A

SUMMER PROJECT REPORT ON

“STUDY OF CUSTOMER PERCEPTION TOWARDS E-COMMERCE WITH
REFERENCE – FLIPKART.COM”

FLIPKART
REPORT SUBMITTED IN THE PARTIAL FULFILLMENT OF
BACHELOR OF BUSINESS ADMINISTRATION
SESSION: 2019-2022

Submitted to:- Submitted By:-

YASH SONI
ROLL NO. 190995105051
BATCH OF 2019-2022

MODERN COLLEGE OF PROFESSIONAL STUDIES,

431, ANAND INDUSTRIAL ESTATE, MOHAN NAGAR,
GHAZIABAD(UP)

1
 MODERN
COLLEGE OF PROFESSIONAL STUDIES

Approved by C.C.S Chaudhary Charan Singh University

CERTIFICATE
This is to certify that Yash Soni has undertaken this Research project work entitled

―Study of Customer Perception towards E-Commerce with reference -

Flipkart.com‖ for the partial fulfilment of the award of Bachelor of Business Administration

degree from Chaudhary Charan Singh University, Meerut (U. P.).

As per best of my knowledge this Research project work is an original piece of work and has not

been submitted or published elsewhere.

I wish him all the best for his/her bright future ahead.

Name

2
 DECLARATION

I YASH SONI Student of BBA Sixth semester 2019-2022 studying at MCPS, Mohan
Nagar, declare that the project work entitled―Study of Customer Perception
towards E-Commerce with reference - Flipkart.com‖ was carried by me in the partial
fulfilment of BBA program under the CCSU.
This project was undertaken as a part of academic curriculum according to the
university rules and norms and it has not commercial interest and motive. It is
my original work. It is not submitted to any other organization for any other
purpose.

Date: - YASH SONI

Place: - 190995105051
B.B.A

3
 ACKNOWLEDGEMENT

Several people have contributed to the accomplishment of this dissertation and my

sincere Gratitude goes to all of them. First of all, I am truly grateful to Prof. Faisal
Nomanmy guide, who had dedicated his vast deal of his time to examine the draft
of my work and also for his disciplined Guidance and continuous encouragement
throughout the progression of this dissertation. My gratitude is extended to all my
faculties at Lloyd Institute of Management & Technology for having helped me to
achieve a higher education. Finally, of course, I am particularly grateful to my
family for having believed in me and for their constant support.

YASH SONI
1990995105051
BBA

4
 PREFACE

Internet became more powerful and basic tool for every person‘s need and the way people

work. By integrating various online information management tools using Internet, various

innovative companies have set up systems for taking customer orders, facilitate making of

payments, customer service, collection of marketing data, and online feedback respectively.

These activities have collectively known as e-commerce or Internet commerce. Online

shopping made so easy for everyone with their product variations and simple way to buy

things. An attempt has been made to critically examine various corporate and business level

strategies of two big e-tailers and those are Flipkart and Amazon. Comparison have been

done considering e-commerce challenges, their business model, funding, revenue

generation, growth, survival strategies, Shoppers‘ online shopping experience, value added

differentiation, and product offerings. Both these big players made their own mark in India,

but who is going to be ultimate winner or be the top one is going to be. An analytical study

of Flipkart.com has been done which showcases the various information about the different

strategies to succeed in e-commerce market and different opportunities available in India.

YASH SONI
190995105051
BBA

5
 EXECUTIVE SUMMARY

Crossword Book store is a lifestyle store that not only delivers a product but offers service to the

customer. Through this project, we aim to improve the customer experience on store by studying

the consumer behaviour and competition. Various sub objectives like study of the customers‘

perception about loyalty programs, study of sales per unit area to facilitate merchandise re

organisation, study of direct and indirect competition as well as online competition, perform

SWOT analysis and study of catchment have enabled in achieving the overall objective

This report include the brief introduction about Flipkart, its also include research objective ,

Findings , literature review , research methodology , conclusion question etc.

Flipkart is the most preferred online bookstore because of convenience, discounts and cash on

delivery. Though the online buying behaviour is not that prevalent now, it has a huge potential in

future. The average online purchase amount is higher than the average on store purchase amount

The successful completion of this report indicates that the future of marketing is in the hands of

digital. I conclude my research by quoting again that ―Brands can‘t sustain without

digital presence‖

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Table of Contents
DECLARATION..............................................................................................................................3
ACKNOWLEDGEMENT................................................................................................................4
PREFACE.........................................................................................................................................5
CHAPTER 1...................................................................................................................................10
INTRODUCTION..........................................................................................................................10
TO...................................................................................................................................................10
THE INDUSTRY...........................................................................................................................10
1.1 E-Commerce.............................................................................................................................11
1.2 Market Size & Growth.............................................................................................................12
1.3 Funding.....................................................................................................................................13
1.4 Evolution of Commerce...........................................................................................................13
1.5 Types of E-Commerce Technology..........................................................................................27
1.6 The Status of E-Commerce in India and its Potential..............................................................27
1.7 E-Commerce in India today......................................................................................................28
1.8 Facilitators of E-Commerce in India........................................................................................29
1.9 Potential of E-Commerce in India............................................................................................30
1.10 Mobile Electronic Commerce.................................................................................................31
1.11 E-Commerce: Doing Business on the Internet.......................................................................32
1.12 Electronic Payment Methods Through Smart Cards..............................................................34
1.14 Indian e-commerce to hit Rs 2,11,005cr in 2016: IAMAI study............................................35
1.14.1 Highlights from the study....................................................................................................36
1.14.2 Ambiguous future................................................................................................................38
1.15 SWOT Analysis......................................................................................................................40
1.15.1 Strengths..............................................................................................................................40
1.15.2Weaknesses...........................................................................................................................41
1.15.3Opportunities........................................................................................................................42
1.15.4 Threats.................................................................................................................................43
CHAPTER 2...................................................................................................................................44
INTRODUCTION TO....................................................................................................................44
THECOMPANY............................................................................................................................44
2.1 Flipkart.....................................................................................................................................45

2.2 History of Flipkart.com............................................................................................................45

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2.3 Flipkart Today..........................................................................................................................46
2.4 Evolution of Logos...................................................................................................................48
2.5 Funding.....................................................................................................................................48
2.6 Acquisitions..............................................................................................................................49
2.7 Teams at Flipkart......................................................................................................................49
2.8 Payment through Wallet in Flipkart.........................................................................................51
2.9 Interesting facts & figures about the portal:.............................................................................52
2.10 Flipkart Success Factors.........................................................................................................53
2.11 Future Road Map....................................................................................................................54
2.12 Threats in future.....................................................................................................................54
CHAPTER 3...................................................................................................................................55
LITERATURE REVIEW...............................................................................................................55
3.1 ANALYSIS OF CONSUMER BEHAVIOUR ONLINE.........................................................58
CHAPTER 4...................................................................................................................................61
RESEARCH...................................................................................................................................61
METHODOLOGY.........................................................................................................................61
4.1 STATEMENT OF THE PROBLEM........................................................................................62
4.2OBJECTIVE OF STUDY.........................................................................................................62
4.3 SCOPE OF THE STUDY........................................................................................................62
4.4Research Design........................................................................................................................63
4.5Data collection...........................................................................................................................63
4.5.1 Primary data...........................................................................................................................63
4.5.2 Secondary Data......................................................................................................................63
4.6Sample technique.......................................................................................................................64
CHAPTER 5...................................................................................................................................65
DATA ANALYSIS........................................................................................................................65
& INTERPRETATION..................................................................................................................65
CHAPTER 6...................................................................................................................................83
FINDINGS.....................................................................................................................................83
CHAPTER 7...................................................................................................................................85
CONCLUSION..............................................................................................................................85

CHAPTER 8...................................................................................................................................87
LIMITATIONS..............................................................................................................................87
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OF...................................................................................................................................................87
THE STUDY..................................................................................................................................87
CHAPTER 9...................................................................................................................................89
RECOMMENDATIONS...............................................................................................................89
CHAPTER 10.................................................................................................................................91
ANNEXURE..................................................................................................................................91
10.1 BIBLIOGRAPHY..................................................................................................................92
10.2Questionnaire...........................................................................................................................94

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 CHAPTER 1
INTRODUCTIO
N TO
THE INDUSTRY

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1.1 E-Commerce
E-commerce is a transaction of buying or selling online. Electronic commerce draws on

technologies such as mobile commerce, electronic funds transfer, supply chain

management, Internet marketing, online transaction processing, electronic data

interchange (EDI), inventory management systems, and automated data collection systems.

Modern electronic commerce typically uses the World Wide Web for at least one part of the

transaction's life cycle although it may also use other technologies such as e-mail.

E-commerce businesses may employ some or all of the following:

 Online shopping web sites for retail sales direct to consumers

 Providing or participating in online marketplaces, which process third-party business-to-

consumer or consumer-to-consumer sales

 Business-to-business buying and selling

 Gathering and using demographic data through web contacts and social media

 Business-to-business (B2B) electronic data interchange

 Marketing to prospective and established customers by e-mail or fax (for example,

with newsletters)

 Engaging in pretail for launching new products and services

 Online financial exchanges for currency exchanges or trading purposes

India had an internet user base of about 354 million as of June 2015 and is expected to cross 500

million in 2016. Despite being the second-largest userbase in world, only behind China (650

million, 48% of population), the penetration of e-commerce is low compared to markets like

the United States (266 million, 84%), or France (54 M, 81%), but is growing at an unprecedented

rate, adding around 6 million new entrants every month.[3] The industry consensus is that growth

is at an inflection point

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-

retail activities. Demand for international consumer products (including long-tail items) is

growing much faster than in-country supply from authorised distributors and e-commerce

offerings.

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In 2015, the largest e-commerce companies in India were Flipkart, Snapdeal, Amazon India,

and Paytm.

1.2 Market Size & Growth

India's e-commerce market was worth about $3.9 billion in 2009, it went up to $12.6 billion in

2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-commerce

market is travel related.According to Google India, there were 35 million online shoppers in India

in 2014 Q1 and is expected to cross 100 million mark by end of year 2016.CAGR vis-à-vis a

global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of sales.

According to a study conducted by the Internet and Mobile Association of India, the e-

commerce sector is estimated to reach Rs. 211,005 crores by December 2016. The study also

stated that online travel accounts for 61% of the e-commerce market.

By 2020, India is expected to generate $100 billion online retail revenue out of which $35 billion

will be through fashion e-commerce. Online apparel sales are set to grow four times in coming

years.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by

2016 and $850 billion by 2020, – estimated CAGR of 10%. 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 2012–16.

As per "India Goes Digital", a report by Avendus Capital, the Indian e-commerce market is

estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable

portion (87%) of this market today. Online travel market in India had a growth rate of 22% over

the next 4 years and reach Rs 54,800 crore ($12.2 billion) in size by 2015. Indian e-tailing

industry is estimated at Rs 3,600 crore (US$800 million) in 2011 and estimated to grow to Rs

53,000 crore ($11.8 billion) in 2015.

Overall e-commerce market had reached Rs 1,07,800 crores (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

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A new sector in e-commerce is online medicine, selling complementary and alternative medicine

or prescription medicine online. There are no dedicated online pharmacy laws in India and it is

permissible to sell prescription medicine online with a legitimate license.

Online sales of luxury products like jewellery also increased over the years. Most of the retail

brands have also started entering into the market and they expect at least 20% sales through

online in next 2–3 years.

1.3 Funding
Examples of venture capital firms having invested in e-commerce companies in India are as

follows: Flipkart.com raised about USD 2.3 billion. On 10 July 2013, Flipkart announced it had

received $200 million from existing investors Tiger Global, Naspers, Accel Partners, and

ICONIQ Capital, and an additional $160 million from Dragoneer Investment Group, Morgan

Stanley Wealth Management, Sofina, Vulcan Inc. and more from Tiger Global.

In February 2014, online fashion retailer Myntra.com raised $50 million from a group of

investors led by Premji Invest, the investment company floated by Azim Premji, Chairman

of Wipro. May 2014 also witnessed an acquisition of Myntra by Flipkart reportedly for ₹ 2,000

crores.

In September 2015, Pepper Tap raised $36 million from Snap deal and others.

1.4 Evolution of Commerce

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 t forms of

Commerce. Once the marketplace came into existence, a few pioneers realized 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 “StreetVendors” was born.

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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 were 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.

Over the millennia, communication technologies have been revolutionizing the management of

commercial activities. In the 19th century, the cheap steam powered print technology and the

introduction of public schools gave rise to print‐ literate workforce with the communication

skills to manage the increased flow of commercial activity made possible by coal and steam

power technology. In the 20th century, centralized electricity communication—the telephone, and

later radio and television—became the primary communication mediums to manage more

complex industrial enterprises and mass consumer culture. Today, Internet communication

technology has not only made the entire system interactive, integrated and seamless, but has also

created whole new opportunities for cross‐ industry relationships. Information networks across

countries have been democratized and enabled nearly one‐ third of human population to share

music, knowledge, news, and social life on an open playing field.1 Such an all‐ pervasive reach

of communication technology has enabled entrepreneurs to conduct business transactions without

even meeting in person. This mode of transacting business through communication technology,

commonly known as internet, is what has come to be known as ―electronic commerce‖

or e‐ commerce (EC). EC is not just about buying and selling; it is about electronically

communicating, collaborating and discovering information. It has come to impact a significant

portion of the world—affecting businesses, professions, and of course, people. The term EC was

coined in the early 1990s when internet became commercialized and users began flocking to

participate in the World Wide Web. The earliest example of many‐ to‐ many EC in physical

goods was the Boston Computer Exchange, a market place for used computers launched in 1982.

It wasn‘t until 1994 that e‐ commerce really began to accelerate with the introduction of security

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protocols and high‐ speed internet connections, allowing for much faster connection speeds and

faster online transaction capability.2 Internet was introduced in India in 1995 and the first wave

of e‐ commerce started soon thereafter. At about the same time it got its start in the US in an

accelerated manner. The most common users were Business‐ to‐ Business (B2B) users such as

micro and small enterprises (MSMEs) who lacked the requisite financial resources to market their

products and services to potential clients through traditional media such as newspapers and

television. India‘s first online B2B directory was launched in 1996. Trade through B2B portals

increased the visibility of MSMEs in the market place and helped them overcome the barriers of

time, communication and geography. B2B activities include purchasing and procurement,

supplier management, inventory management, payment management, and service and support

amongst the organizations as also between organizations and retailers.

According to an estimate, these are reaching the level of $100 billion per annum. The scope of

B2B transactions has also broadened over the years, which includes promoting investments,

trading in stocks and forging financial alliances.3 Business‐ to‐ Consumer (B2C) e‐ commerce

also took off at around the same time in 1996 in the form ―matrimonial portals‖ that

were developed to facilitate alliances among Indian families. This initiative was followed by the

introduction of online ―recruitment portals‖ in 1997. Internet was proving to be an

efficient medium that enabled employers and job seekers to connect with each other. Also, since

this medium was faster, it did away with the delays involved in print media. Obviously such

initiatives could not be significantly intensified or replicated quickly in other businesses because

the supporting ecosystem had yet to be put in place. Internet had yet to penetrate and the user

base was small. Also, the slow internet speed was limiting the growth of e‐ business mode. Slow

growth was further compounded by low consumer acceptance of making purchases without

―feeling‖ the product and the supporting logistics infrastructure had still to be developed.

The landscape was to radically change with the introduction of Low Cost Carriers (LCC) in the

aviation sector in 2005 giving boost to air travel in India manifold. Travel related information,

flight schedules and ticket booking facilities were available online through ICC portals. The

Indian Railways had already developed their portal for online ticket booking and for providing

travel related information. Thus, Indian travellers got introduced to e‐ ticketing in a significant

way. The benefits of this mode of acquiring tickets over the conventional mode were many:

15
convenient, time saving and also with relatively no cost and time incurred on purchasing the

ticket. In India, travellers using public transport constitute a large section from across regions and

those transcending economic gradations. The wide scale customer satisfaction in the e‐ ticketing

sector encouraged e‐ retail and instilled confidence in entrepreneurs to enrich customer

experiences by launching multiple online websites in 2007.4 The B2C segment has matured to

include a wide spectrum of businesses. Value‐ wise, this business segment, despite its impressive

annual growth over the years, has a long way to go on par with B2B, largely due to high‐ value

transactions in B2B segment. The share of revenues in total B2C until 2011 from the travel

segment has been dominant at 81%. Online shopping excluding travel and ticket has been of the

order of $2 billion in 2013 according to ACCEL India and is expected to grow to $8.5 billion in

2016, i.e. rising annually at 63%. Also, the number of shoppers in this segment would grow from

20 million to 40 million, i.e. a CAGR of 25%. According to ACCEL India, the average value of

order jumped from INR 1080 in 2012 to INR 1860— reflecting a jump of 67%; and, it is

estimated to be INR 3600—assuring a modest rise of 25% per annum. The rise in average value

of order is significant of the growing comfort among customers with e‐ shopping, especially with

segments such as jewellery and home decor. Fashion wear and accessories generated revenue of

$278 million in the year 2012 which rose to $559 million and is expected to further rise to $2811

million, reflecting an impressive growth. Revenue generated through mobile phone

infrastructures increased eight times in 2013 over 2012 and is projected to be 27 times in 2016.

This is reflective of increasing connectivity and mobile website applications. There has been an

impressive fourfold increase in women influenced sales in 2013 compared to 2012 and is

estimated to be twenty‐ fourfold in 2016, reflecting inclusion of ―special interest‖

products offered online, for e.g., baby care and motherhood products over and above fashion and

jewellery products. Trends suggest that more and more secure financial modes such as

credit/debit cards, net banking, etc., are being adopted and the COD (cash on delivery) mode has

started declining. Projections made above for e‐ retail are modest when it transpires that of the

247 million mobile shipments in India in 2013, online sales were only 4 million, i.e. 2 % of the

total. The corresponding figures in regard to books were 600 million and 45 million (7%) and in

regard to jewellery and fashion wear less than 1% online sales. E‐ retail business, including

average order value per month and the annualized growth rate of online shopping, has

increased on a
16
year‐ over‐ year basis with increasing internet usage. The number of internet users shot up from

140 million in 2012 to 213 million in 2013 and is projected to be 400 million in 2016. Of the total

internet users in India, 60% visit e‐ retail sites and amongst these, the percentage of buyers as

well as the number of orders per buyer has been steadily rising. The Indian e‐ commerce market

has thus begun to mature and displays characteristics close to that of China, which traditionally

has conversion rates of 3.5 %. The corresponding figure for the Indian Market is 2.70% (in 2013)

and is projected to be 2.90% in 2016. Annualized online shopping is likely to jump to $8.5 billion

from the realization of $1.9 billion in 2013 and this figure is exclusive of e‐ ticketing for travel

related business. In India, retail market composition in 2012 was 92% in unorganized sector and

8% in organized sector, of which only 0.2% was online. In 2013, this composition stood at 9.1%,

8.7% and 0.3%. E‐ commerce is a small sliver of Indian retail.7 Therefore, there is tremendous

scope for increased share in the online segments, particularly when government is targeting to

ensure that every Indian owns a smartphone by the year 2019. The main objectives of the Digital

India programme of the Government of India are

(i) to ensure that every Indian citizen is digitally connected to the government,

(ii) use the smartphone as a tool for empowering Indians (for doing online retail

transactions and providing various other services).

The prospect of buoyancy in e‐ retail is enhanced by the fact that the working women segment

has been growing; in 2013 it constituted nearly 10% of active internet users. Women have

traditionally influenced the domestic buying patterns in India, particularly among the mobile

middle income groups. The e‐ retail entrepreneurs are bringing forward more and more products

such as baby care, artificial jewellery, home decor, fashion wear and fashion waves and with

positive effects on this segment of business. Percentage of young people in the total population of

India is another factor that positively contributes to the e‐ commerce segment. This group prefers

to buy latest products online, while also gaining access to special offers, from the comfort of their

own surroundings. It is because going over the specifications of the product of their fancy

studying, comparing competing websites, and then arriving at the optimum price is easier and

safer than depending on a smooth‐ talking salesman who may be interested in pushing a product

solely on the consideration of his share in the sale profit.9 According to an estimate, 40 million

17
young people in the age‐ group of 19–24 may be drawn to e‐ purchasing in the next three

years.10 In the same vein, many regions of the country such as North East, Central India, Coastal

Orissa, Hill States in the Himalayan region and areas of Rajasthan & Gujarat in western India

have tremendous potential of entering the e‐ retail segment once internet penetration gets its way

and smartphones become freely available. Currently, only 17% Indians use internet compared to

50% in Brazil, 66% in Russia and 40% in China and percentages shopping online are 9%, 31%,

45% and 47% respectively. The size of the Indian e‐ commerce market is $1.88 billion compared

to $13 billion (Brazil), $16 billion (Russia) and $106 billion (China) and the average expenditure

by an individual in these countries is $93, $421, $533 and $380 respectively. It transpires from

the preceding paragraph that internet retail is not a new phenomenon in India, it saw its share of

popularity in the late nineties and in the early 2000s with the success of matrimonial and

recruitment facilitation sites followed by e‐ ticketing sites which are still performing well. In

other sectors, on the one hand, there were multi‐ media portals largely catering to the needs of

the NRI‘s looking for means to send gifts to India; on the other hand, the average Indian kept

himself/herself away from actual purchase, not being sure of the quality of products ultimately

delivered and with no assurance of customer service. Over the years, the scenario has changed.

Internet penetration is surely accelerating and there is a generational change. That is, today‘s

generation spends hours in front of a screen—be it a computer or a smartphone—not only in

search of products which catch their fancy, but also to be ahead of others before the products are

launched in bricks‐ and‐ mortar stores. Entrepreneurs, too, on their part are ―alive‖ to respond to

customer demand and are eager to win their loyalty through assurance of better customer care and

service. Also, web portals are designed in such a way that they can delight and attract the average

consumers. Online retail market has its own unique models—varying from vertical focused

players dealing in specific categories such as apparels, electronics and baby products to

multi‐ category players dealing in multiple categories.11 Some entrepreneurs maintain their own

websites to provide merchants with functional ―virtual‖ stores to sell products, including

merchandise. It is, in its most literal sense, like creating a virtual mall environment. Participating

merchants play up on the brand value built by the owner of the website not just to introduce and

vend their products, but also to garner interest of those who generally indulge in virtual window

shopping. Traditional brick‐ and‐ mortar stores can also extend their reach beyond physical

18
confines. In such malls, each seller (merchant) quotes a price and defines the products. However,

the billing and delivery infrastructure is common for all merchants listed on a particular website

and is carried on a cost‐ sharing basis between the merchant and the individual hosting the site.

In the early years of e‐ retailing in India, e‐ retailers prepared web catalogues of products offered

by their partner merchants and displayed them on the portal. Once an order was placed, the

concerned merchant was notified who would then supply the goods to the customer. Such early

entrants in the field of e‐ retail were spared of investment on warehousing and inventory costs

and also on logistics. However, such an arrangement did not provide to the e‐ retailer control

over timely deliveries and quality of the product actually dispatched. The new age customer

demands utmost assurance of timely and quality supply including the right to return the

unsatisfactory supplies at the vendor‘s cost. Thus, more and more e‐ retailers prefer the inventory

holding model, which enhances their ability to honour their commitments to the customers. Part

of the enhanced cost of maintaining inventory is met by their ability to order in bulk, qualifying

them for higher discounts on the purchases made. Such e‐ retailers, as they analyse customer

demand pattern, can price the retail items to their optimum advantage. As per global trends, with

the increasing penetration of internet and easy availability of affordable smartphones, there is

bound to be accelerated growth in e‐ commerce. In fact, it may outstrip the projections being

made, provided the related logistic framework keeps pace with the spread of internet. It is

reported that in 2013, the number of parcel checkouts in existing e‐ commerce portals exceeded

100 million. In years to come, not only would parcel checkouts increase remarkably, but also the

rising competition would force e‐ retailors to operate on shorter timelines— consistently and

predictably—at negligible delivery costs to them at their doorsteps along with traceability

solutions and convenient reverse logistics. There is obviously an urgent need for capital

investment to place operational assets in position, which are capable of accommodating vagaries

of e‐ commerce customer orders such as free delivery, order rescheduling, cancellation, returns

and cash on delivery with the features of traceability while minimizing turnaround time. A

distinguishing characteristic of e‐ retailing is the proliferation of delivery points and the need to

move small parcels to these delivery points spread across the country and at affordable cost with

the shortest turnaround time. A pertinent feature of the Indian Market is that, at present, FDI in

B2C segment of e‐ commerce is not allowed but there is no such barrier in B2B segment. Thus,

19
inventory led e‐ retailing cannot be supported by FDI whereas market based e‐ retailing can get

such support. More and more e‐ retailers on date are practising marketplace models with

suppliers‘ storing on their behalf and delivering as per the requirement projected by the retailer.

In order to build an efficient delivery system under the present scenario it would be best to

convert inventory stocks into parcels of varying sizes and pushed down the chain efficiently

without drying up at any of the intermediate nodes in the downward stream. The balance between

inventory and the flow of stock to the supply nodes would then be dynamic and the motion of this

flow would be dictated by the vagaries of the orders of the customers. Upstream management has

to be sensitized to the ―push‖ by the customer to pass the equivalent stock down the chain. The

design of such a network would also be dynamic as more and more products of varying shelf life

and considerable urgency get included. Similarly, there would be particularized requirement

depending upon the size, dimensions and fragility of products in an environment of heightened

commercial activities on the emergence of intermediate supply and production nodes. With the

expected take‐ off of the e‐ retail business (transcending to Tier II and Tier III towns),

e‐ commerce majors like Flipkart have set up captive logistic businesses, e.g. E‐ kart, and have

gone ahead with setting up of regional warehouses with the intention of increasing the supplier

base across the country to achieve low transportation cost by ensuring delivery from the nearest

supplier or regional warehouse. Similarly, Amazon India is building capacities with its logistic

arm Amazon Logistics. However, in the long run even such enterprises would have to have third

parties to supplement their reach to cover the entire country and also maintaining rational

delivery costs. EBay has successfully entered into service level agreements with third party

logistics companies and also courier companies in preference to a captive logistics setup of its

own. With the exponential growth in e‐ retail on the horizon, major third party logistics

companies like Gati, DHL, FedEx, UPS, would play a crucial role in the last‐ mile delivery.

Increasing projections of e‐ retail across the country should be a wake‐ up call for the Airport

Authority of India to include the possibility of increased flow of sorties from the logistics

companies supporting e‐ retail while the Authority plans for air connectivity to smaller towns.

Similarly, while Railways run parcel trains at their end, it should be ascertaining the requirements

of this segment of the economy. The activities surrounding e‐ commerce would have a

spill‐ over to infrastructure and logistics, which will be towards warehousing, sortation and

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delivery contents. This will create 75000 additional jobs during the period 2017–20, over and

above the existing level of around 25000. Though the profit margins in e‐ retail business in India

have not been significant, there are large expectations. Global e‐ retail giants like Rakuten and

Alibaba are eying an entry into the Indian e‐ retail market taking cue from Amazon, which

announced a USD 2 billion investment operating on marketplace model (B2B). Fructification of

FDI investments by global giants in B2B mode would result in better infrastructure and robust

supply chains.12 Walmart, through its B2B e‐ commerce segment, has planned to roll out the

online e‐ commerce platform to members of its Best Price Modern wholesale stores in Guntur

and Vijaywada—expanding on the facilities already available in Lucknow and Hyderabad.13

Snap deal will hire 1000 software engineers and set up at least three new development centres in

the country as part of its plans to plough marquee investor funding into building proprietary,

disruptive technologies to make online shopping even more seamless for consumers. This

addition of engineering talent, which seems to now form the backbone for most e‐ commerce

companies, is happening as Snap deal nears a run rate of $2 billion (Rs 12,000 core) in

annualized sale. Snap deal has a registered user base of 25 million and seller base of 50,000;

which is expected to double in the next six months. The e‐ tailor, which has investors like Ratan

Tata and Azim Premji, will hire 400 engineers in Bangalore to set up its second development

centre next to the one in NCR which employs 300 engineers. Pune and Hyderabad are other cities

which the company is looking at to set up development centres in.14 While the growth potential

of e‐ commerce in India is tremendous, there is intense competition in the market because the

increasing access to information allows consumers to find the most competitive price for a

product/service, thereby increasing the satisfaction level. Operators who are unable to invest in

technology and infrastructure to maintain the loyalty of the ever‐ demanding consumers would

have to bow out by merging or assimilating with the operator who has superior staying power.

Thus, mergers and acquisitions in the e‐ commerce segment in India have been significant.

Mergers and acquisitions in the Indian e‐ commerce space so far, including 2014, have increased

187 per cent, compared to 2013 (the entire 12‐ month period). The year 2014 has already seen

six deals (worth $310 million), as against 12 deals (worth $ 108 million) last year. Mergers like

that between Flipkart‐ Myntra seem to be a ―strategic move‖ triggered off by common investors

of the merging companies, namely Tiger Global, Accel Partners, Sofina with a view to fight

21
Amazon and be proactive to take on the challenges that would be brought on in the technology,

logistics, retail and brand segments. Existing e‐ commerce companies will have to scale much

more to be bought out.15 The Alibaba Group of companies handling e‐ tailing business in China

has created history with their outing at New York Stock Exchange (NYSE) by coming up with

the biggest IPO ever—raising USD 28.8 billion on 14th September whose valuation was put at

USD 223 billion. The success story of Alibaba Group at NYSE is reflective of the robust growth

of the Chinese e‐ commerce industry. China has emerged as a leader among all other countries in

B2C and C2C purchases and the year 2013 will be remembered as the one in which China

surpassed the US as the world‘s largest digital retail market. In regard to the growth of e‐ tailing

in China, Jack Ma, founder of Alibaba, expressed: ‗In other countries, e‐ commerce is a way to

shop. In China it is a lifestyle.‘ A little over a decade ago, China‘s path to e‐ commerce

leadership would have been difficult to foresee. In 2000, China had yet to develop e‐ commerce

applications and had only 2.1 million internet users. Payment systems and physical delivery

systems, too, were yet to develop. But in 2013, the picture changed drastically with 600 million

internet users, and, revenue growth between 2009 and 2012 was above 70 per cent compounded.

By 2015, e‐ commerce transactions in China are projected to hit USD 540 billion, 10% of retail

transactions, and by 2020, China‘s e‐ commerce market is forecasted to be larger than that of US,

Britain, Japan, Germany and France combined. China has its share of homegrown e‐ commerce

players and occupies a sizeable share of the Chinese e‐ commerce market; in fact, China handles

a greater number of transactions than its well‐ known global competitors. Alibaba is one of those

homegrown companies and the total merchandise sold by them in 2012 was greater than that of

eBay and Amazon combined. In 2016, it may surpass Walmart as the number one retail network

in the world. Its C2C company Taobao, created in 2003, does not charge any commission from

either the seller or the buyer and runs on the revenue generated through online advertising; it is

China‘s C2C market leader with 80% market share. Taobao‘s B2C company Tmall, created in

2008, has grown to account for 51% of B2C market in China and is a virtual mall which allows

merchants to set up their own‐ brand pages (instead of creating standalone websites) on a

commission basis. These two companies together dominate the Chinese market and sell anything

from sports cars to shoe laces.16, 17 Such a spectacular performance would not be possible but

for the concerted social media influencing consumer behaviour, smartphone proliferation and

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secure payment portals. Further, the introduction of advanced electronic tools would help develop

a robust delivery infrastructure as part of the move towards revenue sharing among the

participating partners. Thus Alibaba, with its success with IPO, would have necessary capital to

expand its reach in a technology‐ enriched environment. The Indian majors can expect

challenges and opportunities to come their way. The Indian e‐ commerce market, by world

standards, is yet to flower; nevertheless, it has immense potential with digitalization policy as the

primary goal of the government. Market is poised for further consolidation as major players from

US and China compete to enter the market. Manufactures from outside India would be the

ultimate gainers because the growth of manufacturing in India has been on the decline. Chinese

companies have major incentive to seek foothold in India as their manufacturing sector would be

further boosted by whetting the appetite of the growing internet‐ enabled middle class in India.

E‐ commerce has narrowed down the role of intermediaries between buyers and sellers to the

mutual benefit of both parties. Internet technology lowers transaction costs. 18 There is added

stimulus to employment creation and infrastructure development. New market opportunities are

emerging. Thus, e‐ commerce has strong implications at micro and macro levels. Sumanjeet in

his paper 19 has highlighted strong implication of e‐ commerce on economic and social activities

with the potential to transform the future of economic and societal landscape. This paper has

taken up some areas of economy, e.g. transportation, intermediation, agriculture, labour market,

taxation, cost, price and competition, and money. There is evidence of efficiency gains in

resource use and allowing higher consumption resulting in higher growth. With e‐ commerce

comes cost reduction, be it search cost, administration cost, distribution cost or even labour cost.

However, all these opportunities are yet to materialize into profitability, e.g. in agriculture sector.

The area of e‐ taxation is a challenging concern, both domestically and internationally. With the

emergence of growth of digital money in the economy, the chances of fraud may increase.

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Fig 1.1 Evolution of Commerce

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Since, Internet has the ability to reach the customer‘s home; the Distribution Channel has started
to assume new meaning to the B2C and C2C e-Marketer. The Physical delivery got converted to
electronic delivery; physical products were now electronic products, displayed on a website. With
options of paying online through debit and credit cards, even the Transaction was purely
electronic.

Fig 1.2: The Dimensions of E-Commerce

Another important P for the e marketer, Promotion, assumed importance, especially because there
is no face to face interaction between the buyer and seller. The focus of online promotions is the
‗great deals‘, ‗discounts‘, ‗convenience‘ offered by the Marketers

Electronic commerce is doing business online. It is about using the power of digital information
to understand the needs and preferences of each customer and each partner to customize products
and services for them, and then to deliver the products and services as quickly as possible.

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Personalized, automated services offer businesses the potential to increase revenues, lower costs,
and establish and strengthen customer and partner relationships. To achieve these benefits, many
companies today engage in electronic commerce for direct marketing, selling, and customer
service; online banking and billing; secure distribution of information; value chain trading; and
corporate purchasing.

Although the benefits of electronic commerce systems are enticing, developing, deploying, and
managing these systems is not always easy. In addition to adopting new technology, many
companies will need to reengineer their business processes to maximize the benefits of electronic
commerce.

An electronic commerce strategy should help deliver a technology platform, a portal for online
services, and a professional expertise that companies can leverage to adopt new ways of doing
business. Platforms are the foundation of any computer system. An e-commerce platform should
be the foundation of technologies and products that enable and support electronic commerce.
With it, businesses can develop low-cost, high-value commerce systems that are easy to grow as
business grows. An e-commerce platform‘s breadth should also be unmatched, ranging from
operating systems to application servers, to an application infrastructure and development tools,
and to a development system.

Portals are the crossroads of the Internet, where consumers gather and where businesses can
connect with them. Companies normally provide customers with a wide range of choices for
professional implementation services and tightly integrated software for commerce solutions.
Independent software vendors (ISVs) have created specialized commerce software components
that extend the platform.

This chapter details introductory strategies and priorities for electronic commerce, which sets the
stage for the rest of the book. It also describes how the platform, portal, and partners are critical
to solving business problems in the four most common areas of electronic commerce: direct

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marketing, selling, and service; value chain integration; corporate purchasing; and financial and
information services.

1.5 Types of E-Commerce Technology

In addition to a general discussion of e-commerce technology, this chapter also covers various
business-to-business connectivity protocols between procurement systems, private marketplaces,
and suppliers. The chapter describes how WCBE-based suppliers and private marketplaces can
connect to diverse procurement systems, other suppliers, and external private marketplaces.
Specifically, the chapter shows how WCBE-based suppliers and WCS MPE-based marketplaces
can connect to buyers at procurement systems that use punchout, such as Ariba, Commerce One,
and mySAP. The chapter then describes how a WCS MPE-based supplier or private marketplace
could originate a punchout process in order to connect to either an external supplier or another
private marketplace.
Next, the chapter outlines the types of trading mechanisms that can be supported by existing
punchout protocols and the asynchronous trading mechanisms, such as request for quotations
(RFQs), that require extensions to the punchout mechanisms. The chapter also describes
B2B/M2M Protocol Exchange, a tool that IBM has implemented that can map between various
protocols used by different procurement systems. Although this chapter focuses on the external
partner business-to-business (B2B) protocols, a large part of the integration effort for suppliers is
the tie-in to internal processes, such as the processes to handle purchase orders.

1.6 The Status of E-Commerce in India and its Potential

Ecommerce stands for electronic commerce and pertains to trading in goods and services
through the electronic medium, i.e. the Internet or phone. On the Internet, it pertains to a web site,
which sells products or services directly from the site using a shopping cart or shopping basket
system and allows credit card payments. Back in 2005, the 100 million mark would have seemed
impossible. With a small number of 25 million internet users in India (2.5% penetration) in 2005,
we have seen a surge in the following years as the number jumped to 46 million in 2010 and 100
million in 2016 which is more than a 100% growth.

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1.7 E-Commerce in India today
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.

1.7.1 Multi-Product E-Commerce

Some Internet portals provide almost all categories of goods and services in a single site hence;
they are targeting buyers of every possible product and service. The most popular examples are
www.indiaplaza.com, www.india.com, www.khoj.com, www.sify.com, www.rediff.com,
www.indiatimes.com and so on.These Indian E-commerce portals provide goods and services in
a variety of categories.To name a few:
• Apparel and Accessories for men and women
• Health and beauty products
• Books and magazines
• Computers and peripherals
• Vehicles
• Collectibles
• Software
• Consumer electronics
• Household appliances
• Jewellery
• Audio/Video entertainment goods
• Gift articles
• Real estate and services
• Business opportunities
• Employment
• Travel tickets
• Matrimony
• Pets and more

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1.7.2 Single-Product E-Commerce
Some Indian portals/websites deal in a specialized field, for example:
Automobiles:
Examples are: http://www.indiacar.com/ and http://www.automartindia.com/.
On these sites, we can buy and sell four-wheelers and two-wheelers, new as well as used
vehicles, online. Some of the services they provide are:
• Car research and reviews
• Online evaluation
• Technical specifications
• Vehicle Insurance
• Vehicle Finance
• Dealer Locator
• Regional Transport Office regulations
• Expert speak
• Message board…and more.

1.8 Facilitators of E-Commerce in India

1.8.1 Information directories

Portals like http://www.trade-india.com/ and http://trade.indiamart.com/ maintain directories
giving trade details on almost any topic, whether it is from apparel to toys, from gems to heavy
machinery, or from food to employment. The products and services are listed with appropriate
sub-headings to make it easy for a serious information-seeker to find what he wants. Some other
similar sites are http://www.indiagrid.com/,http://indiainfo.com/,and http://in.indiatimes.com/.
Allied services provided by them: Message boards, chat rooms, forums, etc.

1.8.2 Banks:

Net banking / phone banking:

This is an online banking facility available for savings account holders as well as current

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Account holders. Some of the special Net banking services are:
• Demat accounts for sale/purchase of stocks and shares
• Foreign Exchange services
• Direct/Instant payment of bills on the account-holder‘s behalf
• Financial Planning & advice
• Electronics Funds Transfer
• Loans to account-holders
• NRI services…and more.

Credit/Debit Cards:
Banks facilitate E-commerce by providing the most vital trade instrument, namely the Creditor
Debit Card, without which E-commerce would be impossible. Some of the major Indian players
in this field are:
http://www.hdfcbank.com/, http://www.icicibank.com/and http://www.statebankofindia.com/.

1.9 Potential of E-Commerce in India

Microsoft Research India was inaugurated in January 2005 in Bangalore, as the sixth MSR
laboratory in the world. The arrival of a giant like Microsoft itself speaks of India‘s potentials a
world-player in the field of Information Technology and e-commerce; and others will soon
follow. Indian researchers and technicians can further the fast-emerging world of E-commerce in
India and take it to greater heights.
What does the future hold for e-commerce? Many would say it is difficult to predict.
The forces that determine the web's winners and losers are just taking shape and technological
advances could add even more uncertainty. On the downside, some experts predict that it will be
increasingly difficult for smaller companies to establish their presence. Public companies and
traditional brand name retailers have deep pockets and a name recognition that will make it
difficult for smaller sites and mom-and-pop shops to attract customers, thereby forcing them to
compete with the big boys. On the Net, it's one big neighbourhood. On the upside, nearly all
experts believe that overall e-commerce will increase exponentially in coming years. Business to

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Business transactions will represent the largest revenue. Online retailing will also enjoy a drastic
growth. Areas expected to grow include financial services, travel, entertainment and groceries.
And for those considering opening a virtual store front, forthcoming technology and standards
agreements will make it easier to create a site, to protect it against payment fraud, and to share
information with suppliers and business partners.
According to a Reuters, Google expects India‘s Internet users to triple (a whopping 300 million)
by 2014. Now, what is it that will propel this huge growth? Rajan Anandan, who heads Google‘s
India operations shared with The WSJ that -‖The next 200 million new users will largely be
mobile-first users and out of those, 100 million will be mobile-only users‖. This is mainly
because telecom carriers have invested in high-speed wireless infrastructure and smart phones
will become cheaper. Let‘s see how that goes.
So, what does this user growth mean for E-commerce in India? Online travel and movie ticket
sales generate about $5 billion in revenue in India compared to a massive $80 billion in
neighbouring China. It remains to be seen whether this growth in Internet penetration will
translate into more number of users who will indulge in online purchasing. Anandan had also
mentioned that, ―Making money off that growing audience, though, is proving difficult thus far
for Google and other Internet companies,‖ Also, Indian online ad spending is only about $200
million per year – a small fraction of the $80 billion global digital advertising industry

1.10 Mobile Electronic Commerce

The demand for and use of mobile technologies is increasing at a phenomenal rate.
Simultaneously, the underlying landscape of mobile technologies is changing rapidly, creating
the need for solutions to facilitate the long-term growth and success of mobile enterprise
initiatives. This chapter discusses how important it is for software vendors to provide
comprehensive solutions to manage, secure, and maintain the mobile application‘s infrastructure,
while fostering development, integration, and access to applications and information over
wireless media.

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1.11 E-Commerce: Doing Business on the Internet

Businesses communicate with customers and partners through channels. The Internet is one of
the newest and, for many purposes, best business communications channels. It is fast, reasonably
reliable, inexpensive, and universally accessible—it reaches virtually every business and more
than 200 million consumers. Doing business online is electronic commerce, and there are four
main areas in which companies conduct business online today: direct marketing, selling, and
service; online banking and billing; secure distribution of information; and value chain trading
and corporate purchasing.

1.11.1 Direct Marketing, Selling, and Service

Today, more Web sites focus on direct marketing, selling, and service than on any other type of
electronic commerce. Direct selling was the earliest type of electronic commerce, and has proven
to be a stepping-stone to more complex commerce operations for many companies. Successes
such as Amazon.com, Barnes & Noble, Dell Computer, and the introduction of e-tickets by major
airlines, have catalysed the growth of this segment, proving the reach and customer acceptance of
the Internet. Across consumer-targeted commerce sites, there are several keys to success:
 Marketing that creates site visibility and demand, targets customer segments with
personalized offers, and generates qualified sales leads through observation and analysis
of customer behaviour.
 Sales-enhancing site design that allows personalized content and adaptive selling
processes that do more than just list catalogue items.
 Integrated sales-processing capabilities that provide secure credit card authorization and
payment, automated tax calculation, flexible fulfilment, and tight integration with existing
backend systems, such as inventory, billing, and distribution.
 Automated customer service features that generate responsive feedback to consumer
inquiries, capture and track information about consumer requests, and automatically
provide customized services based on personal needs and interests.
 This business-to-consumer (B2C) electronic commerce increases revenue by reaching the

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 right customers more often. Targeted and automated up-selling and cross-selling are the
new fundamentals of online retailing. Sites that most frequently provide the best and most
appropriate products and services are rewarded with stronger customer relationships,
resulting in improved loyalty and increased value.

1.11.2 Financial and Information Services

A broad range of financial and information services are performed over the Internet today, and
sites that offer them are enjoying rapid growth. These sites are popular because they help
consumers, businesses of all sizes, and financial institutions distribute some of their most
important information over the Internet with greater convenience and richness than is available
using other channels. For example, you have:

 Online Banking
Consumers and small businesses can save time and money by doing their banking on the
Internet. Paying bills, making transfers between accounts, and trading stocks, bonds, and
mutual funds can all be performed electronically by using the Internet to connect consumers
and small businesses with their financial institutions.

 Online Billing

Companies that bill can achieve significant cost savings and marketing benefits through the use
of Internet-based bill-delivery and receiving systems. Today, consumers receive an average of 23
bills per month by mail from retailers, credit card companies, and utilities.

 Secure Information Distribution

To many businesses, information is their most valuable asset. Although the Internet can enable
businesses to reach huge new markets for that information, businesses must also safeguard that
information to protect their assets. Digital Rights Management provides protection for intellectual
and information property, and is a key technology for secure information distribution.

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1.12 Electronic Payment Methods Through Smart Cards

Overview

The electronic payment card has been in existence for many years. It started in the form of a card
embossed with details of the cardholder (account number, name, expiration date), which could be
used at a point of sale to purchase goods or services. The magnetic stripe was soon introduced as
a means of holding more data than was possible by embossing alone. The magnetic stripe also
allowed cardholder details to be read electronically in a suitable terminal, so that checks could be
made with little or no human intervention about the cardholder‘s creditworthiness or whether the
card had been reported lost or stolen.

Card technology has advanced over the years to keep ahead of the worldwide increase in card-
related crime. As the criminal fraternity found ways of producing sufficiently good counterfeit
cards, the card companies introduced new ways of combating the problem. A succession of
antifraud measures has been introduced over the years, such as the hologram, the Card
Verification Value (CVV, a value stored on the magnetic stripe that can be used to determine if a
card has been produced illicitly), and in some cases, photographs of the cardholder.

Magnetic stripe cards have now been developed to the point where there is little or no further
scope for introducing more anticrime measures. This has caused the card associations to look at
new technologies to take the plastic card well into the twenty-first century. One technology that
offers many benefits is the smart card—essentially, a small computer chip embedded into a
plastic card with the same dimensions as the magnetic stripe card. The only difference the
cardholder sees is a small metal area on the face of the card that contains a set of electrical
contacts through which the chip can be accessed.

From the anticrime perspective, there are a number of benefits in adopting the smart card. The
card itself (or in conjunction with the terminal) can make decisions about whether or not a
transaction can take place. Secret values can be stored on the card that are not accessible to the
outside world—allowing, for example, the card to check the cardholder‘s PIN without having to

34
go online to the card issuer‘s host system. Also, there is the possibility of modifying the way the
card works, while it is inserted in a point-of-sale terminal—even to the point of blocking the card
from further transactions if it has been reported lost or stolen.

As well as these antifraud measures, the smart card is seen as offering a number of other benefits
to the card issuer and cardholder. These additional benefits are an integral part of building the
business case for introducing smart card technology. Some of the other benefits of introducing
smart cards are:

 The ability to have more than one payment application resident on the card. For example,
a card could contain an ―electronic purse‖ to provide the equivalent of cash, usually for
lower-value transactions, such as parking, tickets, newspapers, and so forth.
 The ability to have other applications, such as loyalty schemes, and access to information
facilities (libraries) coresident on the card.
 The possibility of reducing online validation costs by allowing the card to operate offline
more of the time.

There are many issues to be resolved before such all-embracing cards become commonplace, the
most obvious ones being who owns the card and who controls which applications can be loaded
or deleted. Today, the banks are interested mainly in providing payment-related services to their
customers and most of the current activity surrounding the provision of smart card-based
credit/debit services—sometimes with an additional electronic purse facility.

1.14 Indian e-commerce to hit Rs 2,11,005cr in 2016: IAMAI study

India might have only 300-odd million Internet users, out of its total population of 1.3 billion. But
this has not stopped online commerce from establishing itself in the country. For any other
industry, it takes decades of effort to have companies that are worth billion dollars. But in India,
out of the nine start up unicorns, four are horizontal online marketplaces. And despite the recent
shutdowns and funding crunch affecting the start-up ecosystem, digital commerce has established
itself. The latest study by the Internet and Mobile Association of India (IAMAI) has, in fact,

35
found that at a CAGR growth rate of about 30 percent between December 2011 and December
2015, Indian digital commerce stands at Rs 1,25,732 crore. The report estimates that it will hit Rs
2,11,005 crore this year. However, online shopping comes only after online travel, which is
valued close to Rs 76,396 crore.

1.14.1 Highlights from the study

 Online retail has grown by 57 percent since December 2014; electronics goods and
fashion contribute close to 49 percent of overall spend in e-tail. Horizontal marketplaces
are the clear winner. In 2015, $9 billion flowed into Indian start-ups, with Shop
Clues, Flipkart, Snap dealand Paytm bringing in a fourth of the amount. In fact, Indian
online commerce‘s big daddy Flipkart gets highest sales from mobile phones and
electronic categories. Fashion, however, is where vertical players shine: Flipkart-
owned Myntra, Rocket Internet-backed Jabong, and well-funded players
like Wooplr, Voonik, and Limeroad are playing on a huge customer base.
 According to the report, apparel and footwear sale has grown by 52 percent, from Rs
4,699 crore in December 2014 to Rs 7,142 crore in December 2015. This segment is
expected to reach Rs 72,639 crore by end of 2016. Investments in this sector support this
claim – lingerie seller Zivame, fashion marketplace Limeroad, and fashion social
network Roposohad raised $40 million, $30 million, and $20 million respectively in 2015

36
 alone. Offline sellers like Shoppers Stop have, in fact, launched their own online
platforms to face this competition.
 With the Indian smartphone market having grown by 100 percent in 2015, hotel booking
has also seen annual growth of 165 percent. There is good news for hotel aggregators:
with rise in tourism, the Federation of Hotels & Restaurants Association of India
estimates that India needs another 1.8 lakh rooms by 2020. Hotel aggregator OYO
Rooms announced profitability recently. Curiously, there was no mention of online rental
commerce, logistics, or online furniture sellers in the report.
 The report states that 48 percent of shoppers have looked for information online in
apparels, footwear and mobile categories; but 18 percent of them purchased offline. Also,
76 percent shoppers still prefer to pay by cash-on-delivery (Cod), which the e-tailers have
been trying to fight off, with incentives like easy EMIs and additional discounts for online
payments, as the logistics costs are through the roof for Cod. However, credit cards and
even Internet itself is yet to penetrate the India outside the metros.

37
1.14.2 Ambiguous future
Despite the impressive numbers, scepticism around e-commerce is still alive –and for good
reason. The Indian e-commerce industry is still far from making profit. In fact, Flipkart was
devalued by 27 percent by Morgan Stanley and later another 15 percent by T Rowe Price
recently. They are valued at less than $10 billion, from $15 billion in 2015. A few weeks ago,
online restaurant discover platform Zomato was devalued by 50 percent, to $500 million,
by HSBC. As much as these companies say there is no funding crunch, it is an open secret that
most biggies are struggling. A Live mint report recently stated that Flipkart and Snap deal in fact
are stagnant and seeing a fall in sales. The latter is also scaling down regional operations
now.

Marketplaces hiking their commission from sellers is proof of the distress they are in. Jabong –
which has been facing severe fund crunch – recently cut down on its low-margin brands,
and Myntra had to migrate back to desktop after its app-only strategy cut down its revenue.
Yet, none of this has stopped bigger players from entering the sector – Aditya Birla‘s ABOF,
Reliance‘s AJIO Life, Tata Group‘s Tatacliq, - all the titans have been making their presence
felt. Amazon, which had already invested $2 billion in India since they entered the market in

38
2013, is investing another $3 billion now. Tata Group also made its first investment in an e-
commerce firm recently – in online jewellery platform Caratlane.

Some cynicism, however, is inevitable; cost of customer acquisition has discouraged Future
Group Head Kishore Biyani from taking a leaf out of their competitors‘ book. But the expansion
of Central Mall and Big Bazaar going online show that they are taking competition from online
marketplaces seriously.

Online commerce will drive 25 percent of organised retail and will be of GMV $60 billion by
2020, according to a study conducted by Google and A.T. Kearney. Besides, foreign investors
like Japan‘s Soft Bank and China‘s Alibaba, HNIs like Ratan Tata are also waking up to the
online opportunities –by investing in about 50 startups, a majority of them in e-commerce,
including Snapdeal, Bluestone, Kaaryah, Paytm, Urban Ladder, Zivame. If the numbers are true,
it certainly looks like Indian e-commerce is maturing.

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1.15 SWOT Analysis
Most of the time we see that the use of electronic techniques for doing business add value either
by the reducing transaction cost or by creating some type of network effect, or by a combination
of both. In SWOT analysis (the acronym is short for Strengths, Weaknesses, Opportunities and
Threats), here we try to find out the strengths and weaknesses of ecommerce in respect of Indian
business environment. Then after we try to identifies opportunities presented by that environment
and the threats posed by that environment. As shown in the following figure which shows the
questions that an analyst would ask in conducting a SWOT analysis

1.15.1 Strengths
 Global market: E-commerce biggest strength is the boundary less access in other word no
brick structure is mandatory to do business or no specific boundary is required. It enables all
the companies to expand them to global level. The widening of geographic retail markets may
facilitate the development of global retailers
 Time saving: Transaction through internet is no doubt very fast. It saves time by reducing
physical movement.
 No time constraints: The concept of 25X7 shows that online trans can be used anywhere any
time as there is no time constraints.
 Price/Product comparison: Information and to choose are some of the right which every
consumer has. On the same footing ecommerce provide platform to consumers to compare
price and product effectively and efficiently. It will tend to have far greater bargaining
effectively and efficiently. It will tend to have far greater bargaining power with suppliers
than traditional local or national retailers.
 Cost effective: Elimination of long chain of middle man, decreasing need of having brick
infrastructure and outsource logistic are helping a small business to stand at par with giants.
 Flexible target market segmentation: The success of business depends on right choice of
segmentation. Target market segment here in e commerce is flexible can be modified any
time.

40
 Fast Exchange of information: ―e‖ will always guarantee fast and accurate sharing of
information among merchants and customers and enables prompt quick just in time reply.
 Faster buying procedure: The buying is just a click away from the seller. No physical
movement is required, no hunting of right product at right price is to done by the consumer
this make the buying process faster
 Niche Market: It is a concept of sub segmentation where the product of rare species is
available without putting some special efforts by consumer. Almost everything can be sold on
internet. Even if products targeted to smaller markets the buyer will be somewhere on net.
666 Ms Kiran Yadav & Dr.` Divya Sharma

1.15.2Weaknesses
 Security: Security is a biggest challenge in to progress of e commerce. Customer always
found themselves insecure especially about the integrity of the payment process.
 Fake websites: Many fake websites are available on net which promises better service and
secure dealing. These web sites can not only disgrace ecommerce but also bring bad name to
ecommerce.
 Fraud: Personal and financial details provided for trading purpose are misused by hackers
their personal undue interest.
 Fewer discounts and bargaining: Hardly online businesses offer discounts and bargaining
cannot be possible.
 Long delivery timing: The task of Delivery is usually outsourced, who do not care about the
timing of the seller. They provide their services as per their own convenience. Sometime the
delivery time may extend to days or weeks which one cannot wait for.
 Impossibility of physical examination: Products whose choice is merely depend on its
physical condition of the product with need personal touch before selection are not suitable
for e-commerce business. As Online products cannot be touched, wear or sit on the products.
 Limitation of products: Only a limited number of products can be available.
 Lack of personal services: Physical products can be available but lack in personal services
which are intangible.

41
 Limited exposure: In developing areas where internet is not accessible will have no or little
exposure to e commerce.
 Limited advertising: Limited advertising opportunities are available because in e commerce
one cannot go for mass advertising. The advertising is limited only to computer literate
person. And out of them only those who are comfortable with e-commerce applications.
 Customer‘s satisfaction: There is no physical and personal or direct face to face interaction
between customer and the seller. Therefore, the scope of convincing the customer does not
exist.

1.15.3Opportunities
 Changing trends: People are very brand conscious. They are interested in buying branded
stuff rather than local. If such stuff is available cross border they will not mind it ordering
through e-commerce. E- commerce is fast and effective even financial transactions can be
made from any part of the world. People of tomorrow will feel more comfortable to buy
products through internet only.
 Increasing number of user: Daily number of internet users is increasing. People feel more
comfortable to shop online. SWOT Analysis of E-Commerce 667
 Regular Global expansion: E commerce can be operated anywhere any time without any
interruption. It always has a scope of expansion. All new population and existing population
who are not the user of e commerce are the target expansion.
 High availability (24 hour and seven days a week): Along with each and every click of the
mouse business is in operation. Those who are busy in day time and cannot spare time for
them self, have all the opportunity to shop as per their convenient time even during late night
hours.
 Wide business growth: E business has wide scope and broader vision to grow. Business
always took place in gap. Gap filling is a never ending process hence the growth of business
is also never ending process.
 Advertising: Advertising is cost effective as compare to conventional offline system.

42
1.15.4 Threats
 Competitors: Along with local competition, global competition also exists. Competition is
increasing day by day. Big companies have already entered in this field. They are making
people habitual at the cost of their companies.
 Changes in environment, law and regulations: Change in trends, fashion and fad can distress
E Commerce side by side change in law and regulations can also affect it.
 Innovation: Customers now a days are always in a search of innovative products and
technique. Innovation will always work as an extra burden on the pocket of consumer, be
either in product, place, promotion and even price.
 Privacy concerns: Fears that information can be misused lead to spam e mail or identity fraud.
 No direct interaction: In e commerce there is no direct interaction between customer and the
seller. There is no scope of bargaining. People prefer to buy physically as compare to online
to experience personal feel.
 Fraud: Persons using unfair means to operate ecommerce can damage the confidence and
faith of common people.
 Risk: Nature of fraud 3. Conclusion A developing country can be rationalized and
mechanized if it introduces e-commerce effectively and efficiently. It will enhance its output
and gives competitive advantage. Information Technology (IT) has boosted ecommerce
worldwide. Now it‘s easier to enter to a new market and one can evaluate his/her product and
company‘s performance. It reduces business overhead and enhances business management.

43
 CHAPTER 2
INTRODUCTION
TO
THECOMPANY

44
2.1 Flipkart

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was

founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart focused on
online sales of books, but it later expanded to electronic goods and a variety of other
products. Flipkart offers multiple payment methods like credit card, debit card, net banking,
e-gift voucher and Cash on Delivery.

Flipkart went live in 2007 with the objective of making books easily available to anyone who
had internet access. They‘re present across various categories including movies, music,
games, mobiles, cameras, computers, healthcare and personal products, home appliances and
electronics – and still counting!

With over 11.5 million book titles, 11 different categories, more than 2 million registered
users and sale of 30000 items a day, they‘re one of the leading e-commerce players in the
country.
Their success is largely due to their obsession with providing customers a memorable online
shopping experience. Be it Cash on Delivery, a 30-day replacement policy, EMI options, free
shipping - and of course the great prices that they offer. Then there's dedicated Flipkart
delivery team that works round the clock to personally make sure packages reach on time.
For now, they're present in 27 lucky cities, but don't worry, plans are underway to spread to
many others.

2.2 History of Flipkart.com

Flipkart was founded in 2007 by Sachin and Binny Bansal, both alumni of the Indian Institute
of Technology, Delhi. They worked for Amazon.com before quitting and founding their own
company.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 lacs (co-founders savings).
It was never going to be easy since India had a bad past experiences with e-commerce
trading. It was not an easy segment to break into, people were very particular in paying

45
money for something which they had not seen and received. The trust was missing in the
Indian customers. So what Flipkart had to do was to instil trust and faith in their customers.
And they did exactly the same later.

Initially they used word of mouth marketing to popularise their company.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. A few months later, the company sold its first book on
Flipkart.com—John Woods' Leaving Microsoft to Change the World.

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.

2.3 Flipkart Today

Today, as per Alexa traffic rankings, Flipkart is amongst the top 20 Indian Web sites and has
been credited with being India's largest online bookseller with over 11 million titles on offer.
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. As of today, The Company started from 2 employees and now employs more than
4500 people.
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

46
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 India, 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 provides online-
shoppers a memorable online-shopping experience because of its innovative services like:
 Cash on Delivery,
 30-day replacement policy,
 Easy Monthly Instalment options (EMI),
 Free shipping
 Discounted prices & deals

Flipkart started with consignment model as discussed above, since most of the customer
issues like delivery delays etc. result from procurement model, the company started opening
its own warehouses as it started getting more investments. The company opened its first
warehouse in Bangalore and later on opened warehouses in Delhi, Kolkatta and Mumbai.
Today the company works with more than 500 suppliers. As on date more than 80% orders of
Flipkart are handled via warehouses which help in quick and efficient service.

A humble beginning from books, Flipkart now has a gamut of products ranging from: Cell
phones, laptops, computers, cameras, games, music, audio players, TV's, healthcare products,
washing machines etc. etc. Still, Flipkart derives around 50% of its revenue from selling
books online. Flipkart is the Indian market leader in selling books both offline and online, it
enjoys an online share of around 80%. The electronic items have a large number of players
like Naaptol, Letsbuy, Indiaplaza, Tradus, Infibeam, Yebhi etc. The electronic market share is
distributed among them in different unknown proportions.

India has around 13.5 crore internet users today where as the number of homes with Cable
and Satellite (C&S) television is 10.5 crore. The expected internet users will reach a figure of
30 crores by 2014 and C&S homes are expected to be 14 crores by 2014. Thus India has a
tremendous internet growth and with the customers getting accustomed to e-commerce, the

47
future of e-commerce sector is definitely rosy. An approximated 25 lac people have
transacted online this year; the number is all set to increase with time.
Also to mention most of the Flipkart customers use internet from PC's/Laptops to order
goods. The use of mobile internet is very less at the moment, but with the advent of smart
phones the use of mobile internet for e-commerce transactions will soar with time. India has 8
crore mobile net users at the moment, the number is expected to swell to 22.5 crore by 2014.
Flipkart had a revenue of 4 crores in FY 2008 - 2009, 20 crores in FY 2009 - 2010, 75 crores
in FY 2010 - 2011, and the revenue for FY 2011 - 2012 which ends on 31 Mar 2012 had 500
crores. This is indeed a massive growth. The company targets revenues of 5000 crores by
2015.

2.4 Evolution of Logos

2.5 Funding

 Initially funded by the Bansal‘s themselves with 4 Lakhs (INR).

 Flipkart has since then raised two rounds of funding from venture capital funds Accel
India (in 2009) and Tiger Global Management (up to the tune of US$10 million) (in
2010).
 Private equity firms Carlyle and General Atlantic are in talks to jointly invest about
$150 million to $200 million in Flipkart, according to sources.

48
2.6 Acquisitions

 2010: WEREAD, a social book discovery tool. The stated goal was to give Flipkart a
social recommendation platform for buyers to make informed decisions based on
recommendations from people within their social network.
 2011: Mime360, a digital content platform company.
 2011: Chakpak.com is a Bollywood news site that offers updates, news, photos and
videos. Flipkart acquired the rights to Chakpak‘s digital catalogue which includes
40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has
categorically said that it will not be involved with the original site and will not use the
brand name.
 2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart has
bought the company for an estimated US$ 25 million.

2.7 Teams at Flipkart

2.7.1 Category Management

All this requires an extremely efficient supply chain and this is where Category Management
comes in. The folks at Category Management are responsible for vendor relations and supply
management – without which online shopping wouldn‘t be what it is at Flipkart.
 Developing Vendor Network across Country
 P&L Responsibility for various Product Categories
 Building Relations with Leading Brands and Manufacturers
 Market Research
 Managing Supply Chain for efficient sourcing
 Using Technology to Solve Problems

2.7.2 Catalogue
These guys build the look of every catalogue that is launched on the website. From defining
product specifications to ensuring all product related content appears correctly on the site –
the team is constantly working to ensure the customer can make an informed purchase from
us at all times.

49
2.7.3 Warehouse &FulfilmentCentre
Procurement in Flipkart is all about obtaining products that are the best in ―Quality‖, from the
right ―Source‖ and in the shortest possible ―Time‖ to ensure ―Customer
Delight‖. Warehousing in Flipkart, on the other hand, is where these products are inspected
with a fine tooth-comb. After all, we have a promise to keep - original products with original
warranty. And this is all done with the highest level of automation because for us, technology
is everything.

2.7.4 Logistics
Flipkart ship 30,000 items every day. That‘s 20 items a minute, to nearly every single pin
code in this country. At least 80% of these orders are shipped by our very own, one-and-a-
half-year-old delivery team, Flipkart Logistics.

Today Flipkart is in 30 cities and soon we intend to expand all over the country. A huge (and
growing) team od delivery executives with a ‗customer first‘ approach – this is what FKL is
all about.

2.7.5 Customer Support

‗Customer delight‘ is one of the USP of Flipkart. Flipkart want their customer to have the
best ever online shopping experience when they are with them – and will do everything in our
power to ensure it. Though every employee at Flipkart is responsible for giving the customer
a great experience at all touch points, it is our 24X 7 customer support team that has
succeeded in setting unbeatable standards in the service industry.

2.7.6 Finance

Flipkart is a company that has gone from being a start-up to the largest online retailer in the
country – clocking revenues of Rs 2.5 cores per day and well on its way to achieve a target of
$1 billion in revenue by 2014. So can there be any doubt that Finance plays a really important
role in their development.

50
2.7.7 Talent Acquisition

Growing by leaps and bounds is not an exaggeration when it comes to Flipkart. What was
started by two people in 2007 has today become a 4500 strong company – and counting! In
the last year alone we have added 4000 people to the team. With the demand for high quality
talent across departments showing no signs of slowing down, the Talent Acquisition Group,
or TAG as Flipkart like to call them, have their hands full.

2.7.8 Human Resource

Flipkart as an organization has grown from strength to strength to emerge as a leader today in
the Indian e-commerce space. The pace which we have maintained has been possible because
of a high caliber, energetic and agile workforce. Today Flipkart attracts highly talented
professionals from across the industry and campuses alike - the opportunity to innovate and
exposure to a high-growth business environment being our main attraction.

Being a de-centralized function, the team constantly interacts with various business
departments at all times in order to better understand and cater to their HR needs. The team
also builds strategic relationships with the corporate functions to drive pan-organization
initiatives.

The Human Resources team is responsible for the end to end HR life cycle of an employee
once they come on board. It is the HR team that ensures that employees across departments
and from various backgrounds get to know and understand the Flipkart culture. Creating a
high level of employee engagement and helping them develop as professionals is what keeps
the HR team at Flipkart busy.

2.8 Payment through Wallet in Flipkart

Flipkart has added a new ‗Wallet‘ feature to enable customers store money in their Flipkart
account and redeem it on future purchases. Flipkart Wallet works on a prepaid credit system:

51
customer can top up your wallet with any desirable amount up to Rs 10,000 by using any one
of its regular payment modes like credit card, debit card, and net-banking. This amount will
then be reflected as prepaid credit on customer‘s account and can be used as a payment mode
for all forthcoming purchases on the portal. Expectedly, this amount will be deducted from
the balance in their account‘s wallet.

They can keep track of your Wallet balance by either heading over to their Flipkart account
or viewing the wallet balance at the top. However, if they run out of balance on their wallet
before making a purchase, Flipkart allows them to make a partial payment using your Wallet
and pay the remaining amount using other payment modes like credit card, debit card, and
net-banking. Flipkart does point out that cash-on-delivery payment mode cannot be combined
with a Wallet payment.

As said earlier, there are other players in the country like MobiKwik and PayTM* which
offer online wallet services called ‗MobiKwik Balance‘ and ‗Paytm Cash‘ respectively,
indicating the impact of unreliable payment gateways on online transactions in India. While
MobiKwik Balance allows customers to add money into their account to allow multiple
purchases like online recharge for prepaid mobile phones, DTH and datacards, PayTM Cash
allows you to store money in a wallet for future transactions on its portal.

The company had recently claimed to ship around 20 units every minute, with 65% of the
purchases being made through Cash on Delivery (COD). The company had also hoped to
grow its sales by more than tenfold this financial year.

2.9 Interesting facts & figures about the portal:

 Flipkart employs 4500+ people
 2 million sales unit and 4 million visitors/month
 11.5 million titles, Flipkart is India‘s the largest online book retailer.
 Registered user base of 4 million customers
 Ships out as many as 45,000 items a day, clocking daily sales of approx. Rs 2.5 cr.
 Flipkart is now investing in expanding its network of distribution centres, warehouses,
procurement operations which is now in only 8 cities in country, so as to reach more &
more Indian cities.

52
  The company is even setting up its own delivery network which is now in 37 cities, by
which company can save up cost associated to the outsourced shipping & logistic
function and is set to expand this even further by next year.

2.10 Flipkart Success Factors

The site is very easy to navigate, which helps users to easily search for the contents or
products online, it even allows users to search by using various filters like by price range,
search by brands, by age group, by hot-selling etc. If a certain product is not available or is
out of stock it even asks users to input its details & then when the products is available the
desired users are informed, this really helps one connected to the products they are seeking &
leads to repeat & frequent purchases.

The Flipkart site is fast & powerful, i.e. if you Search any products in the Flipkart search bar
and you‘ll find exactly what you looking in likes no time & it‘s very quick to process the
payments & transactions by a very efficient & flexible payment mechanisms of the portals.
Approximately 60% of orders are placed in cash on delivery system. So there is high
possibility scams & frauds, so users have to have their email account linked & with verified
details & receives a confirmation code message on their cell phones or email, after which the
users confirms the unique code& the transaction is processed & usually get delivered in 2-3
business days on the confirmed mailing address.

Flipkart manages to deliver the item in 2-3 business days. If the order placed is not delivered
in the specified time, immediate enquiry goes to nearest supplier and the item becomes
available. It will then be delivered within 24 hour depending on the cause of delay.

Flipkart is continuously aiming to bring down the delivery time of regular orders, in doing so
it is investing in its own delivery system & network, as the time to delivery is one of the
important aspects of selling products online as users want a fast turnaround time. An
excellent marketing strategy by Flipkart marketing team is to increase the sales revenues & to
optimize the user shopping experience & increasing loyalty by repeat purchases.

The portals offer a good pricing offers & deals to its users by the means of cash rewards,
loyalty points, discounts, coupons, Frequent buyer rewards points. It even offers goods

53
relatively cheaper pricing points than it is available in the physical market which in total
helps users save money & at the same time get benefited by the means of rewards points.

2.11 Future Road Map

 They aim at 10 times growth and eyes at $ 1Billion sales by 2020.

 They will look at bigger investments in their supply chain and technology.
 Investment will be made in large warehouses and increased automation of their
process, so that the product is not delayed.
 They intend to enter in to various new categories and expand their current categories
as well.
 Everything except for groceries and automobiles will be available on Flipkart in
future.
 To go further in the value chain, Flipkart is looking at associations with a larger
number of suppliers and partners, both nationally and internationally.

2.12 Threats in future

There are no major foreseeable threats in the future. The company has built a great brand
name, they just have to maintain and enhance the same. Need to keep introducing more
products, adapting to the changing needs of the customer with time. The entry of
Amazon.com in 2012 in the Indian e-commerce space has been cited as a big challenge to
Flipkart. However, Flipkart is a respected Brand name in India and should be able to compete
with Amazon. Amazon being a very big company can bring in serious competition to
Flipkart, since Amazon can bear more losses in the beginning to gain customer base. But
again Indian market is growing at a rapid pace as access to internet increases and people
become more aware of e-commerce sites and start trusting the same; hence Indian market is
sufficiently big at-least for these two giants to co-exist beneficially.

54
CHAPTER 3
LITERATURE
REVIEW

55
Literature Review
Several researchers have carried out studies in their effort to examine consumers‘ online
buying behavior. For example, Bellman et al (1999) investigated various predictors for
whether an individual will purchase online. These authors concluded that demographic
variables, such as income, education and age, have a modest impact on the decision of
whether to buy online, whereas the most important determinant of online shoppingwas
previous behavior, such as earlier online purchases. This is consistent with Forrester Research
which proved that demographic factors do not have such a high influence on technology as
the consumers‘ attitudes do (Modahl, 2000). Steinfield and Whitten (1999) suggested that the
combination of the Internet, plus physical presence, provides more opportunities to capture
business than the online-only presence, because they can provide better pre-purchase and
post-sales services to lower consumer transaction cost and build trust in online stores.
However, it is worth mentioning that beliefs and attitudes that are found in the stage prior to
the adoption of e-commerce are different to those in the ―post-adoption‖ stage (Gefen et
al, 2003; Venkatesh and Brown, 2001; Yu et al, 2005).

Concerning the factors that influence or hinder online shopping, Ernst and Young (2000)
reported that Internet users purchased online because of good product selection, competitive
prices, and ease of use, but were concerned about shipping costs, lack of opportunity to prior
examining the products, as well as, the confidentiality of credit card and personal
information. Know and Lee (2003) explored consumers‘ concerns about payment security
and its relationship to online shopping attitude and actual purchases. They observed a
negative relationship between attitude towards online shopping and concerns about online
payment security. Consumers with a positive attitude seem to be less concerned about
payment security. Similarly, popular literature cited ease of shopping comparison, low prices,
timely delivery, convenience, time saving, low shipping costs, improved customer service,
tax exempt status and speedy e-mail response, as key reasons for the increase in online
shopping (Lorek, 2003; Magee, 2003; Maloy, 2003; Retail Merchandiser, 2003).

HOT BARGAINS: TIPS TO FIGURE OUT TRAPS FROM THE REAL VALUE DEALS
SUSHMITA CHOUDHURY AGARWAL, ET Bureau Apr 22, 2013 (The Economic Times)

56
Bargain, hot deal, steal... every day consumers are bombarded with hundreds of seemingly
promising offers. However, not every value buy saves money; some can be costly mistakes.
Here's how to figure out the trap from the real deal.
It's a great way to save on interest, particularly if you aren't keen on paying the high rate for
revolving credit with your existing card. However, be warned that such a teaser deal is
typically temporary. If you don't pay the outstanding amount within the offer period, you will
be penalised with a higher interest rate, possibly more than the one on your old credit card.

Straight cash discount instead of value-added promotion

The trouble with most value-added offers is that they come with caveats. It could be for a
limited period, or you may land discount vouchers/coupons that don't appeal to you. What's
not to like about saving hard cash? The only drawback is that you are unlikely to find such
bargains at shopping malls. Hit standalone, smaller shops instead.

A gadget bought at a discount of 80% on a little-known website

It really should not come as a surprise that you are being ripped off. Online shopping
promises discounts, but if just one player offers rebates far more than its competitors, it
should be a red flag. For instance, the MRP on the HP Pavilion G6-2232TX laptop is nearly
Rs 41,000, while Flipkart is offering it at Rs 38,342 and Laptopwale at Rs 38,100. So how
can an unknown player offer it at just Rs 8,200? Other warning signs are an absence of
credible contact information for the company. If the website is legitimate, chances are you are
being peddled a counterfeit item.

Registering on private sale websites

To begin with, registration is free, so even if you never get lucky, all you are wasting is time.
The likes of Jetsetter.com and Sniqueaway.com hold short-term flash sales on unsold
inventory at luxury hotels and cruises, where you could land discounts of 40-70%.

Buying gold because the jeweller insists it's a good investment

Given the high making charges and issues with determining purity, make sure that you buy
jewellery solely for the love of bling. If investment is the agenda, you would be better off
buying gold bars/coins or gold funds. The jeweller who promises you the moon will be quick
to list out caveats while buying it back.

57
Renting a car at the airport at a 10% discount
It may be the handiest option for travellers, but the airport is also the most expensive place to
rent a car, especially at foreign destinations. Typically, you will shell out 12-15% more than
the rental charges at any off-site location, including at or near your hotel. Try to wrangle a
complimentary airport pick-up service from the hotel you've booked, and then check with the
concierge for rental rates, or book a car online.

Accessories, perfumes and cosmetics from duty-free shops

These items, including designer watches and sunglasses, can be had much cheaper online. For
instance, perfumes costing $53-55 (around Rs 3,000) at duty-free shops can be bought for
around $50 (Rs 2,750) on Amazon.com, including shipping charges. Often, mall/high street
sales too offer a better deal. However, duty-free shopping continues to be attractive when it
comes to alcohol and cigarettes.

3.1 ANALYSIS OF CONSUMER BEHAVIOUR ONLINE

Author: Dejan
Petrovic Published:
2007
The report outlines about the most relevant behavioral characteristics of online consumers
and examine the ways they find, compare and evaluate product information. Comparison of
the newly collected survey data with the existing consumer behavior theory resulted in
detection of a number of issues related to a specific consumer group. The purpose of this
report is to translate these findings into a set of implementation activities on strategic and
technological level. Execution of these recommendations will result in better conversion of
visitors into customers and encourage customer loyalty and referrals.
The focus group of this study will be young adults aged between eighteen and thirty-four
interested in buying a mobile phone or a related product.
Research by Shun & Yunjie (2006) showed that there are product types, which are more
likely to be sold online such as software, books, electronics and music. Reason for this is that
when purchasing these types of products, one does not require personal inspection and most,
if not all features, can be outlined in the product description and images. Most products in the
mobile phone family belong to this category.
According to the recent research on consumer behaviour on the Internet users (Cotte,
Chowdhury, Ratenshwar & Ricci, 2006), there are four distinct consumer groups with
different intentions and motivations:
58
  Exploration
 Entertainment
 Shopping
 Information

Majority of young adults interviewed for purpose of this research tend to be active
information seekers. A high level of technological confidence within this group tends to be an
encouraging factor when it comes to product information research online.
The following analysis presents both, focus group results and behavioural theory in a parallel
fashion divided into two main research topics:
 Information Retrieval and Search Patterns
 Perception of Product Information Online

These two areas are mutually dependent and particularly important in a market where
consumers have the power to choose the right product from a number of competing suppliers.
Well-structured product information that cannot be found easily online is as much of a
problem as is having easily accessible information that does not meet the consumer‘s
expectations.

Petrovic Dejan (2006) in his study on Analysis of consumer behaviour online explained that
the most relevant behavioural characteristics of online consumers and examine the ways they
find, compare and evaluate product information. Comparison of the newly collected survey
data with the existing consumer behaviour theory resulted in detection of a number of issues
related to a specific consumer group. The purpose of this report is to translate these findings
into a set of implementation activities on strategic and technological level. Execution of these
recommendations will result in better conversion of visitors into customers and encourage
customer loyalty and referrals. The focus group of this study will be young adults aged
between eighteen and thirty-four interested in buying a mobile phone or a related product.

Shun &Yunjie (2006) in their study showed that there are product types, which are more
likely to be sold online such as software, books, electronics and music. Reason for this is that
when purchasing these types of products, one does not require personal inspection and most,
if not all features, can be outlined in the product description and images. Most products in the
mobile phone family belong to this category. According to the recent research on consumer

59
behaviour on the Internet users (Cotte, Chowdhury, Ratenshwar& Ricci, 2006), there are four
distinct consumer groups with different intentions and motivations:
 Exploration
 Entertainment
 Shopping
 Information

Music Videos, Lyrics

- Daily updated collection of music videos and lyrics. Majority of young adults interviewed
for purpose of this research tend to be active information seekers. A high level of
technological confidence within this group tends to be an encouraging factor when it comes
to product information research online. The following analysis presents both, focus group
results and behavioural theory in a parallel fashion divided into two main research topics:
Information Retrieval and Search Patterns Perception of Product Information Online These
two areas is mutually dependent and particularly important in a market where consumers
have the power to choose the right product from a number of competing suppliers. Well-
structured product information that cannot be found easily online is as much of a problem as
is having easily accessible information that does not meet the consumer's expectations.

Anders Hasslinger; Selma Hodzic; Claudio Opazo (2008-02-01) in their study they showed
that developed into a new distribution channel and online transactions are rapidly increasing.
This has created a need to understand how the consumer perceives online purchases. The
purpose of this dissertation was to examine if there are any particular factors that influence
the online consumer. Primary data was collected through a survey that was conducted on
students at the University of Kristianstad. Price, Trust and Convenience were identified as
important factors. Price was considered to be the most important factor for a majority of the
students. Furthermore, three segments were identified, High Spenders, Price Easers and
Bargain Seekers. Through these segments we found a variation of the different factors
importance and established implications for online book stores.

60
 CHAPTER 4
RESEARCH
METHODOLOGY

61
4.1 STATEMENT OF THE PROBLEM

Analysis of Customer Perception towards online shopping on Flipkart.com. Basically it is

important to investigate the motivation behind consumer purchase but it is equally important
to find us how the consumers form perception and behaviours towards online buying because
consumer perception towards purchasing online is a conspicuous factor affecting actual
buying behaviour. One of the researches is to work on factors that influence customers to buy
online from Flipkart.com, and have decided to study four factors such as convenience, time
saving, Website features, and security. And along with this the study for out of stock on
highly discounted items also will be done.
However, customer‘s willingness to purchase online could be affected by one‘s individual
needs and these needs can be ‗Need for cognition‘. Taking these aspects into account, a
survey is conducted to know the perception towards online shopping on Flipkart.com.

4.2OBJECTIVE OF STUDY

 To discover the key factors that influence online buying behaviour of consumers in
India

 To identify who are the online shoppers in terms of demography

 To understand the customer awareness on Flipkart.com

 To determine the factors responsible for customer satisfaction

4.3 SCOPE OF THE STUDY

Scope of study is a general outline of what the study (e.g. class or seminar) will cover.
"Scope" defines the parameters of this can be an object, or a theory process, activity,
describing either future, current or past knowledge or statements of descriptive activity,
experience etc. The topic chosen for this particular study is to analyze the customer
perception towards online shopping on Flipkart.com. The sample size chosen was according
to the convenience and the objectives of the study. To know about various aspects of Flipkart
in market, the improvements needed in case of features and process, and the effect of factors
on the buying behavior of online customers. The geographical area that this study covers is
Greater Noida (India).

62
4.4Research Design

―Research means different things to different people‖ and the intention behind it are
to investigate innumerable data, theories, experiences, concepts and law. ―The
procedural framework within which the research is conducted‖ is the definition of research
methodology. The two broad and distinct approaches to social research cover the Quantitative
and Qualitative methods of enquiry.

The quantitative paradigm on the other hand intends to gain a deeper understanding,
knowledge and insight into a particular situation or phenomenon, by providing answers to
questions of ‗how?‘ rather than ‗what?‘. Unlike qualitative research which occurs in natural
settings, quantitative research is where hypotheses are established.

4.5Data collection
The data collection method in this particular research comprises Primary data & Secondary
data. One needs to be careful while using secondary data as maybe the collected data may be
biased as the collector of that original data might have highlighted only a partial picture or
another aspect may be that data may be quite old and also the data quality could be unknown.

4.5.1 Primary data

Primary data is generally originated by any researcher to address any specific problem or
issue at hand, where the only drawback is that it can be expensive and time-consuming. The
various ways of gathering primary data is through surveys, focus group and observations.

In this study, the primary data is collected through well-formed questionnaire with the help of
a digital survey. The questionnaire consists of quantitative and qualitative multiple choice
questions and the respondents are asked to choose the one choice which suits them the best
amongst the multiple choices.

4.5.2 Secondary Data

Prerequisite to the collection of primary data is a careful scrutiny of the existing secondary
data. The Data that is collected from existing journals, reports and statistics from private and
public institutions are called Secondary data. For this specific study the collection of
secondary data was done primarily from marketing journals already available on this topic.
Secondary data helps the author to comprehend the perception of Indian consumers on online
shopping.

63
Thus the study carried out has analyzed the primary data with the rationale and validation of
the present secondary data.

4.6Sample technique

Choosing a study sample is an important step in any research project since it is rarely
efficient, practical, or ethical to study whole populations. In this study the sampling strategy
used is convenient sampling. The sample size is 100. A small part of something intended as
representative of the whole, or a subset of a population. In this research simple random
sampling is being used.

Data collection
The data collection would be:
PRIMARY DATA: 100 RESPONDENT
SECONDARY DATA: Journals, Internet, newspaper etc.
RESEARCH AREA: GreaterNoida

64
 CHAPTER 5
DATA ANALYSIS
&
INTERPRETATION

65
Data Analysis & Interpretation

This chapter aims obtain the Solution of the objective of the study by critically analysing the
data through thoroughly examining the interviewee‘s responses and beliefs. This has been
achieved through evaluating the most relevant responses by the participants. The data has
been analysed and discussed by comparing the comments made by the respondents with the
literature review keeping in mind the research objective of the study. Thus, the rationale of
this analysis is based on the personal answers provided by the respondents.

An appropriately designed questionnaire was used to collect the primary data for the study.
The data for 100 respondents was organized systematically in tables and graphs and then was
subjected to analysis using appropriate statistical tools. The results of the analysis are
presented in the following section in order to assess the customer perception towards online
shopping on Flipkart.com in India.

Here for analysing, we are considering two factors. That is:

 Demographical factors
 Behavioural factors

66
Demographical Factor:

1. Gender of Respondents:

Table 5.1: Gender wise respondents

Male Female Total
Responses 58 42 100
Percentage 58 42 100

Graph 5.1: Gender wise respondents

Gender

42%

58% Male
Female

Interpretation:
According to demography profile, in this study 70 % male and 30% female respondents are
part of my target population and they help me to fulfil my questionnaire from different area
of Greater Noida city. From these groups total respondents are 100.

67
2. Age Group:

Table 5.2: Age wise respondents

15 -25 25 -35 35 - 45 45 & above Total
No of respondents 63 24 12 1 100
Percentage 63 24 12 1 100

Graph 5.2: Age wise respondents

Age Group
1%

12%

15 -25
24%
25 -35
63% 35 - 45
45 & above

Interpretation:
Below figure shows that 63% respondents are between 15-25 age group, 24% respondents are
between 25-35 age group, 12% respondents between 35-45 age group, and 1% respondents
are between 45&above.

68
3. Occupation:

Table 5.3: Occupation wise respondents

Business House wife Salaried Student Total
person
No. of respondents 8 7 46 39 100
Percentage 8 7 46 39 100

Graph 5.3: Occupation wise respondents

Occupation

7%
8%
39%
Business person
House wife

46% Salaried
Student

Interpretation:
In this survey, 46% of the respondents are salaried and 39% are students. So they both
together made majority of respondent‘s percentage (85%). 8% are business persons and 7%
are House wife. Salaried persons and students will always look for new technologies and new
services which make them more comfort.

69
5 Educational Qualification:

Table 5.4: Educational wise respondents

Graduate Post graduate SSC or Others

Equivalent
Number of respondents 63 36 0 1
Percentage 63 36 0 1

Graph 5.4: Educational wise respondents

Educational Qualifications
0% 1%

36%
Graduate
post graduate SSC or Equivalent PhD
63%

Interpretation:
All of them in this survey are graduate and above qualified peoples only. Among these 63%
are graduates, 36% are post graduates

70
5. Annual Income:

Table 5.5: Income wise respondents

0- 3 L 3-6L 6-9L 9 & above
Number of respondents 60 23 13 4
Percentage 60 23 13 4

Graph 5.5: Income wise respondents

Annual Income
4%

13%

0- 3 L
23% 3-6L
60%
6-9L
9 & above

Interpretation:
Since 39% of this survey is students most of them are of 0-3L income range, i.e. 60%. 23% of
them are in 3-6L income range, 13% in 6-9L and 4% is 9 & above.

71
Behavioural factors:

This survey is conducted on those people who do online shopping and are aware of Flipkart.
So everyone answered ‗yes‘ for those two questions.

6) Frequency of purchase from online:

Table 5.6: online shopping usage

Always Often Sometimes Seldom Never Total
Male 5 21 29 3 0 58
Female 4 14 23 1 0 42
Total 9 35 52 4 0 100

Graph 5.6: online shopping usage

35
30 29

25 23
21
20
15 14

10
5 4
5 3
1 00
0
Always OftenSometimesSeldom Never

MaleFemale

Interpretation:
More than half of them use online shopping sometimes, i.e. 52%. People who always and
mostly shop through online shopping are also good in number, 9 and 35, together 44%. And
who use online shopping rarely is very less in number 4%. Since only 44% are mostly using
this, there is a wide space to fill and to make online shopping a great success. And there is not
much gender difference in online shopping, which means both males and females enjoying
online shopping and its benefits.

72
 7) Mode of awareness about Flipkart.com:
Table 5.7: Modes of awareness about Flipkart

Word of Advertisements, Blog Links Promotional Search Total

Mouth newspapers, TV recommend- from emails engines
dations other (like
websites Google)
No: of 39 22 2 15 5 17 100
respondents
Percentage 39 22 2 15 5 17 100

Graph 5.7: Modes of awareness about Flipkart

No: of respondents
45
40
35 39
30
25 22
20 15 17
15 2 5
10 No: of respondents
5
0

Interpretation:
Most of them are aware about Flipkart through word of mouth (39%) followed by television
and online advertisements (22%). Customers got awared through blog recommendations
(2%) and promotional e-mails (5%) are very less in number.
This means a good communicaton about Flipkart is going on through friends and families,
which proves that word of mouth strategy by them is the most successful means of making
people aware about their products. Success can only be gained through delighted customers
who act as advocates for their products and there is a wide scope of other digital
advertisement techniques like search engine marketing, email- marketing, providing links and
blog recommendations inorder to make more customers.

73
8) Frequency of using Flipkart.com while online purchasing:

Graph 5.8: Frequency of using Flipkart

Every Occasionally Most of the time Hardly Total
time ever
No: of respondents 17 45 32 6 100
Percentage 17 45 32 6 100

Graph 5.8: Frequency of using Flipkart

No: of respondents
50
45 45
40
35

32
30
25
No: of respondents
20 17
15

10
6
5
0

Everytime OccasionalyMost of the timeHardly ever

Interpretation:
Here on this survey 17% are always choosing Flipkart for online shopping, while 45% are
using it occasionally. Hardly ever using members are very less, and 32% are using it most of
the time. Since more than half of them prefer Flipkart while thinking of online shopping, it
means branding had done successfully by them either through advertisements, services or
providing good experience to customers.

74
 9) Category that mostly prefer to buy from Flipkart.com:
Graph 5.9: Category mostly prefer to buy from Flipkart
Electronics Apparels & Books, Stationaries Healthcare & Home & Total
Accessories Movies & personal care Kitchen
Music items
No: of 39 20 30 3 4 4 100
respondents
Percentage 39 20 30 3 4 4 100

Graph 5.9: Category mostly prefer to buy from Flipkart

No: of respondents
45
40
35 39
30
25
20 30
15
10
5 20
0
No: of respondents
3 4 4

Interpretation:
Electronic items, Books and Stationery, Apparels & Accessories, cameras, watches and
others (bags, belts, etc.) are purchased more. 39% of respondents are preferred to buy
Electronics items followed by Books and Stationery (30%) and Apparels and Accessories
(20%). Books & stationery and electronics items are more famous among the students and
that may be the reason for large purchase of those items from Flipkart.com.

75
10) Reason for customer’s preference on Flipkart.com than others:

Table 5.10: Customers expecting feature of Flipkart

Fast Availability After Sales Easy Payment Portal Total
Delivery Services options Features
Responses 41 29 8 17 5 100
Percentage 41 29 8 17 5 100

Graph 5.10: Customers expecting feature of Flipkart

Responses
45

40 41

35

30 29

25
Responses
20
15 17

10
8
5
5
0
Fast DeliveryAvailability After SalesEasy Payment Portal Features
Servicesoptions

Interpretation:
One of the most efficient features in Flipkart is fast delivery when compared to other online
shopping websites. So, most of the customers prefer this website for shopping with the
perception of quick delivery (41%) and availability of product (29%), followed by easy
payment options (17%). And there is a scope of increasing after sales services and portal
features when comparing with other features.

76
 11) Product selection from the categories given by Flipkart.com:

Table 5.11: On the basis where product is chosen

Rating of the Discounts and Review about the Brand of the Total
product features product product
No: of 14 48 26 12 100
Responses
Percentage 14 48 26 12 100

Graph 5.11: On the basis where product is chosen

No: of Responses
60

50
48

40

30
26 No: of Responses
20

14
10 12

0
Rating of the Discounts and Review about theBrand of the
product features product product

Interpretation:
Customer perception varies while using Flipkart; it is one of the online shopping sites which
give high discounts and offers. Most of them in this survey (48%) are looking for good
featured product with high discounts while purchasing products from Flipkart. And also
customers more often go through the product review (26%) before making their decision to
purchase. Product review is a kind of word of mouth strategy where product users leave
their review on their experiences with Flipkart. Customers are giving priority to these two
features while brand of product (12%) and rating of product (14%) also taken care by some
other customers.

77
 12) Rating of services on Flipkart.com (in a scale of Excellent, Good, Average,
below average, Poor)

Table 5.12: Rating of Flipkart services

Excellent Good Average Below Average Poor
Cash on delivery 46 45 5 2 2
30 days replacement policy 23 55 20 2 0
EMI options 21 48 25 5 1
Free shipping 35 34 17 12 2
Graph 5.12: Rating of Flipkart services

60
50
40
30 Cash on delivery
20 30 days replacement policy EMI options
10 Free shipping
0

ExcellentGoodAverage Below Poor

Average

Interpretation:
46% of respondents are rated excellent for cash on delivery service, while for 30 days‘
replacement policy 55% rated good and 23% rated excellent. For EMI options 48% rated
good and 21% rated excellent, and for free shipping 35% rated excellent.
While analysing the data, customers have more interest in two services of Flipkart: That is,
30 days replacement policy and EMI options.
Since Flipkart is providing 30 days‘ replacement policy for all the products in the platform.
And this combined mix service increased the customer trust.
In case of EMI options, Flipkart is the only site which accepts all credit cards and thus it
provides a better payment options to the customers.
Cash on delivery is a compactable service that provided to the customers and they are much
satisfied on that service also. Even some rated less for this service, may be because of less
customised experience on cash on delivery.
In case of free shipping, Flipkart provide this service for total purchase of rupees 300 and
above only. So it may affect some of the customers who purchase less price products
frequently.

78
 13) Issues faced by customers while shopping in
Flipkart.com? Table 5.13: Issues faced when purchased from
Flipkart
Out of Payment Replacement Delay in Faulty No Others Total
stock issues issues Delivery product issues
No of Responses 37 6 6 12 8 30 1 100
Percentage 37 6 6 12 8 30 1 100
Graph 5.13: Issues faced when purchased from Flipkart
37
30
40
6 6 12 8
30 1
20
10
0

No of Responses

Interpretation:
In this survey, 30% of customers didn‘t face any of those problems that mentioned, while
37% of customers faced out of stock issue. This is one of serious issue faced by most of
customers. Since discounts and features are the one feature that most of the customers
looking for and when a good product with high discount is displayed in Flipkart platform,
customers brought it as soon as they could. Thus the products will be out of stocked.
Flipkart started notifying the customers about the product when the stock got available.
Payment issues and replacement issues are less in number (total 12%) since different
payment options like EMI options, card payments, Cash on delivery, Wallet payments etc…
are provided by Flipkart and customers are satisfied with those.
In case of replacement also only less issues are happened, thus shows most of them are
satisfied with that service.
Delay in delivery happens because of shipping and courier service issues. It is a problem
with supply chain. Mostly it happens in the end part of the supply and in rural areas where
courier services are less active.
Faulty product issue also happened to 8% of the customers and one of the policies to
overcome this issue is 30 days‘ replacement policy of Flipkart.

79
14) Recommending this website to others:
Table 5.14: Recommending Flipkart to others

Yes No Total
No: of Responses 95 5 100
Percentage 95 5 100

Graph 5.14: Recommending Flipkart to others

95
100
80
60
40
20

0
Yes No

No: of Responses

Interpretation:
In this survey, most of them (95%) are happy to recommend Flipkart to others like friends
and family. And this shows word of mouth publicity is successfully running and this is one of
the great advantages for Flipkart.

80
15) Customer’s rating about services on Flipkart.com: (in a scale of 5, 5 as highest and 1
as least)

Table 5.15: Rating the experience from Flipkart

1 2 3 4 5 Total
No of 7 11 16 49 17 100
Responses
Percentage 7 11 16 49 17 100

Graph 5.15: Rating the experience from Flipkart

49
50

40

30
16 17
20
11
7
10

0
1 2 3 4 5

No of Responses

Interpretation:
While analysing the rating of experiences, Flipkart provides a good and excellent experiences
to most of the customers.
Mode of given data: 4 & Median of given data: 4
49% of customers rated 4 as the experience and more than half of the population (66%) rated
4 & 5 as experience.

81
16) Satisfaction of customers while Flipkart services are used:

Table 5.16: Satisfaction on services of Flipkart

Yes No Total
No: of responses 81 19 100
Percentage 81 19 100

Graph 5.16: Satisfaction on services of Flipkart

81
100
80
60
40
19

20
0

Yes No

No: of responses

Interpretation:
81% of the population is satisfied with the service of Flipkart. This helps Flipkart to retain the
customers and also shows that the branding and marketing techniques of Flipkart also got
succeed.

82
CHAPTER 6
FINDINGS

83
 FINDINGS
 There is not much difference in gender for using online shopping.
 Students and salaried persons are most frequent users of Flipkart.
 Frequency of purchase for electronics, books and music, apparels and accessories are
more in Flipkart.
 Word of mouth was more influential in promotion as many people were made aware
by their friends and family when customers recommend this website to them.
 Highly discounted products got out of stock quickly, since customers purchased it as
soon as they could when they see high discount on good featured product.
 The services provided by Flipkart are good and even more scope of development is
there for increasing the customer strength.
 Digital marketing techniques like search engine marketing, links providing other
website and advertisement also functioned well for promotion of this website.
 Fast delivery is one of best service Flipkart is providing.
 Different payment options available in Flipkart made customers more satisfied and
comfort for paying while purchasing product.
 Customers feeling more secured when purchasing through Flipkart because of
different policies and services they have.
 In comparison with competitors, Flipkart is charging free shipping for the purchase of
300 plus rupees, while others free ship the service without any barrier.
 Out of stock is the main issue faced by Flipkart.
 Most of customers have good experience with Flipkart while purchasing products.
 Most of them are satisfied with the services of Flipkart and so that they succeed in
retaining the customers.
 Advertising is an important way to have the brand and products familiar to
consumers.
 Convenience and time saving are two important factors that customer looking for
while purchasing through online.

84
CHAPTER 7
CONCLUSION

85
 CONCLUSION

The thorough study is based on the consumer behaviour analysis which serves a great
idea regarding consumer perception when they go for online shopping. In order to satisfy
themselves consumer perceive many things before buying products and they will be satisfied
if the company meet their expectation.

The Overall Brand Value of Flipkart is good, but it is facing some tough competition from its
global competitors like Amazon& EBay. Talking about domestic market i.e. India, it is the
most superior E-business portal which is aggressively expanding & planting its roots deep
into the Indian market & at the same time shifting the mind-set of the people from going &
shopping from physical store to online stores, which is magnificent!
Be very focused on consumers and build amazing experiences for the customers.

86
 CHAPTER 8
LIMITATIONS
OF
THE STUDY

87
 Limitation of the Study
No research is complete without admitting the limitations that was faced while
conducting a study which will contribute to present learning. This study too like the others
have certain constrains which has been discussed below.

 The study was restricted to Greater Noida only

 The study is mainly concentrated on Flipkart.com

 The sample of the size will be limited to time and resources

 The result is assuming that respondents have given accurate information

88
 CHAPTER 9
RECOMMENDATIONS

89
 Recommendations
 Flipkart has successfully placed itself into the prospects mind making it the India‘s
largest online store with huge range of products. But it still needs to work on their
core competence that is books and stationery items.
 Delivery services can be improved mainly in rural areas by selecting appropriate
courier service which has services in customer area for dispatching an item.
 Can make free delivery to all priced products.
 Can include more coupon codes and gift vouchers for increasing the traffic of the
customers.
 Out of stock items can made available as soon as possible and intimate the needed
customers.
 Should look for International/ Overseas markets or Neighbouring Countries.
 Delivery Should be on time.
 Flipkart App & Website should be more user friendly.
 Should clearing focus on the Growing Online Apparel business & it can diversify into
apparel category either organically or inorganically by acquiring other portals.
 User Experience: Portal should continuously aim to work to improve the user
experience by adding more & more innovative features in the website like virtually
shopping basket, virtual trial rooms. In this competitive world to differentiate via user
experience, the ultimate winner will be the Indian online consumer.
 Should comprehensively invest into E-CRM & online reputation management.
 Logistics & Supply Chain: can continuously aim to reduce the delivery time cycle.
 Price will still be a factor as amazon being a huge company will use its economies of
scale to remove their competitors from the market; therefore, they need to be more
competitive on that aspect.

90
CHAPTER 10
ANNEXURE

91
10.1 BIBLIOGRAPHY:
BOOKS:

 Assael, Henry. (1984.) ―Behavior and Market Action‖. Boston, Massachusetts: Kent
Publishing Company,
 Belch, G.E., & Belch, M.A. (2001). Advertising and Promotion: An integrated
Marketing Communications Perspective (5th ed.). Boston: Irwin/McGraw- Hill.
 Cooper, Donald R. and Schindler , Pamela S. (1999), Business Research Methods, 6
Tata McGraw-Hill Publishing Company Limited, New Delhi, India.
 Creswell, J. W. (2003). ―Research Design: Qualitative, Quantitative, and Mixed
Methods Approaches‖. Thousand Oaks, CA, Sage.
 Easterby-Smith, M., Thorpe, R. & Lowe, A. (2002), Management Research 2nd
edition, London: Sage.
 Remenyi, D., Williams, B., Money, A. and Swartz, E. (1998), ―Doing Research
in Business and Management‖, Sage Publications, London.

JOURNELS AND MAGAZINES:

 Arnould, E.J. and Wallendorf, M. ―Market-oriented Ethnography:

Interpretation Building and Marketing Strategy Formulation,‖ Journal of Marketing
Research, Vol. 31 (November 1994), pp. 484–504.

 ANALYSIS OF CONSUMER BEHAVIOUR ONLINE

Author: Dejan Petrovic

 HOT BARGAINS: TIPS TO FIGURE OUT TRAPS FROM THE REAL VALUE
DEALS
SUSHMITA CHOUDHURY AGARWAL, ET Bureau Apr 22, 2013 (The Economic
Times)

92
WEBSITES:
 www.Flipkart.com
 www.commodityindia.com
 www.marketoperation.com
 www.nextbigwhat.com
 www.britannica.com
 en.kioskea.net
 www.ecommerce-land.com
 www.commodityindia.com
 www.marketoperation.com

93
10.2 Questionnaire

Demography

Q1) Gender of Respondents

A) Male
B) Female
Q2) Age Group
A) 15-25
B) 25-35
C) 35-45
D) 45 & Above
Q3) Occupation
A) Business Person
B) House Wife
C) Salaried
D) Student
Q4) Educational Qualification
A) Graduates
B) Post Graduates
C) SSC Equivalent
D) Others
Q5) Annual Income
A) 0-3 Lacs
B) 3-6 Lacs
C) 6-9 Lacs
D) 9 & Above

Behavioural Factors

Q1) Frequency of purchase from online

A) Always
B) Often
C) Sometimes
D) Seldom
E) Never

94
Q2) Modes of awareness about Flipkart
A) Word of Mouth
B) Advertisements, Newspaper, TV
C) Blog recommendations
D) Links from other websites
E) Promotional emails
F) Search engines (like google)

Q3) Frequency of using Flipkart.com while online purchasing

A) Every time
B) Occasionally
C) Most of the time
D) Hardly ever

Q4) Category that mostly prefer to buy from Flipkart.com

A) Electronics
B) Apparels & Accessories
C) Books, Movie & Music
D) Stationaries
E) Healthcare & Personal care
F) Home & Kitchen items

Q5) Reason for customer‘s preference on Flipkart.com than others

A) Fast Delivery
B) Availability
C) After Sales Services
D) Easy Payment options
E) Portal Features

Q6) Product selection from the categories given by Flipkart.com

A) Rating of the Product
B) Discounts & Features
C) Review about the Product
D) Brand of the Product

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Q7) Rating of services on Flipkart.com (in a scale of Excellent, Good, Average,
below average, Poor): Rating of Flipkart services
Excellent Good Average Below Average Poor
Cash on delivery
30 days replacement
policy
EMI options
Free shipping

Q8) Issues faced by customers while shopping in Flipkart.com?

A) Out of Stock
B) Payment Issues
C) Replacement Issues
D) Delay in Delivery
E) Faulty Product
F) No issue
G) Others

Q9) Recommending this website to others:

A) Yes
B) No

Q10) Customer‘s rating about services on Flipkart.com: (in a scale of 5, 5 as highest and 1 as
least)
A) 1
B) 2
C) 3
D) 4
E) 5

Q11) Satisfaction of customers while Flipkart services are used:

A) Yes
B) No

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