Financial Analysis of Amazon and Flipkart

A Project submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Management Studies

By
Radhika Majithia
A-34

Under the guidance of

Ms Ganga Susheel Warriar

KANDIVALI EDUCATION SOCIETY’S

B.K. Shroff College of Arts & M.H. Shroff College of Commerce
Bhulabhai Desai Road, Kandivali (West), Mumbai-400067
An Autonomous College NAAC Reaccredited ‘A’ Grade (CGPA 3.27) and ISO 9001:2015 Certified

April 2021
 Financial Analysis of Amazon and Flipkart

A Project submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Management Studies

By
Radhika Majithia
A-34

Under the guidance of

Ms Ganga Susheel Warriar

KANDIVALI EDUCATION SOCIETY’S

B.K. Shroff College of Arts & M.H. Shroff College of Commerce
Bhulabhai Desai Road, Kandivali (West), Mumbai-400067
An Autonomous College NAAC Reaccredited ‘A’ Grade (CGPA 3.27) and ISO 9001:2015 Certified

April 2021
 KANDIVALI EDUCATION SOCIETY’S
B.K. Shroff College of Arts & M.H. Shroff College of
Commerce
Bhulabhai Desai Road, Kandivali (West), Mumbai-400067
An Autonomous College NAAC Reaccredited ‘A’ Grade (CGPA 3.27) and ISO 9001:2015 Certified

CERTIFICATE

This is to certify that Ms Radhika Majithia has worked and duly completed
her project work for the Degree of Bachelor in Management Studies and her
project is entitled, ‘Financial Analysis of Amazon and Flipkart’
under my guidance and as per her declaration no part of it has been submitted
previously for any Degree or Diploma of any University and it is her own work
and facts are reported by her personal findings and investigations.

Ms. Ganga Susheel Warriar

Principal Project Guide

Date of submission: External Examiner

 DECLARATION BY LEARNER

I, the undersigned, Ms Radhika Majithia hereby declare that the work embodied in this
project work titled, ‘Financial Analysis of Amazon and Flipkart’ forms my own
contribution to the research work carried out under the guidance of Ms. Ganga Susheel
Warriar and is a result of my own research work. It has not been previously submitted to this
or any other University for any other Degree/Diploma.

Whenever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, hereby further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Radhika Majithia

Guided by

Ms. Ganga Susheel Warriar

 ACKNOWLEDGEMENTS

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. Lily Bhushan for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator, Ms. Shweta Mishra, for her moral support
and guidance.

I would also like to express my sincere gratitude towards my project guide Ms. Ganga
Susheel Warriar whose guidance and care made the project successful.

I would also like to express my gratitude to my College Library and the Librarian Dr. Alka
Wadhwana for having provided various reference books and magazines related to my
project.

Lastly, I would like thank each and every person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout
my project.
 INDEX

Sr. No. Title Page no.

1. 1
Introduction to study
1
1.1 Introduction
3
1.2 Objectives
3
1.3 Methodology used to collect data
4
1.4 Scope of Study
4
1.5 Limitations of Study

2. Review of Literature 5
3. Conceptual Framework 8

3.1 An overview 8

3.2 History 11

3.3 Financial performance 12

3.4Board of directors 15

3.5 Product and services 17

3.6 Supply chain management 18
3.7 SWOT Analysis 19
4. Research Methodology 22
4.1 What is Research Methodology 22
4.2 What is Research Design 22
4.3 Sampling 23
4.4 Data collection source 24
4.4.1 Primary Research 24
4.4.2 Secondary Research 25
4.5 Statistical Techniques 28
 29
4.6 Methods of statistical techniques used
29
4.7 Techniques of Data Analysis
5. Data Analysis and Interpretation 30
5.1 Gender 30
5.2 Age 31
5.3 Occupation 32
5.4 Annual family income 33
5.5 Have you ever used online shopping? 34
5.6 How do you often shop online? 35
5.7 Which online site do you prefer? 36
5.8 Which payment method do you use? 37
5.9 Which online service is more satisfied in terms of 38
products, customer care and delivery services?
39
5.10 In terms of pricing, which site you prefer more?
40
5.11 Does promotional activities impact your
purchase decision?
41
5.12 Which site you would you like to suggest others?
42
5.13 How confident you are that your personal
information is kept secure when buying products
online? 43
5.14 What problems do you face while online
shopping? 44
5.15 On a scale of 5 how much you rate the customer
service of Amazon? 45
5.16 On a scale of 5 how much you rate the customer 46
service of Flipkart?
48
5.17 Calculation of Liquidity Ratio
50
5.18 Calculation of Solvency Ratio
5.19 Calculation of Profitability Ratio
 52
Findings and Conclusions
6. 6.1 Findings 52
6.2 Conclusion 53
6.3 Recommendations and suggestions 53

7. Bibliography and Annexure

 INDEX

Chapter Table
Table Heading Page No
no no

5 5.1 Gender 30

5.2 Age 31

5.3 Occupation 32

5.4 Annual family income 33

5.5 Have you ever used online shopping? 34

5.6 How do you often shop online? 35

5.7 Which online site do you prefer? 36

5.8 Which payment method do you use? 37

Which online service is more satisfied in terms of

5.9 38
products, customer care and delivery services?

5.10 In terms of pricing, which site you prefer more? 39

Does promotional activities impact your purchase
5.11 40
decision?
5.12 Which site you would you like to suggest others? 41

How confident you are that your personal information

5.13 42
is kept secure when buying products online?

5.14 What problems do you face while online shopping? 43

On a scale of 5 how much you rate the customer

5.15 44
service of Amazon?
On a scale of 5 how much you rate the customer
5.16 45
service of Flipkart?

5.17 Calculation of Liquidity Ratio 46

5.18 Calculation of Solvency Ratio 48

5.19 Calculation of Profitability Ratio 50

 Chapter 1
Introduction to Study
1.1 Introduction:

Financial analysis is the process of evaluating businesses, projects, budgets, and other
finance-related transactions to determine their performance and suitability. Typically,
financial analysis is used to analyse whether an entity is stable, solvent, liquid, or profitable
enough to warrant a monetary investment.

Financial analysis is used to evaluate economic trends, set financial policy, build
long-term plans for business activity, and identify projects or companies for investment. This
is done through the synthesis of financial numbers and data. A financial analyst will
thoroughly examine a company's financial statements—the income statement, balance sheet,
and cash flow statement. Financial analysis can be conducted in both corporate finance and
investment finance settings. One of the most common ways to analyse financial data is to
calculate ratios from the data in the financial statements to compare against those of other
companies or against the company's own historical performance.

Amazon:

Amazon.com is one of the most renowned names on the Web today. Amazon’s name
reflects the vision of founder Jeff Bezos, to produce a large-scale phenomenon like the
Amazon River; which it has definitely served to be in the e-commerce industry. The Seattle-
based company serves as the biggest most successful pure-online merchant, with the goal to
“Offer the Earth’s Biggest Selection and to be Earth’s most customer-centric company where
customers can find and discover anything they may want to buy” (Laudon). With three main
goals of offering the lowest prices, best selection, and convenience, the consumers are able to
search and shop for millions of new and used items on Amazon. From books, digital
downloads, health care products, to jewellery, computers, and automobiles, you name it, and
Amazon carries it. If they do not carry it, they have created a system enabling consumers to
participate in online transactions with online merchants who rent space from Amazon. With
Amazon’s stock increase of 155% since April 2008, it is clear to consumers that their
sustainable business strategy is successful and will continue in the future. With the growing

1
e-commerce trend, Amazon is constantly adapting and innovating changes in the environment
to “maintain” its competitive advantage. Because of Amazon’s rank as leader of the e-retailer
industry with a market capitalization of $77.62 billion, there are few companies that can
compete. The company has been able to buy out companies like Zappos, and IMDB, to
alleviate their competition. Amazon has further expanded their Web presence in becoming a
single one-stop merchant on the Internet through integration of their “shopping portal” and
“product search portal”. This establishes intense competition from “online general
merchants” like eBay, and “general portals” like Google. Ultimately, Amazon has proven to
be immortal in the industry. However, there are economic problems facing the company that
could lead to their demise. With increasing oil prices, Amazon is seeing rising transportation
costs, which could directly hinder their ability to provide free shipping and lowest prices on
the Web. Another prevalent issue is the new taxation laws in Web transactions, which have
already been established in some states in the United States. These new taxes pose a big
threat to online companies and may introduce new opportunities to compete with Amazon
from the brick-and-mortar companies. In order for Amazon to remain successful, they must
identify resolutions to these problems. To relieve such issues, Amazon must continue to do
what has separated them from their competition, and remain “customer obsessed”. By putting
customers first, Amazon will be forced to innovate ways to keep costs low for customers
through economic recessions, and relieve issues surrounding online sales taxes

After months of preparation, he launched a website in July 1995 (Douglas

Hofstadter's Fluid Concepts and Creative Analogies was its first book sale); it had sales of
$20,000 a week by September. Bezos and his team kept working with the site, pioneering
features that now seem mundane, such as one-click shopping, customer reviews, and e-mail
order verification.

Flipkart:

Flipkart is the most preferred online bookstore because of convenience, discounts and
cash on delivery. Though the online buying behaviour is not that prevalent now, it has a huge
potential in future. The average online purchase amount is higher than the average on store
purchase amount. Crossword Book store is a lifestyle store that not only delivers a product
but offers service to the customer. Through this project, we aim to improve the customer
experience on store by studying the consumer behaviour and competition. Various sub
objectives like study of the customers’ perception about loyalty programs, study of sales per

2
unit area to facilitate merchandise reorganisation, study of direct and indirect competition as
well as online competition, perform SWOT analysis and study of catchment have enabled in
achieving the overall objective.

The data was collected through secondary sources like EBSCO, internal data, etc. as
well as primary sources through market survey and field visit. Two surveys were conducted
with an aim to study consumer behaviour and effectiveness of different media used for
communication to the customer. Sales per unit area was studied to determine sections whose
allocated area can be reduced and allocated to section with high sales but less area allocated.
Direct and indirect competition was studied through field visit to organised retail book store
as well as music stores, toy stores, etc. Discount pattern across various online book store was
also studied. Lastly, catchment was studied through field visit. Descriptive and statistical
analysis was done to conclude that the target customer for Crossword Book Store, Saket is 18
to 40 years with an average purchasing amount of Rs. 500 to 1500.

1.2 Objectives of the Study:

• To study the market share of Amazon and Flipkart.

• To analyse and compare the Financial Performance of Amazon and Flipkart.

• To evaluate financial status of Amazon and Flipkart.
• To compare Income Statement and Financial Statement of Amazon and Flipkart

PROBLEM DEFINITION: In India e-commerce evaluated like a giant with huge

opportunity and success rate. There are so many big and small players in market. Are they
really going to sustain in market for a long time and is there success rate for them. What are
customers expecting from them and are they ready to fulfil their requirements. The study is to
understand both parties’ requirements and procedures.

1.3 Methodology Used to Collect Data:

A research design is typically include how data is to be collected, what instruments is

to be employed, how the instruments is to be used and the intended means for analysing data
collected. Descriptive research design will be adopted for the research. Descriptive research
design is adopted because it aims to study the demographic characteristics of customers who
avails the services of e-commerce. The descriptive research design typically concerned with
determining frequency with which something occurs or how two variables (preference and
satisfaction level) vary together.
3
DATA COLLECTION:

The goal for all data collection is to capture quality evidence that then translates to rich
data analysis and allows the building of a convincing and credible answer to questions that
have been posed.

1. PRIMARY DATA: Primary data was collected from various people and their
opinion and information for the specific purposes of study helped to run the analysis.
In essence, the questions asked were tailored to elicit the data that will help for study.
The data was collected through questionnaire to understand their experience and
preference towards their loyal company.
2. SECONDARY DATA: To make primary data collection more specific, secondary
data will help to make it more useful. It helps to improve the understanding of the
problem. Secondary data was collected from various sources such as different
business websites and published papers.

1.4 Scope of the Study:

• The present study discusses the consumer spending behaviour towards e-commerce
with reference to Mumbai.
• The study also analyses the features, extent of satisfaction
• The study also analyses the level of awareness and services to consumers.
• This study also covers the factors that affect the buying behaviour in the consumers.
• The study is designed to gain better understanding of the factors influencing the use of
e-commerce and satisfaction level.
• The study also covers the extent of utilization internet.

1.5 Limitation of the Study:

Although this stage is too early to discuss the limitations of the study but some general
limitations of the study are:

 There was so much confidential data of companies that are not exposed.
 Survey was restricted to particular age group because respondents willing to fill are
college students
 Analysis was done based upon personal opinion of respondents individually, not from
any focus groups or experts.

4
 CHAPTER 2

REVIEW OF LITERATURE

1. Dodge Martin (1999),” finding the source of Amazon.com: examining the hype of the
earth’s biggest book store”, centre for advanced spatial analysis. Concluded that
Amazon.com has been one of the most promising e-commerce companies and has
grown rapidly by providing quality service.
2. Miyazaki and Fernandez (2001) substantiated that the prior experience was found to
affect the intention and behaviour significantly and in a variety of ways. The results of
this study imply that the technology acceptance model should be applied to electronic
commerce research with caution. In order to develop a successful and profitable web
shop, understanding customers' needs is essential. It has to be ensured that products
are as cheap in a web shop as purchased from traditional channels. According to
Sharma and Mittal (2009) in their study “prospects of e-commerce in India”, mentions
that India is showing tremendous growth in the e-commerce. Undoubtedly, with the
middle class of 288 million people, online shopping shows unlimited potential in
India. The real estate costs are touching the sky. Today e-commerce has become an
integral part of our daily life. There are websites providing any number of goods and
services. The e-commerce portals provide goods and services in a variety of
categories. To name a few: apparel and accessories for men and women, health and
beauty products, books and magazines, computers and peripherals, vehicles, software,
consumer electronics, household appliances, jewellery, audio, video, entertainment,
goods, gift articles, real estate and services. Samadi and Ali (2010) compared the
perceived risk level between internet and store shopping, and revisit the relationships
among past positive experience, perceived risk level, and future purchase intention
within the internet shopping environment.
3. Sharma and Mittal (2009) in their study “prospects of e-commerce in India”, mentions
that India is showing tremendous growth in the e-commerce. Undoubtedly, with the
middle class of 288 million people, online shopping shows unlimited potential in
India. The real estate costs are touching the sky. Today ecommerce has become an
integral part of our daily life. There are websites providing any number of goods and
services. The e-commerce portals provide goods and services in a variety of

5
 categories. To name a few: apparel and accessories for men and women, health and
beauty products, books and magazines, computers and peripherals, vehicles, software,
consumer electronics, household appliances, jewellery, audio, video, entertainment,
goods, gift articles, real estate and services. Ashish Gupta, senior managing director
of hellion venture partners and one of the first backers of Flipkart as an angel
investor: “Flipkart has been absorbing companies that have some potential (letsbuy,
Myntra). In that process, some of the bets will go wrong, for sure. But that is par for
the course. The company (Flipkart) is consciously taking bets that allow it to either
grow or eliminate competition that reduces marketing spend and improves
economics.”
4. Mitra Abhijit. (2013), “e-commerce in India-a review”, international journal of
marketing, financial services & management research. Concluded that the ecommerce
has broken the geographical limitations and it is a revolution-commerce will improve
tremendously in next five years in India.
5. D.K.Gangeshwar. (2013),” e-commerce or internet marketing: a business review from
Indian context”, international journal of u- and e- service, science and technology.
Concluded that the e-commerce has a very bright 000future in India although security,
privacy and dependency on technology are some of the drawbacks of e-commerce but
still there is a bright future to e-commerce.
6. Samadi and Ali (2010) compared the perceived risk between internet and store
shopping and revisit the relationship among past positive experience, perceived risk
level and future purchase intention within the internet shopping environment.
7. Dr. Sudha S (2015), Innovation bring itself a new set of challenges. The e-retailing
was fairly something unheard-of to the Indian consumer in 2007. Flipkart which
carved a niche for itself in terms of market share, goodwill and popularity in online
market to the extent that retailers are coming under threat because of its discounts and
smooth operations. The ascent of flipkart to capture the online market in India in just
four years, the strategies implemented by it to create online business, its ability to
stand out among numerous e-retail sites. This case study aims to understand the
market strategy, brand awareness, SWOT analysis, functioning of flipkart. It aims to
predict the future roadmap and also aims to find significant threats to flipkart in near
future.
8. Gupta Pooja (2015) the study tries to recognize that, how consumer measure channels
for their purchasing. Specifically, it progresses a conceptual model that addresses
6
 consumer value perception for using the internet shopping versus the traditional
shopping. Earlier study showed that perceptions of price, product quality, service
quality and threat strongly impact perceived value and purchase intents in the offline
and online network. Observation of offline and online buyers can be evaluated to see
how value is constructed in both channels. It is hitherto to recognize what factors
influence online and offline shopping choice progression. The objective of this study
is to provide an impression of online shopping decision process by comparing the
offline and online decision making and identifying the factors that motivate customers
to decide whether to do online shopping or go for the offline shopping. The study
finds that female are more into online shopping than male.
9. K Francis Sudhakar (2016), Internet became more powerful and basic tool for every
person’s need and the way people work. By integrating various online information
management using internet, various internet companies have set up systems for taking
customer orders, facilitate making of payments, customer service, collection of
marketing data, and online feedback respectively. These activities have collectively
known as e-commerce or internet commerce. Online commerce made so easy for
everyone with their product variations and simple way to buy things. An attempt has
been made to critically examine various corporate and business level strategies of two
big e-trailers and those are amazon and flipkart. Comparison has been done
considering e-commerce challenges, their business models, funding, revenue
generation, growth, survival strategies, shoppers online shopping experience, value
added differentiations and product offerings.
10. Vijay Govindarajan is one of the world’s leading experts on strategy and innovation.
Govindarajan, coxe distinguished professor at Dartmouth college’s tuck school of
business and Marvin bower fellow at Harvard business school, is also a best-selling
author. The biggest opportunity in India is e-commerce. Why? Three important
factors will drive this: 1) mobile phone penetration; 2) a young demographic that is
used to ordering things using the mobile platform; 3) growth of consumerism with
more Indians with higher disposable income. We will see many new innovative
business models in the e-commerce space in the next five years. No doubt we will see
new innovative high-growth companies—Indian equivalents of Alibaba.

7
 Chapter 3

Conceptual Framework

3.1 An Overview

AMAZON:

Amazon is an American multinational technology company based in Seattle that

focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is
considered one of the Big Four technology companies, along with Google, Apple, and
Microsoft. It has been referred to as "one of the most influential economic and cultural forces
in the world" as well as the world's most valuable brand.

Amazon is known for its disruption of well-established industries through

technological innovation and mass scale. It is the world's largest online marketplace, AI
assistant provider, live-streaming platform and cloud computing platform as measured by
revenue and market capitalization. Amazon is the largest Internet Company by revenue in the
world. It is the second largest private employer in the United States and one of the world's m
most valuable companies.

Amazon was founded by Jeff Bezos in Bellevue, Washington, on July 5, 1994. The
company started as an online marketplace for books but expanded to sell electronics,
software, video games, apparel, furniture, food, toys, and jewellery. In 2015, Amazon
surpassed Walmart as the most valuable retailer in the United States by market capitalization.
In 2017, Amazon acquired Whole Foods Market for US$13.4 billion, substantially increasing
8
Amazon's footprint as a physical retailer. In 2018, Bezos announced that its two-day delivery
service, Amazon Prime, had surpassed 100 million subscribers worldwide.

Amazon distributes downloads and streaming of video, music, and audiobooks

through its Prime Video, Amazon Music, Twitch, and Audible subsidiaries. Amazon also has
a publishing arm, Amazon Publishing, a film and television studio, Amazon Studios, and a
cloud computing subsidiary, Amazon Web Services. It produces consumer electronics
including Kindle e-readers, Fire tablets, Fire TV, and Echo devices. In addition, Amazon
acquisitions include Ring, Twitch, Whole Foods Market, and IMDb. Among various
controversies, the company has been criticized for technological surveillance overreach, a
hyper-competitive and demanding work culture, tax avoidance, and anti-competitive
practices.

LOGO

Flipkart
Flipkart is an e-commerce company headquartered in Bangalore, Karnataka, India,
and registered in Singapore. The company initially focused on online book sales before
expanding into other product categories such as consumer electronics, fashion, home
essentials, groceries, and lifestyle products.

The service competes primarily with Amazon's Indian subsidiary and domestic rival
Snapdeal. As of March 2017, Flipkart held a 39.5% market share of India's e-commerce
industry. Flipkart has a dominant position in the apparel segment, bolstered by its acquisition
of Myntra, and was described as being "neck and neck" with Amazon in the sale of
electronics and mobile phones. Flipkart also owns PhonePe, a mobile payments service based
on the Unified Payments Interface.

9
 In August 2018, U.S.-based retail chain Walmart acquired an 81% controlling stake in
Flipkart for US$16 billion, valuing Flipkart at around $20 billion.

Just over a decade ago, Flipkart was just a dream by two former Amazon employees
in India. Now it’s the largest e-commerce retailer in the country and has been directly brought
into the longtime war between Amazon and its brick-and-mortar nemesis from the United
States.

Walmart has just announced its acquisition of Flipkart in a ground breaking deal. The
acquisition is reportedly the largest in the history of e-commerce and gives Walmart a stake
in one of the world’s largest and fastest-growing online retail markets, setting up a massive
clash between the company and Amazon in a key emerging market.

The company is led by Sachin Bansal as chairman and Kaylan Krishnamurthy as its
CEO. As of 2016, Flipkart has approximately 30,000 employees and a revenue stream of $3
billion (£2.2 billion) as of 2017. Its subsidiaries include Myntra, PhonePe, and eBay.in, Ekart,
Jeeves.co.in and Jabong.com.

As of now, the company offers 80 million+ products spread across more than 80
categories such as mobile phones & accessories, computers and accessories, laptops, books
and e-books, home appliances, electronic goods, clothes and accessories, sports and fitness,
baby care, games and toys, jewellery, footwear, and the list goes on.

Flipkart has 100 million registered users and more than a million sellers on its
electronic commerce platform. To ensure prompt delivery to its customers, the company has
invested in setting up warehouses in 21 states.

This online platform attracts ten million page hits every day and around eight million
shipments are processed every month. Flipkart has also introduced its mobile application,
which has become quite popular, with 50 million+ app users. Flipkart is a billion dollar
company and its valuation in 2016 was INR 15,129 crore (US$2.3 billion). It is also fulfilling
its social responsibility by providing huge scale employments (employs more than 33,000
people).

There is cut-throat competition in the e-commerce market and the biggest Rival of
Flipkart is Amazon. In the recent years, many mergers and acquisitions have been witnessed
in the e-commerce market and Flipkart has also made many acquisitions to expand its
business and boost its sales and earnings.

10
 The major acquisitions made by Flipkart include Myntra, eBay India, PhonePe,
Jabong, Letsbuy (dot) com, WeRead, Mime360, chakpak (dot) com, Appiterate, FX Mart,
and ngpay. It has recently acquired its former competitor Snapdeal. It has acquired Snapdeal
at a cost of $ 950 million.

LOGO:

3.2 History

History of Amazon

When you consider the scale and reach of Amazon today, it’s hard to believe that it all
started in its founder’s garage. Yet that’s exactly where Jeff Bezos launched the online
bookstore that would explode into a world-beating phenomenon.

In those early days, Bezos and his employees would pack books and bring them to the
post office themselves, and even after the company began to build warehouses and acquire
more assets, many investors still wrote them off as another dot-com pipedream.

But in the 26 years since, Amazon’s progression from bookseller to the world’s
leading ecommerce marketplace has been astonishing, even if – according to the architect of
its rise – building the “everything store” was all part of the plan from the beginning.

Of course, even Bezos couldn’t have mapped out every twist and turn, as our selection
of key turning points in Amazon’s journey from garage to the globe proves.

History of Flipkart

Sachin and Binny had started Flipkart together from a house in Koramangala in
Bengaluru in 2007 with Rs 4,00,000 of their own money. More than a decade later – after

11
building a company that generated $7.6 billion in revenues, after making entrepreneurship
cool, after becoming billionaires – they could no longer stand each other.

When the Bansal’s launched Flipkart in 2007, despite many years of liberalisation,
business in India was still dominated by opaque companies whose success had as much to do
with their ability to keep regulators happy as it did with the founders’ business acumen.
Companies such as Infosys and Airtel were the exceptions, and in the arena of high-
technology, Indian companies were especially wanting. This wasn’t surprising.

In that period, internet entrepreneurship was considered a feeble initiative, doomed to

fail. Many venture capital firms in India, despite being in the business of funding start-ups,
didn’t believe in the possibility of large indigenous internet firms. The Bansal’s were among
the few dissenters. Sachin and Binny were an unlikely duo. Considered unexceptional by
their friends and acquaintances, they weren’t even particularly close to begin with. Though
they had both grown up in Chandigarh and studied computer science at IIT Delhi, they got to
know each other only in Bengaluru. They lived in the same apartment complex and worked at
Amazon, which was operating a technology development centre in the southern city since
2004.

To start Flipkart, the founders Sachin Bansal and Binny Bansal left their jobs at
Amazon and took a huge risk to start a venture of their own. When the founders thought of
starting Flipkart as a company the market at that time was not so much vibrant and was not
adapted to the e-Commerce sector that much.

This means e-commerce in India was mostly non-existent at that time and there was
no certainty about its future. Still, the Bansal’s decided to take this risk and now it has turned
out to be a huge success.

One of the major problems that Flipkart tackled during its initial years was online
payments because at that time, people in India were averse to make online payments to a
virtual store, d due to fear of frauds and loss of money.

3.3 Financial Performance

Financial Performance of Amazon

Amazon.com is primarily a retail site with a sales revenue model; Amazon takes a small
percentage of the sale price of each item that is sold through its website while also allowing
companies to advertise their products by paying to be listed as featured products. As of 2018,

12
Amazon.com is ranked 8th on the Fortune 500 rankings of the largest United States corporations by
total revenue. For the fiscal year 2018, Amazon reported earnings of US$10.07 billion, with an annual
revenue of US$232.887 billion, an increase of 30.9% over the previous fiscal cycle. Since 2007 sales
increased from 14.835 billion to 232.887 billion, thanks to continued business expansion. Amazon's
market capitalization went over US$1 trillion again in early February 2020 after the announcement of
the fourth quarter 2019 results. Amazon's total employees now number 798,000. Amazon founder
Jeff Bezos started the company by making a total investment of $5 billion in Amazon India.
It may take several more years to generate profits for Amazon India, but the founder, Jeff
Bezos is quite bullish on India. He is ready to make more investments, as may be needed for

the operations of Amazon India.

It is a bit of an understatement to call Amazon.com's recent revenue growth strong.

Amid a boon in online shopping, the company's sales have rocketed more than 160% since
2015. Net income had been slightly more volatile amid heavy investments, but that figure has
exploded in the past three years.The company reported a 20% increase in 2019 to $280.5
billion. All three segments grew that year, with North America adding about $29.4 billion.

Amazon posted record net income for the fourth consecutive year with profit of $11.6
billion, up from $10.1 billion the prior year. Cash at the end of 2019 was about $36.4 billion,
an increase of $4.2 billion from the prior year. Cash from operations contributed $38.5 billion
to the coffers, while investing activities used $24.3 billion, mainly for purchases of
marketable securities. Financing activities used another $10.1 billion as Amazon made
principal repayments of finance lease obligations.

The financial results for the fourth quarter of 2020 and the full year were indeed
impressive and exceeded Amazon’s projections. The company had projected Q4 revenue of
between $112 billion and $121 billion but reported revenue of more than $125 billion, an
increase of nearly 44% from the prior-year quarter. Q4 revenue from Amazon’s retail
ecommerce sites grew 43% year over year, in part because the e-retailer moved its annual
Prime Day event into October this year from its usual July time slot because of pandemic-
related issues in its fulfilment network.

Amazon also surpassed its net income estimate of between $1 billion and $4.5 billion
as it reported earnings of $7.22 billion for the quarter and $21.33 billion for the year, an
84.1% increase over 2019.

13
 For the fiscal year, ending Dec. 31, 2020, Amazon reported: Net sales of $386.06 billion, a
37.6% increase from $280.52 billion in 2019Net product sales—revenue from merchandise Amazon
owned and sold to consumers—of $215.92 billion, up 34.6% from $160.41 billion in 2019.Net
services sales of $170.42 billion, an increase of 41.9% from $120.11 a year earlier. This includes
revenue from commissions from outside merchants that sell on Amazon marketplaces, the Amazon
Web Services (AWS) cloud computing service and other smaller revenue sources. North American
net sales of $236.28 billion, up 38.4% from $170.77 billion in 2019. North America accounted for
about 61.2% of total net sales in 2019, or 69.4% of sales excluding AWS. International net sales
totalling $104.41 billion, up 39.7% from $74.72 billion in 2019. International accounted for about
27.0% of total net sales in 2020, or 30.6% of sales excluding AWS. Amazon Web Services revenue
hit $45.37 billion, up 29.5% from $35.03 billion a year earlier. AWS sales accounted for 11.8% of
2020 consolidated revenue. AWS earned $13.53 billion in operating income, or 59.1% of the $22.90
billion in consolidated operating income Amazon reported for the year. Other revenue–largely coming
from Amazon’s growing advertising business–totalled $21.48 billion, up 52.4% from $14.09 billion in
2019.Revenue from subscriptions, including Prime fees, was $25.21 billion, up 31.2% from $19.21
billion in 2019.Net income of $21.33 billion, up 84.1% from $11.59 billion in 2019.Spending on
fulfilment increased 45.5% to $58.52 billion, up from $40.23 billion in 2019.Spending on marketing
increased 16.6% to $22.01 billion, up from $18.88 billion in 2019.Spending on technology and
content, including fees for licensing content for its Amazon Video service, increased 19.0% to $42.74
billion, up from $35.93 billion in 2019.General and administrative spending increased 28.2% to $6.67
billion, up from $5.20 billion in 2019.

Net sales of $125.56 billion, a 43.6% increase from $87.44 billion in the same quarter in
2019. Net product sales accounted for $71.06 billion, up 40.6% year over year from $50.54 billion.
Net service sales hit $54.50 billion, up 47.7% from the prior year’s $36.90 billion. North American
net sales of $75.35 billion, up 40.4% from $53.67 billion in the fourth quarter of 2019. North America
accounted for about 60.0% of total net sales in the fourth quarter of 2019, or 66.8% of sales excluding
AWS.International net sales totalling $37.48 billion, up 57.4% from $23.81 billion in the fourth
quarter of 2019. International accounted for about 29.8% of total net sales in the fourth quarter, or
33.2% of sales excluding AWS. Amazon Web Services revenue hit $12.74 billion during the quarter,
up 28.1% from $9.95 billion a year earlier. AWS sales accounted for 10.1% of consolidated revenue
in the fourth quarter of 2019. AWS earned $3.56 billion in operating income, or 51.9% of the $6.87
billion in consolidated operating income Amazon reported in Q4.Other revenue, including
advertising, totalled $7.95 billion, up 66.4% from $4.78 billion in the same period in 2019.Revenue
from subscriptions, including Prime fees, was $7.06 billion, up 34.8% from $5.24 billion in the same
period in 2019.Net income of $7.22 billion, up 120.9% from $3.27 billion in the same period in 2019.

14
 Spending on fulfilment increased 51.6% to $18.47 billion, up from $12.19 billion in the same
period in 2019.Spending on marketing increased 20.0% to $7.40 billion, up from $6.17 billion in the
same period in 2019.Spending on technology and content increased 23.7% to $12.05 billion, up from
$9.74 billion in the same period in 2019.General and administrative spending increased 39.6% to
$1.97 billion, up from $1.41 billion in the same period in 2019.
Financial Performance of Flipkart

Initially, they had spent ₹400,000 (US$6,100) only for making the website to set up the
business. Flipkart has later raised funding from venture capital funds Accel India ($1 million in 2009)
and Tiger Global ($10 million in 2010 and $20 million in June 2011). On 24 August 2012, Flipkart
announced the completion of its 4th round of $150 million funding from MIH (part of Naspers Group)
and ICONIQ Capital. The company announced, on 10 July 2013, that it has raised an additional $200
million from existing investors including Tiger Global, Naspers, Accel Partners and Iconic Capital.

Flipkart has received funds worth more than $ 4.5 billion, with the biggest funding in
July 2014 worth $ 1 billion and in April 2017 worth $ 1.4 billion List of top investors in
Flipkart includes Naspers, Stead view Capital, Tiger Global Management, DST Global, Accel
Partners, Dragoneer Investment Group, Baillie Gifford, GIC, Greenoaks Capital, ICONIQ
Capital, Microsoft, Morgan Stanley, Qatar Investment Authority, and Sofina.

On May 9, Walmart announced its acquisition of 77 per cent of Flipkart for $16
billion (£11.7 billion) for a valuation of $20 billion (£14.7 billion), making it the largest
online commerce acquisition in history and giving Walmart a key stake in India’s fast-
growing e-commerce market.

Flipkart's reported sales were ₹40 million (US$610,000) in FY 2008– 2009, ₹200
million (US$3.1 million) in FY 2009–2010 and ₹750 million (US$11 million) for FY 2010–
2011. In FY 2011–2012, Flipkart is set to cross the ₹5 billion (US$77 million) mark as
Internet usage in the country increases and people get accustomed to making purchases
online. Flipkart projects its sales to reach ₹10 billion (US$150 million) by year 2014. On
average, Flipkart sells nearly 10 products per minute and is aiming at generating a revenue of
₹50 billion (US$770 million) by 2015. On November 2012, Flipkart became one of the
companies being probed for alleged violations of FDI regulations of the Foreign Exchange
Management Act, 1999.

3.4 Board of Directors

15
Board of Directors of Amazon:
Jeff Bezos founded Amazon.com in 1994. Amazon’s mission is to be Earth's most
customer-centric company. Amazon offers low prices and fast delivery on millions of items,
provides thousands of movies and TV shows through Prime Video, designs and builds the
bestselling Kindle, Fire and Echo devices and Alexa voice recognition service, and empowers
companies and governments in over 190 countries around the world with the leading cloud
computing infrastructure through Amazon Web Services. Bezos is also the founder of
aerospace company Blue Origin, which is working to lower the cost and increase the safety of
spaceflight, and he is owner of the Washington Post. Bezos has launched two philanthropic
organizations. The Bezos Earth Fund helps fund non-profits preserving and protecting the
natural world, and The Bezos Day One Fund provides grants to non-profits to help homeless
families and is creating a network of preschools in low-income communities. Bezos
graduated summa cum laude, Phi Beta Kappa in electrical engineering and computer science
from Princeton University in 1986, and was named TIME Magazine’s Person of the Year in
1999.

Amazon announced one of the biggest corporate transitions with founder Jeff Bezos
moving into the role of executive chairman and Andy Jassy, who heads the cloud business –
Amazon Web Services (AWS), stepping into his shoes. Andy Jassy is the Head of Amazon
Web Services and will take over as the new CEO of Amazon in the third quarter of this year.

Board of Directors of Flipkart

Sachin Bansal and Binny Bansal are the founders of Flipkart. Both of them are IIT
(Indian Institute of Technology, Delhi) graduates. Both of them are from Chandigarh.
Though they share the same last name, they are not relatives.

First, Sachin Bansal joined Amazon.com and worked as a software engineer and later
he got Binny Bansal to join it. But eventually, they both quit Amazon and decided to start a
venture of their own. That decided to launch Flipkart. Sachin Bansal is the Executive
Chairman of Flipkart and Binny Bansal is at the post of Chief Executive Officer (CEO) of
Flipkart.

Forbes India Rich List 2015 named Binny Bansal along with Sachin Bansal, the 86th
richest person in India with a net worth of $1.3 billion.

16
 In 2017, Kalyan Krishnamurthy, a former executive of Tiger Global Management,
took over the role from Binny Bansal, who was named group CEO.

3.5 Products and Services

Products and Services of Amazon:

Amazon’s product lines available at its website include

several media (books, DVDs, music CDs, videotapes and
software), apparel, baby products, consumer electronics,
beauty products, gourmet food, groceries, health and
personal-care items, industrial & scientific supplies, kitchen
items, jewellery, watches, lawn and garden items, musical
instruments, sporting goods, tools, automotive items and
toys & games. In August 2019, Amazon applied to have a
liquor store in San Francisco, CA as a means to ship beer and alcohol within the city.
Amazon has separate retail websites for some countries and also offers international shipping
of some of its products to certain other country.

Product and Services of Flipkart:

Flipkart Online Services Private Limited owns and operates e-commerce website. The
Company provides books, movies, music, games, consoles, televisions, mobiles, digital
cameras, computers, network components, software, peripherals, apparel, shoes, and kitchen
appliances.

17
3.6 Supply chain Management

Supply Chain of Amazon

Amazon first launched its distribution network in 1997 with two fulfilment centres in Seattle and New
Castle, Delaware. Amazon has several types of distribution facilities consisting of cross dock centres,
fulfilment centres, sortation centres, delivery stations, prime now hubs, and Prime air hubs. There are
75 fulfilment centres and 25 sortation centres with over 125,000
employees. Employees are responsible for five basic tasks:
unpacking and inspecting incoming goods; placing goods in
storage and recording their location; picking goods from their
computer recorded locations to make up an individual shipment;
sorting and packing orders; and shipping. A computer that records
the location of goods and maps out routes for pickers plays a key
role: employees carry hand-held computers which communicate
with the central computer and monitor their rate of progress.
Some warehouses are partially automated with systems built by
Amazon Robotics.

Supply Chain Management of Flipkart

18
 Order Management System: registers the order, maintains the state of the order
through its life cycle, keeps track of the order, and forwards details of the order to the Order
Fulfilment System.

Order Fulfilment System: arranges for faster and cost-effective product delivery,
verifies the availability of inventory in the warehouse, notifies the warehouse of the order,
and identifies the logistics partner.

Warehouse: Reserves the product in shelves, assigns a picker to pick, pack and
dispatch as shipments to the sortation centre.

Sortation Centre: Sorts shipments based on pin codes and loads them into designated
trucks for transportation to the Delivery Hub.

Delivery Hub: Caters to one pin code with separate areas in it. Delivery executives
deliver the products from the Delivery Hub to the Customer’s address.

In the whole workflow, we can optimize various supply chain workflows to improve
the efficiency of operations. This article discusses the various reusable components that serve
as building blocks to model any workflow in Flipkart Supply Chain operations.

3.7 Swot Analysis

SWOT analysis of Amazon

Strengths
 Strong brand name
 Brand valuation

19
  Customer oriented
 Differentiation and innovation
 Cost leadership
Weakness
 Easily imitable business model
 Losing margins in few areas
 Product flops and failures
 Tax avoidance controversy
 Declining consumer safety
Opportunities
 By expanding physical stores
 Investing in smart materials
 Can do backward integration
 More acquisitions
 Self-driving technology
Threats
 Few controversies
 Government regulations
 Increasing cyber crime
 Aggressive competition
 Link to exploitative labour

SWOT Analysis of Flipkart

Strengths:

 Established consumer base

 Own distribution channel
 Good understanding of domestic markets
 Steady cash in-flow and investments

20
  Acquisition of Myntra

Weakness:

 Late entry into mobile space after entry of amazon

 Fewer innovations compared to competitors
 Future profitability since focus is more on expanding consumer base
 Limited Distribution channel reach
 Power in the hand of buyers

Opportunities:

 Global markets through Mergers and Acquisitions

 Growing online shopping
 Growing smartphones and mobile shopping
 Growing online fashion retail
 Expanding their Product categories

Threats

 Government regulations
 Competition

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 Chapter 4

RESEARCH METHODOLOGY

4.1 What is Research Methodology?

Research methodology is the path through which researchers need to conduct their
research. It shows the path through which these researchers formulate their problem and
objective and present their result from the data obtained during the study period. This
research design and methodology chapter also shows how the research outcome at the end
will be obtained in line with meeting the objective of the study. This chapter hence discusses
the research methods that were used during the research process. It includes the research
methodology of the study from the research strategy to the result dissemination. For
emphasis, in this chapter, the author outlines the research strategy, research design, research
methodology, the study area, data sources such as primary data sources and secondary data,
population consideration and sample size determination such as questionnaires sample size
determination and workplace site exposure measurement sample determination, data

22
collection methods like primary data collection methods including workplace site observation
data collection and data collection through desk review, data collection through
questionnaires, data obtained from experts opinion, workplace site exposure measurement,
data collection tools protest, secondary data collection methods, methods of data analysis
used such as quantitative data analysis and qualitative data analysis, data analysis software,
the reliability and validity analysis of the quantitative data, reliability of data, reliability
analysis, validity, data quality management, inclusion criteria, ethical consideration and
dissemination of result and its utilization approaches. In order to satisfy the objectives of the
study, a qualitative and quantitative research method is apprehended in general. The study
used these mixed strategies because the data were obtained from all aspects of the data source
during the study time. Therefore, the purpose of this methodology is to satisfy the research
plan and target devised by the researcher.

4.2 What is Research design?

Research design means a specified framework for controlling the data collection. The
research is of descriptive in nature, which could provide an accurate picture of induction
procedure conducted in the organization. Descriptive research includes surveys and fact -
finding inquiries of different kinds. The research is of Ex post facto nature in which
researcher no control over the variables has. Statistical method lay stress on objectivity rather
than rely on intuition and judgment and average & percentages can easily be calculated.

Research design is the conceptual structure within which research is conduction. It

constitutes the blue print for the collection, measurement and analysis of data.

Type of Research used for the study: Descriptive Research

• Survey or fact finding enquires of different kinds. It describes the actual prevailing state of
affairs, existing at present.

• Otherwise known as ex post facts means existing position of facts / issues.

• Here the variable influencing the research has no control or the researcher has no control
over the variables. E.g.: Frequency of shopping, customer preference etc.

In this case, a Descriptive Research study was used to study the relationships in question.
Descriptive research facilitates the study to obtain accurate and complete information
regarding a concept or a situation or a practice.

23
Therefore, survey method was followed for the study.

4.3 Sampling

Sampling is the process whereby a researcher chooses her sample. Sampling is

concerned with the selection of a subset of individuals from within a statistical population to
estimate characteristics of the whole population. Each observation measures one or more
properties (such as weight, handling, features and service) of observable bodies distinguished
as independent objects or individuals. In survey sampling, weights can be applied to the data
to adjust for the sample design, particularly stratified sampling. Results from probability
theory and statistical theory are employed to guide practice. In business and medical research,
sampling is widely used for gathering information about a population.

Because sampling isn't as straightforward as it initially seems, there is a set process to

help researchers choose a good sample. Let's look closer at the process and importance of
sampling. Defining the sample and collecting data are key parts of all empirical research,
both qualitative and quantitative. In this research, samples are from 105 people.

• All the items considered in any field of inquiry constitutes a “universe” or population. Study
of the entire population without leaving out a single item is known as “Census Study”

• This type of census study is practically not possible.

• So, we select few items from the entire population for our study purpose. The items so
selected constitute what is technically called “sample”.

• The way of selecting such a “sample” is known as the “Sample Design”.

• These samples can be either probability samples or non-probability samples.

Sample unit - Samples are collected from college students and relatives.

Sample Size - The population being large the survey was carried among 105 respondents.

Sampling Procedure - The sampling procedure followed in this study is non-probability

convenient sampling. Simple random procedures are used to select the respondent from the
available database. Investment pattern of investors on different products research work will
be carried on the basis of structured questionnaire.

4.4 Data collection source

There are 2 types of research

24
A] PRIMARY RESEARCH

B] SECONDARY RESEARCH

4.4.1 PRIMARY RESEARCH

Primary data refers to the information obtained first-hand by the primary data are
those, which are collected afresh and for the first time, and therefore it happens to be original
in character.

Primary data were gathered using questionnaire as a tool for data collection. The data
was collected through personal contact with the help of a well-designed structured and
pretested questionnaire given in Appendix from 105 respondents. The questionnaire was
drafted in order to study the preferences of mobile banking and collected relevant information
about their reviews. The questionnaires were distributed among the respondents by the
researcher through the mail. The respondents found the topic and the questionnaire very
interesting. The researcher assured the respondents to use the information strictly for research
purposes.

4.4.2 SECONDARY DATA

Secondary data refers to data that was collected by someone other than the user.
Common sources of secondary data for social science include censuses, information collected
by government departments, organisational records and data that was originally collected for
other research purposes. Primary data, by contrast, are collected by the investigator
conducting the research.

Secondary data analysis can save time that would otherwise be spent collecting data
and, particularly in the case of quantitative data, can provide larger and higher-quality
databases that would be unfeasible for any individual researcher to collect on their own. In
addition, analysts of social and economic change consider secondary data essential, since it is
impossible to conduct new survey that can adequately capture past change and/or
developments. However, secondary data analysis can be less useful in marketing research, as
data may be outdated or inaccurate.

For the study of the project the data is obtained from the published annual reports of
the company.

25
Secondary Research Methods with Examples:

Secondary research is cost effective and that’s one of the reasons that makes it a
popular choice among a lot of businesses and organizations. Not every organization is able to
pay huge sum of money to conduct research and gather data. So, rightly secondary research is
also termed as “desk research”, as data can be retrieved from sitting behind a desk.

Following are popularly used secondary research methods and examples:

1. Data available on the internet:

One of the most popular ways of collecting secondary data is using the internet. Data
is readily available on the internet and can be downloaded at the click of a button. This
data is practically free of cost or one may have to pay a negligible amount to download
the already existing data. Websites have a lot of information that businesses or
organizations can use to suit their research needs. However, organizations need to
consider only authentic and trusted website to collect information.
2. Government and nongovernment agencies:
Data for secondary research can also be collected from some government and non-
government agencies. For example, US Government Printing Office, US Census Bureau,
and Small Business Development Centres have valuable and relevant data that businesses
or organizations can use. There is a certain cost applicable to download or use data
available with these agencies. Data obtained from these agencies are authentic and
trustworthy.
3. Public libraries:
Public libraries are another good source to search for data for secondary research.
Public libraries have copies of important research that were conducted earlier. They are a
storehouse of important information and documents from which information can be
extracted. The services provided in these public libraries vary from one library to
another. More often, libraries have a huge collection of government publications with
market statistics, large collection of business directories and newsletters.
4. Educational Institutions:
Importance of collecting data from educational institutions for secondary research is
often overlooked. However, more research is conducted in colleges and universities than
any other business sector. The data that is collected by universities is mainly for primary

26
 research. However, businesses or organizations can approach educational institutions and
request for data from them.
5. Commercial information sources:
Local newspapers, journals, magazines, radio and TV stations are a great source to
obtain data for secondary research. These commercial information sources have first-
hand information on economic developments, political agenda, market research,
demographic segmentation and similar subjects. Businesses or organizations can request
to obtain data that is most relevant to their study. Businesses not only have the
opportunity to identify their prospective clients but can also know about the avenues to
promote their products or services through these sources as they have a wider reach.

Key Differences between Primary Research and Secondary Research

Primary Research Secondary Research

Research is conducted first hand to obtain Research is based on data collected from
data. Researcher “owns” the data collected. previous researches.
Primary research is based on raw data. Secondary research is based on tried and
tested data which is previously analysed and
filtered.
The data collected fits the needs of a Data may or may not be according to the
researcher, it is customized. Data is requirement of a researcher.
collected based on the absolute needs of
organizations or businesses.
Researcher is deeply involved in research to As opposed to primary research, secondary
collect data in primary research. research is fast and easy. It aims at gaining a
broader understanding of subject matter.
Primary research is an expensive process Secondary research is a quick process as

27
 and consumes a lot of time to collect and data is already available. Researcher should
analyse data. know where to explore to get most
appropriate data.

How to conduct Secondary Research?

Here are the steps involved in conducting secondary research:

1. Identify the topic of research: Before beginning secondary research, identify the topic
that needs research. Once that’s done, list down the research attributes and its purpose.

2. Identify research sources: Next, narrow down on the information sources that will
provide most relevant data and information applicable to your research.

3. Collect existing data: Once the data collection sources are narrowed down, check for any
previous data that is available which is closely related to the topic. Data related to research
can be obtained from various sources like newspapers, public libraries, government and non-
government agencies etc. 4. Combine and compare: Once data is collected, combine and
compare the data for any duplication and assemble data into a usable format. Make sure to
collect data from authentic sources. Incorrect data can hamper research severely.

4. Analyse data: Analyse data that is collected and identify if all questions are answered. If
not, repeat the process if there is a need to dwell further into actionable insights.

Advantages of Secondary Research

1. Most information is secondary research is readily available. There are many sources from
which relevant data can be collected and used, unlike primary research, where data needs to
collect from scratch.

2. This is a less expensive and less time-consuming process as data required is easily
available and doesn’t cost much if extracted from authentic sources. A minimum expenditure
is associated to obtain data.

3. The data that is collected through secondary research, gives organizations or businesses an
idea about the effectiveness of primary research. Hence, organizations or businesses can form
a hypothesis and evaluate cost of conducting primary research.

28
 4. Secondary research is quicker to conduct because of availability of data. Secondary
research can be completed within a few weeks depending on the objective of businesses or
scale of data needed.

Disadvantages of Secondary Research

1. Although data is readily available, credibility evaluation must be performed to understand

the authenticity of the information available.

2. Not all secondary data resources offer the latest reports and statistics. Even when the data
is accurate, it may not be updated enough to accommodate recent timelines.

3. Secondary research derives its conclusion from collective primary research data. The
success of your research will depend, to a greater extent, on the quality of research already
conducted by primary research.

Tools Used: MS-Excel has been used to create a Charts and calculation

4.5 Statistical Techniques

Statistics is the study of the collection, analysis, interpretation, presentation, and

organization of data. In applying statistics to, e.g., a scientific, industrial, or societal problem,
it is conventional to begin with a statistical population or a statistical model process to be
studied. Populations can be diverse topics such as "all persons living in a country" or "every
atom composing a crystal". Statistics deals with all aspects of data including the planning of
data collection in terms of the design of surveys and experiments.

4.6 Methods of statistical techniques used

1. Tabulation method:

After classification of information the data is placed in the tables. With the help of
this the information becomes simple & clear to understand. In this process the data is kept in
the columns so that they can be understood. Statistical tabulation is short hand of statistics
because it becomes attractive, adequate in size, convenient for comparisons & assumes
clarity. Tabulation makes comparative interpretation simple. It also saves time & space &
makes scientific analysis work simpler.

The research is conducted using tabulation method of statistical application for

presenting the samples.

29
• Pie Diagram

After the data is placed in the tables it is then converted into pie diagram. A pie chart
(or a circle chart) is a circular statistical graphic, which is divided into slices to illustrate
numerical proportion. In a pie chart, the arc length of each slice (and consequently its central
angle and area), is proportional to the quantity it represents. While it is named for its
resemblance to a pie which has been sliced, there are variations on the way it can be
presented. The research is interpreted using pie diagram method for presenting data.

4.7 Techniques for Data Analysis

The purpose of analysing data is to obtain usable and useful information. The
analysis, irrespective of whether the data is qualitative or quantitative.

The analysis of data collection is completed and presented systematically with the use
of Google forms and MS-Word.

Pie chart were used for the study.

Chapter 5
Data Analysis and Interpretation
Question 5.1 – Gender

Gender No. of respondents

Male 52

Female 53

Chart no.1

30
Interpretation:
The first characteristic of the respondents that is taken into account is the Gender of the
respondents. It can be seen from the above graph that 49.5% respondents are male and 50.5%
respondents were female.

Question 5.2 – Age

Age group (years) No. of respondents

10-20 32

21-30 51

31-40 9

41 and above 13

Chart no. 2

31
Interpretation:
The characteristic of the respondents that is taken into account is the age of the respondents.
It can be seen from the above graph that 30.5% respondents belong to the age group of 10-20
years, whereas 48.6% were of Age between 21-30 years, 8.6% were of Age between 31-40
years, 12.4% were 41 and above years. So large part of respondents were youngsters.

Question 5.3 – Occupation

Category No. of respondents

Student 68

Businessman 15

Salaried Professional 13

Others 9

Chart no. 3

32
Interpretation:
The characteristic of the respondents that is taken into account is the occupation of the
respondents. It can be seen from the above graph that 64.8% respondents belong to Student
category. 14.3% of respondents are from business category. 12.4% of the respondents are
salaried professionals and 8.6% of respondents can be observed in others (anonymous
category).

Question 5.4 – Annual family income

Particulars No. of respondents

Less than Rs.200000 30

Rs.200000-Rs.500000 38

Rs.500000-Rs.1000000 24

Rs.1000000-Rs.2000000 9

Above Rs.2000000 4

Chart no. 4

33
Interpretation:
28.6% respondents belong to the family with annual income below Rs.200000, whereas
36.2% of respondents belong to the family with annual income of Rs.200000-Rs500000
followed by 22.9% belonging to income Rs.500000-Rs.1000000, then it comes to 8.6%
respondents with income Rs.1000000-Rs.2000000 and lastly 3.8% of respondents with
annual income above Rs.2000000.

Question 5.5 – Have you ever used online shopping?

Particulars No. of respondents

Yes 103

No 2

Chart no. 5

34
Interpretation:
The above graph indicates that 98.1% of respondents were aware of online shopping whereas
only 1.9% where unknown to it.

Question 5.6 – How often do you shop online?  

Particulars No. of respondents

Once a month 33

Once in two months 20

More frequently 27

Rarely 25

35
 Chart no. 6

Interpretation:
From the above observation we can see that 31.4% respondents would like to shop online
once a month followed by 25.7% who likes to shop more frequently, where as 23.8%
preferred shopping rarely and lastly 19% of respondents shopped once in two months.

Question 5.7 – Which online site do you prefer ? 

Particulars No. of respondents

Amazon 26

Flipkart 13

Depends on product 46

Both 20

36
 Chart no. 7

Interpretation:
The above graph indicates that 43.8% of the respondents went with depend on product as
their opinion with Amazon being at the second most preferred opinion 24.8%, followed by
both as option with 19% and lastly flipkart with 12.4%.

Question 5.8 – Which payment method do you use?

Particulars No. of respondents

Credit Card 13

Debit Card 33

Cash on delivery 59

Chart no. 8

37
Interpretation:
We can clearly see that 56.2% people responded with cash on delivery as an option followed
by debit card with 31.4% and credit card with 12.4%.

Question 5.9 – Which online service is more satisfied in terms of products,

customer care and delivery services?

Particulars No. of respondents

Amazon 70

Flipkart 24

Other 11

38
 Chart no. 9

Interpretation:
From the above pie chart we can interpret that 66.7% of the respondents opted Amazon as
their option and flipkart with 22.9% followed by other with 10.5%.

Question 5.10 – In terms of pricing, which site you prefer more?

Particulars No. of respondents

Amazon 68

Flipkart 37

Chart no. 10

39
Interpretation:
The above graph indicates that 64.8% of respondents preferred Amazon in terms of pricing
whereas 35.2% respondents preferred Flipkart.

Question 5.11 – Does promotional activities impact your purchase decision?

Particulars No. of respondents

Yes 34

No 16

Maybe 45

Chart no. 11

40
Interpretation:
We can conclude that 41.9% went with yes as an option and 42.9% respondents with maybe
as a preferred option and no being at the last with 15.2%.

Question 5.12 – Which site would you like to suggest others?

Particulars No. of respondents

Amazon 73

Flipkart 32

Chart no. 12

41
Interpretation:
From the above pie chart we can clearly see that 69.5% of respondents would like to suggest
Amazon to others and only 30.5% of the respondents preferred flipkart as their suggestion.

Question 5.13 – How confident are you that your personal information is
kept secure when buying products online?  

Particulars No. of respondents

Extremely confident 18

Quite confident 43

To some extent 38

42
 Not confident 6

Chart no. 13

Interpretation:
We can interpret that 41% were quite confident followed by 36.2% with to some extent as an
option, 17.1% with extremely confident as an option and lastly 5.7% respondents were not
confident.

Question 5.14 – What problems do you face while online shopping?

Particulars No. of respondents

Delay in delivery 28

Product damage 19

Cheap quality of product 27

Non deliverable 6

Other 25

43
Chart no. 14

Interpretation:
We can conclude that 26.7% respondents went with delay in delivery as their option followed
by cheap quality of product with 25.7% of respondents where as 23.8% of respondents opted
other as their option, 18.1% respondents with product damage option and lastly 5.7% as non-
deliverable as an option.

Question 5.15 – On a scale of 5 how much would you rate the customer
service of Amazon?

Chart no. 15

44
Interpretation:
It can be observed that 49.9% respondents rated 4 on a scale of 5 followed by 24.8%
respondents rated 5, whereas 21.9% respondents rated 3 out of 5 and lastly 3.8% respondents
rated 2 on a scale of 5 to the consumer service of amazon.

Question 5.16 – On a scale of 5 how much would you rate the customer
service of Flipkart?

Chart no. 16

45
Interpretation:
From the above graph we can clearly state that 38.1% respondents rated 4 for the consumer
service of flipkart followed by 32.4% respondents rating 3 where as 18.1% respondents rating
5 out of 5 lastly 9.5% respondents rated 2 and only 1.9% respondents rated 1 on a scale of 5.

5.17 Calculation of Liquidity Ratio

Current Ratio = Current Assets

Current Liabilities

46
 Amazon Flipkart

Year Ratio Answer Year Ratio Answer

96,334 82,590
2018-19 1.10:1 2018-19 35,179 2.35:1
87,812

75,101 60,755
2017-18 1.10:1 2017-18 24,178 2.51:1
68,391

60,197 78,516
2016-17 57,883 1.04:1 2016-17 77,783 1.01:1

Current Ratio
3
2.51
2.5 2.35

1.5
1.1 1.1 1.04 1.01
1

0.5

0
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
A current ratio of 2:1 is considered as ideal for any company. It means that for
every 1 rupee of liability, 2 rupees of current asset are available for the
company. On overall comparison from the above graph, we can say that amazon
has a higher current ratio than flipkart. Thus Amazon is having greater capacity
to repay its debt as a result of increase in its asset holdings.

Quick Ratio = Current assets – Inventories 

Current Liabilities

Amazon Flipkart
47
 Year Ratio Answer Year Ratio Answer

72,684 66,060
2018-19 87,812 0.83 2018-19 35,179 1.87

54,560 43,324
2017-18 68,391 0.80 2017-18 24,178 1.79

40,678 78,516
2016-17 57,883 0.70 2016-17 77,783 1.00

Quick Ratio
2 1.87
1.79
1.8
1.6
1.4
1.2
1
1
0.83 0.8
0.8 0.7
0.6
0.4
0.2
0
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
A Quick ratio of 1:1 is considered as ideal for any company. This also indicates that the
company can pay off its current debts without selling its long-term assets. If a company has
a quick ratio higher than 1, this means that it owns more quick assets than current liabilities.
From the graph we can say that Flipkart has a better quick ratio compared to amazon.
Therefore flipkart has better liquidity

5.18 Calculation of Solvency Ratio

Debt to Equity Ratio= Total Liabilities

Shareholder`s Equity
Amazon Flipkart

48
 Year Ratio Answer Year Ratio Answer

163,397 47,200
2018-19 62,060 2.64 2018-19 61,389 0.77

119,099 35,256
2017-18 43,549 2.74 2017-18 63,536 0.57

103,601 24,233
2016-17 27,709 3.74 2016-17 39,449 0.61

Debt to Equity Ratio

4 3.74
3.5

3 2.74
2.64
2.5

1.5

1 0.77
0.57 0.61
0.5

0
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
The ratio suggests the claims of creditors and owners over the assets of the company.
It says that for every 1 rupees financed by debts, there are 2 rupees being brought in
by the equity shareholders . From the above graph we can interpret that amazon is
comparatively higher than the flipkart. Amazon has better debt ratio.

Proprietary Ratio= Shareholder`s fund

Total Assets
Amazon Flipkart

49
 Year Ratio Answer Year Ratio Answer

62,060 61,388
2018-19 225,248 0.28 2018-19 108,589 0.57

43,549 63,536
2017-18 162,648 0.27 2017-18 98,778 0.64

27,709 39,449
2016-17 131,310 0.21 2016-17 63,683 0.62

Proprietary Ratio
0.7
0.64
0.62
0.6 0.57

0.5

0.4

0.3 0.28 0.27

0.21
0.2

0.1

0
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
A high proprietary ratio indicates a strong financial position of the company
and greater security for creditors. A low ratio indicates that the company is already heavily
depending on debts for its operations. So we can conclude that flipkart has better ratio as
compared to amazon.

5.19 Calculation of Profitability Ratio

Return on Equity = Net Income

Shareholder`s Fund
50
Amazon Flipkart

Year Ratio Answer Year Ratio Answer

11,588 -38,353
2018-19 62,060 21.07% 2018-19 61,388 -62.47%

10,073 -20,648
2017-18 43,549 27.02% 2017-18 -32.49%
63,536

3,033 -2,447
2016-17 27,709 12.47% 2016-17 -6.2%
39,449

Return on Equity
40.00%
27.02%
21.07%
20.00% 12.47%

0.00%

-20.00%

-40.00% -32.49% -32.49%

-60.00%
-62.47%

-80.00%
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
A rising ROE suggests that a company is increasing its profit generation without needing as
much capital. A higher ROE is usually better while a falling ROE may indicate a less
efficient usage of equity capital. From the above graph we can clearly identify that amazon is
increasing whereas flipkart is decreasing and having negative values too due to losses.

Return on Investment = Net Income

Total Investment

Amazon Flipkart

51
 Year Ratio Answer Year Ratio Answer

14,541 2018-19 -38,353

2018-19 85,471 18.61% 69,784 -54.96%

12,421 2017-18 -20,648

2017-18 67,041 20.15% 51,179 -40.34%

4,106 2016-17 -2,447

2016-17 52,456 10.13% 42,399 -5.77%

Return on Investment
30.00%
18.61% 20.15%
20.00%
10.13%
10.00%

0.00%

-10.00% -5.77%

-20.00%

-30.00%

-40.00%
-40.34%
-50.00%

-60.00% -54.96%
2018-19 2017-18 2016-17

Amazon Flipkart

Interpretation:
ROI is a profitability measure that evaluates the performance or potential return from a
business or investment. According to the above graph amazon has better ROI as compared
to the Flipkart. Flipkart is having negative values due to constant losses. 

Chapter – 6
Recommendations and Suggestions
6.1 Findings:
52
The study was conducted with the help of primary data which was collected from the
respondents with the help of a Questionnaire. The detailed data analysis was made and the
findings were drawn in the tabular format. The following are the main Findings:
 It was seen that 49.5% respondents are male and 50.5% respondents were female.
 Majority of respondents are between 21-30 years of age.
 Majority of respondents were students.
 Most of the respondents belongs to the family annual income of Rs.200000-
Rs.500000
 98.1% of the respondents have used online shopping...
 It was seen that there were almost equal no of respondents for different options and in
which most of them preferred to shop once a month.
 It was seen that most of the respondents selected site depending on their product
which they have to purchase which was followed by Amazon as their most preferred
site for online shopping.
 Majority of the respondents opted cash on delivery as their payment method.
 Majority of the respondents are satisfied with amazon in terms of products, customer
care and services.
 64.8% respondents preferred amazon in terms of pricing over flipkart.
 41.9% respondents think promotional activities impact purchase decision where as
42.9% think it might or might not affect their purchase decision.
 Majority of respondents would suggest amazon for shopping to others.
 Most of the respondents were quite confident about their personal information is kept
secured when buying products online where as some of them were confident to an
extent for it.
 Most of the respondents faced problem of receiving cheap quality of product while
online shopping whereas some of them were facing delivery issues.
 Majority of respondents rated 4 out of 5 for customer service of Amazon
 38.1% of respondents rated 4 out of 5 for customer service of Flipkart where as 32.4%
went with 3 out of 5 rating.
 Amazon has ideal Current Ratio as compared to Flipkart.
 Flipkart is having better Quick Ratio than Amazon has.
 Amazon is having better Debt to Equity Ratio than flipkart.
 Proprietary Ratio is high of Flipkart.

53
  ROI and ROE is ideal of Amazon than Flipkart being in negative due to its losses.

6.2 Conclusion:
The study consisted with all the work flows of major e-commerce players in
India, Flipkart and Amazon. How they are performing and how they are running
perfectly in the competitive world has been explained. The innovative thinking of them
to reach more and more consumers is appreciable. They increased their network as much
as possible with ultimate aim of reaching more and more customers. They made
consumers work more easy and comfortable. In this competitive market one has to be
lead and rest will follow. Based upon consumer’s survey we got our clear winner and it is
Amazon. Even though it is an international company it understood Indians very well and
made its roots stronger in India. Flipkart is also giving very tough competition to
Amazon even though it is new company when compared to Amazon. May be it takes
some time to overcome, but definitely they are doing very well in Indian e-commerce
markets.

From the study we get to know various aspects related to Flipkart and Amazon
India. It highlights that people accept both the mobile applications as indifferent from
one another based upon the attributes enquired. However, they are aware of the aspect
that Amazon used the strategy of more language options. Additionally, they opine that
Discounts, Stock availability, Delivery speed and Quality of the products is better in
Amazon India. It was also seen that the respondents are indifferent towards the
advertisements of Flipkart and Amazon India on the grounds of Emotions, Simplicity,
Discounts and Offers. However, it is seen Flipkart win this war when it comes to
Entertainment, Attention Grabbing, and Attractiveness, Retain and Recall and Exclusive
sales. Though Flipkart is the market leader, it was observed that a major chunk of the
respondents i.e. 69.5% would like to recommend Amazon India to others.

6.3 Recommendations & Suggestions:

A valid reason for this is that respondents shop online for wider accessibility of
products of superior quality. It is observed that both Flipkart and Amazon India are into
deep neck competition and are in a brutal war where one tries to wipe the other out. Both
these firms are seen to apply various strategies from time to time in order to make the
other feel their presence. But it was very unfortunate to find that despite all the efforts
Flipkart puts; people seem to recommend Amazon India more to others. Though people

54
are more attracted towards Flipkart, yet it was observed that many of them choose not to
retain with Flipkart, rather switch to Amazon India for its better quality and range of
products. Flipkart should learn from its mistake and should make a balance between
convenience, quality and quantity in order to retain its leadership position in the long run.

Flipkart is performing ok but not good enough. There are so many cases where
people felt that packing might have been better than this. Either it may be big or small /
expensive or not product has to be treated with care. Some of the products mostly
apparel’s are turning out with original cover of supplier, which shows negligence of
them. In this issue Amazon made a mark among us, because whatever the product is their
packing will obviously safe and secure.

Amazon has become leading E-commerce Company in India, few years

before Amazon India was behind in competition with Flipkart, but as we know Amazon
India is a customer-centric company. It always tries to provide better services to its
customers.

Bibliography
55
Websites:
https://www.businessinsider.in/business/ecommerce/news/flipkart-amazon-sales-grow-but-
post-big-losses-in-india/articleshow/71800470.cms
https://www.financialexpress.com/industry/sme/flipkart-india-revenue-up-12-in-fy20-even-
as-losses-drop-18-expenses-see-marginal-rise/2141027
https://rbsa.in/archives_of_research_reports/RBSA-E-Commerce-Industry-Analysis.pdf
https://www.flipkart.com/
https://www.amazon.com/
https://en.wikipedia.org/wiki/Amazon_(company)
https://en.wikipedia.org/wiki/Flipkart
https://www.investopedia.com/articles/markets/120115/amazons-3-key-financial-ratios.asp
https://dyvmwwyqozzzb.cloudfront.net/main/2018-19-4.pdf
https://www.macrotrends.net/stocks/charts/AMZN/amazon/operating-expenses
https://www.wsj.com/market-data/quotes/AMZN/company-people

Books:
 Financial Statements: A Step-by-Step Guide to Understanding and
Creating Financial Reports - Thomas R Ittelson
 How to Analyse Financial Statements - N Ramachandran & Ram Kumar
Kakani
 Theory and interpretation of financial Ratio analysis - Chandra Sekhar
 Financial planning and performance management - Jack alexander
Periodicals and Journals:
 “E- Commerce challenges: a case study of Flipkart.com versus Amazon. in by Dr Priti
Nigam
 “Prospects of e-commerce in India” by Sharma and Mittal (2009)
 “E-Commerce in India-A Review”, International Journal of Marketing, Financial
Services & Management Research by Abhijit Mitra. (2013).
 ” E-Commerce or Internet Marketing: A Business Review from Indian Context”,
International Journal of u- and eService, Science and Technology by
D.K.Gangeshwar. (2013)
 “Finding the source of Amazon.com: examining the hype of the earth’s biggest book
store”, by Martin Dodge. (1999)

Annexure

56
1. Age
 10-20
 21-30
 31-40
 40 and above
2. Gender
 Male
 Female
 Other
3. Occupation
 Salaried professional
 Businessman
 Student
 Other
4. Annual family income
 Less than Rs.200000
 Rs.200000-Rs.500000
 Rs.500000-Rs.1000000
 Rs.1000000-Rs.2000000
 Above Rs.2000000
5. Have you ever used online shopping?
 Yes
 No
6. How often do you shop online?
 Once in a month
 Once in two months
 More frequently
 Very rare
7. Which online site do you prefer?
 Amazon
 Flipkart
 Depends on product

57
  Both
8. Which payment method do you use?
 Debit Card
 Credit Card
 Cash on Delivery
9. Which online service is more satisfied in terms of products, customer care and
delivery services?
 Amazon
 Flipkart
 Others
10. In terms of pricing, which site you prefer more?
 Amazon
 Flipkart
11. Does promotional activities impact your purchasing decision?
 Yes
 No
 Maybe
12. Which site would you like to suggest others?
 Amazon
 Flipkart
13. How confident are you that your personal information is kept secure when
buying products online?
 Extremely confident
 Quite confident
 To some extent
 Not confident
14. What problems do you face during online shopping?
 Delay in Delivery
 Product damage
 Cheap quality of product
 Non deliverable
 Other

58
15. On a scale of 5 how much would you rate the customer service of Amazon?
16. On a scale of 5 how much would you rate the customer service of Flipkart?

59