COMPARATIVE STUDY ON RETAIL &

E- COMMERCE
Submitted to: PROF. AMAL ROY
Subject: Strategic Management

ADITYA KUMAR ANANNYA MUKHERJEE ANKIT MALI KANISHKA GUPTA

20BSP0094 20BSP0232 20BSP0279 20BSP1004

AMITA PUROHIT ANCHAL SINGHLA DEEKSHA JAIN KARTIK BHARTIYA

20BSP0222 20BSP0239 20BSP0617 20BSP1034

 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

ACKNOWLEDGEMENT

We take this opportunity to thank Prof. Amal Roy, who has always been
there to support us and answer all our queries, he constantly supervised
and provided necessary feedback that helped us steer in right direction. He
has been a constant motivator and a good mentor to take care of all the
requirements that would have otherwise proved to be a hindrance in our
path.

Last but not the least I feel indebted to each person associated directly or
indirectly in the successful completion of this project
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

AUTHORIZATION

This is to certify that this report is submitted in partial fulfilment of the

requirement of PGPM program of ICFAI Business School (IBS),
Mumbai.

This report titled, “Comparative Study on Retail & E-Commerce” is a

submission of the work done by Group 2. The members of the group are
Aditya Kumar, Amita Purohit, Anannya Mukherjee, Anchal Singhla, Ankit Mali,
Deeksha Jain, Kanishka Gupta, and Kartik Bhartiya.

Prof. AMAL ROY

IBS, Mumbai

3
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Table of Contents

1.ANALYSIS of DMART..........................................................................................................................4
1.1.................................................................................................................Mission, Vision & Values 4
1.2Marketing Strategies of DMart.....................................................................................................5
1.3SWOT ANALYSIS OF DMART.........................................................................................................7
1.4 COMPETITIVE STRATEGIES OF DMART...............................................................................................9
2. ANALYSIS of AMAZON..................................................................................................................12
2.1Mission, Vision & Values............................................................................................................12
2.2 Amazon's strategy.....................................................................................................................13
2.3 SWOT Analysis of Amazon.........................................................................................................14
3. ANALYSIS of FLIPKART.....................................................................................................................18
3.1Mission, Vision & Values............................................................................................................18
3.2 STRATEGIES...............................................................................................................................19
3.3 SWOT Analysis of Flipkart..........................................................................................................22
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COMPARATIVE STUDY ON RETAIL & E-COMMERCE
M

RETAIL AND E-COMMERCE

Retail Industry

Indian retail industry has emerged as one of the most dynamic and fast-paced
industries due to the entry of several new players.  It accounts for over 10% of
the country’s gross domestic product (GDP) and around eight% of the
employment. India is the world’s fifth-largest global destination in the retail
space.  India is the world’s fifth-largest global destination in the retail space and
ranked 63 in World Bank’s Doing Business 2020.
As per Forrester Research, in 2020, India's retail sector was estimated at US$
883 billion, with grocery retail accounting for US$ 608 billion. The market is
projected to reach ~US$ 1.3 trillion by 2024. According to the Retailers
Association of India (RAI), the retail industry achieved 93% of pre-COVID sales
in February 2021; consumer durables and quick service restaurants (QSR)
increased by 15% and 18% respectively.
The Indian retail trading has received Foreign Direct Investment (FDI) equity
inflow totalling US$ 3.44 billion during April 2000-December 2020, according to
Department for Promotion of Industry and Internal Trade (DPIIT). With the
rising need for consumer goods in different sectors including consumer
electronics and home appliances, many companies have invested in the Indian
retail space in the past few months.

E-commerce Industry

E-commerce has transformed the way business is done in India. The Indian
E-commerce market is expected to grow to US$ 200 billion by 2026 from
US$ 38.5 billion as of 2017. Much of the growth for the industry has been
triggered by an increase in internet and smartphone penetration. As of
September 2020, the number of internet connections in India significantly
increased to 776.45 million, driven by the ‘Digital India’ program. Out of the
total internet connections, 61% connections were in urban areas, of which
97% connections were wireless
India's e-commerce orders volume increased by 36% in the last quarter of
2020, with the personal care, beauty and wellness (PCB&W) segment being
the largest beneficiary. In India, smartphone shipments reached 150 million
units and 5G smartphone shipments crossed 4 million in 2020, driven by
high consumer demand post-lockdown.

In festive season CY20, the Indian e-commerce GMV was recorded at US$
8.3 billion, a significant jump of 66% over the previous festive season.
Similarly, the Indian e-commerce market recorded ~88 million users in
festive season CY20, a significant jump of 87% over the previous festive
season.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

1.ANALYSIS of DMART
1.1 Mission, Vision & Values

MISSION
At DMart, we research, identify and make available new products and
categories that suit the everyday needs of the Indian family. Our mission is to
provide the best value possible for our customers, so that every rupee they
spend on shopping with us gives them more value for money than they
would get anywhere else.

VISION
It is our continuous endeavour to investigate, identify and make available
new product strategies for customer everyday use and at the best values than
anybody else.

VALUES
D- Mart, we place strong emphasis on excellence in customer service. Our
employees believe in the values of Action, Care and Truth (ACT) to get the
job done, with Dedication and Determination.

 ACTION
• Focus: To be focused about what I do.
• Motivated: To be clear of achieving my goal.
• Enthusiastic: To love what I do.

 CARE
• Respect: To respect every individual in the organisation and
provide her/him with the dignity and attention to make her/him believe
that she/he makes a difference to the organisation.
• Listen: To listen and resolve any employee / customer grievance
quickly and fairly.

 TRUTH
• Integrity: By being open, honest and fair in all our relationships and
being respectful and trustful to others.
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1.2 Marketing Strategies of DMart

A marketing mix is a model that a company uses to get its products and
services noticed by the right people at the right time. This model is based on
pillars of 4Ps: Product, Price, Place and Promotion. It forms the conceptual
core of an overall marketing strategy.
So, let us go through the marketing mix model of DMart by looking at the
parameters of Product, Price, Place and Promotion in the coming section.

Product Strategy of DMart

Talking about the product strategy of DMart, as previously said, it offers a
wide range of products, the company has segmented its wide range of
products into three categories, i.e. Foods, Non-foods and General
Merchandise and Apparel.
Under its Foods Category – It offers groceries, staples, processed foods,
dairy, frozen products, beverages & confectionery and fruits & vegetables that
contributes close to 52 percentage in revenues
Under its Non-foods Category – It offers home care products, personal
care products, toiletries and other over-the-counter products that contribute
close to 21 percentage in revenues
Under its General Merchandise and Apparel Category – It offers bed & bath,
toys & games, crockery, plastic goods, garments, footwear, utensils and home
appliances that contributes close to 29 percentage in revenues
DMart also sells a variety of products under its own name through brand
names such as DMart Minimax, DMart Premia, D Homes, Dutch Harbour.

Price Strategy of DMart

DMart deeply discounts its merchandise and offers products at less than
competitive prices. Thanks to this strategy, it has succeeded in creating an
image as a low-cost retailer and has attracted customers who are price
sensitive.
The company prides itself on being able to provide affordable prices to its
customers regardless of whether they live in urban areas or rural areas.
Its pricing is usually less than the Maximum Retail Price (MRP) except for
vegetables, fruits, and medicines. During festival seasons, these low prices
make customers buy products in bulk quantities which results in a huge
volume of sale.
The pricing strategy of DMart is the major reason why its supermarkets’ chain
has been one of the most successfully operated entities in the country
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Place & Distribution Strategy of DMart

DMart is the fastest-growing supermarket retail brand in India. As of 2020, DMart
has about 214 stores present in about 11 states and 1 union territory and is
constantly expanding its stores’ footprints.
DMart stores are present in a major part of India which includes a
presence in cities like Ahmedabad, Hyderabad, Bangalore, Chennai,
Mumbai etc.

All of its stores are strategically placed as

this helps the company to gain a
competitive advantage as easy
accessibility attracts customers and also
leads to proper transportation facility for
logistics and operations related functioning
which is very important for the survival
during uneven times and to accelerated
growth of the business during the normal
times.

It also offers online ordering & delivery as

well as takeaway service under its DMart
Ready vertical.

Promotion Strategy of DMart

DMart, being the largest multi-brands in
India, has been maintaining its
positioning as a supermarket offering
products at lower prices.
They offer various coupons to reward the customers and employees and thus
boost their sales in the market. Coupons are also allotted to the customers
when they meet certain standards of bulk purchases.
For instance, during the festive seasons, they offer 15% off on sweets and
various other products. It also offers goods at 50% off or at one plus one
free offer.
The company however doesn’t engage in aggressive marketing promotion but
chooses to promote itself through Newspaper Ads and Outdoor Ads. It also
recently collaborated with HDFC Bank and offered additional discounts on
payments done with HDFC Cards.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

This is how DMart’s lines up on the parameters of the marketing mix model.

1.3 SWOT ANALYSIS OF DMART

DMart is a supermarket and hypermarket retail chain that is based out of

India. The chain which is a multi-category retailer offers a wide range of
products under its umbrella. Some of the categories it deals with include
consumer goods, groceries, personal care products, home care solutions, deli,
kitchenware, furniture and home appliances.
The company was started by Mr. Radhakishan Damani with the objective of
offering value-based products to families across the country at affordable
rates. The retailer is said to be modelling itself on Big Bazaar and
follows similar pricing strategy. The company that is headquartered in Mumbai
also sells a lot of its private labels such as DMart Premia and DMart
Minimax.
DMart has multiple stores at
various location across India and
also a fairly well spread out
distribution channel. The company
registered an annual revenue of
1.86 billion USD in the year
2016 and the business is expected to also showcase a steady growth.

Strengths in the SWOT analysis of DMart:

Strengths are defined as what each business does best in its gamut
of operations which can give it an upper hand over its competitors. The following
are the strengths of DMart:
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

• Focus on long-term: Damani, the founder of DMart is an investor and

thus the company has been focused entirely on long-term gains. This
has made the company maximise its returns through a value is driven
pricing strategy.
• Slow scaling up: DMart started off on a very low key note and slowly
took its time to move up the ladder. This gave the company a better
control and deeper understanding of its supply chain and also helped
they manage the bottom line better.
• People-centric management style: DMart has a very good employee
policy in place and is very transparent in its employee relations. They
also have a good relationship with vendors and suppliers and the
stakeholders are happy.
• Discount Policy: One factor that delineates DMart from its competitor
is its huge discount policy. The retailer sells essential goods at a flat
discount price which most competitors cannot match and this helped
them penetrate the market.
• Clear price based differentiation : DMart never followed the trends set by
other competing retail brands but believed in setting their own trends.
They captured the market through a clear price based differentiation
and priced their goods at significantly lower prices than competitors.

Weaknesses in the SWOT analysis of DMart:

Weaknesses are used to refer to areas where the business or

the brand needs improvement. Some of the key weaknesses of DMart are:
• Focus on certain places: Quite unlike their competitors, who are
present everywhere, DMart has focused more on the Western States
and has a very low presence in the South. This has restricted them
from gaining market prominence.
• Slow growth: DMart has established almost 16 years ago much before
the retail boom set a fire in India. However, it has not been able to
capture the market even as much as many of the later entrants
primarily because of its long-term focus.
• Sustainability of low pricing: The Company has a zero credit policy and
thus vendors and suppliers give them a much better price which is
how the company is able to afford the low prices that the competitors
cannot imagine.
• No frills: DMart follows a no-frills approach where the focus in to cut
costs wherever possible. Their facilities are basic and lack the frills
of most upmarket retailers. The customers who come here essentially
look at the low prices of products on offer. So thus the sustainability
of this differentiator is questionable.

Opportunities in the SWOT analysis of DMart:

Opportunities refer to those avenues in the environment that surrounds the
business on which it can capitalize to increase its returns. Some of the
opportunities include:
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

• Technology: Technology has a

lot to offer to retailers in terms
of in- store experiences and
retailer can use IoT, artificial
intelligence etc. to create value-
adding services to their
customers for which a
premium can be charged.
• Personalization of
services: Customers are
looking for personalized
services for which they are
willing to pay extra.
Retailers should capitalize on this propensity to pay more and increase
the quality of their services.

Threats in the SWOT analysis of DMart:

Threats are those factors in the environment which can be detrimental to
the growth of the business. Some of the threats include:
• Online retailers: People in cities especially are highly lethargic about
leaving their homes and prefer to shop online today.
Companies like Amazon and Flipkart thus become major threats to
most retailers.
• Online Start-ups: The hottest trend in India is online start-ups. Many of
them are aggregators who bring together the supplier and the
customer cost- effectively. These companies are the emerging threats
more so because many new brands are cropping up in the
aggregation market primarily because of lower barriers to entry.

DMart is operating in 2 business Models

These are basically a Mall or Super market Stores. DMart Pickup Points:
These are the Small Stores near you where you can collect the order
placed
online. DMart online Store by the name of DMart Ready: DMart Ready is
Mobile application. Just Download it and start shopping.

1.4 COMPETITIVE STRATEGIES OF DMART

Avenue Supermarts, also popularly known as DMart, was founded by stock

market veteran Radhakishan Damani in 2002. Having its presence across
12 states through 214 stores, DMart has followed a very calibrated
expansion strategy compared to its peers like Reliance Retail and Big
Bazaar.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

What is EDLP?
EDLP stands for an Everyday low price. Essentially, it means the retailer
will provide the lowest price on an assortment of items on a daily basis. This
contrasts to the strategy generally followed in retail or eCommerce wherein
companies come out with certain days of ‘flash sales,’ and usually, prices
resume normalcy post the discount period. EDLP is known to generate
more customer loyalty and is also known to make consumers spend more
when inside the store.

How DMART adopted the EDLP strategy?

• High Inventory Turnover- Inventory turnover is the holy grail of
retail. It basically is a number that says how quickly a retail outlet
can churn its products. In other words, how quickly the products are
flying off the shelves.The best way to achieve this is by only stocking
those products that are high in demand made by big brands with a
higher brand recall. DMart has striven to stay away from higher value
items and only keeps everyday use items such as food and groceries.
DMart strives to have an inventory turnover that does not exceed 30
days, while competitors have an average turnaround time of 70. This
means that DMart can get their products off their shelves in less
than 30 days, which helps them save on costs to maintain unsold
inventory and storage costs.
• Low payable days- Retailers buy their products from vendors on
credit. Basically, they take delivery of the product upfront but pay after
a certain period. DMart never delays its payments to vendors, and in
fact, they have one of the lowest payables days in the industry of
7.9 days.
This helps because creditors are happy to offer more discounts to DMart
on the products since they can recover their dues faster. These
discounts are further passed on to the customers of DMart. They also
buy their products in bulk and huge volumes from their vendors,
which means they get more discounts.
This can be seen in the graph below:-
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

• Low operating cost- DMart is very efficient in conducting its

operations. Retail can be a very cost-intensive business to run. Think
of all the major expenses a retail store has to incur – rent, utilities,
and employee expenses. All these expenses are fixed in nature.
DMart not only optimizes its operations but also actively lowers its
procurement costs, both of which it passes on to its customers. They
work on a low interior cost concept. They optimize their floor space
utilization by putting more products in lesser space and having fewer
billing counters, which reduces their employee costs.
• Store ownership and location- Unlike its competitors who lease out
spaces to run their retail stores, DMart actually owns every store it
operates. That means they buy the land and build their store on
their own. While this is a capital expenditure for the company, it saves
on the huge rental costs, which can be a huge proportion of their
revenue.
Secondly, DMart places its stores very strategically in the suburbs and
in tier 2 and tier 3 cities where operating costs will be lower. They
avoid opening stores inside malls since that involves huge Common
Area Maintenance charges.
• Low debt and Interest Costs-
DMart has a very low amount of debt on their balance sheet which
means they don’t have to incur huge interest costs that reduce their
profits.

Top Competitors of DMart

 Mahindra Retail Private Limited- 2,241. $448 Million.
 HyperCITY Retail Ltd. - INR 9 billion
 Aditya Birla Retail Limited. 5,932. $300 Million.
 Big Bazaar. - $4.4 billion
 Home Accessories Decor. US $169 billion
 Kataak.com. 372. $74 Million.
One reason is his reliance on local supplies instead of elaborate supply chains.
Though D-Mart started 16 years ago, it still has 119 stores in a few states, a
small number compared to those owned by Ambani and Biyani. Instead of
rapid expansion, Damani adopted a slow pace which gave him his focus on
profitability.
In an era where E-commerce has gained huge momentum, operating a brick
and mortar retail store can be a daunting task in itself. Offline retailers
need to offer excellent value propositions to attract their customer base and
keep them loyal.
While DMart has also recently made strides into E-commerce through DMart
Ready, its offline presence still commands the lion’s share of its revenue.
Offering the widest assortment of products. The success of DMart can clearly
be attributed to its unique strategy that focuses on maximizing customer
value.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

2.ANALYSIS of AMAZON

2.1 Mission, Vision & Values

MISSION
"We strive to offer our customers the lowest possible prices, the best
available selection, and the utmost convenience."
This corporate mission promises attractive e-commerce services to satisfy
target customers' needs. The company focuses on the variables of price,
selection, and convenience. In this regard, the following characteristics are
identifiable in Amazon's corporate mission statement:
• Lowest prices
• Best selection
• Utmost convenience

VISION
"To be Earth's most customer-centric company, where customers can find and
discover anything they might want to buy online. "
This vision statement underscores the business organization's main aim of
becoming the best e-commerce company in the world. In this regard, the
following characteristics are identifiable in Amazon's corporate vision
statement:
• Global reach
• Customer-centric approach
• Widest selection of products

VALUES
• Customer Obsession
• Ownership
• Invent and Simplify
• Learn and Be Curious
• Hire the Best
• The Highest Standards
• Think Big
• Bias for Action
• Earn Trust
• Deliver Results
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

2.2 Amazon's strategy

Amazon's mark-up strategy

Amazon itself does not have a mark-up strategy. Therefore, it's up to
Sellers to determine how much mark-up they want to add to their online
products and set healthy margins.
For low-margin products, consider raising the price or strategically bundling
the product with a high-margin product. You can also try to cut production
costs.
It may be worth it to increase your marketing spend for high-margin
products, shoot for cross- and up-sells, and devote more time to the
development.

Amazon's positioning strategy

Amazon's brand is built on customer satisfaction. It wants to be known as the
most customer-friendly company on the entire planet. This means Amazon
intends to position itself as the most convenient company with the lowest
prices and the best customer service out there.
Amazon essentially achieves this goal, and it's developed a strong brand
as a result. A 2019 survey of 2,000 US shoppers found that 89% were more
likely to buy products from Amazon than other e-commerce sites. The same
study found that Amazon was indispensable through the customer journey,
especially when it came to reviews. As Kiri Masters writes in Forbes.
Two-thirds of respondents (66%) typically start their search for new products
on Amazon, compared with one-fifth (20%) who start on a search engine
such as Google…and when consumers are ready to buy a specific product, 74%
go directly to Amazon.

Amazon sales strategies

Being successful on Amazon comes down to working hard and thinking about
the customer. The company rewards Sellers who put the customer first
and offer a consistently great experience.
But what does that look like in real life?
If you want to sell on Amazon, you should have one goal: getting your listing
into the so-called "Buy Box."
The Buy Box is the box on the right side of any product listing. It has two
significant calls to action: Add to Cart and Buy Now.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

If several third parties sell the same product, the Seller who "wins" the Buy
Box is the Seller whose item gets added to shoppers' carts when a
customer clicks on either of these CTAs.
Statista estimates that 82% of Amazon sales go to the winner of the Buy Box.
This number is higher for purchases on Amazon's mobile platforms, whether
that's the app or web browser.
Winning the Buy Box is a complicated dance, and it requires work across
all aspects of your Amazon business. Much like Amazon considers
customer satisfaction in its every move, so do its Sellers. So to win the Buy
Box, delivering an excellent experience should be at the top of your
priorities.
Amazon takes a holistic view of Sellers when considering who to feature in
the Buy Box.

2.3 SWOT Analysis of Amazon

Amazon's Strengths – Internal Strategic Factors

• Strong brand name – As a global e-commerce giant, Amazon has a
strong position and successful brand image in the market.
• Brand valuation – According to Interbrand's Global Brand Ranking
2020, Amazon is ranked at #2 position (Apple at #1 and Google at
#3), with a brand value of $200 Billion.
• Customer-oriented – Amazon caters to a large number of customers
for everyday needs at low prices. This has made it a customer-oriented
brand.
• Differentiation and Innovation – Amazon frequently brings creative ideas
and innovative additions to its product line and service offerings like
ambitious drone delivery service and Withing’s Aura Smart Sleep
System. This creates differentiation from other companies.
• Cost Leadership – Amazon doesn't incur costs in maintaining physical
retail stores by selling everything online. With economies of scale,
Amazon efficiently controls its costs and lowers its inventory
replenishment time. The company has formed numerous strategic
alliances with many companies like Evi Technologies, Thalamic Labs,
Shofar, The Orange Chef, etc. It has a robust value chain system which
also helps in maintaining a low-cost structure.
• Largest Merchandise Selection – Amazon owns an extensive product
mix that attracts online customers to make their most purchases from it
rather than other online retailers. As of 2018, Amazon has sold
562.3 million products in its Amazon.com Marketplace.
• A large number of third-party sellers – Due to the high traffic
volume on Amazon's sites, many third-party sellers have joined the
platform of Amazon
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

to sell their own merchandise. The data from Fulfilment by Amazon

(FBA) reveals that there are more than 2 billion items available from
third-party sellers.
• Go Global and Act Local strategy – This strategy has benefitted Amazon
the most. Amazon develops partnerships with local supply chain
companies that help it in competing against domestic e-commerce
rivals. In addition, it understands the local needs and launches its
services as per the country's culture.
In India, for example, it has launched a market campaign, "Aur
Dikhao," to encourage users to search more of its products.
• A large number of acquisitions – The successful acquisitions of Whole
Foods, Zappos.com, woot.com, Junglee.com, IMBD.com, and many
others have produced significant revenues and profits for Amazon.
• Involved into 3 key businesses – Amazon Marketplace, Amazon
Web Services (AWS), and Amazon Prime are 3 key businesses of
Amazon which work and support each other. As a whole, they generate
massive profits and advantages for the company.
• Market Leader – With over $1 Trillion market capitalization and above
$386 billion annual revenues, Amazon is indeed a market leader in
the online retail industry.
• Superior logistics and distribution systems – Amazon uses highly
efficient logistics and distribution systems. It even has fixed rates for
different delivery time periods. Thus, it executes reliable, secure, and
fast delivery of goods and products to the customers.
• Minimum pay raise to $15 per hour – Amazon is among the first
companies in retail to raise its minimum hourly pay to $15. In
comparison, Target pays $12 per hour, Walmart pays $11 per hour,
and Costco pays $14 per hour.

Amazon's Weaknesses – Internal Strategic Factors

• Easily imitable business model – Online retail businesses have become
quite common in this digital world. So imitating Amazon's business
model for rival firms is not so difficult. A few companies are even
giving Amazon a tough time. These include Barnes & Noble, eBay,
Netflix, Hulu, and Oyster, etc.
• Losing Margins in Few Areas – In few areas such as India, Amazon has
faced losses. It's free shipping to customers can be one reason to
expose the risks of losing margins in some markets.
• Product Flops and Failures – Its Fire Phone's launch in the U.S. was
a big failure, while its Kindle fire device didn't even grow well.
• Tax Avoidance Controversy – Tax avoidance in Japan, U.K., and the U.S.
has sparked negative publicity for Amazon. President Trump criticized
Amazon over taxes on social media.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

• Limited brick-and-mortar presence – Amazon owns minimal physical stores.

This sometimes hinders attracting customers to buy things that are
not sellable in online stores.
• Declining consumer safety – As its offerings increase, it is becoming
a challenge for Amazon to vet each product and guarantee the highest
level of security. The U.S. Environmental Protection Agency (EPA)
recently had to order Amazon to remove a wide range of pesticides and
unsafe products on its platform.
• Unfair use of third-party data – Engaging in unfair trade
practices undermines trust and increases legal risks. Amazon is
facing antitrust charges in the European Union for collecting and using
data from third-party to compete against them. If found in violation,
Amazon can be fined up to 10% ($28 Billion) of its 2019 annual
revenue ($280 Billion).
• Overdependence on distributors – Relying on distributors exposes
Amazon to a wide range of issues. One of its leading distributors
(German Logistic Group – Deutsche Post DHL) can leverage its position
to renegotiate terms.
• Employees Strike – Strikes can grind Amazon's operations to a halt.
For example, in Germany, Amazon employees went on strike due to
unsafe working conditions and paralyzed procedures in six distribution
centres.

Amazon's Opportunities – External Strategic Factors

• Amazon can gain the opportunity to penetrate or expand its
operations in developing markets.
• By expanding physical stores, Amazon can improve competitiveness
against big-box retailers and engage customers with the brand.
• Amazon has the opportunity to improve technological measures
and organizational policies to reduce counterfeit sales. One case of
counterfeit sales came to light when Amazon sold a fake, My Critter
Catcher. The product was sold for $1 less than the original product.
• Can do backward Integration by expanding its production of in-house
brands such as Amazon basics to differentiate its offerings and
improve profit margins.
• More acquisitions of e-commerce companies can increase the
company's market share and reduce the competition level.
• Self-Driving Technology – Amazon recently acquired California-based
self- driving start-up Zoox Inc for a whopping $1 Billion. It can now
leverage autonomous technology to exploit the increase in demand for
ride-hailing services or use it to improve its delivery network.
• Launch of electric rickshaws in India– Amazon pledges to make a
positive impact on the environment. With this vision in mind, Amazon
plans to deploy 10,000 electric rickshaws for delivery in India by 2025.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Amazon's Threats – External Strategic Factors

• Few controversies have caused a dent in Amazon's brand image.
People critically reacted and boycotted Amazon sites in 2010 when they
found that it's selling the book "The Paedophile’s Guide to Love &
Pleasure: A Child- lover's Code of Conduct."
• Government regulations can also threaten the business proceedings
of Amazon in some critical countries. For example, Amazon does not
ship to Cuba, Iran, North Korea, Sudan, and Syria.
• Links to exploitative labour – Amazon is one of three retail giants
facing scrutiny from the U.S. State Department for maintaining supply
chains and labour sources associated with human rights abuses. This
exposes the e- commerce giant to reputational, economic, and legal
risks.
• Increasing cybercrime can affect the network security system of the
company.
• Aggressive competition with big retail firms like Walmart and eBay can
give Amazon a tough time in the future. In addition, now Amazon
competes with the following companies:
1. In Video Streaming Service: Apple TV+, Netflix, Disney+
2. In Logistics: FedEx
3. In Self Driving Technology: Tesla, Uber, Ford
4. Imitation is simple as many new entrants are coming up in the
market, usually with the same business model as Amazon.
• Fake Products – The increase in counterfeiting and fake products
threatens Amazon's profits. For example, the company recently filed a
lawsuit against a New York-based online retailer for allegedly
counterfeiting Valentino shoes, a luxury Italian shoe brand offered by
Amazon.
• Economic Recession – Amazon is not immune to an economic
recession. If economic uncertainty worsens, it can impact Amazon's
sales.
• Fake reviews – Amazon has an overwhelming amount of fake reviews,
and the problem has worsened in recent times due to the pandemic.
Product reviews are a critical indicator of quality and authenticity, and
customers rely heavily on reviews to make purchases. According to
the Financial Times investigation, Amazon has deleted over 20,000
fake 5-star reviews from its top U.K. reviewers.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

3.ANALYSIS of FLIPKART
3.1 Mission, Vision & Values

MISSION
The Flipkart mission revolves around "Delivering a delightful customer experience"
- they use a slogan "Ab har wish hogi poori!"

VISION
Flipkart's current vision is to “become Amazon of India”. When you consider
that Flipkart is one of the most promising tech companies of the next
decade, and Amazon has already entered the Indian market, there is a great
need for them to revise and reinvigorate their long-term goal and vision and a
new brand idea for the one to come to develop the future.

VALUES
There are 5 values that flipkart
puts emphasis on: -
o Customer First
o Ownership
o Bias for Action
o Audacity
o Respect
o Honesty
o Communication
o Innovation

As other companies follow some of these values Flipkart has these traits
and demonstrate these qualities, it stands out from crowd because it lives
these values.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

3.2 STRATEGIES

FLIPKART MARKETING MIX (4PS) STRATEGY

Flipkart product strategy
Flipkart sells products in more than 80+
categories, from books, clothing to
electronics, cell phones and home appliances.
Flipkart can be seen as a service platform
that acts as an interface between sellers and
buyers. Therefore, the product range in the
marketing mix is roughly divided into two
areas:
- Product to the seller
- Product to buyer

Flipkart price / pricing strategy

Flipkart has built its pricing model to
compete with other ecommerce players. By
following the marketplace model, Flipkart
reduced the price by forcing sellers to
compete with each other to offer the
cheaper product. Flipkart does not charge
any fees for its delivery service if the order
is more than 500 rupees, but charges a
nominal charge of less than 500 rupees in the case of Flipkart insured. If
the product is shipped directly from the seller, the seller's shipping costs
apply. Flipkart also offers one day delivery where the product is delivered
within one day, but in this case, Flipkart will charge an additional service fee
and installation option at one price in certain locations. This gives an overview
of the pricing strategy in the marketing mix of the flip kart.

Flipkart placement and distribution strategy

Flipkart follows a hub-and-spoke model. It has
21 state-of-the-art warehouses. Here the
products are first sorted and packaged. The
goods are transported from these warehouses
or fulfilment centres to the parent centres.
Mother Hubs are located in the centre of a
200-kilometer radius zone made up of 3 to 5
major cities, which made up the bulk of the
demand, as well as numerous
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

smaller cities. From the parent hubs, the goods are transported to local hubs,
from where the delivery van or bicycle picks and delivers the products.
Flipkart delivers products to customers across India through an extensive
delivery network.

Flipkart advertising and promotion strategy

Flipkart started its famous campaign
in 2011 under the name “No
kidding, no worries”. Here the
campaign was about children playing
in adult roles. These ads have
been making a comeback recently
but now focus on “Best of
Everything on Flipkart #PerfectBuy!
". Flipkart was aggressive in its
promotion and advertising strategies
as part of its marketing mix. Flipkart advertises through print media
sometimes through a full-page ad, especially during Big Billion Day. Big Billion
Day is a Flipkart promotional tool where Flipkart sells products at a cheaper
price throughout the day, sometimes with huge discounts. Flipkart has other
promotional tools on its website and app such as the great freedom sale, the
deals of the day and the offer zone page.
•Uses its app to send pop-ups to its customers with the latest offers
• Leverages data mining and Adwords to deliver dedicated advertisements
to potential customers
Since it's a service marketing brand, here are the other three Ps to make
it Flipkart's 7Ps marketing mix

People strategy
Flipkart's direct contact with the buyer is through the customer care centre,
which takes into account cancellations, supplier issues, product damage and
other issues that the customer may face while conducting a transaction.
The other way of contacting buyers is through the app and website. These
modes are indirectly related to the people in the company as the IT
infrastructure and website need to be updated and protected from crashes
as this can lead to huge losses for buyers, sellers and Flipkart as a whole.
Contact with the seller takes place via the seller portal on Flipkart and via
the business development managers. If the buyer ensures Flipkart, the
packaging and packaging of the product will be done by Flipkart
executives and the product will undergo 6 quality checks that will help the
seller to offer high quality products to customers. For this purpose, Flipkart
hires highly qualified people.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Physical evidence strategy

Flipkart offices, shipping boxes, packing
materials, etc. are part of the physical
evidence. The product delivered by Flipkart
is well packed and padded to prevent
damage to the product. As already
mentioned, the product also goes through 6
quality controls in order to deliver high
quality products. The prompt delivery of
the product, the 30-day return
policy, the website and app user interface and the cash on delivery option
complete the physical environment of Flipkart.

Process strategy
Flipkart has several business processes in place to ensure the smooth
execution of its services and deliveries. As soon as the person lands on the
Flipkart page, the offers and the products previously browsed by the
customer are listed. The buyer can choose to purchase the product or add it
to the shopping cart and purchase other items. Once the product is ordered,
the product is packaged, processed and shipped from the fulfilment centres.
The product can be tracked by the user from the fulfilment centre to the
actual point of sale. With cash on delivery, the person pays the amount to
the person delivering the product. Otherwise, for online payments, Flipkart's
payment gateways will be used to purchase the product. Every process is
ensured by Flipkart to be trouble-free and error-free. This completes the
Flipkart marketing mix.

Flipkart business model:

The Flipkart's online platform is a B2C (Buyer to Consumer) model that is
an effective way to provide extensive shopping opportunities for Indian
consumers. As a popular online marketplace, Flipkart also enables the various
sellers from across the country to sell their products in different categories on
the online platform. It also encourages the sellers to offer various attractive
discounts to the buyers or consumers so that their products are sold and they
make significant profits. The sellers receive certain amounts from Flipkart
after the deduction of Flipkart's commission for the services provided to
the sellers.
The different options Flipkart chooses when formulating its business model
include:
 Improvement of the entire Flipkart website.
 Introduction of the web app for users.
 Introduction of the mobile app to consumers and their optimization.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

 Promote the products and services on the various social websites

like Facebook, YouTube, Twitter, Instagram and many more.
 Proper offline advertising and promotions based on the banners and
TV commercials.
 Use of affiliate networks such as coupon websites, review websites,
bloggers and much more.
According to Flipkart's progressive business model, the percentage of
commission that Flipkart charges from different sellers on its online portal
may vary depending on the type of products and the type of sale. It is usually
between 5 and 20 percent, depending on the type of services used by the
sellers. Flipkart has also introduced the various other forms of income into
the business model, such as the marketplace, the collection of listing and
convenience fees, logistics from consumers, digital media such as the jointly
advertised products, Myntra - another e-commerce website in the Owning a
Flipkart and more.

3.3 SWOT Analysis of Flipkart

Now let us get to the SWOT analysis of Flipkart.

You will see how the internal and external factors affect Flipkart and its
success. You can also analyse and indicate the strategic improvements that
the company can cater to in future.

Strengths of Flipkart
 Exceptional Brand Recall: Flipkart enjoys a good brand recall through
online branding, social media and its TV ads. For example – “big billion
days” and advt. of small kids acting like adults in their adv. Also it
has tie ups with celebrities such aa Virat Kohli, Alia Bhatt, Ranbir
Kapoor etc.
Tag lines like ‘Ab Har Wish Hogi Poori’ and “India ka Fashion Capital’
are trending amongst Indian consumers.
 Experienced Foundation: The online retail industry in India was making
its child strides back in 2007-08 and around then Flipkart originators
Bansal brothers who had recently worked at Amazon were driving the
firm. Their specialized aptitude in online retail industry facilitated
Flipkart development and conspicuousness.
Even after Amazon passage, the opposition is as yet ferocious inferable
from the extraordinary establishments laid by them.
 Strategic Acquisitions & Partnerships: Flipkart has reliably had the
option to set up tie-ups with preferences of Myntra, Jabong, Walmart on
the grounds that it needed to set its position.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Having a different brand relating to form and one for computerized

instalments (PhonePe) contributes enormously to mark value.
Further, Flipkart has entered numerous essential associations like
Ekart, Chakpak, Letsbuy, Walmart and so on This empowers Flipkart to
reinforce their logistics, payment gateways and digital content
creation.
 High Volume & Range of Products: Flipkart has a plenty of value item
choices to look over in each class they sell.
Selective tie-ups with famous brands like Lifestyle, Apple, Motorola, and
Xiaomi in the past just as empowering in-house brands like Citron,
Digiflip and MarQ and so forth have assisted with their large catalogue
of products.

Weaknesses of Flipkart
The online retail giant, Flipkart also faces some internal weaknesses. Let us
have a look at some of them.
 Excessive Advertisement Expenses: Flipkart spends as much as 30% of
its yearly incomes on showcasing and promoting, a lot higher than
HUL. Presently, that is a lofty benchmark!
Flipkart depends on hefty limits, spending crores to draw in and hold
clients since it needs higher perceivability across mediums.
What's more, Flipkart detailed a deficiency of Rs 1950 crores in
FY2020 despite the fact that income developed by 32%.
Consequently, 'Big Billion Day' has become a brand name yearly
deal occasion for online customers. Yet, inordinate spends on
advertisements isn't supportable over the long haul.
“Flipkart Plus” is just a straightforward prizes program for customers.
They have neglected to construct more noteworthy impulse around it
and marking it for clients to go through cash to get that 'In addition
to' membership.
 Lack of Technological Innovation: Flipkart distribution channels and effort
are restricted and no place similar to its top rivals. The store
network and coordination’s for the items conveyed to clients’ needs
huge upliftment.
The Just-in-Time stock way of thinking should be followed as delivery
times and lead times to finishing request is excessively high for
Flipkart. Further, Flipkart has needed on the R&D part of innovation -
steering clients from different mediums to their site precisely how
Alexa helps Amazon.
 Rapid Acquisition Spree: Flipkart has been of late looking to up the game
by zeroing in on improving client experience. It's anything but a large
group of start-ups like Mech Mocha (social gaming) and AR start-up
Scapic. Given that the organization is purportedly posting
misfortunes, and contest is warming up, so siphoning assets on
improving client commitment on their foundation isn't by and large
main goal. This fast securing binge may end up being harming for the
funds.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Opportunities of Flipkart
While there are many obstacles on the way, there are situations where
Flipkart can benefit and leverage from. Let’s take a look at the
Opportunities
 Post-Pandemic Sentiments: Very much like COVID has wreaked
havoc globally, it additionally gives incredible impulse to embracing
'advanced'. As an ever-increasing number of shoppers are staying alert
and changing to online utilization of administrations.
You may be requesting your day by day basics however these E-trade
sites. It's anything but a brilliant chance for Flipkart to snatch on. They
ought to expand its scope of contributions zeroing in on shopper
assessments and bits of knowledge.
 Market development: Having a trust towards computerized economy and
retail, Flipkart ought to enjoy new market improvement and broaden its
administrations.
Flipkart must be getting across lines of India and serve clients from
adjoining topographies like South-East Asian countries. Since these
countries have an appeal for online retail.
Going into joint endeavors with nearby players, Flipkart can hope to
enhance its income from substitute business sectors.
 Delivery excellence: Order returns, refunds, cancelations, redressal
of delivery issues and phony item conveyances and so forth are issues
Flipkart should upgrade in their positions. Flipkart should attempt to
decrease the delivery times and increment its operational productivity
for level 2 and 3 urban communities in light of the fact that rural
dwellers are presently struggling to web-based shopping.
 Secure and streamline payments: Better online secure installments can
impart more trust in individuals to shop on the web. India has one
of the greatest number of cell phone clients on the planet.
Flipkart can hope to smooth out installments for their orders through an
in- house installment administration like Amazon Pay to incorporate
new product offerings.
Furthermore, Flipkart can likewise hope to ride on the influx of Vocal
for Local suppositions in India permitting more MSMEs to sell on their
platforms.
 COMPARATIVE STUDY ON RETAIL & E-COMMERCE

Threats of Flipkart
In this era of intense competition for survival, there are some threats of
Flipkart that it must be vary of. Let’s take a look at them
 Threat of Intense Rivalry: There is no lack of competitors in the online
retail space. Be it global players like Amazon, eBay, and Alibaba or local
ones like Shop clues, Snapdeal, and Paytm etc.
Presence of such countless adversaries selling comparable items hugely
decreases incomes.
Two top firms in Amazon and Flipkart are secured a skirmish of
consuming money, offering happy deals, and driven cash implantations
from investor. Since the two of them need to conquer the Indian online
retail advertise and expel the other.
 Buyer Power & Switching: The online retail market is immersed with
Snapdeal, Paytm, eBay, Myntra Reliance Digital, and Nyka etc.
Customers noticeably have lower exchanging costs; they immediately
change starting with one web-based shopping site then onto the
next.
The items are generally the equivalent separated from a couple of
brands. Thus, 'standing out' is hard most definitely.
 Stringent Government Regulations: Flipkart was investigated related to
violations of competition laws in 2020 by Competition Commission of India.
Indian government likewise practices severe control and observing of
FDI and funds from unfamiliar financial backers into Indian firms. This
prompted numerous legitimate issues and operational issues for
Flipkart (now claimed by US-based Walmart).
Additionally, in wake of Indo-China strains, expansion of phony
products on online retail locales has been met with severe measures.
The proposed approaches expect I organizations like Amazon and
Flipkart to guarantee that shipments from abroad are channelized
through the course of the tradition and have an enlisted business
element in the country.
 COMPARATIVE STUDY ON RETAIL & E-
COMMERCE

PRODUCT STRATEGY
Three categories of Product  Holistic view of  Product to seller
 Food sellers.  Product to buyer
 Non – Foods  Suggestion of relative
 General Merchandise products

PRICING STRATEGY
 Price is usually less than  Sellers determine  Reduction of price by
MRP mark-up forcing sellers to
 Low cost retailer image  Bundling low margin compete with each
 Pricing strategy is major product with high other
reason for its success. margin
 Marketing spend for
high margin products

PLACE STRATEGY
 Competitive Advantage  Lowest prices and  Delivers product to
 Proper transportation for best customer customers across
Logistics service. India through an
 Operations related  Amazon developed extensive delivery
functioning itself as a strong network
brand.

PROMOTIONAL STRATEGY
 Coupons to reward  Company rewards  Advertisement
Customers and sellers through print media
Employees.  Prime Video, Amazon  Big Billion Day is the
 Newspaper and outdoor Pay Flipkart’s promotional
Advertisement tool
 Collaboration with
Private banks

COMPETITIVE STRATEGY
 Everyday Low Pricing  Cost leadership  Three additional
(EDLP) for customers strategy for strategy i.e. People,
customers to provide Process and Physical
with alternate Evidence Strategy
affordable product