SUMMER INTERNSHIP PROJECT REPORT

ON

MARKETING STRATEGY OF
“FLIPKART.COM”

Submitted in the partial fulfillment for the award of Degree of

Bachelor in Business Administration 2016-2018

Under The Guidance: Submitted By:

MS. TANU GUPTA ANSHUL CHAUHAN
Faculty (Management), CPJCHS Enrollment No:- 35121501917
BATCH NO. 2017-2020

CHANDERPRABHU JAIN COLLEGE OF HIGHER STUDIES & SCHOOL OF LAW

An ISO 9001:2008 Certified Institute (Approved by the Govt of NCT of Delhi
Affiliated to Guru Gobind Singh Indraprastha University, Delhi)
Plot No OCF Sector A-8, Narela New Delhi -40
 DECLARATION

This is to certify that Report entitled “Marketing Strategy of FLIPKART.COM”

which is submitted by me in partial fulfillment of the requirement for the award of
degree B.B.A (CAM). to GGSIP University, Dwarka, Delhi comprises only my
original work and due acknowledgement has been made in the text to all other
material used.

Date: Name of Student

Anshul Chauhan

Approved By:
Ms. Tanu Gupta

I
 CERTIFICATE

This is to certify that Report entitled “Marketing Strategy of FLIPKART.COM”

which is submitted by Anshul Chauhan in partial fulfillment of the requirement for
the award of degree B.B.A(CAM), GGSIP University, Dwarka, Delhi is a record of
the candidate’s own work carried out by him/her under my/our supervision. The
matter embodied in this report is original and has not been submitted for the award of
any other degree.

Date: Supervisor Signature

2
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Chanderprabhu Jain College of

Higher Studies & School of Law, GGSIP University, New Delhi for imparting us
very valuable professional training in BBA(CAM).
I pay my gratitude and sincere regards to Ms. Tanu Gupta, my project Guide for
giving me the cream of his knowledge. I am thankful to her as she has been a constant
source of advice, motivation and inspiration. I am also thankful to him for giving his
suggestions and encouragement throughout the project work.
I take the opportunity to express my gratitude and thanks to our computer Lab staff
and library staff for providing me opportunity to utilize their resources for the
completion of the project.
I am also thankful to my family and friends for constantly motivating me to complete
the project and providing me an environment which enhanced my knowledge.

Student’s Signature
Anshul Chauhan

3
 EXECUTIVE SUMMARY

The changing global trends have important implications for Indian retailers. The
Indian consumer remains value conscious. The consumer in most cases is willing to
spend money, but remains cost conscious, evaluating every rupee spent. It is therefore
imperative for retailers to offer price advantage via sourcing and operational
efficiency and a strong private label program to attract customers. Existing and new
entrants need to achieve scale quickly for driving efficiencies in procurement, supply
chain and marketing. Else they risk being marginalized by larger players. Real estate
and human resources will be the critical drivers to build scale.

The Easy Bill Limited is expanding its activities, retail chain and geographical reach
day by day in the coming years one may not get surprised to see Easy Bill as one stop
billing solution for every purchase for the retail customers in India.

“Easy Bill is a one stop bill payment shop. Now you don’t have to run all over town
and stand in long queues to pay your utility bills. You can do it right next door at your
friendly neighborhood store. You can pay your mobile, electricity and telephone bills
at leisure, even on Sundays.

The last few pages of this marketing plan deal with the various ways in which the
plan, once implemented, can be monitored and controlled

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 TABLE OF CONTENTS
Sl. No Title Pages No
Student declaration
Certificate from Guide
Acknowledgement
Executive Summary

Chapter-1 INTRODUCTION
1.1 Purpose of the study
1.2 Research Objectives of the study
1.3 Research Methodology of the study
1.3.1. Research Design
1.3.2 Data Collection
1.3.3 Limitation
Chapter -2 Company Profile
2.1 About the Organization / Company Profile
2.2 About the topic of study
Chapter -3 Findings and Analysis
Chapter -4 Suggestions
Chapter -5 Conclusion and Limitation
Bibliography
Annexures
Questionnaire

5
 Chapter-1
Introduction

6
 INTRODUCTION

1.1 Purpose of the study

Purpose is study on the analysis of Customer Perception towards online shopping on
Flipkart.com. Basically it is important to investigate the motivation behind consumer
purchase but it is equally important to find us how the consumers form perception and
behaviours towards online buying because consumer perception towards purchasing
online is a conspicuous factor affecting actual buying behaviour. One of the
researches is to work on factors that influence customers to buy online from
Flipkart.com, and have decided to study four factors such as convenience, time
saving, Website features, and security. And along with this the study for out of stock
on highly discounted items also will be done.

However, customer’s willingness to purchase online could be affected by one’s

individual needs and these needs can be ‘Need for cognition’. Taking these aspects
into account, a survey is conducted to know the perception towards online shopping
on Flipkart.com.

The Internet, as a mean for both firms andindividuals to conduct business, is

nowadaysone of the most widely used non-storeformats.With popular trends and
demands the concept of the Internet as the way forward to increase profit margins,
companies new and old are creating websites here and there. The significance for
retailers to having a web site is that a web site is informational and transactional in
nature,as the web site can be used for advertising and direct marketing; sales;
customer support and public relations.It has been more than a decade since business-
to-consumer E-commerce first evolved. Scholars andpractitioners of electronic
commerce constantly strive to gain an improved insight into consumer behaviour
incyberspace.

Internet is changing the way consumers shop and buy goods and services, and has
rapidly evolved into a globalphenomenon. Many companies have started using the
Internet with the aim of cutting marketing costs, therebyreducing the price of their
products and services in order to stay ahead in highly competitive markets.
Companiesalso use the Internet to convey, communicate and disseminate information,

7
to sell the product, to take feedback andalso to conduct satisfaction surveys with
customers. Customers use the Internet not only to buy the product online,but also to
compare prices, product features and after sale service facilities they will receive if
they purchase theproduct from a particular store. Many experts are optimistic about
the prospect of online business.

A brand is the idea or image of a specific product or service that consumers connect
with, by identifying the name, logo, slogan, or design of the company who owns the
idea or image. Branding is when that idea or image is marketed so that it is
recognizable by more and more people, and identified with a certain service or
product when there are many other companies offering the same service or product.
Advertising professionals work on branding not only to build brand recognition, but
also to build good reputations and a set of standards to which the company should
strive to maintain or surpass. Branding is an important part of Internet commerce, as
branding allows companies to build their reputations as well as expand beyond the
original product and service, and add to the revenue generated by the original brand.
Initially, Branding was adopted to differentiate one person's cattle from another's by
means of a distinctive symbol burned into the animal's skin with a hot iron stamp, and
wassubsequently used in business, marketing and advertising.

Customer perception is a marketing concept that encompasses a customer's

impression, awareness and/or consciousness about a company or its offerings.
Customer perception is typically affected by advertising, reviews, public relations,
social media, personal experiences and other channels.

Consumer behaviour is the study of individuals, groups, or organizations and the

processes they use to select, secure, and dispose of products, services, experiences, or
ideas to satisfy needs and the impacts that these processes have on the consumer and
society. It blends elements from psychology, sociology, social anthropology and
economics. It attempts to understand the decision-making processes of buyers, both
individually and in groups. It studies characteristics of individual consumers such as
demographics and behavioural variables in an attempt to understand people's wants. It
also tries to assess influences on the consumer from groups such as family, friends,
reference groups, and society in general.

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Customer behaviour study is based on consumer buying behaviour, with the customer
playing the three distinct roles of user, payer and buyer. Research has shown that
consumer behaviour is difficult to predict, even for experts in the field. Relationship
marketing is an influential asset for customer behaviour analysis as it has a keen
interest in the re-discovery of the true meaning of marketing through the re-
affirmation of the importance of the customer or buyer. A greater importance is also
placed on consumer retention, customer relationship management, personalisation,
customisation and one-to-one marketing. Social functions can be categorized into
social choice and welfare functions.

The ultimate goal of most businesses is to increase sales and income. Ideally, you
want to attract new customers to your products and encourage repeat purchases.
Brand awareness refers to how aware customers and potential customers are of your
business and its products. Brand Awareness is the extent to which a brand is
recognized by potential customers, and is correctly associated with a particular
product. Expressed usually as a percentage of target market, brand awareness is the
primary goal of advertising in the early months or years of a product's introduction.

Brand awareness is the extent to which the consumer associates the brand with the
product he desires to buy. It is the brand recall and the brand recognition of the
company to the consumers. Brand recall is the ability of the consumer to recollect the
brand with reference to the product whereas brand recognition is the potential of the
consumer to retrieve the past knowledge of the brand when enquired about the brand
or shown an image of the brand logo. Brand awareness is an essential part of brand
development which helps the brand to stand out from the others in this
monopolistically competitive market.

Digital marketing involves the promotion of products and services using digital
distribution channels that reach consumers in a timely, relevant, personal, and cost
effective manner. At a high level, digital channels can have many categories, such as
the internet, mobile, digital outdoors, and any form of interactive digital media. Each
category has multiple digital tools/ sub-channels that can support digital marketing.
These include:

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  Internet- Email banner ads, dedicated websites, pop-up ads, sponsored content,
paid keyword search, podcasts, etc… Newer channels comprise social
networks, blogs, wikis, widgets, virtual words, online gaming etc…
 Mobile- SMS,MMS, mobile Web, mobile application and mobile video
 Digital outdoors – Stills,/ video digital display, interactive kiosks
 Interactive digital medium – interactive television channels

Any combination of the above channels can be used to gain maximum visibility with
utmost impact among targeted customers, thereby enabling more business at a
reasonable cost. While digital channels empower marketers with a tremendous
advantage in terms of their extensive reach, leveraging their potential requires
effective management of multiple channels with complex variables to realize optimal
value.

According to ASSOCHAM e-billing and convenience industry is expected to

touch Rs. 6.5 million by 2008-09 (currently its Rs. 1.9 million)

Here are a few key findings from the report:

 Average Indian household in the top 10 Indian cities pays approximately

50 bills annually, in finance, insurance, telecommunication and utility-
based companies, besides the usual electricity, water, house tax and other
civic levies.

 Mumbai had taken the lead in e-billing since 28% of its population availed
of e-billing transactions followed by 22% of Delhi, 12.5% of Chennai,
12% of Bangalore, and 5.2% of Hyderabad.

 73% of online payers accesses the internet from home, while 79% from
office; 36% from cyber cafes, 7% from friends’ place and 14% from
mobile phone

 75% of cell phone possessor choose online medium for payment of their
bills; 70% pay credit card bills online while 60% pay electricity bills
online; 45% pay insurance premium online;

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  46% online bill payers are between the age of 26-35, followed by 22% in
the age 18-25 group; 20% are in the 36-45 age group, 11% in the 40-60
bracket and 2% in the 61+ age bracket

 83% online bill payers are male and 17% female; 43% are unmarried

What clearly comes out is that majority of e-bill payers access the Internet from
home - which essentially means that the majority of customer base comprise of
‘power users’; and online bill payment concept has not yet reached the next level
(esp. Tier-II cities).

Given that there is a ceiling to PC adoption in India, e-billing industry needs to

tap the mobile users for adoption.

Electronic commerce, commonly known as e-commerce, is a type of industry

where buying and selling of product or service over electronic systems such as the
Internet and other computer networks takes place. Electronic commerce draws on
such technologies as mobile commerce, electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data collection
systems. Modern electronic commerce typically uses the World Wide Web at
least at one point in the transaction's life-cycle, although it may encompass a
wider range of technologies such as e-mail, mobile devices social media, and
telephones as well.

Electronic commerce is generally considered to be the sales aspect of e -business.

It also consists of the exchange of data to facilitate the financing and payment
aspects of business transactions.

Billing can be defined as the process of adding up the price of each transaction
made in a certain fixed period to determine the final aggregate amount, followed
by the generation of a printable image of the bill. Pricing is a key aspect of
billing. Records of the transaction are retrieved from the storage system at the end
of the fixed period and then processed to generate the final bill. This bill will also
include other monthly fees and credits.

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Billing system has enabled rapid business expansion in terms of roll-out of
services across the country, and has helped in providing standard practices
uniformly across all customer touch points. Changing technologies, volatile
market trends and an equally unstable regulatory environment means that Indian
telecom operators are constantly devising new strategies to keep their heads
above water. Add to this the flurry of mergers and acquisitions in the recent past
and it’s mayhem out there. A robust billing system should be capable of reflecting
the change in the aggregate if the price of an individual transaction changes du e
to these or any other factor. Configuration tools should allow for quick loading of
business rules, enabling the operator to rapidly take new products and services to
the market for additional revenue streams and cash flows.

Billing includes various components, including rating, discounting, promotions

and pricing. Rating is the process of computing a rate for usage of a service-voice
or data. Rating means pricing individual calls. Each call is sent to a rating engine
and transactions are rated. The billing system takes all these calls and aggregates
all other charges to arrive at the final pricing. Pricing is the process of computing
a price for a call by doing rating, discounting, and applying promotions—short-
term incentives given to customers.

A robust billing system should also provide tools for customising or personalising
billing and reporting, fine-tuning of billing cycles and account parameters,
creating promotional discounts that are easy to implement, applying invoice
corrections immediately, managing accounts receivables and payables, tracking
account disputes and providing customer care with Web-based interfaces.
Elaborates Amrita Gangotra, VP, IT, Bharti Televentures, “Some of the key
functionalities desired in a telecom billing solution include provisioning of
service (normal and bulk), rapid and flexible configuration of services/products,
express rating and accurate billing, integrated payment and collection, a robust
MIS tool and convergent billing solution.”

According to K Nandakumar, president and CEO of Suntec Business Solutions,

the billing system should be able to automatically calculate the amount of tax due
and interface easily with existing tax management software. It should help reduce
costs with comprehensive Web-based interfaces that provides customer care

12
personnel with instant access to customer account information and track account
disputes and manage their potential impact on accounts receivables and on
collections processing.

Flipkart: India's Amazon*

Flipcart.com, an e-retailer was established in 2007, when e-

retailing in India was at a nascent stage. Since its inception
Flipcart introduced several innovations and went on to become one of the largest
players in the industry. The case discusses Flipcart's inception, growth, expans ion
and development over the years, and the strategies it followed to become a name
to reckon with in the Indian e-retail industry.

Issues:

» The strategies a new company could follow in a new market

» Organic and inorganic growth

» Indian e-retail market - challenges and opportunities

Flipkart.com, one of the leading e-retail companies in India, was launched in

2007 by Sachin Bansal (Sachin) and Binny Bansal (Binny), who were classmates
at the Indian Institute of Technology, Delhi. The idea of starting an e-retail
company emerged while they were working in Amazon, India (Development
center). They studied the Indian e-retail market and found that the number of
online buyers was on the rise, and that the demand they generated was not being
met by the existing e-retail companies. Further, they found that in India, customer
service by e-retail companies was poor when compared to that of international e-
retail companies like Amazon.com...

Questions for Discussion:

1. Discuss Flipkart's inorganic growth strategies.

2. What strategies should Flipkart implement to ward off competition
from Indian and international e-retailers?

Key words: Flipkart, e-retail, Amazon.com, LetsBuy.com, Junglee.com, venture

capital, organic growth, inorganic growth

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1.2 Research Objectives of the study

 To find the factors that leads a website user to return to or recommend the
website Flipkart.com

 To discover the key factors that influence online buying behaviour of

consumers in India

 To identify who are the online shoppers in terms of demography

 To understand the customer awareness on Flipkart.com

 To determine the factors responsible for customer satisfaction

1.3 Research Methodology of the study

Research comprise defining and redefining problems, formulating hypothesis or
suggested solutions; collecting, organizing and evaluating data; making deductions
and reaching conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating Hypothesis.

In short, the search for Knowledge through Objective and Systematic method of
finding solutions to a problem is Research.

1.3.1 RESEARCH DESIGN

Type of Research: - Research design selected for this project is Descriptive.

“Research means different things to different people” and the intention behind it are
to investigate innumerable data, theories, experiences, concepts and law. “The
procedural framework within which the research is conducted” is the definition of
research methodology. The two broad and distinct approaches to social research cover
the Quantitative and Qualitative methods of enquiry.

The quantitative paradigm on the other hand intends to gain a deeper understanding,
knowledge and insight into a particular situation or phenomenon, by providing
answers to questions of ‘how?’ rather than ‘what?’. Unlike qualitative research which
occurs in natural settings, quantitative research is where hypotheses are established.

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1.3.2 DATA SOURCES

The data required for understanding will be collected from various online customers.
In order to conduct the study digital survey was conducted through facebook and e-
mail. And those responses are collected in a spreadsheet and further analysis was
done.

The data collection method in this particular research comprises of two forms: namely
primary and secondary data. One needs to be careful while using secondary data as
maybe the collected data may be biased as the collector of that original data might
have highlighted only a partial picture or another aspect may be that data may be quite
old and also the data quality could be unknown.

There are two types of data.

Primary data

“Data collected specifically for the research project undertaken” is the definition of
primary research as provided by Saunders et.al (2003: pp. 486).

Primary data is generally originated by any researcher to address any specific problem
or issue at hand, where the only drawback is that it can be expensive and time-
consuming. The various ways of gathering primary data is through surveys, focus
group and observations.

In this study, the primary data is collected through well-formed questionnaire with the
help of a digital survey. The questionnaire consists of quantitative and qualitative
multiple choice questions and the respondents are asked to choose the one choice
which suits them the best amongst the multiple choices.

Secondary Data

Prerequisite to the collection of primary data is a careful scrutiny of the existing

secondary data (Malhotra, 2005). The Data that is collected from existing journals,
reports and statistics from private and public institutions are called Secondary data.
For this specific study the collection of secondary data was done primarily from
marketing journals already available on this topic. Secondary data helps the author to
comprehend the perception of Indian consumers on online shopping.

15
Thus the study carried out has analyzed the primary data with the rationale and
validation of the present secondary data.
Sample technique
Choosing a study sample is an important step in any research project since it is rarely
efficient, practical, or ethical to study whole populations. In this study the sampling
strategy used is convenient sampling. The sample size is 100. A small part of
something intended as representative of the whole, or a subset of a population. In this
research simple random sampling is being used.
Data collection
The data collection would be:
PRIMARY DATA: Questionnaire
SECONDARY DATA: Journals, Internet, newspaper etc.
Sample design
Online customers of NCR Delhi are included under this research and tell their
satisfaction level.
Sample Size: 100
Research Area: NCR Delhi
Data source
Both Primary and Secondary source of data would be used .The major type of
information is used from primary data.

1.3.3 LIMITATIONS OF THE STUDY

No research is complete without admitting the limitations that was faced while
conducting a study which will contribute to present learning. This study too like the
others have certain constrains which has been discussed below.

 The study was restricted to NCR Delhi city only

 The study is mainly concentrated on Flipkart.com

 The sample of the size will be limited to time and resources

 The information will be collected valid until there is no any technical change
or any innovation

 The result is assuming that respondents have given accurate information

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 Chapter -2
Company Profile

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 ABOUT THE ORGANIZATION / COMPANY PROFILE

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It

was founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart
focused on online sales of books, but it later expanded to electronic goods and a
variety of other products. Flipkart offers multiple payment methods like credit card,
debit card, net banking, e-gift voucher and Cash on Delivery.

Flipkart went live in 2007 with the objective of making books easily available to
anyone who had internet access. They’re present across various categories including
movies, music, games, mobiles, cameras, computers, healthcare and personal
products, home appliances and electronics – and still counting!

With over 11.5 million book titles, 11 different categories, more than 2 million
registered users and sale of 30000 items a day, they’re one of the leading e-commerce
players in the country.

Their success is largely due to their obsession with providing customers a memorable
online shopping experience. Be it Cash on Delivery, a 30-day replacement policy,
EMI options, free shipping - and of course the great prices that they offer. Then
there's dedicated Flipkart delivery team that works round the clock to personally make
sure packages reach on time. For now they're present in 27 lucky cities, but don't
worry, plans are underway to spread to many others.

Company Overview of Flipkart Online Services Pvt. Ltd.

Flipkart Online Services Pvt. Ltd. owns and operates an online shopping Website in
India. It provides books, movies, music, games, consoles, gaming accessories,
mobiles, mobile accessories, cameras, camera accessories, computers, computer
accessories, network components, software, peripherals, home and kitchen appliances,
TV and video products, and personal and health care products. Flipkart Online
Services Pvt. Ltd. was founded in 2007 and is based in Bengaluru, India.
No. 447/B, 1st A Cross

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12th Main, 4th Block
Opposite BSNL Telephone Exchange
Koramangala
Bengaluru, 560034
India
Founded in 2007
Phone:
91 80 3023 7000
Fax:
91 80 3023 7000

Key Executives For Flipkart Online Services Pvt. Ltd.

Mr. Sachin Bansal
Co-Founder and Chief Executive Officer
Mr. Binny Bansal
Co-Founder and Chief Operating Officer
Mr. Sanjay Baweja
Chief Financial Officer
Age: 54
Mr. Sujeet Kumar
President of Operations
Mr. Mukesh Bansal
Marketing Chief, Head of Flipkart Commerce Platform and Director
Compensation as of Fiscal Year 2015.

Flipkart Online Services Pvt. Ltd. Key Developments

Flipkart Appoints Punit Soni as Chief Product Officer
Mar 4 15
Flipkart announced that Punit Soni, a Google product management executive and
former vice president of product management at Motorola, will join Flipkart as chief
product officer. Punit will lead the product definition and innovation charter for
Flipkart consumer products, marketplace and transaction platform. In this role, Punit
will be driving product strategy, design and product marketing functions to build
world class user interface and product solutions.
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Flipkart Reportedly In Talks To Raise Funds
Feb 16 15

Flipkart Online Services Pvt. Ltd. intends to raise funds. Flipkart is again in talks with
investors to raise at least $500 million. The company is discussing fund-raising with
existing as well as new investors, sources said. It is likely to use the fresh funds for
technology to match the scale of the business and market share. "They have begun
searching for funds again, as the company feels accumulating funds, though not
desperately needed at present, is a good strategy. Talks have just started and it may
take a few months to finalize the intricacies," a source close to the development said,
requesting anonymity. Business Standard added that Flipkart refused to comment on
the matter.

History of Flipkart.com

Flipkart was founded in 2007 by Sachin and Binny Bansal, both alumni of the Indian
Institute of Technology, Delhi. They worked for Amazon.com before quitting and
founding their own company. They both were solid coders and wanted to open a
portal that compared different e-commerce websites, but there were hardly any such
sites in India and they decided to give birth to their own e-commerce venture -
Flipkart.com.

Thus was born Flipkart in Oct 2007 with an initial investment of 4 lac (co-founders
savings). It was never going to be easy since India had a bad past experiences with e-
commerce trading. It was not an easy segment to break into, people were very
particular in paying money for something which they had not seen and received. The
trust was missing in the Indian customers. So what Flipkart had to do was to instil
trust and faith in their customers. And they did exactly the same later.

Initially they used word of mouth marketing to popularise their company. Flipkart
began with selling books, since books are easy to procure, target market which reads
books is in abundance, books provide more margin, are easy to pack and deliver, do
not get damaged in transit and most importantly books are not very expensive, so the
amount of money a customer has to spend to try out one's service for one time is very
minimal. Flipkart sold only books for the first two years. A few months later, the

20
company sold its first book on Flipkart.com—John Woods' Leaving Microsoft to
Change the World.

Flipkart started with the consignment model (procurement based on demand) i.e. they
had ties with 2 distributors in Bangalore, whenever a customer ordered a book, they
used to personally procure the book from the dealer, pack the book in their office and
then courier the same. In the initial months the founder's personal cell numbers used
to be the customer support numbers. So, in the start they tried their best to provide
good service, focus on the website - easy to browse and order and hassle-free, and
strove hard to resolve any customer issues. Since there were not any established
players in the market, this allowed them a lot of space to grow, and they did in fact
grew very rapidly.

Flipkart Today

Today, as per Alexa traffic rankings, Flipkart is amongst the top 20 Indian Web sites
and has been credited with being India's largest online bookseller with over 11 million
titles on offer. The store started with selling books and in 2010 branched out to selling
CDs, DVDs, mobile phones and accessories, cameras, computers, computer
accessories and peripherals, and in 2011, pens & stationery, other electronic items
such as home appliances, kitchen appliances, personal care gadgets, health care
products etc. Further in 2012, Flipkart added A.C, air coolers, school supplies, office
supplies, art supplies & life style products to its product portfolio. As of today, The
Company started from 2 employees and now employs more than 4500 people.

Flipkart.com started off from selling books in 2007, based in Bangalore, and entered
then consumer electronics category with the launch of mobile phones, in September
2010. Since then it kept on adding more new products categories including books,
mobiles, computers, cameras, home & electronic gadgets& appliances, In addition to
these very Recently, Flipkart.com has also widened its foray by entering into the
emerging digital content market with the recent launch of Flyte, the digital music
store & is still continuing to enlarge its product portfolio. It is now one of the leading
e-commerce players in India, currently ranks at the top 20websites in India, spread in
37 cities, with 11.5 million plus book titles, 14 different categories, 3 million plus
registered users and sale of 30000 items a day. It provides online-shoppers a
memorable online-shopping experience because of its innovative services like:

21
 • Cash on Delivery,
• 30-day replacement policy,
• Easy Monthly Instalment options (EMI),
• Free shipping
• Discounted prices & deals

Flipkart started with consignment model as discussed above, since most of the
customer issues like delivery delays etc. result from procurement model, the company
started opening its own warehouses as it started getting more investments. The
company opened its first warehouse in Bangalore and later on opened warehouses in
Delhi, Kolkatta and Mumbai. Today the company works with more than 500
suppliers. As on date more than 80% orders of Flipkart are handled via warehouses
which help in quick and efficient service.

A humble beginning from books, Flipkart now has a gamut of products ranging from:
Cell phones, laptops, computers, cameras, games, music, audio players, TV's,
healthcare products, washing machines etc. etc. Still, Flipkart derives around 50% of
its revenue from selling books online. Flipkart is the Indian market leader in selling
books both offline and online, it enjoys an online share of around 80%. The electronic
items have a large number of players like Naaptol, Letsbuy, Indiaplaza, Tradus,
Infibeam, Yebhi etc. The electronic market share is distributed among them in
different unknown proportions.

India has around 13.5 crore internet users today where as the number of homes with
Cable and Satellite (C&S) television is 10.5 crore. The expected internet users will
reach a figure of 30 crore by 2015 and C&S homes are expected to be 14 crore by
2015. Thus India has a tremendous internet growth and with the customers getting
accustomed to e-commerce, the future of e-commerce sector is definitely rosy. An
approximated 25 lac people have transacted online this year, the number is all set to
increase with time.

Also to mention most of the Flipkart customers use internet from PC's/Laptops to
order goods. The use of mobile internet is very less at the moment, but with the
advent of smart phones the use of mobile internet for e-commerce transactions will
soar with time. India has 8 crore mobile net users at the moment, the number is
expected to swell to 22.5 crore by 2015.

22
Flipkart had a revenue of 4 crore in FY 2008 - 2009, 20 crore in FY 2009 - 2010, 75
crore in FY 2010 - 2011, and the revenue for FY 2011 - 2012 which ends on 31 Mar
2012 had 500 crore. This is indeed a massive growth. The company targets revenues
of 5000 crore by 2016.

Evolution of Logos

Funding

 Initially funded by the Bansals themselves with 4 Lakhs (INR).

 Flipkart has since then raised two rounds of funding from venture capital
funds Accel India (in 2009) and Tiger Global Management (up to the tune of
US$10 million) (in 2010).
 Private equity firms Carlyle and General Atlantic are in talks to jointly invest
about $150 million to $200 million in Flipkart, according to sources.

Acquisitions

 2010: WEREAD, a social book discovery tool. The stated goal was to give
Flipkart a social recommendation platform for buyers to make informed
decisions based on recommendations from people within their social network.
 2011: Mime360, a digital content platform company.

23
  2011: Chakpak.com is a Bollywood news site that offers updates, news,
photos and videos. Flipkart acquired the rights to Chakpak’s digital catalogue
which includes 40,000 filmographies, 10,000 movies and close to 50,000
ratings. Flipkart has categorically said that it will not be involved with the
original site and will not use the brand name.
 2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart
has bought the company for an estimated US$ 25 million.

Teams at Flipkart

Category Management

All this requires an extremely efficient supply chain and this is where Category
Management comes in. The folks at Category Management are responsible for vendor
relations and supply management – without which online shopping wouldn’t be what
it is at Flipkart.

* Developing Vendor Network across Country

* P&L Responsibility for various Product Categories

* Building Relations with Leading Brands and Manufacturers

* Market Research

* Managing Supply Chain for efficient sourcing

* Using Technology to Solve Problems

Catalogue

These guys build the look of every catalogue that is launched on the website. From
defining product specifications to ensuring all product related content appears
correctly on the site – the team is constantly working to ensure the customer can make
an informed purchase from us at all times.

24
Warehouse & Fulfillment Center

Procurement in Flipkart is all about obtaining products that are the best in “Quality”,
from the right “Source” and in the shortest possible “Time” to ensure “Customer
Delight”. Warehousing in Flipkart, on the other hand, is where these products are
inspected with a fine tooth-comb. After all, we have a promise to keep - original
products with original warranty. And this is all done with the highest level of
automation because for us, technology is everything.

Logistics

Flipkart ship 30,000 items every day. That’s 20 items a minute, to nearly every single
pin code in this country. At least 80% of these orders are shipped by our very own,
one-and-a-half year old delivery team, Flipkart Logistics.

Today Flipkart is in 30 cities and soon we intend to expand all over the country. A
huge (and growing) team od delivery executives with a ‘customer first’ approach –
this is what FKL is all about.

Customer Support

‘Customer delight’ is one of the USP of Flipkart. Flipkart want their customer to have
the best ever online shopping experience when they are with them – and will do
everything in our power to ensure it. Though every employee at Flipkart is
responsible for giving the customer a great experience at all touch points, it is our 24X
7 customer support team that has succeeded in setting unbeatable standards in the
service industry.

Finance

Flipkart is a company that has gone from being a start-up to the largest online retailer
in the country – clocking revenues of Rs 2.5 cores per day and well on its way to
achieve a target of $1 billion in revenue by 2015. So can there be any doubt that
Finance plays a really important role in their development.

Talent Acquisition

Growing by leaps and bounds is not an exaggeration when it comes to Flipkart. What
was started by two people in 2007 has today become a 4500 strong company – and

25
counting! In the last year alone we have added 4000 people to the team. With the
demand for high quality talent across departments showing no signs of slowing down,
the Talent Acquisition Group, or TAG as Flipkart like to call them, have their hands
full.

Human Resource

Flipkart as an organization has grown from strength to strength to emerge as a leader

today in the Indian e-commerce space. The pace which we have maintained has been
possible because of a high caliber, energetic and agile workforce. Today Flipkart
attracts highly talented professionals from across the industry and campuses alike -
the opportunity to innovate and exposure to a high-growth business environment
being our main attraction.

Being a de-centralized function, the team constantly interacts with various business
departments at all times in order to better understand and cater to their HR needs. The
team also builds strategic relationships with the corporate functions to drive pan-
organization initiatives.

The Human Resources team is responsible for the end to end HR life cycle of an
employee once they come on board. It is the HR team that ensures that employees
across departments and from various backgrounds get to know and understand the
Flipkart culture. Creating a high level of employee engagement and helping them
develop as professionals is what keeps the HR team at Flipkart busy.

Payment through Wallet in Flipkart

Flipkart has added a new ‘Wallet‘ feature to enable customers store money in their
Flipkart account and redeem it on future purchases. Flipkart Wallet works on a
prepaid credit system: customer can top up your wallet with any desirable amount up
to Rs 10,000 by using any one of its regular payment modes like credit card, debit
card, and net-banking. This amount will then be reflected as prepaid credit on
customer’s account and can be used as a payment mode for all forthcoming purchases
on the portal. Expectedly, this amount will be deducted from the balance in their
account’s wallet.

26
They can keep track of your Wallet balance by either heading over to their Flipkart
account or viewing the wallet balance at the top. However, if they run out of balance
on their wallet before making a purchase, Flipkart allows them to make a partial
payment using your Wallet and pay the remaining amount using other payment modes
like credit card, debit card, and net-banking. Flipkart does point out that cash-on-
delivery payment mode cannot be combined with a Wallet payment.

As said earlier, there are other players in the country like Mobi Kwik and PayTM*
which offer online wallet services called ‘MobiKwik Balance’ and ‘Paytm Cash’
respectively, indicating the impact of unreliable payment gateways on online
transactions in India. While Mobi Kwik Balance allows customers to add money into
their account to allow multiple purchases like online recharge for prepaid mobile
phones, DTH and data cards, PayTM Cash allows you to store money in a wallet for
future transactions on its portal.

The company had recently claimed to ship around 20 units every minute, with 65% of
the purchases being made through Cash on Delivery (COD). The company had also
hoped to grow its sales by more than tenfold this financial year.

Interesting facts & figures about the portal:

• Flipkart employs 4500+ people

• 2 million sales unit and 4 million visitors/month
• 11.5 million titles, Flipkart is India’s the largest online book retailer.
• Registered user base of 4 million customers
• Ships out as many as 45,000 items a day, clocking daily sales of approx Rs 2.5
cr.
• Flipkart is now investing in expanding its network of distribution centres,
warehouses, procurement operations which is now in only 8 cities in country,
so as to reach more & more Indian cities.
• The company is even setting up its own delivery network which is now in 37
cities, by which company can save up cost associated to the outsourced
shipping & logistic function and is set to expand this even further by next year.

27
Flipkart Success Factors

The site is very easy to navigate, which helps users to easily search for the contents or
products online, it even allows users to search by using various filters like by price
range, search by brands, by age group, by hot-selling etc. If a certain product is not
available or is out of stock it even ask users to input its details & then when the
products is available the desired users are informed, this really helps one connected
tothe products they are seeking & leads to repeat & frequent purchases.

The Flipkart site is fast & powerful, i.e if you Search any products in the Flipkart
search bar and you’ll find exactly what you looking in likes no time & it’s very
quickto process the payments & transactions by a very efficient & flexible payment
mechanisms of the portals. Approximately 60% of orders are placed in cash on
delivery system. So there is high possibility scams & frauds, so users have to have
their email account linked & with verified details & receives a confirmation code
message on their cell phones or email, after which the users confirms the unique code
& the transaction is processed & usually get delivered in 2-3 business days on the
confirmed mailing address.

Flipkart manages to deliver the item in 2-3 business days. If the order placed is not
delivered in the specified time, immediate enquiry goes to nearest supplier and the
item becomes available. It will then be delivered within 24 hour depending on the
cause of delay.

Flipkart is continuously aiming to bring down the delivery time of regular orders, in
doing so it is investing in its own delivery system & network, as the time to delivery
is one of the important aspects of selling products online as users want a fast turn
around time. An excellent marketing strategy by Flipkart marketing team is to
increase the sales revenues & to optimize the user shopping experience & increasing
loyalty by repeat purchases.

The portals offers a good pricing offers & deals to its users by the means of cash
rewards, loyalty points, discounts, coupons, Frequent buyer rewards points. It even
offers goods relatively cheaper pricing points than it is available in the physical
market which in total helps users save money & at the same time get benefited by the
means of rewards points.

28
Future Road Map

• They aim at 10 times growth and eyes at $ 1Billion sales by 2016.

• They will look at bigger investments in their supply chain and technology.
• Investment will be made in large warehouses and increased automation of their
process, so that the product is not delayed.
• They intend to enter in to various new categories and expand their current
categories as well.
• Everything except for groceries and automobiles will be available on Flipkart in
future.
• To go further in the value chain, Flipkart is looking at associations with a larger
number of suppliers and partners, both nationally and internationally.

Threats in future:

There are no major foreseeable threats in the future. The company has built a great
brand name, they just have to maintain and enhance the same. Need to keep
introducing more products, adapting to the changing needs of the customer with time.
The entry of Amazon.com in 2012 in the Indian e-commerce space has been cited as a
big challenge to Flipkart. However Flipkart is a respected Brand name in India and
should be able to compete with Amazon. Amazon being a very big company can
bring in serious competition to Flipkart, since Amazon can bear more losses in the
beginning to gain customer base. But again Indian market is growing at a rapid pace
as access to internet increases and people become more aware of e-commerce sites
and start trusting the same; hence Indian market is sufficiently big at-least for these
two giants to co-exist beneficially.

29
 LITERATURE REVIEW

Online retailers like Flipkart, Snapdeal turn marketing focus to

mobiles

BENGALURU: Flipkart is giving the Google-run Great Online Shopping

Festival a miss this year because the biggest Indian online retailer is promoting its
own mobile app. Snapdeal is participating, but pushing its mobile app as well.

Indian e-commerce companies are changing their customer-acquisition strategy

and are enticing people with offers to install their apps on mobile phones. They
expect the move to create more loyal customers than those who land on the portal
through online searches.

For search giant Google, this growing trend underlines the need to expand mobile
offerings to retain its healthy rate of growth in a market where more people are
expected to access the Internet on the mobile than on desktop.

"The ecommerce industry is now mcommerce in India; the way you reach out to
customers is very different even from a year ago when other digital channels were
more prominent," said Mausam Bhatt, senior director for mobile commerce &
digital marketing at Flipkart. Flipkart and the local operations of US ecommer ce
giant Amazon get more than half their India traffic through mobile phones. And,
these companies are increasingly spending on mobile-related promotions.

30
Bhatt declined to provide details on Flipkart's marketing expenditure.
Traditionally, its spending has mostly been on search engine and display
advertising, but he said there has been a large shift in spending to expand the
number of customers having its mobile app installed on their phones.

"An app install is an endorsement that someone wants to shop with you," said
Kishore Thota, head of digital marketing at Amazon India. While Thota still
counts search and display advertising as an important part of Amazon's marketing
strategy, he says from a long term point of view, "We definitely see more
investment going into app presence."

This shift means Google may have to work harder for the advertising dollar. For
Google, which posted more than Rs 3,000 crore in India revenue for FY14,
ecommerce has contributed to the 47 per cent growth in revenue over the previo us
year. For many years, search engine marketing, or advertising on search queries,
has been the mainstay of online businesses. The other major form of advertising
online was display advertising. Google is the leader in both.

As more and more consumers move to mobile, both forms of traditional

advertising have been slowing. The first by the proliferation of apps and the
second by the smaller screen sizes that make it tough for display advertising.
"You have to really earn the real estate on mobile," said Thota.

One-time purchases, like buying insurance or car will still be influenced by a

Google search while regular actions like recharging a mobile, ordering a cab or
ordering food, will see app install and more loyalty, said Naman Sarawagi,
founder and chief executive of comparison shopping site FindYogi.

Google, though, has a few things going for it. "There is a shift in revenue from
SEM (search engine marketing) as we know it, but with products like Google
Maps and Google Now, Google still has significant stake in the future of
interaction, thereby safeguarding its search and discovery based revenue," said
Sarawagi.

Google's mobile revenue is already supporting its growth globally. In the US,
market research firm eMarketer estimates that search revenue from desktop
computers will decline to $10 billion this year from $10.8 billion in 2014. But

31
mobile search revenue is expected to grow to $5.1 billion from $3.1 billion.
According to the estimate, Google's total advertising revenue will increase 14 per
cent to $43.5 billion in 2015.

"The shift to mobile is one we welcome and in Asia the change is happening
faster than anywhere else in the world," said Praveen Sharma, director -
performance at Google-APAC. Sharma said Google has driven hundreds of
millions of app downloads through these formats.

The trend isn't limited to India or Asia. According to eMarketer, desktop search in
the US will decline significantly this year, as mobile search ad spending grows.

In India, mobile advertising has steadily grown in proportion of the total digital
market, to 14 per cent in the fiscal year through March 2015 from 7 per cent in
fiscal 2012, according to the Internet and Mobile Association of India's latest
report.

In the same period, contribution of search to total advertising revenue has gone
down to 30 per cent from 34 per cent. Display advertising has also gone down in
proportion as social media and video advertising have grown. The total digital
advertising market is expected to reach Rs 3,575 crore in fiscal 2016 from Rs
2,750 crore last year.

To serve its growing mobile clientele, the search giant has also launched
advertising solutions for the mobile world. This year, Google launched app
promotions advertising formats across its products including search, display
network and YouTube.

How success of e-commerce startups like Flipkart, Snapdeal is

making traditional retailers rethink their model

At a recent round table meet in Delhi, the top management of one of India's
largest marketplaces, Snapdeal.com, were all smiles conveying how product
categories sold online are increasing and next on their list is selling bathroom
fixtures on the web store. The 30,000 sellers on their platform will soon burgeon
to more than 1 lakh. The expanding online seller and buyer base is also
revamping the website, from English only to offering Hindi and Tamil interfaces

32
as well. "Around 60% of our sales are beyond the top 10 cities. Our reach is more
than that of organized brick-and-mortar retail. We believe online shopping
business will be bigger than offline retail by 2016," said Kunal Bahl, co-founder,
Snapdeal.com whose list of investors include eBay, Temasek, Black-Rock,
PremjiInvest and other venture funds. Bahl feels this growth will be driven mostly
by tier II shoppers and beyond. In these areas (like Mysore, Nagpur) organized
retail has limited or no presence.

In Mumbai, Kishore Biyani, founder CEO, Future Group, one of the country's
largest brick-and-mortar retailers, is unfazed by competition from online startups.
"Online selling, the way venture funded start-ups are doing it, is a gross margin
negative business and not sustainable. I don't see ourselves competing with online
sellers as both models — online and offline — will converge. Not everything will
be sold only online or only offline."

In the $490-billion India retailing business organized brick and mortar retail and
online shopping account for less than 10% or about $35-40 billion of the pie at
present. In a decade, consultancy firm Technopak estimates organized retail —
both online and offline — will be a little over $200 billion and both formats are
trying equally hard to get a larger share of the buyer's wallet. The likes of Jabong,
Flipkart, Amazon are honing algorithms to sharpen their knowhow on what the
shopper is looking for; and the likes of Future Retail, Croma and Shoppers Stop
are moving to omnichannel models — selling both on and offline — while
improving the experience of shopping within their stores.

Says Ajit Joshi, MD and CEO, Infiniti Retail (which runs Croma stores): "In India
people are yet to experience good shopping [a mall experience and large stores].
It's not that people will buy everything online. While there is growing
competition from online retailers, the brickand-mortar stores are also expanding."
Croma has 97 operating stores, down from 101 six months back. Four non -
profitable stores were shut down.

33
Online vs Offline

In an expanding market both models have room to grow, each offering its unique
strengths and weaknesses. Online scores on reach, shipping products to remote
corners of the country, while offline is a largely urban, big city phenomenon.
According to Technopak, 56% of the business of organized retailers comes from
top 24 cities. While for webstores the buyers are across the country.

Says Sachin Bansal, co-founder and CEO, Flipkart.com: "E-commerce solves the
problem of access by making millions of products available to shoppers with a
few clicks." Besides, online shoppers don't have time and place limits. On the
other hand people going to shops get instant gratification, can touch and feel the
products; and for some brands, like Zara, buyers have no choice but to purchase
them offline. Adds Bansal: "Those who prefer to touch and feel products, and that
is still a majority of shoppers, will go to the shops." Biyani of Future Group
believes any product that can be identified by a model number will be sold more
online than offline. For instance, the Google Moto phones were sold online by
Flipkart and not in any retail outlet.

While there is room for both models to exist and expand, each is looking at new
ways to increase clicks and footfalls. Online sellers are adding new categories —
what started with books and music now includes furniture and jewellery. For their
part offline retailers, worried about business being hijacked by online start -ups,
are selling via their own websites as well.

Omnichannel Strategy

In Mumbai, Delhi and Bangalore buyers can shop on the Croma website and get
products delivered the same day (if the order is placed before 2 pm). The price
they pay is similar to what they would if they walked into a Croma outlet. Croma
products also get sold on marketplaces like Amazon.in and eBay.in. Says Joshi:
"We have an omnichannel strategy. Online is another arm of Croma. But the
prices on our site and in our stores will be the same."

Adds Biyani: "We see a convergence of models — physical and digital stores will
converge. That's the next round in retailing. There are some products that will be

34
sold online only [like computers, smartphones and books]. We will unveil our
omnichannel strategy in September." Sites like Jabong.com also sell Future
Group products.

However, when selling from their own sites retailers like Croma and Future
Group will not offer discounts over their shopfloor prices and this is where pure
online marketplaces have an edge.

Says Pragya Singh, assistant vice-president, retail and consumer products,

Technopak: "E-tailers will overtake offline retailers in some product categories.
The challenge for brick-and-mortar is high rentals — 1.5x to 2x more than the
global average. Offline scores in experience, touch, feel and instant gratification .
Products like grocery [about 55% of retail] are more likely to be sold offline."

Online marketplaces are new to India, the trend having picked up only in the past
12-18 months. Global trends favour traditional retailing more than online
shopping. For example in the US, China, South Korea online selling is less than
15% of the total retail business. In India it is 0.2% of organized retail and despite
a 50% growth rate per year (according to Technopak) online retailing will account
for just about 5% of organized retail by 2023.

In the US Dixons and Best Buy continue to be large retailers of electronic

products. Says Joshi, "They did close unprofitable stores and that's the strategy
we will follow in India. In mature markets penetration of online is not more than
10-11% and we see a similar trend here."

Adds Vishal Tripathi, principal research analyst, Gartner, an advisory firm: "The
price advantage is with online marketplaces. Offline retail cannot afford to sell at
lower prices [due to high real estate costs and overheads]. However, there are
products which will be sold more offline [like high-value items] rather than
online."

35
Big Ticket Items Sell Offline

Even as the two models coexist and brick and mortar retailers go in for
convergence, a differentiation is set to emerge on the type of products that can be
sold on either platform. For example buyers are less likely to purchase a curved
or flat TV or a sofa set or a car online. And recent notices by companies
cautioning customers on buying certain products online could deter purchases
from webstores. For example recently Chinese smartphone maker Gionee
cautioned customers about buying online.

Says Arvind Vohra, country head, Gionee India: "There's no price sanity online.
A Rs 14,000 phone in a shop could be Rs 12,500 on one site and Rs 9,000 on
another! We do not authorize websites to sell our products. They pick
smartphones directly from the market and sell online. There is no service
warranty arrangement with online sellers."

Late last
month, carmaker Renault cautioned buyers on shopping online. A Renault public
notice in newspapers (on May 29) stated: "Renault only sells via authorized
dealers. Online marketplaces are not a part of our authorized dealer network." A
Renault India spokesperson told ET Magazine that the company does not sell
online "Although 15-18% of lead generation does happen online, via our sites,
actual car sales happen only though our authorized dealer network."

Adds Praveen Bhadada, director, Zinnov, a consulting firm: "For standard

products [like diapers or pen drives] buyers will go online. For others [like
designer clothes] they will go offline. Despite the growth of marketplaces there
are concerns among buyers on what they get, particularly for expensive items."

At present both models are working on their strengths and increasing the appeal
of their webstores, apps and physical stores. Snapdeal has 250 people in its
engineering and products team, which manages the online platform. This team is
set to double. Meantime the likes of Infiniti Retail and Future Group are looking

36
at models that will increase footfalls. Says Joshi: "Technology is moving fast and
so is the consumer — we need technology to improve the shopping experience."

Online sites like Jabong.com and CaratLane.com are using digital models, avatars
and videos online to show prospective buyers how designer clothes and jewellery
will look when worn. Offline retailers are looking at smart mirrors (that do away
with the need to try out multiple clothes) and augmented reality to make it easy to
navigate around stores and check out multiple items. Says Joshi: "Retailing is a
sunrise industry. There's plenty of room for all models to co-exist." At least in the
short term.

Prime Minister Narendra Modi launches Sukanya Samridhi Yojna

under Beti Bachao campaign

PANIPAT: Prime Minister Narendra Modi today launched a small deposit scheme
for girl child, as part of the 'Beti Bachao Beti Padhao' campaign, which would
fetch an interest rate of 9.1 per cent and provide income tax rebate.

37
'Sukanya Samridhi Account' can be opened at any time from the birth of a girl
child till she attains the age of 10 years, with a minimum deposit of Rs 1000. A
maximum of Rs 1.5 lakh can be deposited during the financial year.

The account can be opened in any post office or authorised branches of

commercial banks.

"The scheme primarily ensures equitable share to a girl child in resources and
savings of a family in which she is generally discriminated as against a male
child," said a government statement.

In an effort to motivate parents to open an account in the name of a girl child and
for her welfare to deposit maximum of their savings upto the prescribed limits,
higher rates of interest at 9.1 per cent is proposed to be given on the deposits on
annually compounded basis with income tax concession in this financial year, the
statement said.

The account will remain operative for 21 years from the date of opening of the
account or marriage of the girl child after attaining 18 years of age.

To meet the requirement of higher education expenses, partial withdrawal of 50

per cent of the balance would be allowed after the girl child has attended 18 years
of age.

"The provision of not allowing withdrawal from the account till the age of 18 has
been kept to prevent early marriage of girls," the statement said.

The Prime Minister handed over bank account details to five girls under the
'Sukanya Samridhi Yojna' (girl child prosperity scheme).

Flipkart: The Growth Strategies of India’s First Billion Dollar.Com

Company

Code : GRS0222

Year : 2014

Industry : E-Commerce

Region : India

38
Teaching Note: Available

Structured Assignment : Not Available

E-Retail in IndiaE-retail, a form of e-commerce, involved selling goods and

services electronically, i.e. through the internet. Generally, e-commerce had four
models: Business to Consumer (B2C), Consumer-to-Consumer (C2C), Business-
to-Business (B2B), and Consumer to Business (C2B). Of these, e-retail fell in the
orbit of B2C.

The main vehicle of e-commerce was the internet and the World Wide Web. Fax,
and telephones too were common. The internet assisted the use of new types of
information-based business processes for reaching and interacting with customers
online...

Flipkart Amidst these companies came Flipkart with what was said to be an
innovative business model compared to its competitors. Initially, Flipkart sold
only books through its e-retail store with above 10 million titles distributed from
warehouses in five cities and its personnel delivering the books to its customers.
Within two years, Flipkart became one of the top 100 Indian sites. It expanded its
business from books to mobile phones, appliances, gaming consoles, music, and
movies...

Flipkart's Business Model Flipkart customized Amazon’s business model to suit

the environment in India. It emerged as a horizontal portal from a vertical portal.
Flipkart adopted the model of virtual presence, keeping its physical presence at a
bare minimum and operating only through the internet...

Road Ahead Flipkart customized Amazon’s business model to suit the

environment in India. It emerged as a horizontal portal from a vertical portal.
Flipkart adopted the model of virtual presence, keeping its physical presence at a
bare minimum and operating only through the internet...

39
TIMELINE

YEARS IMPORTANT EVENTS THAT TOOK PLACE

1979 MICHAEL ALDRICH INVENTED ONLINE SHOPPING

THOMSON HOLIDAYS, UK IS FIRST B2B ONLINE

1981 SHOPPING

GATESHEAD SIS/TESCO IS FIRST B2C ONLINE

1984 SHOPPING AND MRS SNOWBALL, 72, IS THE FIRST

ONLINE HOME SHOPPER

TIM BERNERS-LEE WRITES THE FIRST WEB

1990 BROWSER, WORLDWIDEWEB, USING A NEXT

COMPUTER

 NETSCAPE RELEASES THE NAVIGATOR

BROWSER IN OCTOBER UNDER THE CODE

NAME MOZILLA.

 PIZZA HUT OFFERS ONLINE ORDERING ON ITS

1994 WEB PAGE.
 THE FIRST ONLINE BANK OPENS.
 ATTEMPTS TO OFFER FLOWER DELIVERY AND
MAGAZINE SUBSCRIPTIONS ONLINE.

 JEFF BEZOS LAUNCHES AMAZON.COM AND

THE FIRST COMMERCIAL-FREE 24 HOUR,

INTERNET-ONLY RADIO STATIONS,

1995
 RADIO HK AND NETRADIO START
BROADCASTING.

 DELL AND CISCO BEGIN TO AGGRESSIVELY

40
 USE INTERNET FOR COMMERCIAL

TRANSACTIONS.

 EBAY IS FOUNDED BY COMPUTER

PROGRAMMER PIERRE OMIDYAR AS

AUCTIONWEB.
INDIAMART B2B MARKETPLACE
1996 ESTABLISHED IN INDIA.

ELECTRONIC POSTAL STAMPS CAN BE

1998 PURCHASED AND DOWNLOADED FOR PRINTING

FROM THE WEB.

 THE PEER-TO-PEER FILE-SHARING SOFTWARE

NAPSTER LAUNCHES.
1999
 ATG STORES LAUNCHES TO SELL
DECORATIVE ITEMS FOR THE HOME ONLINE.

2000 THE DOT-COM BUST

 EBAY ACQUIRES PAYPAL FOR $1.5 BILLION.

 NICHE RETAIL COMPANIES WAYFAIR AND

NETSHOPS ARE FOUNDED WITH THE CONCEPT
OF SELLING PRODUCTS THROUGH SEVERAL
2002
TARGETED DOMAINS, RATHER THAN A

CENTRAL PORTAL.

AMAZON.COM POSTS FIRST YEARLY PROFIT.

2003

DHGATE.COM, CHINA'S FIRST ONLINE B2B

2004
TRANSACTION PLATFORM, IS ESTABLISHED,

41
 FORCING OTHER B2B SITES TO MOVE AWAY

FROM THE "YELLOW PAGES" MODEL.

YUVAL TAL FOUNDS PAYONEER - A SECURE

2005 ONLINE PAYMENT DISTRIBUTION SOLUTION

BUSINESS.COM ACQUIRED BY R.H. DONNELLEY

2007 FOR $345 MILLION

 ZAPPOS.COM ACQUIRED BY AMAZON.COM

FOR $928 MILLION.

 RETAIL CONVERGENCE, OPERATOR OF

PRIVATE SALE WEBSITE RUELALA.COM,
2009
ACQUIRED BY GSI COMMERCE FOR $180

MILLION, PLUS UP TO $170 MILLION IN EARN-

OUT PAYMENTS BASED ON PERFORMANCE

THROUGH 2012

GROUPON REPORTEDLY REJECTS A $6 BILLION

OFFER FROM GOOGLE. INSTEAD, THE GROUP

2010 BUYING WEBSITES WENT AHEAD WITH AN IPO

ON NOVEMBER 4, 2011. IT WAS THE LARGEST

IPO SINCE GOOGLE.

GSI COMMERCE, A COMPANY SPECIALIZING IN
CREATING, DEVELOPING AND RUNNING ONLINE

2011 SHOPPING SITES FOR BRICK AND MORTAR

BUSINESSES, ACQUIRED BY EBAY FOR $2.4

BILLION.

2012  US E-COMMERCE AND ONLINE RETAIL

SALES PROJECTED TO REACH $226 BILLION,

42
 AN INCREASE OF 12 PERCENT OVER 2011.

 US E-COMMERCE AND ONLINE RETAIL

HOLIDAY SALES REACH 33.8 BILLION, UP 13

PERCENT

2014 India’s world’s third largest internet user.

This is a preview of the Head - Business Strategy job at Flipkart.com.

To view the full job listing, join LinkedIn - its free!
Job description
Summary: Flipkart is looking for a leader who will drive and manage new initiatives
and build frameworks. The leader will be responsible for :
 Long term Retail strategy
 Study all global and Indian relevant models and feed insights into our
strategy
 Competitive understanding
 New Initiatives
 Retail business Analytics
Long term strategy & differentiation
 Develop the business model: Go deep, understand where opportunities are
and create a viable business model to service the opportunities
 Know the market: Stay on top of trends in an ever-changing landscape,
find opportunities and prioritize based on size, internal capabilities, etc.
 Know the customer: Understand connected customer behavior, develop new
customer insights
 Know the competition: Understand on-line and off-line players. React as
and when necessary in an appropriate manner
 Influence the leadership: Convert strategies into action by liaising with
cross-functional leadership and drive the changes required
 Hands On: Understand & build business right from scratch & build
something on his own.

43
People leadership
 Build, create strong team of high performance leaders/business experts/ world
class business strategists.
 Set goals, define KPIs and ensure team tracks effectively towards goals

Desired Skills and Experience

Desired background
 14 years exp, with 10+ years in top management/business consulting firms
 Expertise in solving complex strategic problems.
 Experience/deep understanding of global retail/ecom/consumer industry
 Experience in identifying new businesses and growth opportunities.
 Demonstrated ability to identify and solve ambiguous problems. In particular,
identifying customer needs and inventing new ways to meet those needs.
 Demonstrated ability to operate both strategically and tactically in a high-
energy, fast-paced environment. High degree of organization and ability to
manage multiple, competing priorities in the heat of battle.

Desired Competencies
 Superior analytical skills, including strong ability to identify and solve highly
ambiguous problems.
 Desire and ability to think like the customer
 Ability to translate strategies into execution plans and take them to completion
 Very high influencing power
 Excellent verbal and written communication with interpersonal skills
 Strong understanding of technology and business
 Must be willing to learn
 Ability to connect with people across teams & levels
 Strong bias for Action - Flipkart works at a very rapid pace

About this company

HeadHIt's nice of you to take the time to get to know us better. Here are some things
about us that we thought you might like to know.

44
Flipkart went live in 2007 with the objective of making books easily available to
anyone who had internet access. Today, we're present across various categories. Be it
our path-breaking services like Cash on Delivery, a 30-day replacement policy, EMI
options, free shipping - and of course the great prices that we offer, everything we do
revolves around our obsession with providing our customers a memorable online
shopping experience.

So it's no surprise that we're a favourite online shopping destination.

To further drive our aggressive growth plans, we are constantly looking out for
dynamic individuals across the spectrum - professionals who are hungry to make a
difference to e-commerce in India. Flipkart offers rich exposure in managing the
complexities and challenges of a high-growth business environment. It's a unique
opportunity to be part of a team that is changing the way people shop in India, thereby
defining the future of e-commerce in the country.

Visit us at http://www.flipkart.com/s/careers to know about our active open positions.

Flipkart To Reportedly List In Next 18 Months

Jan 29 15

Flipkart Online Services Pvt. Ltd. is preparing to raise at least $5 billion through an
initial public offering (IPO) on the US bourses in the next 18 months. Flipkart Online
Services Pvt. has not officially signed on any banker for the listing process but has
stepped up work on the same. Morgan Stanley (NYSE:MS), The Goldman Sachs
Group, Inc. (NYSE:GS), Citigroup Inc. (NYSE:C) along with Deutsche Bank AG
(DB:DBK), are in discussions with Flipkart Online Services Pvt. Ltd. for the sale
mandate, Economic Times reported citing multiple sources directly involved in the
matter. Flipkart Online Services Pvt. Ltd. declined to comment on the story. The
Goldman Sachs Group, Inc., Citigroup Inc. along with Deutsche Bank AG declined
comment, while Morgan Stanley did not respond to queries on this report.

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Company Name Region

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Flipkart went live in 2007 with the objective of making books easily available to
anyone who had internet access. Today, we're present across various categories
including movies, music, games, mobiles, cameras, computers, healthcare and
personal products, home appliances and electronics – and still counting! With over
11.5 million book titles, 11 different categories, more than 2 million registered users
and sale of 30000 items a day, we can say with utmost confidence that we are one of
the leading e-commerce players in the country.

Comparative analysis

1. Keep It Simple

When you look at some very well known online retailers and their logo design, you'll
notice one common thread: simplicity. Largely text-based, both of the following
brands have taken the name of their organization and formatted it to be easily read
and identified, whether it appears on their site, in a list of search results or on an
affiliate site.

This stripped-down format makes them easy to remember and also provides
everything the customer needs to find them on the web since the logo itself doubles
for the web address in each case.

2. Optimize for Mobile

47
Legibility for mobile shoppers is really important these days. With the growing level
of shopping people are conducting on the go, it’s important to make sure the text you
include in your logo isn’t too small. Always keep an eye on the scalability of your
design, ensuring the logo that appears on your ecommerce site or email receipt is
easily read on the miniature screen of a cell phone or similar web-enabled device.

3. Reveal Your USP Through Images or Tagline

Position yourself by clearly defining the specific aspects of your product or service
that are superior to the competition. If you are the only, the biggest, the oldest or the
best, consider reflecting that distinction through a catchy slogan or quality art that lets
your customers know you’re in the lead. Shopify store Cookbook Village does this
really well by including "Vintage and used cookbooks for chefs, collectors and
foodies" right in their logo. They have another logo without the bottom text that scales
better on mobile devices and that they use on Facebook and Twitter.

4. Maximize Your Web Pages with a Horizontal Design

When designing your logo, you might consider keeping the design primarily
horizontal. By minimizing the vertical space and stretching graphics and text across
the horizontal plane, you have a larger amount of real estate to showcase your
products, preventing shoppers from having to scroll down when browsing. Shopify
store A Book Apart has a beautiful logo (not surprisingly) that does a great job of
using a horizontal design to increase the number of products above the fold.

48
5. Use Images Wisely

It’s almost impossible not to think about Amazon without the image of their upward-
arced arrow coming to mind. Plus, as you can see in the other online retailers
mentioned above, the use of art is fairly minimal, making it that much more important
to select images that are unquestionably tied to your offering. Shopify store So Worth
Loving incorporates a clean and minimalist image that will stick in a customer's mind.
The half diamond, half heart conveys quality and value with one half and love with
the other.

Where to Start

Start by getting inspired. There are a number of resources available on the web that
can provide an endless catalog of art and inspirational ideas for making an ecommerce
store logo. Also check out Shopify's guide on How to Design an Online Store Logo.

This is a guest post: Dylan Mazeika is an online writer with a background in

marketing and small business. He enjoys writing articles and guest posts on the latest
business and design trends, and helping small business owners with free logo design.

DEFINITION OF E-COMMERCE (ELECTRONIC COMMERCE OR EC)

E-commerce (electronic commerce or EC) is the buying and selling of goods and
services on the Internet, especially the World Wide Web. In practice, this term and a
newer term, e-business, are often used interchangably. For online retail selling, the
term e-tailing is sometimes used.

49
RISE OF E-COMMERCE BUSINESS IN INDIA

Basic challenge

The e-commerce frenzy is booming in India nowadays, many e-commerce portals are
popping up every second in India. The biggest challenge in present scenario is how to
deal with the issues mushrooming amidst this growth? The main problem plaguing the
e-commerce business is- Lack of proper infrastructure and online frauds.

Due to budget constraint many small business in India overlook the importance of
authentic software. Moreover, many small businesses are showing interest in online
business and most of them are not even aware of how to go about securing and
protecting their online business. Many online companies don't have a basic antivirus
on their servers. The rampant software piracy in India has made small business
vulnerable to spy and Trojan attacks. Many business use pirated software, which has
high chances of getting injected with malware, virus and bots. It is extremely unsafe
to use online transaction on such servers as bank and credit card details could be
easily stolen while doing the transaction. According to Norton, half of the Indian
Internet users are unaware of the online security solutions available to them.

Overcoming these setback

A huge percentage Indian online market is impaired by these challenges. However,

there are few sectors like financial and banking sectors, have raised themselves above
these challenges successfully and they represent the real growth of India. Many of the
reputed banks and financial institution has beefed up their cyber security by taking
charge to control the online frauds. To protect their interest as well as customers'
interested, many reputed banks have beefed up their cyber security by following the
best practice in the industry such as implementing Secure Socket Layer encryption.
Banks are also educating their audience by sending them SMS’s and emails regarding
secure online transactions. Some banks are also utilizing other medium of
communication like newspaper and magazines and having a prominent section
dedicated to cyber security tips and suggestions.

The Reserve Bank of India has announced that they will take strict action against the
banks who do not implement guidelines on electronic security and operations by

50
2012, this has been a very encouraging and legitimate stance towards the progress of
online security and discouraging online frauds. More over many e-commerce sites are
now offering cash on delivery which is encouraging the users to make more
transaction with online stores.

There has been significant improvement done by ecommerce companies as well as

banks in India to encourage online purchase. Because of which there has been a
significant growth in online purchase which is essentially good for e-commerce
market in India.

Reasons Why Companies are Adopting

E-Commerce

 Lower Cost
Doing e-business is cost effective; it reduces logistical problems and puts a small
business on a par with giants such as Amazon.com or General Motors. In a
commercial bank, for example.a basic over-the-counter transaction costs £0.50 to
process; over the Internet, the same transaction costs about £0.01. Every financial
transaction eventually turns into an electronic process. The sooner it makes the
conversion, the more cost-effective the transaction becomes.

 Economy
Unlike the brick–and–mortar environment, in e–commerce there is no physical store
space, insurance, or infrastructure investment. All you need is an idea, a unique
product, and a well–designed web storefront to reach your customers, plus a partner to
do fulfillment. This makes e–commerce a lot more economical.

 Higher Margins
E–commerce means higher margins. For example, the cost of processing an airline
ticket is £5. According to one travel agency, processing the same ticket online costs
£1. Along with higher margins, businesses can gain more control and flexibility and
are able to save time when manual transactions are done electronically.

51
  Better Customer Service
E–commerce means better and quicker customer service. Online customer service
makes customers happier. Instead of calling your company on the phone, the web
merchant gives customers direct to their personal account online. This saves time and
money. For companies that do business with other companies, adding customer
service online is a competitive advantage. The overnight package delivery service,
where tracking numbers allow customers to check the whereabouts of a package
online, is one good example.

 Quick Comparison Shopping

E–commerce helps consumers to comparison shop. Automated online shopping
assistants called hopbots scour online stores and find deals on everything from apples
to printer ribbons.

 Productivity Gains
Weaving the web throughout an organisationmenas improved productivity. For
example IBM incorporated the web into every corner of the firm – products,
marketing, and practices. The company figured it would save $750 million by letting
customers find answers to technical questions via its website. The total cost savings in
1999 alone was close to $1 billion.

 Teamwork
E–mail is one example of how people collaborate to exchange information and work
on solutions. It has transformed the way organisations interact with suppliers,
vendors, business partners, and customers. More interactions means better results.

 Knowledge Markets
E–commerce helps create knowledge markets. Small groups inside big firms can be
funded with seed money to develop new ideas. For example, DaimlerChrysler has
created small teams to look for new trends and products. A Silicon Valley team is
doing consumer research on electric cars and advising car designers.

52
  Information Sharing, Convenience, and Control
Electronic marketplaces improve information sharing between merchants and
customers and promote quick, just–in–time deliveries. Convenience for the consumer
is a major driver for changes in various industries. Customers and merchants save
money; are online 24 hours a day, 7 days a week; experience no traffic jams, no
crowds, and do not have to carry heavy shopping bags.

LAWS AND REGULATIONS IN INDIA (BRIEFLY)

E-commerce laws and regulations in India are still evolving. This has created a sort of
confusion and uncertainty among e-commerce entrepreneurs in India. While some
have opened e-commerce outlets through websites others are exploring a more
appropriate and legal way of running an e-commerce business in India.

Legal issues of e-commerce in India vary as per different business models. For
instance, electronic trading of medical drugs in India requires more stringent e-
commerce and legal compliances as compared to other e-commerce activities. Digital
communication channels for drugs and healthcare products in India are scrutinized
more aggressively than other e-commerce activities. In fact, regulatory and legislative
measures to check online pharmacies trading in banned drugs in India are already in
pipeline.

Besides there are many legal formalities that are required in order to start a company
and e-commerce activity in India.

53
Mostly people decide to open a private company to substantiate an e-commerce
activity. To incorporate a private limited company you must approve its name,
registered office address, have at least 2 directors with director identification numbers
(DINs), must have a minimum authorised capital of Rs. 1 lakh, memorandum of
association (MOA) and articles of association (AOA), digital signature certificates
(DSCs) wherever applicable, etc. Once these conditions and requirements are
fulfilled, a certificate of incorporation is sent by post to the registered office of the
newly registered company.

The private limited company is also required to comply with income tax related
compliances. These include obtaining permanent account number (PAN), tax
deduction account number (TAN), value added tax (VAT) registration and obtaining
of tax identification number (TIN), professional tax if applicable, service tax, etc.

In certain cases, compliance with labour laws is also required. For instance, the Shops
and Establishment Act is a legislation implemented by various States in India. The
Act lays down mutual statutory obligation and rights of employers and employees.
Registration of shop/establishment is mandatory within 30 days of commencement of
work. Other workmen and labour related legislations cover areas like employees
provident fund, employees state insurance, etc.

However, e-commerce in India is also required to be conducted in a legally

permissible manner. This is more so when the Information Technology Act 2000 (IT
Act 2000) prescribes stringent penal and pecuniary penalties for violation of its
provisions during e-commerce transactions.

The e-commerce players must ensure cyber law due diligence in India. This is more
so when the cyber law due diligence for companies in India has become very stringent
and foreign companies and websites are frequently prosecuted in India for non
exercise of cyber due diligence.

The legal requirements for undertaking e-commerce in India also involve compliance
with other laws like contract law, Indian penal code, etc. Further, online shopping in
India also involves compliance with the banking and financial norms applicable in
India. For instance, take the example of PayPal in this regard. If PayPal has to allow
online payments receipt and disbursements for its existing or proposed e-commerce

54
activities, it has to take a license from Reserve Bank of India (RBI) in this regard.
Further, cyber due diligence for Paypal and other online payment transferors in India
is also required to be observed.

List of Top 10 E-commerce Companies of India:(as on 02/07/2014)

1. Flipkart

Website: (www.flipkart.com)

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It

was founded by Sachin Bansal and BinnyBansal in 2007. In its initial years, Flipkart
concentrated on online sales of books, but it later on expanded to electronic goods and
a diversity of other products. Flipkart offers multiple payment methods like credit
card, debit card, net banking, e-gift voucher, and the major of all Cash on Delivery.
The cash-on-delivery model adopted by Flipkart has proven to be of great significance
since credit card and net banking penetration is very low in India.

2. Snapdeal

Website: (www.snapdeal.com)

Snapdeal is a leading online marketplace, headquartered in New Delhi, India.

Snapdeal features products across categories like mobiles, electronics, fashion
accessories, apparel, footwear, kids, home and kitchen, sports, books; and services
like restaurants, spas & entertainment amongst others. The company was started by
KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in February
2010. Snapdeal also provides discounted deals connecting with local merchants.

3. Fashionandyou Website: (www.fashionandyou.com)

Fashion and You is a private invitation only shopping club, based in Gurgaon, India.
It was founded by Harish Bahl in November, 2009. The fashion site features
collections by top designers for men, women and children for up to 80% off retail
prices. Fashion and You obtain authentic designer merchandise straight from the
brand and provides it exclusively to its members through limited-time events.

55
4. Myntra Website: (www.myntra.com)

Myntra was established by MukeshBansal, AshutoshLawania, and VineetSaxena in

February 2007. All three are IIT graduates, and have worked for several start-ups.
Myntra is headquartered in Bangalore and has been funded by Venture Capital funds
like IndoUS, IDG &Accel Partners. Myntra.com works as an online shopping retailer
of fashion and casual lifestyle products. The company started off in the business of
personalization of products, and soon expanded to set up regional offices in New
Delhi, Mumbai and Chennai.

5. Inkfruit Website: (www.inkfruit.com)

Inkfruit is an online t-shirt store, where t-shirt designs are submitted and voted for by
a group of people. It was initiated in December 2007 (then called Gnome) by
Fingerprints Fashion Inc., based in Mumbai, India. KashyapDalal, an undergraduate
of IIT Bombay, and graduated from IIM Lucknow is the CEO of Inkfruit. This
concept is taken from Threadless to India by Inkfruit. The community of Inkfruit
submits t-shirt designs. These designs are put to vote on a scale of 1 to 5. The design
that receives most votes ‘wins’, gets printed and is put for sale. The member whose
design is selected gets paid a winning amount.

6. Dealsandyou Website: (www.dealsandyou.com)

Dealsandyou is a deals website to find the best deals in Indian shopping. The site
provides offers for any one for local services such as full body massages or buffet
restaurants. Shopping using these deals in the website is a nice experience which can
save a great deal of money as well.

7. Homeshop18 Website: (www.homeshop18.com)HomeShop18 is the online and

on-air retail and distribution venture of Network 18 Group, headquartered in NOIDA,
India. HomeShop18 was launched on 9 April, 2008 as India's first 24-hour Home
Shopping TV channel, where anchors performed live demonstration of products on
sale. The television channel established HomeShop18's foothold in Indian retail
because of high television penetration. Later, as the internet reach grew all over the
country, HomeShop18 expanded to the internet.

56
8. Yebhi.com Website: (www.yebhi.com)

Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle &
Fashion e-retailer, launched in the year 2009. Yebhi, which began as
BigShoeBazaar.com, has a registered user base of about 1.5 million people, of who
about half a million have transacted on the site. Nexus Venture Partners and N. R.
Narayana Murthy’s Catamaran Ventures invested 40 crore in Agarwal’s company in
mid-2011. On July' 10th 2012, Big Shoe Bazaar India Pvt Ltd. owner of Brand
Yebhi.com announced that it has raised 100 Cr in Series C round of funding led by
Fidelity Growth Partners India and Qualcomm.

9. Indiangiftsporta Website: (www.indiangiftsportal.com)

Indian Gifts Portal is an online gifts super-market that makes sending a gift to your
dear ones a pleasure. It offers a wide range of gift-options, most of which are
exclusive Indian products, right on your desktop. On click of a mouse, you will
discover it is just the kind of gift store you've always been looking for.

10. Caratlane Website: (www.caratlane.com)

Caratlane is India's first online jewellery store with an assorted range of diamond
jewellery designs to offer every customer. They offer more than 1,40,000 loose
diamonds, and over 1000 ready to choose diamond jewellery online like diamond
rings, pendants, earrings, bracelets, bangles and gold coins for all budgets. The quality
& authenticity of diamond jewellery is validated with BIS Hallmarking and
Certification from International labs like GIA, IGI, HRD and AGS. The website
offers discount up to 25 percent of prices.

PRESENT SCENARIO OF INTERNET IN OUR COUNTRY

India is now world’s third largest Internet user after U.S., China.Three-fourths of
its online population is under 35, says comScore report.

India now has nearly 74 million Internet users, a 31 per cent increase over March
2012, the report says. The numbers are lower than other recent estimates, possibly
reflecting comScore’s methodology that only factors in PC and laptop-based Internet
usage. The Telecom Regulatory Authority of India (TRAI) pegged the number of

57
Internet subscribers in India at 164.81 million as of March 31, 2014, with seven out of
eight accessing the Internet from their mobile phones. The comScore report, on the
other hand, puts mobile and tabled-based Internet traffic at just 14% of the total.
“Mobile phone based Internet usage is a key component of Indian Internet usage, and
I’d say the recent growth is being driven by mobile Internet usage,”
NilotpalChakravarti, spokesperson of the Internet and Mobile Association of India
told The Hindu on Thursday. In addition, many Netizens were using dongles to access
the Internet.

Three-fourths of India’s online population is under 35 as against just over half

worldwide, the comScore report, India Digital Future in Focus 2014, says, possibly
reflecting India’s more recent improvements in literacy. Men under 35 and women
between 35 and 44 are heavier users. But women account for less than 40 per cent of
all Indian users, a far lower sex ratio than that of other countries.

A quarter of time spent online is on social media, the comScore report says, and
another 23 per cent on email. While Google sites have the most unique visitors, Net
users spend the most time on Facebook, which is at second place as far as unique
visitors are concerned. Yahoo, Microsoft and Wikimedia sites follow in unique visitor
numbers. Among social media sites, Linkedin and Twitter are the next most popular,
while Orkut is in decline. Google is by far the most popular search engine, accounting
for 90 per cent of all searches in India. Online retail is on the rise, with domestic retail
sites being the most popular, the report notes, For online travel websites too, domestic
websites are the most popular, the Indian Railways’ website being by far the most
popular destination.

SLOW MOVEMENT OF E-COMMERCE COMPANIES IN

INDIA

Over the last few years India has experienced a spurt in technology advancement with
the advent of broadband and 3G penetration as well as smart devices. Convenience of
online shopping in view of busy lifestyles, long queues, urban traffic congestion and
availability of a wider range of products (incl. international labels) delivered to your
door-step (incl. COD) at lower prices compared to brick and mortar retailers attributes

58
to augmenting e-Commerce adoption. On the contrary, following are few aspects
which may be slowing the adoption of e-Commerce in India;

 Trust & Quality

Consumers when shopping for tangible products have several queries encircling the
product quality and often would like to obtain a first-hand feel of the product (such as
the fabric quality, fit, or screen display quality, etc.).Many e-Commerce companies
have tried plugging the holes by making available large sized product images (incl.
various perspectives), size guides, however, cautious buyers may still prefer
interacting with the product in real-time before an online purchase; not sure if their
behavior would change with time.

Advent of cash-on-delivery (introduced by Pizza shops) has helped mimic the shop-
floor check-out experience and provides immediate gratification for monies spent; this
seems to be working well and has taken the business of e-Commerce to greater
heights. Many e-commerce firms, including Flipkart, Rediff, Infibeam, Yatra,
Cleartrip and Makemytrip, offer cash-on-delivery options. Flipkart’s COO and co-
founder BinnyBansal says cash-on-delivery drives over half its sales. Most players
have reported a figure between 40% and 60%.

“China has had COD [cash-on–delivery] for the last 10 years, and even today a
big chunk of e-commerce there happens through cash. I think that will be the case in
India too,” – Abhishek Nayak, CEO of Gharpay

 Negotiation vs. Price Discounts

Every shopper would like to strike the best deal for their buy; am sure you will agree
that Indians have a keen sense of bargaining for price and would walk/drive any
distance for a better price. With online competition brewing you would find shoppers
wedged amid the huge pricing battlefield and bounce from one store to another for
discovering the best-buy. Have you ever experienced walking into a store (e.g.
electronic, stationery) and striking a deal with the shop-floor manager over-and-above
the tagged price? Try negotiating in comparison to an online/neighboring store deal
and you may be pleasantly surprised. Price could be the prime influencer for decision

59
making however the satisfaction of winning a negotiation could be another strong
driver for purchase.

 ReturnPolicy
Several brick and mortar stores in India provide the flexibility of returning goods
within a stipulated time period once bought; in doing so gain customer confidence and
trust. Online stores have yet not matured to the level of offering favourable return
policies and often shoppers are forced to accept delivered products. One major
advantage that UK online shoppers have over real world buyers is a statutory
“cooling-off” period of seven days. You can cancel an online transaction and receive
a refund anytime in the first seven working days for any reason…or no reason.
Jabong.com is one of the few India-based commerce companies which offers a 30-day
free return policy (full order as well as part if ordered for multiple products) which
has significantly contributed to their sales volume. Hopefully many more will soon
get added to the list of options.

 Broadband Penetration
The total number of broadband subscribers including DSL, cable, fiber optic, and
broadband wireless platforms is estimated to reach around 15.3 million at the end of
2012. The penetration is currently low however growing at a rapid pace. Glancing at a
blank computer screen waiting for products to refresh/display owing to spikes in
connectivity speeds and the fear of a transaction being interrupted during check-out
due to technical snags are inherent problems which are yet to be fine-tuned.

“Shopping online has become a mainstream activity for the rural people. People are
evaluating the option of ecommerce and as the Internet penetrates deeper, more and
more people will try it,” – eBay India Director (Category Management),
KashyapVadapalli

 Credit Card Penetration –

Unlike in the Western countries, in India cash is used for most transactions. Poor
fraud protection policies and the fear of personal information leaking as well as
spamming further contributes towards the low adoption and usage of credit cards in

60
India. However, credit card usage is gradually increasing in the premium card
segment.

“The country saw a 2 percentage point drop in the number of credit card-holders last
year,” - HSBC India consumer assets head Manish Sinha

Several advertising campaigns are being launched by eCommerce companies to

reduce online shopping apprehensions of a consumer. I’m sure you must have
seen/heard about the new television campaign, titled ‘No Kidding, No Worries’, by
the e-commerce portal Flipkart, responds to an online shopper’s worry in a humorous
and quirky way. Few companies are using celebrities as curators/advocates for
products and in that way hoping to inspire trust in consumers. The eCommerce
scenario in India is fast growing with numerous players and the evolution of product
interfaces/platforms and customer experiences have been significant over the last few
years. However, in India online buying is buzzing amongst the younger generation
from select urban areas and in general is still perceived as being complicated and
bumpy.

CHALLENGES FACED BY E-COMMERCE COMPANIES

Security

Security continues to be a problem for online businesses. Customers have to feel

confident about the integrity of the payment process before they commit to the
purchase.

System and Data Integrity

Data protection and the integrity of the system that handles the data are serious
concerns. Computer viruses are rampant, with new viruses discovered every day.
Viruses cause unnecessary delays, file backups, storage problems, and other similar
difficulties. The danger of hackers accessing files and corrupting accounts adds more
stress to an already complex operation.

61
System Scalability

A business develops an interactive interface with customers via a website. After a

while, statistical analysis determines whether visitors to the site are one–time or
recurring customers. If the company expects 2 million customers and 6 million show
up, website performance is bound to experience degradation, slowdown, and
eventually loss of customers. To stop this problem from happening, a website must be
scalable, or upgradable on a regular basis.

E–commerce is Not Free

So far, success stories in e–commerce have forced large business with deep pockets
and good funding. According to a report, small retailers that go head–to–head with e–
commerce giants are fighting losing battle. As in the brick–and–mortar environment,
they simply cannot compete on price or product offering. Brand loyalty is related to
this issue, which is supposed to be less important for online firms. Brands are
expected to lower search costs, build trust, and communicate quality. A search engine
can come up with the best music deals, for example, yet consumers continue to flock
to trusted entities such as HMV.

Consumer Search is Not Efficient or Cost–Effective

On the surface, the electronic marketplace seems to be a perfect market, where

worldwide sellers and buyers share and trade without intermediaries. However, a
closer look indicates that new types of intermediaries are essential to e–commerce.
They include electronic malls that guarantee legitimacy of transactions. All these
intermediaries add to transaction costs.

Products People Won't Buy Online

Imagine a website called furniture.com or living.com, where venture capitalists are

investing millions in selling home furnishings online. In the case of a sofa, you would
want to sit on it, feel the texture of the fabric etc. Beside the sofa test, online furniture
sotres face costly returns which makes the product harder to sell online.

62
Corporate Vulnerability

The availability of product details, catalogs, and other information about a business
through its website makes it vulnerable to access by the competition. The idea of
extracting business intelligence from the website is called web framing.

High Risk of Internet Start–Up

Many stories unfolded in 1999 about successful executives in established firms

leaving for Internet start–ups, only to find out that their get–rich dream with a dot.com
was just that – a dream.

ECOMMERCE TREND BOOMING IN INDIA

With the soared and record breaking online sale in the months of October and
November, it is evidently proved that e-commerce will outpace total retail sales in few
years. Growth of e-commerce was low in starting years due to initial inhibitions, but,
it is growing now with extraordinary pace as the confidence of Indian buyers is
increasing slowly. Seeing the current behavior of Indian buyers, online experts
estimated that the trend of e-shopping will become basic phenomena among buyers in
arriving years. The present and future e-marketers are keeping their eyes on the
Indian market trends and studying the consumer behavior for creating best and
attractive deals potential clients. As per experts the coming holiday season in
December will blur the retail market shine by online deals and free shipping offers.

In last two years many e-commerce websites have mushroomed online and giving
tough competition to one another with striking deals like free shipping, coupons, free
gifts, easy return policy, and many more. As per AlexaFlipkart, Ebay, Snapdeal,
Jabong , Home Shop 18,Yebhi, Myntra, Naaptol, Tradusin, and Fashionandyou are
the top ten e-commerce websites in India.

While Indian online market future is going to be boom and not bubble, the retailers
are fastening their belts for launching online stores. It is a peak time; early adopters
have already initiated the processes such as website design and promotion for
surviving the competition between website and retail in future. Gear yourself up for
the cutthroat competition in Indian market as e-commerce is slowly outpacing
practical retail stores.

63
Comparison shopping has been on a growth but is still under-served compared to
global averages. The need to compare and consume in India across other online
categories like travel, shows a similar consumer behavior in retail category. In the
coming months, expect more and more consumers relying on online research of
products for features and prices.Online retail has seen a heavy overlap with social
networking and search due to aggressive marketing and strong inclination towards
social commerce. We expect a larger portion of online retail from social commerce
with India positioning itself as one of the fastest growing social networked user base
and also larger size of social groups.

To conclude, E-Commerce has seen tremendous growth in the last 12 months. Models
like Cash on Delivery and other consumer centric payment options and improved
service quality will boost overall sales. It is definitely the most exciting phase among
online retailers and consumers as this learning curve will put India on the global map
as one of the largest e-commerce markets in the coming months.

INDIAN BILLING VENDORS IN TELECOM INDUSTRY

A robust, world class billing system forms one of the most critical components of a
telecom operator’s infrastructure, as it has a direct impact on the bottom line. Indian
vendors however have received a lukewarm response from the domestic market
despite the fact that their products are on the shopping list of international telcos.

It’s a strange situation. Indian software solution providers are acclaimed the world
over for delivering high-quality, low-cost solutions. But when it comes to products
very few have been able to achieve any significant breakthroughs. Take the case of
the telecom billing solutions space. Indian telecom operators have internationally
reputed systems in place. But except for one or two exceptions, none of the major
telecom service providers in the country have deployed solutions developed by
domestic telecom billing solution providers. This despite the fact that most Indian
solution vendors boast of quite a few international telecom operators on their client
roster. The tide has been changing in the recent past, but it has been an excruciatingly
slow turnabout.

64
OPPORTUNITIES FOR INDIAN COMPANIES

Just as networks are the backbone of modern communication, the operations support
system, including billing and customer care functions, are the backbone of the
communication service provider. A billing system along with a customer relationship
management (CRM) solution provides telecom operators with a user-friendly
interface for creating accounts, services, products and packages. Besides, the account
information, product/service details, payment, adjustments, call rating details and
invoices are all stored in the billing system, and making it accessible online can
provide instant information to customers.

Churn management is another factor that has a huge bearing on an operator’s

business. A billing solution is directly linked with overall customer satisfaction. The
information captured by the billing system provides statistics on abnormal usage. This
information is in turn used by the operator to effectively reduce churn. Says Gangotra,
“You need a customer care and billing solution that enables an operator to meet all
customer service requirements, and also allows quick roll-out of products and
services. The system should also be capable of real-time call rating and billing.”

According to Nandakumar, the Indian telecom billing space could be worth more than
$600 million. But for the Indian players in this growing sector the real opportunity
lies outside the country.

The telecommunications market outside the United States is estimated to be close to

$1.4 trillion, according to the Telecommunications Industry Association (TIA).
Buoyed by growth in wireless and support services, the overall telecommunications
market internationally is poised for a healthy 10.3 percent compounded average
growth rate (CAGR) through 2006. International spending on communications
services is expected to reach $788 billion in 2003—a 10.5 percent increase over 2002.

The largest regional market outside North America is Asia-Pacific with total
telecommunications revenue expected to reach $421.6 billion in 2003, up from $380
billion in 2002. This market is projected to grow at 9.1 percent through 2006. The
Asia-Pacific market is very diverse, with uneven market growth. Of the top markets—
Japan continues to exhibit only modest market growth while China and India are
growing rapidly. In recent years, growth in the subscriber base for mobile phones in

65
both China and India has exceeded 80 percent CAGR. Considering these factors, a
robust, scalable telecom billing system is today an imperative for all operators.
Thanks to cutthroat competition telecom billing has today metamorphosed from being
a necessary expense into an important strategic tool.

BILLING COMPLEXITIES

For most telcos, traditional competitive benchmarks no longer ensure loyalty.

Essentially, the best competitive point left is customer care and service, including
billing. Says Gangotra, “The billing process encompasses the mission-critical
collection and mediation of call detail records through to the issuing of statements and
receipt of payments. Beyond that, the bill is the one regular contact a telco has with
every customer, and contains a potential wealth of information about each and every
account.” Not only must telcos maximise their customer relationships through this
consistent point of contact, they must also effectively utilise account information to
develop a cohesive portrait of their clients and leverage that portrait into a marketing
and churn management tool.

For effective customer service decisions concerning payment defaults shouldn’t be

taken on the basis of one particular transaction. Instead it should be based on an
aggregate of all the transactions between the operator and the customer over a certain
period of time. The billing system should be able to source the required information to
provide an overall picture of the customer.

Complexities also creep in when the operator has to offer different pricing to different
sets of customers. For instance, members of closed user groups (CUG) have the
benefit of lower rates than normal outgoing rates. So the system has to be configured
accordingly in order to bill them. The same holds true for customers who have joined
under a promotional scheme wherein various concessions and discounts are offered.
For example, many operators offer customers something called the ‘Best Value Plan’.
Based on information gained from the records of previous transactions the system
should be capable of figuring out the best value plan for the customer.

A good billing system should be robust enough to scale to the various demands made
by network users and manage the complexity arising thereof, says Ankur Lal

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Another pain area for most operators is the sharing of revenue. In the case of content
transaction such as tunes, video clips, etc, the service is provided by a third party. The
network operator provides this third party with customers and a transport mechanism.
This service is soon evolving into a supermarket model where a telecom operator
deals with different partners for providing a variety of content—downloads, dating,
chatting and m-commerce. The operator has to provide the customer with a single bill
but has to settle positions with each content service provider individually. The billing
system should enable transparency at both the operator as well as the service
providers’ end. In data the final pricing is based after measuring the volume of data,
which is generally different for each transaction. Says Ankur Lal, CEO of Infozech
Software, “With a plethora of new services being introduced, one key complexity is
multi-service mediation, which is to identify and quantify an event as a billable event.
In my opinion a good billing system should be robust enough to scale to the various
demands made by network users and manage the complexity arising thereof.”

Adds Ritesh Nain, VP—business development and pre-sales, Ascent Telecom, “There
is a mismatch between demand and the technology available. Service providers offer
new services and features in order to differentiate from their competitors but lack of
available technology, at that point of time, makes the task of billing solution vendors
more challenging. Apart from this the telecom billing industry is too diversified to
have a common standard. Hence the billing vendor has to do provide customised
solutions for each individual need.”

THE PLAYERS AND THEIR SOLUTIONS

Though many had entered the fray only a few stalwarts have been left standing.
Among them Suntec seems to be the only one that has managed to make its presence
felt in the Indian telecom sector. The company, which started off by developing a
solution for BSNL, recently managed to deploy its TBMS (telecom billing
management systems) at HFCL Infotel, the networking arm of the Himachal
Futuristic Communication (HFCL), a leading telecom operator in Punjab. The
company has around 240 installations across the country, including a few in Chennai,
Bangalore and Maharashtra. The company also boasts of international clients like
Batelco (Bahrain Telecommunications Company) and SNT Connect based in The
Netherlands, among others.

67
Suntec has two key products for the telecom sector—TBMS and ARE (advanced
rating engine), a rating engine that claims to handle large volumes of transaction data
records. TMBS being an open standards-based design enables easy integration into
the organisation’s heterogeneous operational support system (OSS) environment. A
convergent, rules-based architecture provides the flexibility needed to configure a
broad range of complex billing parameters.

Another Indian player, Infozech, provides a comprehensive range of products,

including eBill, a customer care and billing product targeted at telecom and next
generation service providers. Infozech’s product, ICAS (inter carrier access
settlement) facilitates international carriers and service providers to manage their
charging, billing and reconciliation needs. Another product from the company’s
stable, PMS, is a prepaid management solution that helps providers with PIN
management as in PIN generation, distribution, recharge - call charging, activation,
deactivation and traffic monitoring. The company boasts of international clients like
Embratel Americas, World Link and Globaltel, and is currently working on its first
project in India.

Ascent Telecom (AT) provides the Matrix range of solutions, a comprehensive suite
of billing and customer care solutions and 24x7 support for prepaid and postpaid
telecom service providers. Matrix-VOIP Basic v3.1 billing solution is the prepaid
offering by Ascent Telecom. According to Nain, it enables operators to launch
prepaid calling card services quickly with a low entry cost.

CHALLENGES

The main challenge Indian telecom billing solution providers face is that of
perception. Domestic billing vendors feel that Indian telecom operators are
particularly biased when it comes to implementing a solution developed by them.
Maybe it has got something to do with the Indian fixation for things foreign. But the
common sentiment is that while even a small mistake committed by an Indian vendor
is blown out of proportion the operators turn a blind eye to similar mistakes made by a
foreign player.

But Gangotra feels this is not true. According to her telecom emancipation is a recent
phenomenon in India compared to the rest of the civilised world where telecom

68
services were taken for granted even 20 years back, resulting in the proliferation of
telecom solutions outside India. These same products have matured, and today are
extremely rich in features. But she feels that while Indian IT professionals are
considered to be the best across the world, the same cannot be claimed for Indian
products. Adds Gangotra, “Opting for an internationally acclaimed billing solution
ensures that along with the product the operator also has to adopt best international
practices within the organisation.”

REASONS FOR FAILURE

Creating a product is a long drawn process and a risky venture. Many companies that
got into the business were not able to sustain themselves mainly due to financial
constraints. Most Indian companies also faced the disadvantage of starting from
absolute scratch.

Also, international players are generally wary about any new product. Most
companies prefer a known brand rather than a new product from a lesser known or
unknown player. For them pricing is not the only issue. Most companies have their
own internal technical evaluation system, which an Indian player will have to clear
before their solution can be accepted. This is one area where many Indian companies
have failed to prove themselves.

FORMULA FOR SUCCESS

Value for money is the mantra to success in any industry and the same holds true for
the telecom sector. Nandakumar claims that one of the key reasons for Suntec’s
success has been its ability to roll out fast—in as low as four months and in some
instances within 45-60 days. Suntec provides all functionality out-of-the-box, which
enables the firm to implement the solution faster.

All the companies Express Computer spoke to swear by the partner-centric model.
Both Nandakumar and Lal feel that this has been one of the key reasons for their
success. In most cases the partner is generally an established player with market
credibility. These partners not only provide an entry into an otherwise difficult market
but also come in handy when it comes to providing after-sales service. Businesses can
leverage the systems and specialisation that partners provide and at the same time,

69
focus on their core revenue generating activities. Says Nain, “Partnerships are the key
to success. Partners from various industry verticals strengthen our network and the
ability to satisfy customer needs.”

According to K Nandakumar billing systems should help reduce costs with

comprehensive Web-based interfaces that provide customer care personnel instant
access to customer account information and track account disputes

Other factors that are key include the flexibility of the billing solution to
accommodate the ever changing demands of the telecom operator. The solution
should be rapidly implemented and effectively managed. Ease of use is also
paramount. Even the most competent solution may turn out to be useless if it is not
easy to use. To be a successful software product company a vendor should also
possess an extraordinary understanding of customer need and should ensure
performance and reliability for business-critical operations.

Offering a convergent billing system has been another key strategy followed by many
players. Focusing on the prepaid segment has become a crucial strategy for most
cellular operators. According to industry experts, the prepaid segment is a crucial
growth area as they provide up to 55 percent of the operators’ revenue. With
advancement in the telecommunications space today in India, and all the dramatic
changes which have been happening it can be concluded that billing for converged
services, broadband and prepaid would be the focus area in terms of growth for a
billing solution provider.

The most challenging part is the vendors’ ability to adapt to ever-changing market
requirements. Successful companies have the ability to adapt themselves to new
market conditions and understand their customers thoroughly. Says Nain, “Indian
companies need to study the concentration of potential customer bases around the
world and devise a marketing methodology in order to tap that customer base.”

FUTURE IN BILLING INDUSTRY

The gap between Indian software professionals and Indian solutions needs to be
bridged by having a proper software development life cycle.

70
But there is no way an operator can stop billing. It is the core aspect of any telecom
provider’s business. Nandakumar feels that most Indian players are now facing billing
problems, which might force them to look out for a better solution provider. The
question is how long can they continue with the old billing system. This is an
opportunity that Indian telecom billing vendors need to tap. The USP that these
vendors have to offer is their in-depth knowledge of the Indian environment.

A significant growth in data and application services is expected in the near future.
SMS messaging, music downloads and online games are few of the services that can
be monetised, given the right billing mechanism. Says Lal, “We are looking at a wider
audience whose needs will be varied. To create a satisfied customer base operators
would need to provide more interesting services.”

With increasing competition in the mobile wireless service sphere, cellular players
will not only have to look at their service offerings to their end-users but also the
crucial aspect of billing that will ensure effective control over the all-important thing,
revenue.

The e-billing business has grown by over 200 per cent. Its size is likely to reach 6.5
million by 2008-09 from the current 1.9 million, says the Associated Chamber of
Commerce & Industry of India (ASSOCHAM).

An average individual saves about 80 hours of his time by paying his bills through the
Internet. India’s Internet population stands at over 100 million. It is set to reach 125
million by 2008-09.

Annually, an average Indian household in top 10 cities pays approximately 50 bills, in

areas like — finances, insurance, telecommunications and utilities companies,
electricity, water, house and other civic taxes.

“Offline bill payment is time-consuming, and doing it online not only benefits billers
but consumers as well. Electronic Bill Presentment and Payment (EBPP) as a
potential cost saver, it’s a great revenue opportunity for banks and third-party service
providers. Banks are in a good position to cash in because of their reputation as
‘trusted companies’ and should recognise that their online customers are more
profitable than their offline customers,” said ASSOCHAM president Venugopal N
Dhoot.

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While automated bank debits for bill payment have been available to consumers for
more than a decade, it’s the benefit of self-service at any hour and increasing comfort
with online financial transactions that are attracting netizens to Internet bill payment
services in large numbers.

In a survey conducted by ASSOCHAM on “e-Billing – A Better Option For

Convenience”, it was discovered that Mumbai has taken lead in e-billing as about
28% of its population takes advantage of e-billing transactions followed by 22% of
Delhi, 12.5% of Chennai, 12% of Bangalore, and 5.2% of Hyderabad. In Pune, online
payment is affected by about 5% of its total population and between 6-7% of Kolkata,
2.4% of Ahemdabad, 2.2% of Lucknow and about 2% of Indore.

It also found that 73% of online payers access the Internet from their homes, while
79% do it from their office, 36% access it from cyber cafes, 7% from a friend’s place
and 14% from the mobile phone, points out ASSOCHAM analysis.

75% of cell phone owners choose online medium for payment of their bills. 73%
owners of landline telephones also opt for this medium for bill payment. 70% pay
credit card bills online while 60% pay electricity bills online. 45% pay insurance
premium through online, 42% pay Internet access bills with this medium while 29%
pay for their magazine subscriptions online.

54% cited convenience as the most important that induced them into paying bills
online. 35% cited time saving as they could pay bills without having to stand in line at
a counter or even a bill payment centre. On average, customer saved 80 hours a year;
paying bills online also reduced paperwork and was an easier way to manage bills.
5% were attracted to online bill payment because they could pay multiple bills at the
same time on the same site or on different site.

46% of online bill payers are between the age of 26-35, followed by 22% in the age
18-25 group. 20% are in the 36-45 age group, 11% in the 40-60 bracket and 2% in the
61+ age bracket.

83% online bill payers are male and 17% are female. 43% are unmarried, 14%
married with no kids and 43% are married with kids.

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By occupation, online bill payers 3% are students while 6% are supervisors/officers.
64% are executives (including junior, middle and senior levels). 4% are businessmen/
industrialist, 1% are shop owners and 2% are housewives.

99% of online bill payers use the Internet for e-mails; 82% use search engines; 81%
use it for surfing, 68% look up news online; 20% look up news on the mobile; 80%
use it for online banking, 57% use it for online shopping; 33% trade stocks online,
28% participate in online bidding.

“Netizens will increasingly adopt online bill payment for factors such as convenience,
control, trust, privacy, and improved record-keeping; another plus factor is that they
can depend on customer service for recourse,” said Dhoot.

MANAGERIAL USEFULNESS OF THE STUDY

Easy Bill, India's first chain of one stop Financial Transaction centers, is yet another
initiative in adding value to the life of the common man. Through its vast network of
Retail Partners, it offers the consumer never-before convenience in various kinds of
transactions. Extensive research revealed that one of the biggest problems faced by
the common man is the hassle of dealing with large public and private enterprises for
transaction related services. In the last decade, the consumer base of several industries
has grown exponentially, though the support services have not been able to keep pace.
Easy Bill is promoted by the 'Hero Group of Companies', one of the leading business
houses in India. The 'Hero Group of Companies' has always been dedicated to making
a difference to the life of every Indian, every where. Hero Honda Motors Limited, the
world's largest two wheeler company as well as Hero Cycles Limited, the world's
largest bicycle manufacturer have revolutionized the way Indians commute, becoming
an integral part of the fabric of the nation. The research problem involved here is to
identify the marketing and retailing strategies followed by Easy Bill India

Marketing is the lifeblood and nerve center of a business. As circulation of blood is

essential in the human body for maintain life, Marketings is a very essential to smooth
running of the business. In present time Marketing managers are instrumental to a
company’s success. Where as once the financial manager was charged only with such
routine taken as keeping records, preparing marketing reports, managing the

73
Company’s marketing position and occasionally in other activities. Now a days a
Marketing Manager is supposed to perform the following function as:

a) Marketing forecasting and planning.

b) Allocation of Funds for promotional activities

As the importance of Marketing is growing up in twenty first century, we cannot

afford to ignore it. Following the same line and inspiration I decided to do my project
on the current topic

Easy Bill uses a unique model which leverages cutting edge technology and uses the
existing conventional retail network to deliver consumer convenience. This model has
the potential to convert an ordinary neighbourhood outlet (grocery, chemist,
telecommunication or petrol pump) into a transaction centre. One in which the
consumer can complete all his important transactions in the course of his every day
routine.

Easy Bill is working on different lines and concept, a concept which is very new to
Indian mass. Since I am employed with this company therefore it made all the sense
in the world to choose it as my research topic, as it will make huge contributiuons to
me as well as the company in terms of exposure and experience.

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 Chapter -3
Findings and Analysis

75
 FINDINGS AND ANALYSIS

1. Do you believe that there is a Retail Boom in India?

 Yes -------------------------------------------------------- 85 percent

 No ---------------------------------------------------------- 04 percent
 Do not know/ Can not say ------------------------------ 11 percent

90%

80%

70%

60%

50% Yes

40%
No
30%

20%
Do not
know /
10%
Can not
say
0%
Yes 85%
No 4%
Do not know / Can not
11%
say

Interpretation
As the perception of the consumers and also perhaps the sellers goes, there is a retail
boom in the Indian market and this may be attributed to the growth of income,
disposable income and the penetration of the consumer culture among both the urban
and rural masses, apart from other potential factors.

76
2. THE RETAIL BOOM IS DUE TO THE GROWTH OF DISPOSABLE
INCOME IN INDIA. DO YOU AGREE?

 Yes -------------------------------------------------------- 73 percent

 No ---------------------------------------------------------- 12 percent
 Do not know/ Can not say ------------------------------ 15 percent

80%

70%

60%

50%

Yes
40%

30% No

20%
Do not
know /
10% Can not
say

0%
Yes 73%
No 12%
Do not know / Can not say 15%

INTERPRETATION
The response to the above question suggests that disposable income is one of the most
important factors leading to the present retail boom in India.

77
3. DO YOU THINK THAT THERE EXISTS A GAP IN THE RETAIL
BOOM BETWEEN THE URBAN INDIA AND THE RURAL INDIA? IF
IT IS SO PLEASE ATTRIBUTE THE REASONS FOR IT.

 Yes -------------------------------------------------------- 55 percent

 No ---------------------------------------------------------- 32 percent
 Do not know/ Can not say ------------------------------ 13 percent

60%

50%

40%

Yes
30%

No
20%

Do not
10% know /
Can not
say
0%
Yes 55%
No 32%
Do not know / Can not say 13%

INTERPRETATION
Reasons
a. Income
b. Disposable income
c. Gap in consumerism
d. Spending culture

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4. FDI IN THE RETAIL SECTOR, GOOD OR BAD?
 Good ------------------------------------------------------------------------- 27 percent
 Bad ---------------------------------------------------------------------------- 69 percent
 No comments --------------------------------------------------------------- 04 percent

70%

60%

50%

40%

Good
30%
Bad
20%
No
comments
10%

0%
Good 27%
Bad 69%
No comments 4%

INTERPRETATION
Indian traders are still suffering fro the phobia of foreign investment in India. Even
the retail segment which is more driven by the disposable income is not free from this.
69 per cent of the respondents are of the opinion that FDI is not good for the retailers
in India against the 27 per cent of the respondents who are hopeful that they will be
benefited from the retail boom and the FDI entry in this segment.

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5. WHAT ACCORDING TO YOU IS THE MOST IMPORTANT
PROBLEM FOR A CONSUMER IN THE RETAIL MARKET?
 Availability of goods and services-------------------- 03 per cent
 Cost of the items ------------------------------------------ 24 per cent
 Lack of choice of products ---------------------------------- 20 per cent
 Transaction and service related problems------------------ 40 per cent
 Others -----------------------------------------------------------13 per cent

40%

35%

30%

25%
Availability of
20% goods and
services
15% Cost of the items

10%
Lack of choice of
5% products

Transaction and
0% service related
Availability of goods and services 3% problems
Cost of the items 24% Others
Lack of choice of products 20%
Transaction and service related
40%
problems
Others 13%

INTERPRETATION
While trying to understand the problems in the retail market, from the consumers’
point of view, it was found that the consumers are facing more problems in the service
segment and the transaction front than availability of goods which is obviously not a
problem rather abundancy of it is one. As regards the cost factor, 24 per cent of the
respondents identified it as the most important problem. Negligence of cost factor
may be due to a large portion of middle class customers in the sample of our study.

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6. WOULD YOU PREFER TO PAY A LITTLE BIT EXTRA FOR BEING
PROVIDED BETTER SERVICE?
 Yes ------------------------------------------------- 75 per cent
 No -------------------------------------------------- 18 per cent
 Do not know/ Can not say --------------------- 07 per cent

80%

70%

60%

50%

40% Yes

30%
No

20%
Do not
10% know/ Can
not say

0%
Yes 75%
No 18%
Do not know/ Can not say 7%

INTERPRETATION
As mentioned earlier, transaction related issues like bill payment and getting warranty
service, etc is a major problem for the retail customers in India and now they have
also money with them they are ready to pay for better service. 75 per cent of the
respondents feel that it is worth paying a little extra for being provided better service
whereas only 18 per cent of the respondents are reluctant to make extra payment.

81
7. HOW DO YOU THINK EASY BILL, A HERO GROUP INITIATIVE
WILL BENEFIT YOU TO SOLVE YOU PROBLEMS?

 Enables various types of transactions at a single point

 Convenient location of the outlets - right in the consumer\'s neighbourhood
 Instant authorised payment receipts
 Open on Sundays and holidays
 Convenient timings - early morning to late evening
 Choice of cash, cheque or credit card transactions

CORPORATE QUESTIONS:

8. WHAT WAS THE INITIATIVE BEHIND EASY BILL CONCEPT OF

YOUR COMPANY?
The officials responded that now, the service industry in India has been
growing only from the past 7-8 years. The concept is popular in Europe and
five years ago, somebody from that Continent familiarized us with it. We felt
that this business of cash collection has good potential in our country. If the
strategy has succeeded in Europe, where only 20% of the transactions is done
in cash, then it has great future in India where 90% of mundane business is
cash-based. We did some research and then decided to introduce the idea to
Indian customers. The new measure is picking up pace and filling the gap
between demand and supply. They have opened many service companies like
call centers et al. Being the first few manufactures of bicycles, mopeds et al,
they had to move the way economy was growing. India is not even at a 1/10th
level as compared to developing countries like China, Brazil, South Africa et
al. And with India’s economy growing it was the best time to get into this
service industry by launching East Bill Ltd. Now, when the company launched
Easy bill, it required a huge network of dealers, retailers, the skill sets which
were required were very similar to what Hero Group was already into – low
value cash movement. This led to formation of Easy Bill.

82
9. WHAT ARE THE EXPANSION PLANS OF EASY BILL LIMITED?

The expansion plans as identified by the officials are as follows:

 Bill payments of every possible bill

 Pre-paid coupons
 Railway tickets
 Plain tickets

Right now the company has 3, 000 franchisees and plan to have10,000 in the
next 12 to 15 months. They are collecting bills for at least 50 companies at this
moment. During the same time period, our target is to strike collaboration with
at least for 100 companies

10. HOW DO YOU COMPETE WITH THE COMPANY-OWNED

BILLING CENTERS?

The company is providing comfort to the customers. The USP is --- just walk
into an Easy Bill centre and pay all the bills together. The outlets where these
centres are located are normal stores. Customers are anyway going out to buy
milk, bread or sugar, and not specially making a trip to pay the bills. Hence, in
this way, both shopping and paying such bills are taken care of.

We have got tie-ups with the electricity, telecom, insurance and Internet
companies. Indian consumers are by and large reluctant to pay their bills
through credit cards. Easy Bill sysytem comes in handy. For example, one can
pay his bills in cash for the shopping done on the Internet. Our machines has a
bar code scanner, which scans the bill and gives the recei

83
Chapter -4

Suggestions

84
 SUGGESTIONS

 Flipkart has successfully placed itself into the prospects mind making it the
India’s largest online store with huge range of products. But it still needs to
work on their core competence that is books and stationery items.
 Delivery services can be improved mainly in rural areas by selecting
appropriate courier service which has services in customer area for dispatching
an item.
 Can make free delivery to all priced products.
 Can include more coupon codes and gift vouchers for increasing the traffic of
the customers.
 Out of stock items can made available as soon as possible and intimate the
needed customers.
 Should look for International/ Overseas markets or Neighbouring Countries.
 Critical mass of Internet users – Internet users in India is increasing at
increasing rate, so Flipkart can target more & more cities i.e not only tier 1 &
2 but also tier 3 & 4 cities, which will help generate stronger customer base &
more revenues.
 Should clearing focus on the Growing Online Apparel business & it can
diversify into apparel category either organically or inorganically by acquiring
other portals.
 User Experience: Portal should continuously aim to work to improve the user
experience by adding more & more innovative features in the website like
virtually shopping basket, virtual trial rooms. In this competitive world to
differentiate via user experience, the ultimate winner will be the Indian online
consumer.
 Should comprehensively invest into E-CRM & online reputation management.
 Logistics & Supply Chain: can continuously aim to reduce the delivery time
cycle.
 Price will still be a factor as amazon being a huge company will use its
economies of scale to remove their competitors from the market; therefore
they need to be more competitive on that aspect.

85
 Chapter -5

Conclusion and Limitation

86
 CONCLUSION AND LIMITATION

E-commerce is still in its formative stage. The business-to-business and intra-

organizational segments currently dominate e-commerce. Many major digital retailers
are as yet in the investment and brand-building mode and show no profits; yet many
established retailers realize profits from the new selling channel. Buoyant growth is
apparent throughout.

The technological infrastructure currently imposes several limitations on the

development of a global market-space and on the personal convenience of the
participants. An integrated consumer-oriented transaction space is yet to emerge. The
consumer marketplace is being developed by a large number of entrepreneurial
initiatives, many of them experimenting on the frontiers.

As many new moves are yet to take place and the supply chains are to be
reconfigured, many new firms may be expected to emerge and specialize around
newly redefined core capabilities. The business models of many existing firms will be
threatened. E-commerce will present over time countless opportunities and challenges
to our economies and societies. Expansion of commerce and technological
innovations are two of the levers of economic growth. These forces are combined in
the progress of E-commerce.

The prevailing judgment at this stage of E-commerce development is to allow free-

market forces to assert themselves unhampered by excessive government regulation.
The traditional institutions, such as banks of issue, commercial banks, universities,
established business intermediaries, media and publishing companies, would find a
need to redefine their roles in the new environment. The taxability of products traded
globally over the Internet is as yet an open issue. Intellectual property that can be
converted to on-line content may find itself reevaluate in the global marketplace.

The tension between the transactional efficiency of spot purchasing facilitated by

electronic markets and the need for long-term relationships of trust and forbearance,
enabled by electronic hierarchies, will persist and call for much study. The
geographical limitations that have bound the place of residence to the place of work,
and that have already been eroded by the growth of tele-work, may be expected to be
even less binding. Indeed, the possibilities of the loss of rural space to the new ex-

87
urbanites are already causing environmental alarms. A number of countries that had
been marginalized by their geographical position take extremely active interest in E-
commerce as the means to move to the center of the virtual geography. The
redistribution work has to be studied from multiple perspectives.

E-commerce has entered a stage of rapid and sustained development. A large number
of business models have been enabled by it. A number of questions have been posed
here. All of these and many others will require further experimentation, experience,
observation, analysis, and research.

The changing global trends have important implications for Indian retailers. The
Indian consumer remains value conscious. The consumer in most cases is willing to
spend money, but remains cost conscious, evaluating every rupee spent. It is therefore
imperative for retailers to offer price advantage via sourcing and operational
efficiency and a strong private label program to attract customers. Existing and new
entrants need to achieve scale quickly for driving efficiencies in procurement, supply
chain and marketing. Else they risk being marginalized by larger players. Real estate
and human resources will be the critical drivers to build scale. While there are a few
hundred malls under various stages of development across the country, retailers will
need to think out of the box as well to ensure availability of real estate. This may
include acquiring and developing the real estate themselves rather than wait for mall
development. Given the rising demand for retail real estate, retailers will need to take
a long term view on rentals and look at alternative options like ownership or very long
term leases. Retailers that invest in training will be able to ensure availability of
quality manpower in the rapidly growing market.

“Easy Bill is a one stop bill payment shop. Now you don’t have to run all over town
and stand in long queues to pay your utility bills. You can do it right next door at your
friendly neighborhood store. You can pay your mobile, electricity and telephone bills
at leisure, even on Sundays. Both cash and cheque are accepted and you get an
immediate electronic bill receipt. So, go on, make your life easy with Easy Bill!”.
Easy Bill is a bill payment company that allows people to pay their utility bills such as
electricity, water and phone at a retail outlet. The Easy Bill Limited is expanding its
activities, retail chain and geographical reach day by day in the coming years one may
not get surprised to see Easy Bill as one stop billing solution for every purchase for
the retail customers in India.

88
LIMITATIONS OF THE STUDY

No research is complete without admitting the limitations that was faced while
conducting a study which will contribute to present learning. This study too like the
others have certain constrains which has been discussed below.

 The study was restricted to Bangalore city only

 The study is mainly concentrated on Flipkart.com

 The sample of the size will be limited to time and resources

 The information will be collected valid until there is no any technical change
or any innovation

 The result is assuming that respondents have given accurate information

89
Bibliography

90
 BIBLIOGRAPHY
BOOKS:
 Assael, Henry. (1984.) “Behavior and Market Action”. Boston, Massachusetts:
Kent Publishing Company,
 Belch, G.E., & Belch, M.A. (2001). Advertising and Promotion: An integrated
Marketing Communications Perspective (5th ed.). Boston: Irwin/McGraw-
Hill.
 Cooper, Donald R. and Schindler , Pamela S. (1999), Business Research
Methods, 6 Tata McGraw-Hill Publishing Company Limited, New Delhi,
India.
 Creswell, J. W. (2003). “Research Design: Qualitative, Quantitative, and
Mixed Methods Approaches”. Thousand Oaks, CA, Sage.
 Easterby-Smith, M., Thorpe, R. & Lowe, A. (2002), Management Research
2nd edition, London: Sage.
 Remenyi, D., Williams, B., Money, A. and Swartz, E. (1998), “Doing
Research in Business and Management”, Sage Publications, London.

JOURNELS AND MAGAZINES:

 Arnould, E.J. and Wallendorf, M. “Market-oriented Ethnography:
Interpretation Building and Marketing Strategy Formulation,” Journal of
Marketing Research, Vol. 31 (November 1994), pp. 484–504.

 ANALYSIS OF CONSUMER BEHAVIOUR ONLINE

Author: DejanPetrovic

 HOT BARGAINS: TIPS TO FIGURE OUT TRAPS FROM THE REAL

VALUE DEALS
SUSHMITA CHOUDHURY AGARWAL, ET Bureau Apr 22, 2014 (The
Economic Times)

WEBSITES:

 www.Flipkart.com
 www.commodityindia.com

91
 www.marketoperation.com
 www.nextbigwhat.com
 www.britannica.com
 en.kioskea.net
 www.ecommerce-land.com
 www.commodityindia.com
 www.marketoperation.com

92
Annexure

93
 ANNEXURE
QUESTIONNAIRE

1. DO YOU BELIEVE THAT THERE IS A RETAIL BOOM IN INDIA?

 Yes
 No
 Do not know/ Can not say

2. THE RETAIL BOOM IS DUE TO THE GROWTH OF DISPOSABLE

INCOME IN INDIA. DO YOU AGREE?

 Yes
 No
 Do not know/ Can not say

3. DO YOU THINK THAT THERE EXISTS A GAP IN THE RETAIL BOOM

BETWEEN THE URBAN INDIA AND THE RURAL INDIA? IF IT IS SO
PLEASE ATTRIBUTE THE REASONS FOR IT.

 Yes
 No
 Do not know/ Can not say

4. FDI IN THE RETAIL SECTOR, GOOD OR BAD?

 Good
 Bad
 No comments

5. WHAT ACCORDING TO YOU IS THE MOST IMPORTANT PROBLEM

FOR A CONSUMER IN THE RETAIL MARKET?
 Availability of goods and services

94
 Cost of the items
 Lack of choice of products
 Transaction and service related problems
 Others

6. WOULD YOU PREFER TO PAY A LITTLE BIT EXTRA FOR BEING

PROVIDED BETTER SERVICE?
 Yes
 No
 Do not know/ Can not say

 HOW DO YOU THINK EASY BILL, A HERO GROUP INITIATIVE

WILL BENEFIT YOU TO SOLVE YOU PROBLEMS?

 Enables various types of transactions at a single point

 Convenient location of the outlets - right in the consumer\'s neighbourhood
 Instant authorised payment receipts
 Open on Sundays and holidays
 Convenient timings - early morning to late evening
 Choice of cash, cheque or credit card transactions

8. WHAT WAS THE INITIATIVE BEHIND EASY BILL CONCEPT OF

YOUR COMPANY?

9. WHAT ARE THE EXPANSION PLANS OF EASY BILL LIMITED?

The expansion plans as identified by the officials are as follows:

 Bill payments of every possible bill

 Pre-paid coupons
 Railway tickets
 Plain tickets

95
10. HOW DO YOU COMPETE WITH THE COMPANY-OWNED BILLING
CENTERS?

11. What is Flipkart's business strategy?

How does it make profits? When does it project it would break-even? How is its
strategy different from other e-commerce players? What are its pros and cons?

1. Cracking traditional India's mindset on doing shopping in internet

2. To build relationship with customers for long run revenue.

3. Sell more and more with minimal profit.

Indian e-commerce is emerging and for a start-up company like Flipkart, it is not
time to make profit. It is the time to create market presence and grab
opportunities. Flipkart's business model is much deeper and much expansive that
could possibly elaborate here. However, a few key points –

 Rationalized supply chain - Inbound logistics

 Strategic warehousing and distribution capability - Operations

 Well aligned fulfillment process - Outbound logistics

96