role of online retailing

1. SCOPE OF ONLINE
RETAILING IN INDIA
Parul Bapna 3
Raj Kumar Desai 12
Risheek Iyer 26
Ruchita Jagetiya 27
Karishma Raghav 61
Humpreet Sahans 64
Aman Deep Singh 71

2. History of
Online
Retailing
• Kick-started in India in 2004 when eBay
started its operation in India.
• Stores like Flipkart, Myntra, etc. started in
2007 as an online retail store.
• ‘Cash on delivery’ method of payment
entered the e-commerce industry.

3. • Many brick-and-mortar stores also opened an
online portal to sell their products.
• Internet penetration increased from 21mn in
2006 to 243mn in 2014.
• Accounts for 10% of the GDP of India and 8% of
employment.

4. Advantages
for Internet
shopping
• Convenience: One of the biggest advantages
of Online shopping is that you can buy almost
anything you could imagine without leaving
your house
• More options: Online stores carry more
options as compared to brick-and-motar
stores
• Information: More detailed information
about items for sale than available in a brick-
and-motar store

5. contd…
• Price: Because online stores don’t need to pay
rent for a store in a nice part of town and they
sell larger quantities, they can offer items at a
lesser price
• Availability: Online retailers accept orders
24/7, hence, customers can shop according to
their feasibility

6. Traditional
vs
Online
shopping
• Traditional method allows us real time quality
check whereas in Online shopping we
Circumspect quality
• Traditional method provides sizing and trials
whereas for online shopping we need to wait
for delivery, return and then re-order
• We need to go to a physical store which can
be tiresome whereas for Online shopping we
can do it at our own feasibility

7. contd… • Traditional method has limitation of timings
whereas online method is available 24/7
• Traditional method provides a better aesthetic
experience whereas Online Shopping has a
visually cluttered experience
• Traditional method is time consuming to plan and
execute whereas Online method offers “Click &
Go” experience
• Traditional method has access to stuff only in one
country whereas with Online method you have a
Global access to products and services

8. Sectors
using e-
tailing
• Electronics
• Computer and peripherals
• Toys and games
• Travel and tourism
• Hospitality
• Real estate
• Employment
• Placement

9. E-tailing formats in India

10. Generic e-
tailers
■ Website acts as the sole front end of the
respective player where customers can choose
from online catalogue and place order.
■ Telephonic sales channels are also established to
augment sales
■ Revenue through online (sometimes inbound
telephonic also) product sales
■ Internet savvy customers mostly in Tier I and Tier II
cities
■ Scalability depends upon internet traffic growth
rate and a change in consumer buying
behavior
■ Existing set of low prices are helping to attract
throng of customers and enabling E-tailers to
scale up

11. Online
stores of
physical
retailers
■ Many Indian retailers operate online portals to
adopt a multi channel retail strategy and
complement their physical stores
■ Online stores targets acquiring new customers
who are more convenience driven rather than
looking for in-store experience
■ Revenue through online (sometimes inbound
telephonic also) product sales
■ Scalability is driven by brand value of the physical
retailer and convenience factor demand amongst
its consumers
■ Scalability in this model will happen only with a
paradigm shift in consumer preference for
convenience rather than in-store experience

12. Niche
players
■ Unlike generic E-tailers, niche players in E-
commerce are just focussing on a single product
category/type
■ Niche product categories includes apparel,
footwear, baby care, personal care etc.
■ Revenue through online (sometimes inbound
telephonic also) product sales
■ Their target segment is the Internet savvy and price
conscious customer mostly in Tier I and Tier II cities
■ Scalability is limited as they are catering to niche
demands
■ It is imperative to offer a host of products to gain
new customers and hence niche players will
scale up based upon depth of variety they are
offering

13. Deal
aggregators/
daily deal
websites
■ Offers discount coupons to consumers for
various products and services (restaurants,
spas, hotels, travel deals etc.)
■ Front end includes a website where discount
coupons can be purchased and a sales force
which enlists merchants and deals
■ Their Revenue comes from commission received
via merchants
■ Scalability is a function of number of
merchants/variety of deals one can bring to the
table, which is in turn driven by sales force on the
ground. Hence, scalability is limited

14. Online travel
websites
■ This category consists of players who focuses on
meeting a single consumer need through wide
range of products (air travel, rail travel, hotel
accommodation, travel packages etc.)
■ Focuses mainly on convenience rather than low
prices
■ Travel websites have been able to scale up based
upon convenience as the central tenet of their
value proposition
■Players like makemytrip and cleartrip have to
compete with end-service providers which
operates their own websites (irctc.co.in,
indigo.in etc.)

15. Rapid growth of relatively smaller categories like fashion has led to horizontal players
acquiring niche vertical players to increase selection

16. Current Scenario
in online retailing

17. Growing at a rate of 50-60% per year,
Indian e-tailing market is expected to reach $80-100 billion
by year 2020

18. Split of e-tailing market by nature of player

19. Product categories suitable for E-tailing:
India majorly works in the 1st and 4th quadrant

20. Observed trends in online shopping…
1. Men in India shop 3X more than women!
More disposable income and free time; Shopping online is becoming a habit
2. Cash-On-Delivery (COD) was the most preferred online payment
method but will decline due to demonetization
Gave more control over online transactions since we don’t have to pay until the
product is at our doorstep
Has also proven to boost impulse purchases
3. 60% of online purchases happen during business hours. (9AM –
5PM)
Marketers use this fact to schedule their promotions across advertising channels
accordingly
4. Impulsive categories like Clothing and Mobile accessories count
60% of online purchases

21. Drivers of Internet
Shopping
• Better price- Prices of products available online are
around 5% on an average cheaper and shoots upto nearly
75-80% on special sales days.Also other offers such cash
back etc make shopping online cheaper.
• Range/Choice- choices available online are multifolds
than offered by brick and mortar companies. Companies
likeAmazon,Flipkart claim to have more than 1 crore
product range on its portal for sales.
• Time saving-With different types of products all
available at single place it save lot time of the shopper to
choose and pick up what it wants.

22. • Delivery Options-Options such as One day delivery/
Express delivery , Cash on delivery, delivery tracking ,
delivery at almost any part of the country etc has
made shoppers buy online
• Review-nowadays almost all E-commerce companies
provide reviews of the product , a forum that help the
shopper to understand how well a certain product is
accepted by other buyers
• Exchange policy- With policy like exchange of product
if not according to your taste or like removes fear
from mind of buyer of “what if I don’t like the product
?”

23. • HeavyAdvertisements-Catchy
advertisements, slogans and campaigns
have attracted large number of shoppers
to purchase from online .Tagline lines like
#aurdikhao, #dil ki deal, #Ab har wish
hogi poori etc
• Mobile internet penetration-With
increasing user base there has been
exponential increase in internet usage.
The country’s mobile Internet
subscriptions increased by almost 1,500%
over the 2009-2014 period.

24. Challenges
of E-
Retailing
•E-Infrastructural Issue
•Branding & Marketing
•Declining Margins
•Logistics & Supply
Chain
•Touch & Feel

25. 1)E- Infrastructural Issues
• Internet is the backbone of e-commerce.
Unfortunately, in India internet penetration is so
far dismally low at 0.5 per cent of the population,
penetration of personal computer (PC) as low as
3.5 per thousand of population and penetration
of telephone only 2.1 per cent of population, e-
commerce remains far away from the common
man.

26. 2)Branding & Marketing
• To get people to come on an e-Commerce site and
make a purchase involves heavy cost due to branding
and marketing.This cost is significant and can be
brought down to cost per customer, if the volumes
permit to do so. Experts say that the average figure for
this metric in the current e-Commerce ecosystem is
between INR 500 – 1000 customer, which isn’t
sustainable for even medium sized companies, let
alone early stage ones.

27. 3)Declining
Margins
• With the introduction of a large number of players in
the already competitive e-commerce market, the
customer is pampered by offering huge discounts,
offers, taking returns etc. resulting in razor-thin
margins

28. 4)Logistics &
Supply
Chain
• Logistics failure in any area can mean detrimental
damage to a startup’s future and can hurt the brand
overall.Add to this the need for a guaranteed return
policy.Getting this right is a challenge.

29. 5)Touch &
Feel
• Indian customers are more comfortable in buying
products physically.Companies dealing with products
like apparel, handicrafts, jewelry have to face
challenges to sell their products as the buyers want to
see and touch before they buy these stuffs.

30. Scope
• More than just buying and selling products online.
• It also includes the entire online process of developing, marketing, selling, delivering, servicing
and paying for products and services
• Major breakthrough in e-retail in Consumer Electronics & Fashion Apparel & Home
Furnishing segments.

32. Why online
retail is
growing?
• Critical mass of internet users
• Rising middle class with disposable income
• Payment gateways and logistics
• User Experience
• Infrastructure - Easy to get up & running

34. Future
• Social Media:
 Majority of online buying decisions are made on Social Media.
 Social network like Facebook, LinkedIn,Twitter, Google+, Pinterest etc have become a medium
for easy log-in and purchase.
 Increased chances of successful transaction through advertising and promotions on these social
sites.

35. • Drone Delivery:
 Shorten human effort and time.
 DGCA is now fast tracking the process of issuing guidelines for the use of drones for civil
purposes in India.
 If everything goes as per the plan, then India might become the first country in the world to
allow the use of drones for civil purposes.
• App only Approach:
 Increase in internet users and accessingWeb through mobile phones.
 About two-thirds of its online traffic of Flipkart comes from users in small cities and towns.

36. • Google’s Buy Now Button:
 Search for products on Google & purchase through a single click.
 The button will be displayed near sponsored search results beneath a “Shop on Google” heading
at the top of the page.When users click on the Google’s “Buy Now” button, they will be re-
directed to another Google page that will allow them to choose specific item details.
 Google would then pass on order information, including the customer’s name and shipping
address, to the retailer.

37. • Artificial Intelligence:
 Innovative use of technology by developing artificial intelligence (AI) solutions.
 Jet Airways is experimenting with one such solution devised byVizury.

38. Future
Trends
• Mobile optimized, not just mobile friendly
• Targeting wearable devices
• Rise of long form content
• More social and search ads
• Brand andAuthor Identity Will Become More
Important
• Personalized Experiences
• Local Branding and Marketing
• MarketingAutomation