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The approach that is taken for the project is purely based on case study
approach where in the organization is sliced into several aspects of the life
cycle.
From the conceptualisation to the realisation is been addressed in the project.
Also, there are several entities amongst the ecommerce domain which has been
also highlighted which swept the domain completely.
The slicing of the picked up organization is purely on the basis of steps towards
each strategies, anomalies, key dominant players, customer centricity and
various other topics have been shared with inputs from the team itself.
Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Preface
This document will be useful in understanding the overall impact, the Internet
has on our lives. Be it online shopping, movie ticket booking, and railway
tickets, auctioning your old stuffs, exposure of small and medium business over
the internet.
With the growing enterprises around the world, one of the strategies is to
define its own space in the consumer mind and with the ever increasing
Internet spread on the globe; the milestone is an achievable and sustainable.
And with the same view, I have personally aligned myself in providing this
approach of slicing one of the leading retail giant which has its presence in an
online domain. Future Bazaar India Limited is an online e-tailer which has its
prominent position in the online segment.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Table of Contents
Sr. No
Title
1 An Introduction (www.futurebazaar.com )
Pg. No.
6
2 Growth of e-commerce
10
11
12
14
14
16
17
16
18
19
20
21
22
24
24
25
25
25
26
27
28
31
32
6.4 Visitors
32
34
35
7.2 Past-Present-Future
36
41
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42
43
45
46
47
51
51
52
55
56
12 Bibliography
57
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
The emotional benefit stage of the brand ladder implies that the brand is now
projecting an emotional bond with the consumer as the reason to buy.
Brand Laddering, i.e. moving up the brand ladder is the ultimate goal over the life
cycle that every brand follows.
The earlier you are able to establish a strong emotional connect; the better it is
for the brand.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Fashion and You started in early 2010 as a private shopping club by Pearl
Uppal; where a select group of members could take part in flash sales and this
could be @ 70 to 80% discounted rate. Every minute today, there are 5
subscribers and by December end, the revenue will be odd 150 crores.
BigshoeBazaar is an online cash and carry wholesaler for hundreds of shoes
across the country and has a warehouse of 25, 000 sq. feet. Within few months
the company will add another 1,00,000 sq. ft. to its existing capacity. This is
purely because of the demand and service the company is experiencing it today,
says Manmohan Agarwala, CEO- BigshoeBazaar.com
Ticket booking as an industry itself comprises of 80% of this 32, 000 crores says,
MakeMyTrip, Cleartrip, IRCTC & Yatra. All these sites have disproved the
hypothesis that India is not ready for E-commerce.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
It doesnt even publish any information on the companies it has invested in nor
does it speak with the press. Its name is TIGER GLOBAL.
It is of the many Tiger seed or tiger club funds that sprang forth following the
demise of Tiger Management, a legendary fund- hedge by Julian Robertson.
The same was started by Chase Coleman in 2001 in New York.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
One of the successful criteria for the business to hit the top line was the strategy
that came up with several stakeholders within the team and within the group.
Successful executions of these strategies have made the organization reach the
goal that it had been eyeing since a long time.
The strategies were defined keeping in mind what are the weaknesses,
strengths, threats and opportunities. What came to the teams mind was there
are multiple SO Strategies which will result in driving the 1 Crore number a
day but the major 3 were the hero which could result in significant change in
the sales number.
The above table only talks about few from each quadrant and as a result only
depicts the real heroes of their respective quadrant. So, for example, in the SO
strategies; the topmost is the Future Group Store integration which will ensure
the advantage of the real-estate of one over the other which reduces the realtime inventory cost, estate cost, manpower cost and other in the pipeline
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Is the ability to meet customer and vendor demands and requirements a driving
factor in your business, perhaps even more a factor than pricing?
Is the timing and accuracy of the delivery of goods and services critical to your
customers and vendors?
Could a significantly faster delivery time to your customers and distributors be
turned into a competitive advantage?
Will being "eCommerce enabled" allow your firm to penetrate new markets or find
new suppliers?
Are customer loyalty and long term alliances a high priority for your firm?
Would eCommerce enabled systems systems favourably affect your payment terms
and agreements with customers and suppliers?
If you answered "Yes" to any one of the above questions, then your company could
probably benefit from eCommerce-eBusiness systems. Future Bazzar has yes for all
the above question.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
document preparation
error detection and correction
reconciliation
mail preparation
telephone calling
data entry
overtime
supervision expenses
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
finished goods. This would result in reduced costs including cost of goods, storage space,
service, and insurance.
Cash Flow Improvements - Reduced operating expenses and improved accuracy when
purchasing provide direct cash flow benefits. With eCommerce-eBusiness systems you
should be able to:
As far as ROI goes, once you decide what all the pieces of the shopping system are,
you will know your costs. Then estimate how many of your visitors will buy
something - on average, this will be about 1.8%, can be much higher if you are in a
targeted niche and do a good job with merchandising the store - clean, easy to use
Project for the 3rd Year MFM 2009-2012
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
layout, shipping options are clear, etc. Estimate your average sale and margin, and
you have all you need for ROI:
On a monthly basis:
Traffic = 1000 visitors per month
1.8% buy = 18
Average sale = $60
Sales = 18 x $60 = $1080
Profit Margin = 40% = $432
Cost = $25 for cart + 2.5% of sales = $54
ROI = $432 / $54 = 800%
This calculation ignores whatever it might cost to get set up in the first place - build
the store pages, etc. If that cost $2000, then it takes 4.6 months for you to
"breakeven", meaning you have paid for the set-up and are now into makin $432 a
month in profits:
$2000 site cost / $432 in margin each month = 4.6 months to pay for set-up
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
The below diagram gives a graphical representation of the cost benefits of an eShop vs.
Landed shop
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Running costs
These are an upkeep of the web server and maintenance costs.
Running costs for change process
This is the cost of factoring in for your employees to train and adapting to the newly
introduced technology, mainly the strategies used to make the change as smooth as
possible.
Additionally being on the Internet would result in the your company having to
become familiar to respond to emails, queries, and complaints that require instant or
quick responses as opposed to replying to a Customer/Client via a letter. To be
successful online, your company would have to address this issue of Change
Management in that it would have to incorporate into its business, processes in order
to guide the company to successfully maximise its effectiveness on the Internet.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
The Information Management Website will allow the membership process to become
transparent. For example, for the first time ever, Management will be able to know as a
matter of fact:
1.
2.
3.
4.
5.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
e.
f.
g.
Studies revealed that 23% of the customers quit even before they register
themselves at a site.
The time of delivery stated is unclear.
The time taken for downloading is very long.
People in India have habit of buying goods only after feeling the goods. This
drawback can only be removed if matured companies enter the E-commerce in
whom people have good faith.
The behaviour of the Indian customer is very need driven as compared with the
US customers who are impulsive buyers.
Most of the entrepreneurs in India lack sufficient capital or resources and hence
cannot wait for a long period of time for positive results.
Visibility of the Order.
Ways to remove the pitfalls::
a.
b.
c.
Consistency in execution.
Strong government policy against cyber crimes and frauds.
Tight integration of the system by the online retailers.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
d.
e.
Stating clearly the time required for the delivery of the product and
delivering the goods within that time period.
Safer payment mechanism.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
There are various factors that help the business continuity and the overall
organizations strategy. The SEO is one the pre-requisite parameter for the
growth of the organization.
Some of the guidelines about the Optimisation report that FutureBazaar
implemented are as follows:
a.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
6.1
Let us see the same analysis over the next quarter (Q4 of 2010-2011) and we can infer
that more or less the pattern or behaviour over the site remains spooky.
Not to forget, that in the month of January, the SEO and Analytics were being
implemented with another tool for a distinctive observation and analysis.
However, if the trend is seen for the day of any month it typically reveals that the first
half of the day is where the visitors would barge in to the site.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
The same trend if viewed the previous quarter (Q2 of 2010-2011) the number states
something different and here is the showcase of the aforesaid statement.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
6.4 Visitors
The activity that helps the footfall to the site is referred to as Visitors. Indirectly these
are the footfalls for the online store (present in the digital medium).
What we will do is really look at the sale quarter and trickle down to each segment in
depth as we proceed with the topic.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Let us also see the different scenario where in the flock of visitors have turned the etailer down. And we shall discuss the reason as to why the same have erupted in the
lifecycle of www.futurebazaar.com
This particular point also reveals the true strength of what sets in and sets off for the ecommerce business.
There are plausible scenarios where in this has set in the trend pattern. And some of
these will be marketing stints, Alliances, Business Strategy and change in leadership
and beliefs.
We have covered this part whilst talking about the following topic Promotions &
Campaign.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
7.0
Following display the true number in terms of the activity carried out with one
of the business associate and this reveals a quite true experience in terms of no.
of visitors got attracted to the site along with the TV campaign that
FutureBazaar carried out in the month of October December.
Regular Communication
Offer Based Campaigns
Campaign Result
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
The Battle lasted for 96 hours non-stop & had consumers vying to possess the cheapest
consumer electronics with genuine manufacturers warranty. The Battle allowed the
consumers to buy their favourite electronic gadget at the lowest prices the market had
ever seen. The lowest price guarantee is an outcome of the strong sourcing leverage
that Future Group brought on the table and this was then available digitally and
delivered to the customers home or office free of cost.
The company had and has collaborated with leading brands in the country to offer
deals that are exclusive only to Futurebazaar.com and thus providing the maximum
value across any online or offline mobile retailing network
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
7.2 Past-Present-Future
As discussed aforesaid, there are many contributors to the traffic as well and here is
what we will discuss in concise.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
B) BATTLE
With a window period to purchase a product, the queue is heated up for a
preview and the angle of fear and greed is created.
This is the shown in the marketing campaign across the nation that created a
buzz in the TG.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
C) LUCKY PRICE
The below concept creates a sense of fear and greed and grabs the attention to
the product. And overall it gives the user a feel of what one feels at a gambling.
And more or less, the limited no. of spins and a fencing of time period make
one feel the need of being missed out.
This is surely a distinctive feature where hardly anyone on the online segment
has ever attempted to do this.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
If we look at the sales for the overall period Oct 2010- Jan 2011; there is a
significant sales spike for that period.
A significant 40% rise in the overall share of the sales.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
8.0
The most important aspect of e-tailing is the delivery and tracking or visibility
where most of the cost is incurred and could not be avoided because of the era
of CRM.
And as a result the team leverages over the existing Future Supply Chains
expertise and not only to its offline stores but also to online stores.
With the relevant below features and advantages, the organization could drive
the business goals
1.
2.
3.
4.
5.
6.
7.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
With this amount of detailing the design was drafted and the resultant was the
below high level architecture with detailing with time.
The target of 1000 orders per day was achievable and there was no lag in terms
of a delay w.r.t. the expectations with the customers.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
Customer Service
Creation of CEM (Customer Experience Management) team/module which
enhances the level of customer satisfaction by delivering on various modules of
customer service from customer promises to grievance redressal.
Incubation
Incubate, develop & pilot new business concepts and an eco system that
accelerates & systematizes creating successful and satisfied internal and
external customers across the channel.
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The cornerstone of his philosophy was his following quote In business, I look
for economic castles protected by unbreachable moats.
Nonethless many VC believes that there can be $1
Billion valuation of e-commerce companies from
India over the next 5 years or so.
In turn, implying, the rest of them will close
down or be acquired by the Biggies.
Generating a sales of 200 Million Dollars
Let us look at the figure and let us evaluate this.
Step 1: MRP 499/Step 2: Estimated cost @ e-commerce is 299/(margin
@ 30-40%)
Step 3: Book Cost + Delivery Cost = 344/- (top 8
Step 4: Book Cost (including CoD)= 379/(assuming
35/-)
Step 5: Consumer Price= 324/-
cities)
And hence the conclusion that the e-commerce companies are not making money is
purely because of
these factors along with a defined leadership along the pathway.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
can test new product categories, reach new customers, and increase revenue. Few fixed
costs are truly fixed in e-commerce. Many supposedly fixed costs actually increase in line
with revenue growth, so that largescale
operations are very difficult to create.
Maintaining an industrial-strength Web site and its associated back-end systems, for
example, costs between $15 million and $25 million annually, and this doesnt decrease
over time. If anything, expenses associated with hardware and softwareabout 30
percent of total Web site costsincrease with site traffic and therefore with
revenue growth. Other types of fixed costs, such as warehousing, grow as a percentage
of revenues. They are either huge, up-front hits that depress earnings through
depreciation costs or smaller, ongoing expenses that depress earnings through rental
costs. Even if e-tailers could manage to make a profit on each order and each customer,
the level of sales required
to break even would remain high. These economic realities define the arduous task
facing e-tailers. Gross margins and fulfillment costs must improve dramatically to make
orders profitable, so on-line prices cant be discounted against off-line prices. The cost of
acquiring customers must drop while their loyalty must rise if investments in customers
are to be profitable. And just to break even, Web retailers must achieve revenues in the
neighborhood of $1 billion a year, especially for lowmargin categories such as books. For
most pure plays, these challenges will be impossible.
For the multichannel players, however, the numbers are a great deal better: higher gross
margins make the per-order economics stronger, while lower marketing expenses make
fixed costs much lower. Indeed, the breakeven
point of a multichannel retailer is typically half the breakeven point of its pure-play
counterpart.
Moreover, adding e-tailing to a lineup of sales channels creates synergies. More and
more customers browse on-line before purchasing off-line, and early anecdotal
indications suggest that consumers increase their spending on products sold by landed
(physical-world) retailers that add new channels. So even if e-tailing turns out to be just a
breakeven proposition for multichannel retailers, it is still a worthwhile way to reinforce
and extend the franchise.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
9.0
A. Information directories:
The products and services are listed with appropriate sub-headings to make it
easy or a serious information-seeker to find what he wants. Allied services
provided by them: Message boards, chat rooms, forums, etc.
B. Banks:
1) Net banking/phone banking: This is an online banking facility available for
savings account holders as well as current 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-holders behalf, Financial Planning & advice, Electronic Funds
Transfer, Loans to account-holders.
2) Credit/Debit Cards- Banks facilitate E-commerce by providing the most vital
trade instrument, namely the Credit or Debit Card, without which E-commerce
would be impossible.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
This was a piece which acts as a differentiator when it comes to payments. The
foray of complete scope under the payment was very critical.
Integration with the banks for the credit card plays a vital role because of the
double benefit that the customer gets
On the 1st hand it is the points that the customer avails
& on the 2nd hand the extra discount that one gets because of the affiliate
program that the organization runs.
With these 2 in hand, a real-time integration is the key to the success of any
model in the e-commerce segment & the benefit of this giant groups coverage,
the customer; finally gets the benefit of this kind of arrangement.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
10.0
Going forward the online retailing would not be restricted to only Internet on
the computer but it would also be available on the mobile phone, kiosk, TV.
Basically, there will be a convergence. Typically, 80% of the time, a human life
is in front of a digital medium and keeping that in mind, the e-space will be predominantly be utilised back and forth several times.
Knowing that there is a distinct evidence of 2nd round of E-commerce in India;
the next big thing would be convergence, which would bring in a plethora of
opportunities on the table. As
Digital medium enables limitless inventory
Digital medium boosts customer excellence
Digital medium enables high margins and lowest prices.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
11.0
Point in time, we are talking about e-commerce progress level of India, the
seventh-largest by geographical area, the second-most populous country, and
the most populous democracy in the world. Indian e-commerce space
percentage is getting higher as more and more online retailers enter the market.
Although this level of entry in the e-commerce market is good from a long term
perspective, the challenge is that most entrepreneurs dont have the resources
or capital to wait for years before they can get profits.
The past 2 years have seen a rise in the number of companies' embracing ecommerce technologies and the Internet in India. Most e-commerce sites have
been targeted towards the NRI's with Gift delivery services, books, Audio and
videocassettes etc..
Major Indian portal sites have also shifted towards e-commerce instead of
depending on advertising revenue. The web communities built around these
portal sites with content have been effectively targeted to sell everything from
event and movie tickets the grocery and computers.
This is not to say that the e-commerce scenario has been bad in India as highly
successful e-business like bababazaar and India mart have proved. Indian
Banks too have been very successful in adapting EC and EDI Technologies to
provide customers with real time account status, transfer of funds between
current and checking accounts, stop payment facilities. ICICI Bank, Global
TRUST BANK AND UTI-Bank also have put their electronic banking over the
internet facilities in place for the up coming e-commerce market speed post also
plain to clone the federal express story with online package status at any
moment in time.
The future does look very bright for e-commerce in India with even the stock
exchanges coming online providing an online stock portfolio and status with a
fifteen minute delay in prices. The day cannot be far when with RBI regulations
will able to see stock transfer and sale over the Net with specialized services.
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Growth of e-Commerce in India (An insight in the life of one of the key entrant)
12.0
1.
2.
3.
4.
5.
Bibliography
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