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E commerce industry
The document provides an overview of the Indian e-commerce industry and key players such as Flipkart. It discusses the growth of e-commerce in India, challenges faced, and analyses companies like Flipkart in terms of their business models, operations, marketing strategies, and future prospects. SWOT analyses are also presented for Flipkart and the e-commerce industry in India.
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E commerce industry
- 1. INDIAN E-COMMERCE INDUSTRY Swayam D. Faiz A. Reetu Y. Lavish S. Prakash s.
- 2. INTRODUCTION E-Commerce stands for Electronic Commerce Pertains to trading in goods and services through the electronic medium It is all about speed, connectivity, and sharing and exchanging goods, services and information Javalgi and Ramsey (2001) Ecommerce is the use of the internet “for exchanging information of value between firms and their trading partners, employees, and customers with the absence of geographical and time restrictions” Barnes-Vieyra and Claycomb (2001,p.13)
- 3. SCOPE India isshowing tremendous growth in the Ecommerce With the middle class of 300 Million people, online shopping shows unlimited potential in India
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- 6. E-COMMERCE IN INDIA Various Websites providing variety of goods and services such Flipkart, Home Shop 18, MakeMyTrip, Bigbasket, Bagskart etc. There are total 1938 e-commerce companies in India(Oct, 2012) Domestic e-commerce market has the potential to grow between $ 125 Billion and $ 260 Billion by 2024-25 In India E-commerce is facilitated by Information Directories and Banks (Net Banking, Phone Banking, Credit Card, Debit Card) Most difficult challenge for Indian e-commerce industry is : We still belief of touch and feel concept. People are not comfortable with online money transaction
- 7. SWOT ANALYSIS STRENGHTS Nicheproduct selling Low barrier and overhead cost Direct customer communication WEAKNESS High customer expectations Search engine unpredictability Govt. rules and regulations Indian's are still believe in touch and buy concept Active internet users are very low in number
- 8. OPPORTUNITIES Global exposure 24/7 business Increasing network across the companies FDI in ecommerce has stopped, so Indian players have a good opportunities THREATS Direct selling of the brick and mortar shops are increasing Chance of hacking: security issues Future legislations Less scope of innovation
- 9. INTRODUCTION TO FLIPKART Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka Founded by Sachin Bansal and Binny Bansal in 2007 Started with 4Lacs Then added two venture capital in 2009(Accel India) and 2010(Tiger Global Management) Flipkart focused on online sales of books but it later expanded to electronic goods and a variety of other products
- 10. A BRIEF HISTORYOF FLIPKART GROWTH Source: Flipkart Blog
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- 13. Source: Flipkart Blog
- 14. FLIPKART FUNDING Venture capital Private Equity Flipkart
- 15. OVERVIEW Bansals controlsabout 37% of flipkart equity,while Accel partners and Tiger Global controls 48%. Management holds remaining 15%. Total Revenue of the company Rs 500 crore in 2011-2012. As per the previous year Rs 50 crore in 2010-11. Largest online Book retailer in India with 80% market share. Two million customer base and total daily sales of Rs 2.5 crore.
- 16. WHY FLIPKART ISLOSING MONEY? MRP of Strategy Books Rs 499. Estimated cost at which flipkart gets it from Publisher Rs 299 (Assuming 40% Margin ) Cost of delivering it to a customer outside of eight cities Rs 344 ( Assuming Rs 45 for delivery cost) Charge levied by logistics partners Rs 379( Assuming Rs 35 on order size) Price at which sold to consumer :Rs 324. REMEDY OF THE PROBLEM Increase the price of the books Changing Consumption pattern: Increasing the ticket size In future their logistics will increase. Hence costs related to delivery will be reduced.
- 17. WHAT IS RIGHTWITH FLIPKART? Understanding Customer psychology Gaining Trust Expanding the market Diverse Product Categories Good use of SEO Good use of Social Media Optimization Outstanding delivery Introduction of new technologies in regular intervals.
- 18. OPERATIONS OF FLIPKART Flip kart’s core competency lies in their Supply chain and logistics Process of Supply Chain 1. Building the Supplier Base 2. Building Infrastructure for Operations 3. Use of Information system Technological Overview Round the clock operations. Technology plays a critical role. Flipkart often refer to themselves as a technology company doing e-commerce They use Linux as their implementation technology for resource management, task management and file management Flipkart works with popular open source products such as Ubuntu, Mysql, Apache
- 19. MARKETING OF FLIPKART Word of mouth (initial marketing even now they want to satisfy customer so they come back for more) Good use of SEO “We DONOT sell old books or used books. All the books listed at Flipkart.com are new books. The books listed at Flipkart.com are NOT available for free download in ebook or PDF format” Good use of SEM Ads at proper places and use pay per click to pay for ads
- 20. STP SEGMENTATION 1. All internet users and shoppers TARGET 1. Flipkart concentrates on more Psychographic, which helps in deciding where to display ads online 2. They target online shoppers and people who don’t online shop (thus TVC to encourage them) POSITIONING 1. Customer delight (low price, free shipping, replacement) 2. No kidding no worries 3. Online megastore 4. One stop solution
- 21. 7 P’S OFFLIPKART Product: Appearance –the ease in the website interface even for the first visitor Quality –checking of the product before packing (visual test) Packing –different packing(eg. Bubble pack for electronic items) Brands–all brands integrated in one website Warranty -one year warranty from the manufacturer’s side Service & support–guarantee delivery of undamaged product or else replacement in 30 days
- 22. Price: Special discount As shipping is within India the shipping cost reduces Seasonal discounts Free shipping For expensive products transit cost is borne by company Place: Tie ups with local vendors and courier firms (thereby avoiding octroi charges) Company owned warehouse in major cities near airport If the courier can’t delivery to the location the product is shipped through government post
- 23. Promotion: SEO andSEM Word of mouth marketing TVC lately to encourage non-online shoppers More online marketing like FB, Twitter, linkedin Physical Evidence: Different packaging for different product to ensure safe delivery Flipkart the name goes with the online cart Design and packaging is common so customers can relate it to the company People: Service people, Sales Clerks, Delivery drivers, Managers, Complaints department, Accounting, Warranty people, Technical people, all work for the customer ease, customer satisfaction and customer delight.
- 24. SWOT ANALYSIS OFFLIPKART Strengths Top Indian ecommerce portal Diversified into electronic goods Two VC investment to build its own delivery system thereby reduce delivery time Cash on delivery which is making 60% of its income Weakness Coordination with suppliers and courier was tough Price biasing to maintain the margins ( eg. Low price for the best seller book and more price for the least wanted)
- 25. Opportunities Already workingtowards customer delight will obtain customer loyalty gradually Supplier database interface with Flipkart website for JIT procurement Mobile internet usage is increasing there by chances of increase in sales through mobile shopping. Threats Small players and emerging competitor Major players like Amazon In capabilities to manage certain costs like delivery cost, bank charges.
- 26. FLIPKART ‘S NEWTRIANGLE: RAISING THE BAR Key Success factors: • brand loyalty Competencies: • User experience • large self owned delivery channels • Reliability • supplier network/ first to market • convenience • mobile shopping solution/ increased • delivery reach reach • delivery time • innovation in • mobile shopping services/payments/technology • availability • excellent customer services • product modes (printed/ e-books) • internet strategy (search engine • titles Threshold factors: Brand awareness, price. optimization, platform advancement) • large loyal customer base. Value proposition: “Completely hassle free shopping experience with best services to everyone, everywhere and every time in India”.
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- 28. FUTURE PLANS OFFLIPKART By 2013-14, Flipkart plans to:- • Offer new categories on its website • Increase its footprint of warehouses • Expand operations into new cities(Tier 3) • Increase staff size from 2000 to over 10,000 • Grow revenues 10 to 30 times over
- 29. FUTURE PROSPECTS OFFLIPKART IN INDIA:- Marketing is very important and it is generally believed that online people are easier to target. The savings in marketing costs can be passed on and prices can be reduced. Hence in future that helps Flipkart in reducing prices. FDI will help in improving the efficiency of supply chain. FDI will also help in boosting the confidence levels of the customers in which foreign player will play an important role. Hence in future by spending time on online by purchasing clothes and electronics goods will help Flipkart increase in future rapidly.
- 30. CHALLENGES High inflator trend in the global and domestic economies As capital expenses are being deferred because of huge increase of cost of capital Then there is much pressure on existing asset to deliver operational performance Government policies in most developed and developing countries have imposed very stringent norm for safety.
- 31. TRENDS AND OUTLOOKOF E-COMMERCE INDUSTRY IN INDIA Overall growth of Consumer & Supply side interest in e- Commerce in India - Brands & Manufacturers getting online Increase traction of Lifestyle categories and Women shoppers online Role of Social Media marketing in driving e-Commerce growth Potential from Tier 3 towns Impact of growth in Smart phones on e-Commerce Negative impact of rampant price cutting and couponing in the industry - how will players make money ?
- 32. Flipkart eBay Jabong Homeshop 18 Myntra Available Not Available Available Not Available Books Mobiles & Available Not Available Available Not Available Accessories Computers Available Not Available Available Not Available Available Not Available Available Not Available Cameras
- 33. Gaming Available Not Available Not Available Not Available Music, Movies & Posters Available Not Available Not Available Not Available TV, Video & Audio Available Not Available Available Not Available Home & Kitchen Available Available Available Not Available
- 34. Pens & Stationary Not Available Not Available Not Available Not Available Belts, Bags & Luggage Available Available Available Available Watches Available Available Available Available Beauty & Health Available Available Available Available Care Baby Care Available Available Available Not Available
- 35. Toys Available Available Available Not Available Not Car & Bikes Available Not Available Not Available Not Available Not Footwear & Available Available Available Available Clothing
- 36. EBAY BUSINESS MODEL eBay Marketing Business Person Developers Buyers Sellers In this type of Model any body can buy or sell
- 37. THE PERCENTAGE BREAKDOWNBETWEEN EBAY'S DIFFERENT EXPENSE GROUPS Chart Title Other Sales and 16% Marketing General 40% Administration 24% Product Development 20%
- 38. FLIPKART BUSINESS MODEL WHENCOMPANY ORDER THE GOODS FROM VENDORS Vendors Flipkart Customers Agents
- 39. CONT… WHEN COMPANY HASTHEIR OWN WAREHOUSE Warehouse Flipkart Customers Agents
- 40. JABONG BUSINESS MODEL Customers Vendors Jabong Agents
- 41. HOME SHOP 18BUSINESS MODEL Vendors Channel Partners Customers
- 42. Online Service Qualityfor Luxury Purchases Good customer service 4.55 Money-back guarantee 4.48 Easy return or exchange of merchandise 4.46 Control over use of personal data 4.43 Site reliability 4.42 Ease of use 4.33 Wide product selection 3.99 Fast site 3.97 Information related to products/services sold 3.93 Wide range of shipping/delivery options 3.88 Brand name 3.65 Site personalization 3.55 Physical presence 3.49 Discounts or coupons 3.24 Personalized product recommendations 3.12 Recommendations to complement previous purchases 2.95 Source: Forrester Research Inc., 2001
- 43. COMPARATIVE PERFORMANCE ANALYSIS: Key Success Factors Weight Flipkart Mynta HS18 Jabong Ebay Brand Awareness 0.15 1 0.8 0.7 0.75 0.9 Delivery Time 0.1 1 0.8 0.6 0.7 0.7 Delivery Reach 0.1 0.9 0.8 0.7 0.75 0.8 User Experience 0.15 0.85 0.9 0.8 0.8 0.7 Reliability 0.15 0.9 0.8 0.7 0.7 0.7 Availability 0.1 0.85 0.7 0.7 0.7 0.9 Price 0.15 0.75 0.8 0.7 0.8 0.7 website design 0.1 0.7 0.75 0.65 0.7 0.6 Total Weighted Score 1 0.87 6.35 5.55 5.9 6 Total Market Share(%) 100 37 12 3 4 4 Purely based on assumption and market understanding
- 44. REFERENCES [1] Sinha (April 2009), “Ecommerce in India – The Real Challenges” [2] Chaudhury, Abijit; Jean-Pierre Kuilboer (2002). EBusiness and e- Commerce Infrastructure. McGraw-Hill. [3] Frieden, Jonathan D.; Roche, Sean Patrick (2006), "Ecommerce: Legal Issues of the Online Retailer in Virginia", Richmond Journal of Law & Technology [4] Miller, Roger (2002), “The Legal and E-Commerce Environment Today”, Thomson Learning [5] Turban E, Lee J King D and Chung H M (1999),”Electronic Commerce: A Managerial Perspective”, Prentice Hall [6] Ubois, Jeff (1995), “Wheels of Commerce- an Interview with commerce”, pp 62-69 [7] Megna, Michelle (2008); “E-Commerce Trends for 2008 and 2009”. [8] Rastogi, Rajiv; “Country’s report on E Commerce Initiatives”. [9] Internet World Stats
- 45. CONT… [10] Overview of E-commerce in India [11] 20 Hot E-commerce startups in India [12] Indian e-commerce at inflection point? [13] India broadband penetration growth [14] E-commerce growth with 3G Models of e-commerce in India [15] India B2C E-commerce Market Size [16] Consumer E-commerce in India [17] “Asia Pacific Online Retail Forecast, 2011 To 2016,” Forrester Research Inc. Zia Daniell Wigder, with Steven Noble, Vikram Sehgal and Lily Varon. [18] Indian Retail Market Size and Growth Estimates [19] Written by Piper (2012-08-10). "Name the India’s Largest Ecommerce Company". Ecommerceforum.in. Retrieved 2012-08-14.
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