number of new
entrants. The industry consensus is that growth is at an inflection point. Unique to
India (and potentially to other developing countries), cash on delivery is a preferred
payment method. India has a vibrant cash economy as a result of which 80% of
Indian e- commerce tends to be Cash on Delivery.
However, COD may harm E-Commerce business in India in the long run and there is
a need to make a shift towards online payment mechanisms. Similarly, direct imports
constitute a large component of online sales. Demand for international consumer
products (including long-tail items) is growing much faster than in-country supply
from authorized distributors and E-Commerce offerings. India's E-Commerce market
was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14
billion in 2012.
About 75% of this is travel related (airline tickets, railway tickets, hotel bookings,
online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million
as of 2009) India has close to 10 million online shoppers and is growing at an
estimated 30% CAGR vis-à-vis a global growth rate of 8–10%. Electronics and
Apparel are the biggest categories in terms of sales. Key drivers in Indian E-
Commerce are: Increasing broadband Internet (growing at 20% MoM) and 3G
penetration. Rising standards of living and a burgeoning, upwardly mobile middle
class with high disposable incomes
Availability of much wider product range (including long tail and Direct Imports)
compared to what is available at brick and mortar retailers busy lifestyles, urban
traffic congestion and lack of time for offline shopping. Lower prices compared to
brick and mortar retail driven by disintermediation and reduced inventory and real
estate costs. Increased usage of online classified sites, with more consumer buying
and selling second- hand goods India's retail market is estimated at $470 billion in
2011 and is expected to grow to $675 billion by 2016 and $850 billion by 2020, –
estimated CAGR of 7%. According to Forrester, the e- commerce market in India is
set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57%
between the years 2012–2016. As per "India Goes Digital", a report by Avenues
Capital, a leading Indian Investment Bank specializing in digital media and
technology sector, the Indian E-Commerce market is estimated at Rs28,500Crore
($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of
this market today. Online travel market in India is expected to grow at a rate of 22%
over the next 4 years and reach Rs54,800Crore ($12.2 billion) in size by 2015. Indian
e-tailing industry is estimated at Rs3,600crore (US$800mn) in 2011 and estimated to
grow to Rs53,000Crore ($11.8 billion) in 2015. Overall E-Commerce market is
expected to reach Rs1, 07,800crores (US$24 billion) by the year 2015 with both
online travel and e-tailing contributing equally. Another big segment in e- commerce
is mobile/DTH recharge with nearly 1 million transactions daily by operator
websites.
This study purports to analyze Flipkart and Amazon in terms of their strategies to
capture the market. This knowledge would help to understand consumer preferences
towards online shopping and suitable steps can be adopted by e-commerce
companies to promote their products/services.
People are getting busy with their own work. In their busy schedule they don’t find
time for shopping. Online shopping can save a lot of time. They can do this from
their office or home by browsing on the net. This study is to analyze which online
sites are preferred in comparison to Flipkart and Amazon and their difference in
strategies to capture the market. This knowledge would help to understand consumer
preferences towards online shopping and suitable steps can be adopted by e-
commerce companies to promote their products/services.
An extensive literature review is done on the concepts and theories related to web
advertising. A review of Research papers, articles is undertaken to take note of and
acknowledge work that has been done in the field of web advertising as such. The
Researcher has collected secondary data from reputed Journals and Magazines,
Newspapers, Articles, Internet websites and Archives. The Researcher has visited
Libraries in Shivamogga to collect literature. The Researcher has identified five
research papers along with ten articles published in renowned journals on various
topics such as web ad. Wed based ad market, E-commerce impact, trends of online
marketing, consumer attitude to web ad and sale/marketing strategy. The review of
available literature on each topic is taken into account in this chapter.
Viswanathan and Pick: In his study examined the issue of E-Commerce in India
and Mexico from the framework of developing countries as suggested by Tallon and
Kraemer. The framework included critical factors that might impact the diffusion of
E-Commerce. The factors are government policy, legal framework,
Raven et al.: In his study compared India and China’s approaches in adoption of e-
business. Based on the literature survey and secondary data, the study analysed
various factors influencing the growth of e-businesses in the two countries. The
factors examined include government policy and focus, existing technology
infrastructure regulatory environment, experience and understanding of business
operations, and culture, among others. The study concludes that China appears to be
ahead of India in the infrastructure, but India is ahead in e-readiness. Further, it states
that both countries are poised for rapidly increasing e-business, however, problems of
poverty and inequality between urban and rural connectivity must be resolved to
really take advantage of e-business in both the countries.
IvaturiMurali Krishna & Prof. G. V. Chalam: (2015) In his study Although there
is a lot of research on e-Commerce and consumer behaviour there is very little
research in the synthesis of these two i.e., online consumer behaviour. In fact there
is no standard book on online Consumer behaviour. The study addresses the problem
in a small scale. In recent years there is a rapid development in e-commerce industry.
Online retail competition is heating up as consumer behaviour is becoming more and
more savvier on the web. Competition is increasing day by day with it online
consumer expectations are also skyrocketing. So, it is becoming a norm to provide
online shoppers a strong online shopping experience.
Sonal Thakur & Dr. Rajinder Aurora: (2015) In his study Utilized mostly by the
“Net- Generation”, online shopping is extremely convenient and has become
extremely popular. Consumers have shown different buying behaviors when
shopping online as compared to when they are shopping in a physical store. Online
shopping is very convenient and beneficial but there are some potential problems that
can arise. In order to remain profitable and successful retailers study the behaviors‟
of consumers and make changes. People who come from villages and are living in
cities are prone to use online options. To indicate progressiveness of online
purchasing chronicles most of people who belong to middle class & upper middle
class are more liable. Service class is making online system tangible with respect to
nature of earnings. Customer‟s age affects eMarketing transaction in deciding usage
rate of online facilities.
1.7 Methodology:
For the present study both primary and secondary data are used.
For the study convenience sampling technique is adopted to collect the required data.
Sample size:
The sample size for this study is restricted to 50 respondents, who are working in the
selectedOrganizations.
To make study or research the common facing is it takes huge time. And every we
can’t go for primary information gathered from respondents that may having biased
information in that time we need to use secondary information.
CHAPTER: 02
2.1.1 FLIPKART:
2.1.2 History:
Flipkart.com works with the aim of making products and goods easily available at the
doorsteps of anyone who has Internet access. Flipkart.com started off from selling
books in 2007, based in Bangalore, and entered then consumer electronics category
with the launch of mobile phones, in September 2010. Since then it kept on adding
more new products categories including books, mobiles, computers, cameras, home
& electronic gadgets& appliances,
In addition to these very Recently, Flipkart.com has also widened its foray by
entering into the emerging digital content market with the recent launch of Flyte, the
digital music store & is still continuing to enlarge its product portfolio.
It is now one of the leading E-Commerce players in India, currently ranks at the top
20websites in India1, spread in 37 cities, with 11.5 million plus book titles, 14
different categories, 3 million plus registered users and sale of 30000 items a day. It
• Cash on Delivery,
• Free shipping
The company was initially self- funded, by both co-founders Sachin and BinnyBansal
spending Rs 400,000 or USD 9056 to setup the business. They later raised funds
from Private Equity Investors Accel Partners and Tiger Global Management of
$31million.In the year 2010, the company acquired We Read, a social book
discovery tool; in2011, Mime360, a digital content platform company and
Chakpak.com, a Bollywood news site; and its most recent acquisition is Letsbuy.com
which is India’s second largest e-retailer in electronics.
Flipkarts reported sales for the last FYi.e were 75crores 2010-2011, which has
increased 4 folds from that of the previous year were sales accounted for 20crores in
FY 2008-2009, 20 Cr. And In FY 2011-2012, Flipkart.com now the portal is
expected to cross 500crores mark as Internet usage in the country exponentially
increases
Flipkart was co-founded by SachinBansal and BinnyBansal in Oct 2007. Both are
graduates from IIT-Delhi and have prior work experience in Amazon.com They both
were solid coders and wanted to open a portal that compared different E-Commerce
websites, but there were hardly any such sites in India and they decided to give birth
to their own E-Commerce venture- Flipkart.com
Thus was born Flipkart in Oct 2007 with an initial investment of 4 lakh (co-founders
savings).It was never going to be easy since India has had bad past experiences with
E-Commerce trading. It was not an easy segment to break into, people were very
particular in paying money for something which they had not seen and received. The
trust was missing in the 0Indian customers. So what Flipkart had to do was to in still
trust and faith in their customers.
And they did exactly the same, will discuss more on how they did so later in the post.
Flipkart began with selling books, since books are easy to procure, target market
which reads books is in abundance, books provide more margin, are easy to pack and
deliver, do not get damaged in transit and most importantly books are not very
expensive, so the amount of money a customer has to spend to try out one's service
for one time is very minimal.
Flipkart sold only books for the first two years. Flipkart started with the consignment
model (procurement based on demand) i.e. they had ties with 2 distributors in
Bangalore, whenever a customer ordered a book, they used to personally procure the
book from the dealer, pack the book in their office and then courier the same. In the
initial months the founder's personal cell numbers used to be the customer support
numbers. So, in the start they tried their best to provide good service, focus on the
website - easy to browse and order and hassle-free, and strove hard to resolve any
customer issues. Since there were not any established players in the market, this
allowed them a lot of space to grow, and they did in fact grew very rapidly
Indian Institute of Technology Delhi. They worked for Amazon.com before quitting
and founding their own company.
Today, as per Alexa traffic rankings, Flipkart is among the top 30 Indian Web sites
and has been credited with being India's largest online bookseller with over 11
million titles on offer. Flipkart broke even in March 2010 and claims to have had at
least 100% growth every quarter since its founding.
The store started with selling books and in 2010 branched out to selling CDs, DVDs,
mobile phones and accessories, cameras, computers, computer accessories and
peripherals, and in 2011 Pens & stationery, other electronic items such as home
appliances, kitchen appliances, personal care gadgets, health care products etc.
Further in 2012, Flipkart added A.C, Air coolers, School supplies, Office supplies,
Art Supplies & life style products to its product portfolio.
2.1.5 COMPETITORS:
Amazon has been the major competitor the past two years. Whereas there have been
other competitors like Sanpdeal, Jabong and Myntra.
In its attempt to get micro, small and medium enterprises online, Flipkart has joined
hands with the Indian government to train people from semi-urban and rural areas
and possibly employ them at the company or its business partners.
The Bangalore-based company, which has signed a memorandum of understanding
with the Ministry of Labour and Employment's Directorate General of Employment
& Training (DGET), is aiming to train at least 5,000 students by December.
Flipkart has created courses of two weeks to four months in areas like photography,
cataloguing, social media marketing and handling customer communications. The
courses will be provided at government-run industrial training institutes and
vocational institutes across the country in locations like Agra, Meerut, Varanasi,
Aurangabad, Pochampalli, Salem, Guwahati and Shillong. This is part of Flipkart's
attempt to get MSMEs and traditional artisans to sell their wares on its platform in
the next couple of years. In June, Flipkart partnered with the Federation of Indi an
Micro and Small and Medium Enterprises and National Centre for Design and
Product Development to bring about 50,000 MSMEs and traditional artisans on to the
Flipkart platform as merchants.
The seven-year-old company , which raised over $1.7 billion (Rs 10,400 crore) in
risk capital funding and is not profitable so far, already has 600 MSMEs selling on its
website. "Right now we do much more handholding when on-boarding small
merchants," said MekinMaheshwari, chief people officer at Flipkart. "By helping
with design inputs, market analytics, manpower and logistics linkages we will change
the way these manufacturers sell their goods and run their business." Flipkart, which
is expanding its logistics network to smaller towns, will also get its field staff in these
locations through this programme. At present, the company has its own logistics
network in over 250 cities and towns.A team of 25 Flipkart employees from
functions like human resources and seller acquisition will start training the
government trainers at the institutes, who will in turn conduct the classes. The team
will also help select the students, who have already enrolled at these institutes, for the
specific programmes. The company is promising full placement post the
training.Other organisations have engaged with artisans in the past in different ways.
The Fabindia model of organising artisan and producer groups and giving them
design support is the most well-known. "It is a good idea. If executed well it would
benefit a large group," said Pinakiranjan Mishra, partner and national leader (retail
and consumer products) at consulting services firm EY. "Three years ago none of us
would have imagined the level of change ecommerce would bring in the country."
Weaknesses
high loan rates are possible
future competition
unknown
future profitability
competitive market
Excessive focus on expanding customer base rather than pulling profits
Investor driven organization or lack of Independent board
Opportunities
growing demand
global markets
Providing logistics services to its competitors.
Growth in online retail sector
Threats
Global economy
Unexpected problems such as new regulations.
From competitors like Amazon, Snapdeal.
Flipkart's business model is much deeper and much expansive that could possibly
elaborate here.
However, a few key points -
Rationalized supply chain - Inbound logistics
Strategic warehousing and distribution capability - Operations
Well aligned fulfillment process - Outbound logistics
All the three processes are extremely well integrated - first by a sound strategy,
around which the organizational structure is built (Strategy drives structure -
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Customer Perception on Online Shopping
2.2 AMAZON:
2.2.1 HISTORY:
The company was founded in 1994, spurred by what Bezos called his "regret
minimization framework", which described his efforts to fend off any regrets for not
participating sooner in the Internet business boom during that time. In 1994, Bezos
left his employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and
moved to Seattle. He began to work on a business plan for what would eventually
become Amazon.com.
Jeff Bezos incorporated the company as "Cadabra" on July 5, 1994 and the site went
Bezos selected the name Amazon by looking through the dictionary, and settled on
"Amazon" because it was a place that was "exotic and different" just as he planned
for his store to be; the Amazon river, he noted was by far the "biggest" river in the
world, and he planned to make his store the biggest in the world. Bezos placed a
premium on his head start in building a brand, telling a reporter, "There's nothing
about our model that can't be copied over time. But you know, McDonald's got copied.
And it still built a huge, multibillion-dollar company. A lot of it comes down to the
brand name. Brand names are more important online than they are in the physical
world.After reading a report about the future of the Internet which projected annual
Web commerce growth at 2,300%, Bezos created a list of 20 products which could be
marketed online. He narrowed the list to what he felt were the five most promising
products which included: compact discs, computer hardware, computer software,
videos, and books. Bezos finally decided that his new business would sell books
online, due to the large world-wide demand for literature, the low price points for
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Customer Perception on Online Shopping
books, along with the huge number of titles available in print. Amazon was
originally founded in Bezos' garage in Bellevue, Washington.
times more, since it would have an almost unlimited virtual (not actual) warehouse:
those of the actual product makers/suppliers.Since June 19, 2000, Amazon's logotype
has featured a curved arrow leading from A to Z, representing that the company
carries every product from A to Z, with the arrow shaped like a smile.Amazon was
incorporated in 1994, in the state of Washington. In July 1995, the company began
service and sold its first book on Amazon.com: Douglas Hofstadter's Fluid Concepts and
Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought . In October
1995, the company announced itself to the public.In 1996, it was reincorporated
in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading
under the NASDAQ stock exchange symbol AMZN, at a price ofUS$18.00 per share
($1.50 after three stock splits in the late 1990s).
Amazon's initial business plan was unusual; it did not expect to make a profit for four
to five years. This "slow" growth caused stockholders to complain about the
company not reaching profitability fast enough to justify investing in, or to even
survive in the long-term. When the dot-com bubble burst at the start of the 21st century,
destroying many e-companies in the process, Amazon survived, and grew on past the
bubble burst to become a huge player in online sales. It finally turned its first profit in
the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than
$1 billion. This profit margin, though extremely modest, proved to skeptics that
Bezos' unconventional business model could succeed. In 1999, Time magazine named
2.2.2 Vision:
“Our vision is to be earth's most customer centric company; to build a place where
people can come to find and discover anything they might want to buy online.”
The Company offers services, such as Amazon Web Service (AWS), publishing,
digital content subscriptions, advertising, and co-branded credit cards. The Company
focuses on selection, price and convenience, through the lowest prices possible on
everyday product pricing and shipping offers, including membership in Amazon
Prime. The Company designs its Websites to enable millions of products to be sold
by the Company and by third parties across various product categories, allowing
access to its Websites directly and through its mobile Websites, Kindle devices and
apps.
Origin and Genesis of Amazon.com In May 1994, Jeff Bezos, a 30-year old
employee of a major Wall Street firm D.E. Shaw, was sitting at the computer in
his39th floor office in midtown Manhattan, and he found a site that purported to
measure Net usage while exploring the still immature Internet.
To his surprise, the Internet was growing at a rate of 2,300% a year. The Net had
been, until 1994, a largely commerce-free zone, since it was created by the Defense
Department to keep a network of computers communicating in case of nuclear attack.
This system then evolved into a network over which university and government
researchers could exchange messages and data across most computer platforms.
The government decided to get out of the Internet business and allow private
companies to step in and develop it. Bezos felt that he could have a first-mover
advantage in E-Commerce. Hence, he researched mail- order companies, thinking
that things that’s old well by mail would do well on the internet. He analyzed the top
20 mail-order products and searched for products where he could create value for
customers. This ultimately led to the idea of books. A good catalogue of books would
contain thousands or even millions of listings, which would make it as big as a phone
book, which were too expensive to mail. This was perfect for the Internet, which is
the ideal platform for such a huge amount of information. So, Bezos finally decided
that his new business would sell books online, catering the large world-wide demand
for literature and exploiting the low price points for books with huge availability.
Amazon was originally founded in the garage of a modest two-bedroom home rented
by Bezos in Bellevue, a Seattle suburb in Washington. The company began as an
online bookstore and opened its website on July 16, 1995. In the initial days of
business, without any press, Amazon sold to all 50 states and over 45 countries. Its
sales were up to $20,000/week within two months.
While the largest brick and mortar bookstores and mail order catalogs might offer
over 200,000 titles, an online bookstore could offer much more, since they had an
almost unlimited virtual (not actual) warehouse: those of the actual product makers
and suppliers. Bezos wanted a name for his company that began with "A‖, which
would make it appear early in an alphabetically arranged directory. He began looking
through the dictionary and selected "Amazon" because it was a place that was "exotic
and different" just as he planned for his store to be.
He also planned to make his store the biggest in the world, just like the river
Amazon. In May 1996, Amazon was on the front page of the Wall Street Journal,
which resulted in two things: it introduced Amazon to a whole new stream of
customers, and it captured the attention of rivals like Barnes & Noble and Borders
Group, which were yet to move online. Barnesandnoble.com appeared a year later
just before Amazon's IPO (Initial Public Offering), which went off at a modest $18 a
share.
The celebrated venture capital firm Kleiner Perkins Caufield& Byers was its biggest
institutional investor before the IPO. Some of the Wall Street companies were afraid
of the threat posed by the giant Barnes & Noble, which looked unbeatable with a
national network of bookstores. But Barnesandnoble.com did nothing to stall
Amazon's amazing sales. Since 2000, Amazon's logo has been featured as a curved
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Customer Perception on Online Shopping
arrow (shaped like a smile) leading from A to Z, indicating that they carry every
product from A to Z, and they intend to serve with a smile.
The Company has many affiliated Websites, which offers programs that enable
sellers to sell their products on its websites and their own branded websites and to
fulfill orders through them. The Company also offers programs that allow authors,
musicians, filmmakers, app developers, and others to publish and sell content. The
North America segment of the Company focuses on retail sales earned through North
America-focused Websites. The International segment focuses on the Company’s
operations done through its international Websites.
The North America segment of the Company consists of amounts earned from retail
sales of consumer products and subscriptions through North America-focused
Websites such aswww.amazon.com andwww.amazon.ca and includes amounts
earned from AWS. This segment includes export sales fromwww.amazon.com
andwww.amazon.ca. The North America segment contributes 59.4% of the
Company’s net revenues.
2.2.5 INTERNATIONAL:
The International segment of the Company consists of amounts earned from retail
sales of consumer products and subscriptions through internationally-focused
websites. This segment includes export sales from these internationally based
Websites, including export sales from these sites to customers in the United States
and Canada. The International segment contributes 40.6% of the Company’s net
revenues.
2.3.0YEPME :
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Customer Perception on Online Shopping
2.3.1 History
AnandJadhav. Gaur (CEO) has experience building successful online companies like
Bagittoday.com and has also held senior positions in marketing and sales with HT
Media Ltd, Living Media and Hindustan Unilever Ltd. Sharma, the founder/COO and CTO,
According to an interview with Gaur on Bloomberg UTV, in 2010 the founders saw
New Folder
huge growth potential in In dia’s online shopping market, which was
then dominated by the online travel sector. Having started its operations as an online
apparel retailer, in August 2011 Yepme.com decided to focus on private label fashion-
wear instead of branded apparel. Seeing larger brands handing over end-of-lifecycle
products to online retailers (purportedly to avoid disparity between shop and online
prices) the founders decided to promote the Yepme brand as private label apparel
brand.
2.3.2 Funding:
Operations:
The main target customer for Yepme.com is tier 2 and tier 3 towns, where the big
apparel brands do not have many retail stores. According to Hindu Business Line, of the
13,000 orders that Yepme.com received in July and August 2011, about 69 per cent
were from about 500 tier 2 and tier 3 towns, with the rest coming from six major
cities. About 35 per cent of the site orders are from places not serviced by courier
companies and can only be reached through India Post.
According to Yepme's COO Sandeep Sharma; since around 70 per cent of Yepme's
shipments are going to the smaller towns and the company is providing a Hindi
language option on its website. Currently besides Hindi, customers at Yepme.com
can also shop in Tamil, Telugu, Malayalam& Kannada.
In the October 2011 edition of Business Today, it was reported that Yepme.com attracts
over 21,000 male shoppers daily, and of that, about 1,000 visitors place at least one
order on the site. In August 2012, Business Today reported that around 49 per cent of
Yepme's 200,000 customers so far have gone back to it a second time. The
brand is targeting a turnover of $25 million in its first year of operations and plans to
scale the revenues to over $500 million in the following 3–4 years.
2.3.3 Marketing:
In April 2012, Yepme awarded the advertising and creative duties of the brand
Yepme.com, to Lowe Lintas& Partners. Following a further multi-agency pitch,
Yepme gave its media planning and buying duties to Lintas Media Group. Yepme
plans to spend Rs 30-35 crore annually on media and, according to Gaur, plans to
advertise on general entertainment channels, movie and music channels. The print
campaign will be carried out in the vernacular newspapers. The TV commercials of
Yepme.com that began to be broadcast in June 2012, almost tripled its daily page
views. Yepme awarded its performance marketing duties to Tyroo Direct in July
2012. Tyroo Direct is expected to drive transactions for Yepme.com and to cater to
its customers across metropolitan areas, tier 2 and tier 3 towns.
In August 2011, Yepme.com became the first Indian online retailer to organize a
fashion show. The show was organized at The Ashok Hotel in New Delhi on 13
August 2011, with India’s top male models including Dino Morea, Rajneesh
Duggal, Rahul Dev and Shawar Ali.
The company gives heavy emphasis to social media marketing and has found good
success, having attracted over 4.4 million fans to its fan page on Facebook.
Yepme launched its women's wear collection in the beginning of June 2012 during its
fashion show in New Delhi. KanganaRanaut, the style ambassador for Yepme,
launched the collection categorised into office formals, smart casuals, party wear and
fusion ranges.
In December 2012, Yepme.com was covered by Forbes, India magazine as one of the
top five start-ups to watch out for.
In June 2014, SonuSood has been roped in as the brand ambassador for leading
online shopping portal Yepme.com. Sonu will be endorsing ‘Activewear’- Yepme’s
sportswear line that includes the latest in men’s fashion such as Crew neck tees,
Polos, Muscle tees, workout Vests, Tracksuits and Sports shoes.
In June 2014, Bollywood actress Esha Gupta endorsed Yepme’s women’s wear line
in a new television commercial featuring Yepme’s latest Spring-Summer Collection
2014. Yepme’s association with FarhanAkhtar and Eshagupta has contributed in
increasing their followers on Facebook to 6 million, which is the highest for an e-
commerce website in India.
In November 2014, Yepme is planning to expand and take its home-grown brand
global. Yepme entered the US market earlier this year with the launch of
Yepmeworld.com and is also selling its products on Amazon in the US
December 2014, the company signed Bollywood actor Shah Rukh Khan as their new
brand ambassador. Yepme has introduced Shah Rukh Khan as its brand ambassador,
through a newly launched television ad highlighting #freshfashion as a tagline for its
Autumn-Winter collection’14.
CHAPTER: 03
CONCEPTUAL FRAMEWORK
3.0 INTRODUCTION:
The new economic era witnessed a new technology known as digital economy.
Information Technology has transformed the way people work. By integrating
various online information management tools through the Internet, various innovative
companies set up systems for taking customer orders, payments, customer service,
collection of marketing data, and online feedback. These activities have collectively
known as e-commerce or Internet commerce. By adopting e-commerce practices,
these companies have boosted their profits, net worth, and have permanently altered
competitive dynamics. Electronic Commerce (ecommerce) has unleashed yet another
revolution which has changed the way businesses buy and sell products and services
over computer networks, e-commerce helps traditional commerce through new ways
of transferring and processing information. Major concentration of electronic
commerce is to facilitate the generations to exploits the business opportunities
coming on their way. Indeed, e-commerce has evolved from online billboards to a
fully functional, personalized shopping experience over the past decade. While there
were admittedly a few bumps along the road, the path from 1994 through the 2004
holiday shopping season is full of crucial milestones of Internet pioneers and
technology innovators. In the beginning, the Internet was characterized by slow dial-
up connections and online billboards. Netscape came on the scene in the year 1994
with its point-and-click Web browser that opened the door to the billion-dollar
revenues e-tailers enjoy today. India has an internet user base of about 250.2 Million
as of June 2014. The penetration of e-commerce is low compared to markets like the
United States and the United Kingdom but is growing at a much faster rate with a
India’s e-commerce market was worth about $3.8 Billion in the year 2009, it went up
to $12.6 Billion in 2013. In the year 2013, the e-retail market was worth US$ 2.3
Billion. About 70 per cent of India’s e-commerce market is travel related. India has
close to 10 Million online shoppers, and is growing at an estimated 30 per cent
CAGR vis-à-vis a global growth rate of 8 to 10per cent. It also includes busy
lifestyles, urban traffic congestion and lack of time for offline shopping; lower prices
compared to brick and mortar retail driven by disintermediation and reduced
inventory and real estate costs; increased usage of online classified sites, with more
consumer buying and selling second-hand goods; evolution of the online marketplace
model with websites like Jabong.com, Flipkart, Snap deal respectively. According to
Report by Avendus Capital, entitled “India Goes Digital”, the Indian e-tailing
industry is estimated to grow to Rs53,000Crores ($11.8 Billion) in the year 2015. On
7th March 2014, e-tailer.Flipkart claimed that it has hit $1 Billion in sales, a feat it
has managed to achieve before its own target (2015). A report recently published by
the Boston Consulting Group also stated that online retail in India could be an
$84Billion industry by the year 2016 more than 10 times its worth of the year 2010.
Many of the implicit and explicit definitions of E-Commerce rely on past experience
rather than on possible futures. There are various ways to define E-Commerce by
different people, different books or different parties.E-Commerce is a general term
for any type of business, or commercial electronic transaction that involves the
transfer of information across the Internet. Or we can say that E-Commerce is
defined as the use of computers and electronic networks to conduct business with
other businesses or with customers over the Internet or another electronic network.
Since there are various definitions of E-Commerce, the United Nations Conference
on Trade and Development (UNCTAD, 2000) has summarized the descriptive
definitions of electronic commerce as stated below:
E-Commerce is commercial interaction over the internet, which can lower costs
dramatically and facilitating new types of commercial transactions. As the Internet
empowers citizens and democratizes societies, it is also changing classic economic
paradigms. New models of commercial interaction are developing as businesses and
consumers participate in an electronic marketplace and reap the resultant benefits.
The Internet has the potential to revolutionize commerce and other areas. The
Internet will revolutionize retail marketing. Commerce on the Internet could total
tens of billions of dollars by the turn of the century. (UNCTAD, 2000)
Commerce has evolved over the centuries. Prior to the evolution of money it was the
simple “barter process” where things could be exchanged, say milk for grains. The
evolution of money brought with it, the concept of a “marketplace”. In a marketplace,
Commerce is function of 4 P’s – Product, Price, Place and Promotions. All these four
components play a vital role in a transaction to take place. Different combinations of
4Ps determine different forms of Commerce. Once the marketplace came into
existence, a few pioneers realised that people would be ready to pay extra if they
could deliver products at the customer’s doorstep. A slight modification on Price and
Place led to the convenience of getting products at their homes. This concept
delighted the customers and thus, the concept of “Street Vendors” was born. When
the Postal System came into being the sellers decided to cash in on the new
opportunity and started using mailers giving description of their products. It led to the
concept of “Mail Order Cataloguing”. From here, the evolution of the “Tele
shopping” networks was thus inevitable with the development of media vehicles. The
latest generation of commerce is one that can be done over the internet. Internet
provides a virtual platform where sellers and buyers can come in contact for sale and
purchase of goods and services. They can be thousands of miles apart, may belong to
different parts of the world, might speak different languages, “E-Commerce”
emerged as the boundary-less trade medium in the era of globalization.
Today E-Commerce is a byword in Indian society and it has become an integral part
of our daily life. There are websites providing any number of goods and services.
Then there are those, which provide a specific product along with its allied services.
• Vehicles
• Collectibles
• Software
• Consumer electronics
• Household appliances
• Jewellery
• Gift articles
• Business opportunities
• Employment
• Travel tickets
• Matrimony
• Pets…and more.
penetration in India remains at 12.6% India now has the 3rd largest Internet
population with 151 million in the world after China at 568 million and USA at 254
million (in 2013). Considering the annual rate of growth 41-43% India is expected to
cross 375 million unique internet users by end of 2015.The number of new entrants
in this sphere is escalating daily and with growth rate reaching its zenith; it can be
presumed that in years to come, customary retailers will feel the need to switch to
online business. Insights into increasing demand for broadband services, rising
standards of living, availability of wider product ranges, reduced prices and busy
lifestyles reveal this fact more prominently thereby giving way to online deals on gift
vouchers. Going by the statistics, according to a study by the Internet & Mobile
Association of India and KPMG, Indian ecommerce was projected to grow to $12.6
billion by the end of this year. By 2020, it is expected to contribute around 4 per cent
to GDP. Currently, the Internet penetration in India stands at 11 per cent of the
population, a third of the world average.
The table shows market size of different verticals of ecommerce industry since 2009
to 2013. The growth in ecommerce business clearly implies the growing number of
internet users .The online purchases are limited to certain categories like gaming
subscription, food delivery, online classifieds, buying movie tickets, travel related
purchases and electronics items etc. The growth in ecommerce industry is primarily
driven by online travel industry which has contributed 78 % (Rs 14953 crore) in 2009
and expected to touch 72 % (Rs 44907 Crore) in 2013 of total ecommerce market and
is building user confidence. The online travel industry includes sale of domestic air
travel, international travel, hotel bookings, railway tickets, bus tickets, tour packages
and travel insurance.
INCREASE IN E- BOOKINGS.
Reduction in operational cost as the entire business can be moved online, the need for
physical stores has become obsolete. Less infrastructural investment and associated
labour costs drives up the profit margin. It is far easier and quicker to compare prices
of goods online, equipping the customer with the information to decide the right price
or terms for themselves. With services like COD, customers can trust the process of
going online and purchasing.
“These businesses are difficult to turn into profitable ventures due to the low margins
and the logistics costs involved.”GauravSaraf, director of Epiphany Ventures says
that, the concept of online grocery shopping faces the problem of turning their
business into profitable ventures as the concept is new in the market which leads to
low margin along with low margin high cost is involved when it comes to logistics.
In addition to these problems the perishable items such as fruits& vegetables have a
short shelf life, if these items are not delivered before the expiry of their shelf life it
would could cause wastage and also add up the cost. From the above comment a
conclusion is arrived that these business ventures have a very thin margin when it
comes to business operations.
CHAPTER : 04
INTRODUCTIONS
The purpose of conducting the survey is to obtain the opinion of the respondents
regarding the impact of online shopping. For the survey questionnaire is been
prepared and has administered 50 respondents. The questionnaire has distributed to
the respondents from shimoga area. The survey has been successfully carried out of
the respondents gave good and realistic answers to the questions, the information
collected from respondents is tabulated processed and analyzed to get some
meaningful inferences. The detailed analysis of data collected during survey is
presented
1. Gender :
Respondents Percentage
Male 31 62%
Female 19 38%
Total 50 100
Source: Primary Data
Male
Female
Inference:
As observed from the given table and Graph the sample constitutes of 62% male
respondents and 38% female respondents. As a more number of Male respondents
are transacts with online shopping.
2. Age :
Respondents
6 3
7
18-20
21-30
31-40
41-50
51 – above
34
3. Educational Qualification:
120
10000%
100
80
60 50
40 3000% 3000% Respondents
2400% Percentage
20 12 15 15 1200%
2400% 6
0
LC C n n rs l
PU tio tio ta
SS a a the To
u du O
ad ra
Gr g
st
Po
4. Monthly Income :
10000%
100
90
80
70
60 5000% 50
50 3400%
40 25 Respondents
30 17
20 1000% Percentage
2400% 5 1200%
10
0
5. Marital Status :
Chart Title
28%
28% Single
Married
72%
72%
Inference:
The above table provides information on marital status of respondents. 72% of them
are Unmarried and 28% are married in Total respondents.
6. Occupation :
120
100 10000%
80
60
50
40
3000% 3400%
Respondents
20 1800% 17 Percentage
15
1000% 9 800%
5 4
0
Inference:
The above table and chart it is clearly evident that majority of the respondents
Maximum no. of online shopping service users are student other than
workingexecutive. Like 34% of students and 30% of Private Employees are shop
online as compared to others.
Respondents Percentage
Yes 50 100%
No 0 0%
Total 50 100
Source: Primary Data
50 10000%
Respondents
Percentage
Yes 0
0%
No
Inference:
The above table provides information on online shopping awareness, on all the 50
respondents are aware of online shopping, here taking respondents will only for
online buyers.
Respondents Percentage
Yes 39 78%
No 11 22%
Total 50 100
If yes go to Question Number : 10, If No go to question number : 15
Source: Primary Data
Respondents
11
Yes
No
39
Inference:
The above table and chart provides information on online buyer 78% of respondents
are buy online and rest of 22% are not buying online in some of the reason that will
show in question number 16.
100
90
80
70
60 Respondents Yes
Respondents No
50
Total
40 Percentage Yes
30 Percentage No
20
10
0
Amazon Flipkart Yepme Ebay Alibaba Others Total
Inference:
The above table and chart it is clearly evident that majority of the respondents
61.54% are shop and 38.46% are not shop with Amazon, and similar that 92.30% and
7.69% of Flipkart, 25.64% & 74.36% of Yepme, 35.89% & 64.11% are Ebay,
12.82% & 87.18% are Alibaba.com and 30.76% & 69.24% are other online sites.
Corresponding to Shop & non shop of online sites.
Frequency of buying
160
120
80
40
0 Percentage
Respondents
Inference:
The above table and chart it is clearly evident that majority of the respondents
58.98% of the respondents are once a month frequency of buying online. Rest are
7.69%are once a week, 20.51% are once a two week, and 12.82% are more than 10
purchase in a month.
Respondents Percentage
Products Total
Yes No Yes No
Cloths 29 10 39 47.36% 25.64%
Accessories 35 4 39 89.74% 10.26%
Home Appliances 20 19 39 51.28% 48.72%
Books 28 11 39 71.79% 28.21%
Electrical Items 37 2 39 94.87% 5.13%
Furniture’s 10 29 39 25.64% 74.36%
Others 29 10 39 74.36% 25.64%
Total 100% 100%
Source: Primary Data
100
90
80
70
60
50
40 Respondents Yes
30 Respondents No
20 Total
Percentage Yes
10
Percentage No
0
hs ies
lot ce
s
C or n ok
s s
ess ia o m ’s rs
cc pl B Il te ti u
re
he ta
l
A
e Ap ica r n O t To
m tr Fu
Ho lE ec
Inference:
The above table and chart provides information on online purchasing products in
relation to buying or not buying, 47.36% of respondents are buy cloths and 25.64%
of not buying cloths in online, in all are similar that in online shopping they are more
number of respondents are buy Electrical Items like 94.87%.
Products Respondent
Weekly Monthly When required Total
Cloths 0 21 9 30
Accessories 2 9 22 33
Home Appliances 0 8 14 22
Books 15 12 2 29
Electrical Items 1 12 23 36
Furniture’s 0 1 9 10
others 0 0 28 28
40 36
33
35 30 29 2828
30
22 22 23
25 21
20
14 15 Respondent Weekly
15 12 12 Respondent Monthly
9 9 8 910
10 Respondent When
required
2 2 1
5 0 0 01 00 Respondent Total
0
hs ies es ok
s
em
s
re
’s rs
ot or nc Bo he
Cl ss lia la It itu ot
ce pp c rn
Ac e A c tri Fu
m Ele
Ho
Inference:
The above table and chart it is clearly evident that majority of the respondents
frequency of buying products more than that of when the product will be required.
Only the books more purchased weekly.
120
100
80
60
Respondents Yes
40 Respondents No
20 Total
Percentage Yes
0 Percentage No
Inference:
The above table and chart it is clearly evident that majority of the respondents says
that (89.75%) yes for the online shopping will save the time and (87.18%) yes for
low price, (64.11%) no for warrantee of the products and (46.15%) no for timely
delivery.
Respondents Percentage
Yes 36 92.31%
No 3 7.69%
Total 39 100%
Source: Primary Data
Percentage
8%
Yes
No
92%
Inference:
The above table and chart it is clearly evident that majority of the respondents
92.31% satisfy with online shopping and rest are not satisfied. And all the online
buyer are happy to buy online and they are all satisfy their needs and wants.
15. If you don’t shop online what are the reason behind that :
Respondents Percentage
Total
Yes No Yes No
Not safe 10 1 11 90.90 9.09
Can’t see the product and 8 3 11 72.73 27.27
touch also
Can’t Identify the quality 9 2 11 81.82 18.18
Not interested 5 6 11 45.44 54.54
High cost 3 8 11 27.28 72.72
Availability of same 10 1 11 90.91 9.09
product near locality
Tough procedure 5 6 11 45.46 54.54
Total 100% 100%
Source: Primary Data
90
60
30
0
Respondents Yes
Respondents No
Total
Percentage Yes
Percentage No
Inference:
The above table and chart it is clearly evident that all the respondents are not buying
online why because of more numbers are says that Not safe (90.90%) and availability
of same product near locality (90.91%). And they will not interested to buy 45.44%
yes & 54.54% are says no but some other reasons. High cost, Can’t Identify the
quality, Can’t see the product and touch also, Tough procedure,
16. Give correct rating to the following statement regarding reasons for online
shopping preferences :
Inference:
The above table it is clearly evident the majority of the respondents says that reason
of online shopping is saving time 56% strongly agree and 46 % are agree this
statement. Branded products are available are 48% agree, 20% strongly agree. And
28% are neutral. 40% are agree, 26% strongly agree, 28% are neutral, rest of
disagree of Varity of branded are available. Quality of the product Agree as well as
neutral(34% & 32%). Cash on delivery is more on Agree (44%). Return option are
44% neutral. And cash reimbursement available are 36% neutral & 30% disagree.
CHAPTER – 5
FINDINGS:
E-commerce is more than just buying and selling products online. Instead, it
encompasses the entire online process of developing, marketing selling, delivering,
servicing and paying for products and services transacted on internet of worldwide
network of business partners.
78% of respondents are buy online and rest of 22% are not buying online in
some of the reason
The Majority of the respondents 61.54% are shop and 38.46% are not shop
with Amazon, and similar that 92.30% and 7.69% of Flipkart , as more
number of people who were buy flipkart in shimoga area.
The more number of online products buying in online is Electrical items, and
that will purchasing when they are required.
The majority of the people are not buying online reason for not safe and
Availability of same product near locality.
The majority of the respondents says that reason of online shopping is saving
time 56% strongly agree and 46, Branded products are available are 48%
agree, & 20% strongly agree, 28% are neutral and 26 % are strongly agree
Varity of branded are availably. Quality of the product Agree as well as
neutral(34% & 32%). Cash on delivery is more on Agree (44%). Return
option are 44% neutral. And cash reimbursement available are 36% neutral &
30% disagree.
5.2 SUGGESTIONS:
Before they can find new customers and increase sales, they need to understand who
are the customer is, what value proposition they offer to customers, and what their
competition is currently offering in the market and where there are gaps for a new
entrant. In other words, onlie sites need to do some market research -- whether that
means hiring an outside firm to do the legwork or trying to do it thyself. There's an
underlying disconnect between their motivation to increase sales and customer's
motivation to solve their problems. "Attracting more customers is really about
listening to their needs, not being a solution looking for a problem,"
Find New Customers and Increase Sales: Understand the Target Audience.
In order to increase sales, many businesses believe the only way is to find new
customers, but a number of experts say that this strategy leaves out an obvious
potential source of new sales. It's much easier to get an existing customer to buy from
you than to convince a new customer to take the plunge.
Think about customer rewards. Like the airlines have done with frequent
fliers, there is no reason a small business can't reward good customers with a
loyalty program. Offer a discount on their birthday or for every 10 purchases give
them one for free.
5.3 CONCLUSION
There is an old saying, “Physician, heal thyself.” The meaning of the phrase suggests
that because doctors are always busy healing others, they often fail to pay attention to
their own health. Every once in a while, physicians need to turn their expertise
inward to make sure they are in good shape so they can be ready to help others. The
concept is applicable to e-commerce business companies also as they are very busy
industry to focus on delivery of consumer service and solutions provider in
merchandising with effective technology and expertise. So, every time they require to
update their Internal Structure Systems and Innovative Management System with
sound database to provide end-to-end connectivity across all the different processes
to reach out its suppliers, partners and customers effectively.
The Indian online customer is typically aloof, and seeks the cheapest possible
product across all Most of the customers are satisfied by online shopping, but the
only hindrance is that they are not fully secured. The customers also feel that it is
very easy to purchase goods online rather than to move shop to shop. From the
research it can be set that in today’s fast moving world people don’t have time to
travel to buy goods and other factors like distance, traffic make it even more difficult
for a person to manually go to shops and buy goods and hence people have started
using online shopping for purchasing and because of payment modes like cash on
delivery has rapidly increased the number of the online shoppers and this list will
keep on increasing.
BIBLIOGRAPHY
BOOKS REFERRED
WEB SITES :
www.onlineshop.com
www.google.com
www.wikipidea.com
www.amezon.com
www.flipkart.com
www.yepme.com
MAGZINES :
JOURNALS :
ANNEXURE
QUESTIONNAIRE
Respected sir/Madam,
Thanking You,
Yours truly,
CHITRALINGAPPA.G.H
1. Name : ……………………………………….
2. Gender :
Male [ ] Female [ ]
3. Age :
4. Educational Qualification:
5. Monthly Income :
Marital Status :
Single Married
6. Occupation :
Type Yes No
Government Employee
Private Employee
Self Employee
Students
House maker
Yes No
Yes No
Amazon
Flipkart
Yepme
Ebay
Alibaba
Others
10. What is the frequency of your Buying online :
Frequency Yes No
A. Once in a week
B. Once in a two weeks
C. Once a month
D. More than 10
purchase in a month.
Products Yes No
Cloths
Accessories
Home Appliances
Books
Electrical Items
Furniture’s
others
Yes No
Quality
Variety
Price
Timely delivery
Save time
Warrantee
Return option
Easy mode of payment
Others
Yes No
15. If you don’t shop online what are the reason behind that :
Yes No
Not safe
Can’t see the product and
touch also
Can’t Identify the quality
Not interested
High cost
Availability of same
product near locality
Tough procedure
16. Give correct rating to the following statement regarding reasons for online
shopping preferences :
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
DATA:
PLACE: Signature of the Respondent