Industry Profile

Online shopping or e-shopping is a form of electronic commerce which allows consumers to

directly buy goods or services from a seller over the Internet using a web browser. Alternative
names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online
storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an
online retailer's mobile optimized online site or app.
An online shop evokes the physical analogy of buying products or services at a bricks-andmortar retailer or shopping center; the process is called business-to-consumer (B2C) online
shopping. In the case where a business buys from another business, the process is called
business-to-business (B2B) online shopping. The largest of these online retailing corporations
are Alibaba,Amazon.com,and eBay. Retail success is no longer all about physical stores. This is
evident because of the increase in retailers now offering online store interfaces for consumers.
With the growth of online shopping, comes a wealth of new market footprint coverage
opportunities for stores that can appropriately cater to offshore market demands and service
requirements.

History :-

English entrepreneur Michael Aldrich invented online shopping in 1979. His system connected a
modified domestic TV to a real-time transaction processing computer via a domestic telephone
line. He believed that videotex, the modified domestic TV technology with a simple menu-driven
humancomputer interface, was a 'new, universally applicable, participative communication
medium the first since the invention of the telephone.' This enabled 'closed' corporate
information systems to be opened to 'outside' correspondents not just for transaction processing
but also for e-messaging and information retrieval and dissemination, later known as e-business.
His definition of the new mass communications medium as 'participative' [interactive, many-tomany]

was

fundamentally

different

from

the

traditional

definitions

of mass

communication and mass media and a precursor to the social networking on the Internet 25 years
later.

In March 1980 he went on to launch Redifon's Office Revolution, which allowed consumers,
customers, agents, distributors, suppliers and service companies to be connected on-line to the
corporate systems and allow business transactions to be completed electronically in real-time.
During the 1980s he designed, manufactured, sold, installed, maintained and supported many
online shopping systems, using videotex technology. These systems which also provided voice
response and handprint processing pre-date the Internet and the World Wide Web, the IBM PC,
and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.
The first World Wide Web server and browser, created by Tim Berners-Lee in 1990, opened for
commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994:
online banking, the opening of an online pizza shop by Pizza Hut, Netscape's SSL v2 encryption
standard for secure data transfer, and Intershop's first online shopping system. The first secure
transaction over the Web was either by NetMarket or Internet Shopping Network in 1994.
Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was also
introduced in 1995.

Indian online stores getting hooked to e-community culture

More often than not, it's being argued that online shopping is
convenient but yet an isolated activity. This format of easy-to-order-easy-to-deliver has
been catching up with the tech-savvy buyers but it has always been looked upon as option
out of necessity and not pleasure. In order to break this monotony, the concept of esocializing was introduced to the online buying experience.
Apart from a few established online stores, most of new entrants and the upcoming eretail ventures are banking heavily on the rising popularity of social networking within
the online shopping domain. There are a number of major international e-stores who

initiated the coupling of online shopping with social networking. Online giants like e-bay
started their buyers' "Community" which was then followed by arch-rival Amazon's
popular "Daily Blog" section.
The e-community trend has now moved-in to the Indian shopping terrain as well. Most of the
upcoming Indian online stores and the Indian counterparts of the already established inter-nation
e-retail brands are reaping in the benefits of shoppers' community and the latest Web 2.0
technology to create a loyal consumer base out of their readily generated user traffic on the sites.
Some of the popular community-based Indian shopping portals for your reference include: - ebay
India:
The global retail giant's Indian venture has a shoppers' community dedicated to registered
users willing to chat, discuss, ask questions, leave messages and even leave feedback for
the portal.
- Retailsdirect:
This site is arguable India's first interactive store ever. If you have anything to share,
discuss, ask or answer on any issue/subject including shopping, this site has it. It also has
video conferencing, (or Video-Voice Text-Chat facility, as they term it) and is based on
Web 2.0 technology.
- Hindustanlink:
A site where you can do a lot more than shopping, including activities like Forum
discussions, Blogging and Questions-Answers section as well.

All in all, Indian shopping portals need to take a leaf out of their international
counterparts' online strategies. After the emergence and expansion of global shopping

portals like eBay, Kaboodle, Zebo etc., there many e-stores of Indian origin which need
to incorporate the concept of social networking to add that 'zing' lacking in them. Until
then, the aforesaid e-stores are there to bring in your friends and favorite brands while
you choose to laze around at home!!! (no offense intended)
Why not to shop at the malls again!! Before I start off with this lens, I would like to ask you as to
when was the last time you
went shopping to your nearest shopping mall? A week ago, a month back, and some
would probably say that they have these virtual stores to shop for them and deliver goods
like a trained pet, right? Hence, the question arises that with so much that an online store
has to offer, do we really need shopping malls at all?
As the famous saying goes, "There is nothing permanent in this world except change", it
can be easily applied to the ever-changing trends in the retail industry. The whole 'sale
and purchase' idea got a new meaning with the advent of online version of shopping.
Today, it would not be advisable for any educated online shopper to hop back to shopping
at the malls.
The big players in the online retail scene in India are trying every trick in their bags to
convert online users into traffic and then converting it into visitors, then into buyers and
finally, into a loyal consumer base. For this, the focus has shifted from merely providing
products online to social communities and special offers which can only be availed at
these virtual stores.
With the prospects of becoming a long-term successful industry, major e-stores like

Indiamart, Futurebazaar, Retailsdirect and Indiaplaza are relying heavily on the online
retail boom. They are leaving no stone unturned in accelerating the conversion rate of its
user traffic. The most bankable factor for drawing in consumers from the offline domain
is the 'convenience' factor of online shopping.
The most effective strategies of the major Indian e-stores are as follows: - Indiamart:
It is a common platform for the online buyers and sellers, i.e., a B2B marketplace.
Highlights - Upcoming trade shows, divergent industry updates, international trade leads,
tender notice via emails etc.
- Futurebazaar:
The finest brands online, user-friendly and simple design.
Highlights - Clearance sales, buying in bulk offers
- Retailsdirect: India's first interactive store with a Video-Voice-Text-Chat facility HighlightsGroup Bargains (Savings of upto 33% on products by creating groups to bargain), Cafe Retail
(Earn redeemable RD coins, upload videos and photos)

Why are Indians apprehensive to online shopping?

The Internet provides a progressive dimension to most of the
industries on global platform. The retail industry has also benefited from its online
version which has resulted in the growth and expansion of the sector worldwide.
In India, e-commerce has been on a slow track in comparison to other parts of the world. There
has been a visible growth in the e-retail sector yet the industry is being seen in its incipient stage.
Earlier, the reasons cited for the weak response towards online shopping was blamed on the lack

of Internet facilities and inadequate online transaction facilities available in the market. Since
then, there has been technological boom in India. Now, the Internet is easily
accessible to urban India and even rural pockets are getting Internet accessibility at select
places. Growth in the credit card industry and other online transaction methods has also
been a boon for e-shopping. Despite the recent developments, response to online trading
and transaction has been feeble in this part of the world.
Some of the reasons which potentially work against the industry in India include: - Bargaining is
not possible
- Product trial is generally unavailable
- Insecurity surrounding the credibility of a shopping portal
- Delays in product delivery
Lack in the variety of products
- Social networking is restricted
- Preference to real-time shopping for get-togethers
The above mentioned reasons clearly indicate that apart from online activities like travel ticket
booking and online broking, e-commerce still has a long way to go before earning the faith of the
consumers. More innovative and tangible options are still awaited before the shopaholic appetite
of the quintessential Indian is satisfied by these virtual stores. What is Your Brand Personality?
How would you differentiate Nike's 'Just do it' from Reebok's 'I am
what I am'? Both sell the same products, at almost the same prices and hold the same
target audience. Still Nike's 'Sweat and Beauty' sells more than Reebok's 'We know you
suck'.
Needless to say that in such markets people don't turn to these brands for their offerings

but because of the attitude these brands represent. These brands no longer offer mere
products now, they are living experiences and identities in the minds of the consumers.
Consumers now view these brands as a 'living entity' - an entity that speaks its mind,
reflects its attitude and acts as an aide in acknowledging their eccentricities and whims.
That is what we call- BRAND PERSONALITY!
The catch for this new generation of consumers is ' Be their friend'. The clutter and
pressures of today's lifestyle has left the consumer flustered and beclouded. Loneliness is
another hazard. However, the good news is people cling on to where they find value and
stay where they find comfort. Therefore without infusing a feeling of security,
accountability and 'liking' in the mind of the consumer, brand loyalties are difficult to
achieve.
How to render a personality to your online brand?? WHAT IS YOUR GOAL? If your goal is to
generate sales through your venture then the first step will be to initiate
an exhaustive research about your domestic as well the world market, determine SEO
strategies, optimize shopping cart and navigation functionalities along with other e-paths.
IS YOUR HOMEPAGE YOUR CONSUMER'S HOME? Your homepage is your first interface
with the visitor. Ensure that it makes him to stick to it by giving him what he wants, there itself.
Banners displaying your core product or benefits for your consumer will act as a bait to hook
him into reading more about it. Colorful pictures, layouts, interactive templates follow suit. THE
HUMAN TOUCH! The most important element in building a brand, online as well as offline is
'trust'. The

more real your conversations are with your consumers, the more accountable your

business becomes in their mind. Internet is still in its nascence as far as this interactivity
is concerned. If feasible, allow your consumers to raise requests and receive relevant
suggestions based on those requests.
HIT THE BULL'S EYE IN THE FIRST GO! Your site content should be presented to your
customers almost immediately. Content
segregation in the form of bullets points, captions and brief paragraphs work best. Most
importantly, visual presentations of messages are very helpful in creating an impression
in the mind of the consumers.
CREATING HYPE - A BIG NO, NO! Internet provides you with a flood of information in a nopressure environment, with
reigns solely in the hands of the users. Therefore traditional monotones of creating hype
lose their credibility in this medium, where consumer behavior is regulated by
product/price comparisons, variety and features.
As mentioned above, people associate a brand with the experience it gives to its
customers. In e-commerce environment, there is no space or time for frustration.
Information should be easily digested. Ordering should be quick and smooth and loading
time almost instantaneous.
The idea is to catch the whim of the consumer and make him feel 'special' and 'cared for'. That's
when a brand attains its own personality and becomes the consumer's friend. The rise and rise of
Online Retail! The globe is finally at your fingertips. Human numbers may be expanding by the
second
but distances have finally shrunk. Investing money is a tradition. Investing time is the
newest wrinkle. People don't mind spending the almighty rupiyah for a pair of Levi's Red

Loop jeans if buying the same from an online store takes just a few minutes. Else driving
an hour to reach the high street to buy it seems nothing less than a sluggish idea. Time
and time alone stands as the new age currency today. And taking this as an opportune
pedestal to climb higher, entrepreneurs have finally entered the new arena of Online
Retail.
Say, you had already seen your favourite digital camera at a store in a mall. What say if you
found the same product at a much better price in the comfort of your home- on the web, at half
the time you spent shopping offline?? Well, the web is serving all this and
more to its online customers. According to the NASSCOM Report, India expects a
massive mass of internet users. Even the big brands have already found their space on
web. Whether it is the Luxury Retail, Kids Retail, Mobile Telephony or other Consumer
Electronics, the high street e-stores are on a roll.
The challenge however is to engage that portion of the mob, which visit the sites but go away
without spending any bucks. The reason? Their distrust. This section of online turf is not
comfortable transacting on the net because of their fear of e-stores mishandling their precious
information. This population is almost half of the total online populace. If online retail portals
begin to instill a security factor in the minds of their consumer base, half their battles will be
won!

Flipkart
Flipkart is among Indias largest online retailers. It is an electronic
commerce company
headquartered
in Bangalore, Karnataka,India.
Established in 2007 by Sachin and Binny Bansal, Flipkart started as an
online bookstore, but has since diversified into media, consumer
electronics, computers, healthcare and home appliances. [3] Flipkart went
live in 2007 with the objective of making books easily available to
anyone who had internet access. With over 11.5 million book titles
listed, 11 different categories, more than 2 million registered users and
sale of 30000 items a day, Flipkart is one of the leading e-commerce
players in the country. It offers path-breaking services like Cash on
Delivery, a 30-day replacement policy, EMI options, free shipping &
Electronic wallet
Flipkart

The Online Megastore

Type

Private

Industry

Internet, Online retailing

Founded

5 September 2007

Founders

Sachin Bansal
Binny Bansal

Headquarters

Bangalore, Karnataka, India

Area served

India

Key people

Sachin Bansal
Binny Bansal

Services

Revenue

Electronic commerce

US$ 1 billion (gross merchandise 201314)[1]

Employees

15000 (2014)[2]

Subsidiaries

Myntra

Website

Flipkart.com

Existing Ecommerce practices by competitors (Flipkart)

:
Flipkart an electronic commerce company was established by Sachin Bansal and Binny Bansal
in2007 and now
it is among Indias largest online retailers with reported sales of Rs 75 crore for year
2011-11. Sachin Bansal and Binny Bansal both are alumni of Indian Institute of Technology
Delhi who started this company after quieting their jobs in Amazon.com with a vision To be one
of the largestmulti-category e-commerce destinations in India, with a strong focus on customer
service.Initially Flipkart started with selling books online and has since diversified into a generic
e-commercesite, selling CDs/DVDs of music, movies, games and software, as well mobile
phones and electronics.Flipkart started with books because they are a comparatively easy
category products to sell online.They do not require huge inventory maintenance, are easier to
negotiate supplier terms and profitmargins are high. Also since books are low value items,
inducing customer trial was easy. It is a safeoption to start off with books, given their

appreciation in e-commerce the world over. Now Flipkarthave about 11.5 million book titles, 11
different categories, more than 2 million registered users andsale of 30000 items a day which
makes it India's answer to Amazon. The major goal of the companyis to provide a memorable
online shopping experience to their customers so that they come backagain and again using
innovative services like Cash on Delivery, a 30-day replacement policy, EMIoptions, free
shipping, and discounted price and very importantly on time delivery of the products.Flipkart
follows some of the best practices of supply chain1.

Building the Supplier base:

The Company has established a network of more than 500distributors and only stocks frequently
ordered items. Items like the 'Long tail' arealmost always sourced from suppliers in real time and
as and when the customerplaces an order.
2.

Building Infrastructure for Operations: The Company has 4 offices in 4 metros cities withmore
than 500 employees. Warehouses of the company are located in 7 cities including themetros.
Company has tie-ups with more than 15 courier companies like Blue Dart, FirstFlight etc. to
deliver their products and Indian post for areas where courier do not reach.3.

The Process of Supply Chain- The first step in buying the products like books online from
theFilpkart.com site by making payments using payments options like credit/debit card, cash-ondelivery, net banking, cheque/DD and money order and enter the phone number andaddress
where the items need to be delivered. Depending on items purchased they arepacked and shipped
accordingly for example mobile phones and books are packeddifferently as per requirement and
also all items have transit insurance against theft anddamages that may be caused while they are
in transit. Flipkart bears the cost of delivery andthis make them give a reason/motivator for
improving efficiency at every point of supplychain. This also makes them differentiate from their

competitors. Depending upon the areawhere the item is to be shipped the company uses either
their own internal logistics orIndian post and the delivery time varies between less than 24 hours
3 weeks and
availability of the product like the products which are imported take 3 weeks time
to getdelivered to the customers. All the Team Members have been trained to work efficiently
tomeet customer expectation4.

Use of Information system: The Company use sales to predict the inventory levels.
Thewarehouses are split into multiple areas

inventory, packing, shipping and so on. Thestocks are replenished every 24-48 hours. In the
Back End, Flipkart stores details of all thetransactions that need to be carried out. They have an
understanding with their associatesfor order tracking, reconciliation and MIS (Management
Information Systems) reports. Theprivate courier companies in turn have their own ways of
tracking every package. The customer is also updated about the status of his shipment via
message, email or through thewebsite

SNAP DEAL
Snapdeal.com is a leading online marketplace, headquartered in New Delhi, India. Snapdeal
featuresproducts across categories like Mobiles, Electronics, Fashion accessories, Apparel,
Footwear, Kids,Home and Kitchen, Sports, Books; and services like Restaurants, Spas &
Entertainment amongstothers. The company was started by Kunal Bahl, a Wharton graduate and
Rohit Bansal, alumnus of IIT Delhi, in February 2010. Snapdeal.com was started in February
2010, as a daily deal platform, butlater expanded into product retailing across various categories.
Snapdeal claims to have a subscriberbase of around 18 million and has a presence across 50
cities in India. In January 2011, Snapdealreceived a funding of $12 million from Nexus Venture
Partners and Indo-US Venture Partners.Subsequently, in July 2011, the company raised a further
$45 million from Bessemer VenturePartners, along with existing investors Nexus Venture
Partners and Indo-US Venture Partners, takingthe total investment in the company to $52
million. It almost ships to around 4000+ towns and citiesin India, has almost 3000+ featured
brand, 250000+ listed products with over 200 categories. Thecompany claims that everyday
about 25000+ units are sold.
Existing Ecommerce practices by Snapdeal
:
The Company believes in working backwards to fulfilling what customer wants and then align
supplychain, technology, product management, and customer support towards this objective."
TheCompany interrogate things about what is the best experience for the customer." In doing all
this, aconscious effort is made to make it cost-effective too.Its E-commerce business is built
around three pillars: value, assortment, convenience. The value-based approach of Walmart for
example is hard to replicate. In India, there is no middle path inconvenience. You are either
convenient, or you are out of business. So, the only differentiatingfactor is assortment, Snapdeal,
with 3000 products and adding a product every 10 seconds, has thatedge in assortment as of now
in both online and offline modes. Another significant factor is theretail sector worth $500 billion
in India is only 10% organized. Clearly, Snapdeal has zipped ahead of others. Cash on delivery
model is also one the key differentiating ecommerce practice adopted bythe company however
high charges for COD transactions and customer returns are quoted as two

reasons for COD being unfavourable. Snapdeal s experience is different. Its COD charges are
lower
than expenses of online payments and so the company prefers that
customers buy on COD. Thecourier companies returning products dont charge Snapdeal.
Furthermore, the returns are still
singledigit figures, which doesnt eat much into Snapdeals sales.
When a user visit the website it gives an option to enter the users email address to receive daily
promotional and discount offers. The company has a section by the name Todays top offer from
which a user can select the best offer as per his/her demand