Summer Training Project Report

ON

“CONSUMER BEHAVIOR TOWARDS DIGITAL MARKETING IN FLIPKART”

A Report Submitted
To
Abdul Kalam Technical University, Lucknow

For the Partial Fulfilment for The Award of Degree of

MASTER OF BUSINESS ADMINISTRATION

Rajeev Dass SUBMITTEDBY:

Manager Prasannata Kumar
Flipkart Gautam
Roll No.:- 1868670036
Semester-III Session 2018-2020

Accurate Group of Institutions

Knowledge Park III, Greater Noida, Uttar Pradesh 201308

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 TO WHOM IT MY CONCERN

This is to certify that Mr. Prasannata Kumar Gautam, a student of

MBA (Abdul Kalam Technical University, Lucknow) has successfully
completed 3 week(From 1st july,2019 to 23th July, 2019) long
internship programme at Flipkart. During the period of his internship
programme with us he was found punctual, hardworking.

We wish him every success in future endeavors.

Rajeev Dass
Manager
Flipkart

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 Accurate Group of Institutions
Affiliated to Abdul Kalam Technical University, Lucknow
Approved by AICTE, Ministry of HRD, Govt. of India.
Knowledge Park III, Greater Noida, Uttar Pradesh 201308

Department of Management Studies

TO Whomsoever IT MAY CONCERN

This is to certify that the ‘Summer Training Research Project Report ‟

entitled “CONSUMER BEHAVIOR TOWARDS DIGITAL MARKETING
IN FLIPKART ”has been prepared by Mr. Prasannata Kumar Gautam
Bearing University Roll No: 1868670036 and enrolled as MBA III
Semester student at Accurate institute of Advanced & Management,
Greater Noida.

This report embodies the original work done by the student and
partially fulfills the requirement of the Abdul Kalam Technical
University (Formerly UPTU) to award the degree of “Master of Business
Administration ‟

……………………………………………………………………………………....

Head of the Department

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 Accurate Group of Institutions
Affiliated to Abdul Kalam Technical University, Lucknow
Approved by AICTE, Ministry of HRD, Govt. of India.
Knowledge Park III, Greater Noida, Uttar Pradesh 201308

Department of Management Studies

TO Whomsoever IT MAY CONCERN

This is to certify that the ‘Summer Training Research Project Report ‟

entitled “CONSUMER BEHAVIOR TOWARDS DIGITAL MARKETING
IN FLIPKART ”has been prepared by Mr. Prasannta Kumar Gautam
Bearing University Roll No: 1868670036 and enrolled as MBA III
Semester student at Accurate institute of Advanced & Management,
Greater Noida.

This report embodies the original work done by the student and
partially fulfills the requirement of the Abdul Kalam Technical
University (Formerly UPTU) to award the degree of “Master of Business
Administration ‟

…………………………………………….......................

Faculty Guide

Page | 4
 ACKNOWLEDGEMENT

It gives me immense pleasure to acknowledge all those who have given me their valuable

time, energy and views to supply all indispensable facts and opinions that has helped me

in bringing out this project to fruition.

I would also like to express my gratitude to all our respondents and friends who were

instrumental in the successful completion of my project.

Prasannata Kumar Gautam

Roll No-1868670036

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 DECLARATION

I hereby declare that the survey, data collection and analysis work related to Summer

Training Project report titled “Consumer Behaviour towards digital marketing in

Flipkart” has been carried out exclusively on my efforts under the guidance of Rajeev Dass

I, further declare that this work was neither published nor submitted to any other institution
for award of any other degree or diploma.

Prasannata Kumar Gautam

Roll No-1868670036

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 INDEX

chapter CONTENTS Page no.

INTRODUCTION
1.1 INTERNET USAGE IN INDIA
8
1. 1.2 RETAILING
1.3 INTRODUCTION TO ONLINE SHOPPING
1.4INDUSTRY PROFILE
1.5 COMPANY PROFILE
1.6 OBJECTIVE AND SCOPE OF THE STUDY
1.7 LIMITATIONS OF THE STUDY
2. REVIEW OF LITERATURE 59
RESEARCHMETHODOLOGY
3.1 RESEARCH DESIGN
3.2 PRIMARY DATA 62
3. 3.3SECONDARY DATA
3.4 DATA COLLECTION
3.4.1SAMPLE DESIGN

DATA ANALYSIS AND INTERPTATION

4. 4.1 DATA ANALYSIS AND INTERPTATION 66
4.2 FINDING
5. CONCLUSIONS
5.1 CONCLUSIONS 91
5.2 RECOMMENDATION
6. BIBLIOGRAPHY AND WEBSIDES 94

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CHAPTER- 1
INTRODUCTION

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 INTRODUCTION

The Internet, as a mean for both firms and individuals to conduct business, is nowadays one

of the most widely used non-store ‘formats. 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 and

practitioners of electronic commerce constantly strive to gain an improved insight into

consumer behaviour in cyberspace.

Internet is changing the way consumers shop and buy goods and services, and has rapidly

evolved into a global phenomenon. Many companies have started using the Internet with the

aim of cutting marketing costs, thereby reducing the price of their products and services in

order to stay ahead in highly competitive markets. Companies also use the Internet to convey,

communicate and disseminate information, to sell the product, to take feedback and also 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 the product from a particular store. Many experts are

optimistic about the prospect of online business.

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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 was

subsequently 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

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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.

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.

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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:

 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.

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1.1 INTERNET USAGE IN INDIA

Internet in India report says that India’s internet user base has gone well above 100 million –

that’s just fewer than 10% of the population. India’s internet user base was growth was very

sluggish until 2007-08, but has picked up rapidly thereafter.

Graph 1.1: Internet usage in yearly basis

At about 150 million Internet users, India now has 3rd largest Internet population in the

world after China (at 575m) and the US (at 275m). At 150 million total Internet users, the

Internet penetration in India remains at 12 per cent vs. 43 per cent in China and 80 per cent in

the US. However, the low penetration means that India presents unmatchable growth

opportunity for the Internet sector in coming years. In our view, India will likely see golden

period of the Internet sector between 2013 to 2018 with incredible growth opportunity and

secular growth adoption for E-Commerce, Internet advertising, social media, search, online

content, and services relating to E-Commerce and Internet advertising.

Here is the India Internet outlook for 2013, the first year for this golden period.

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  Internet penetration will reach 15%. Expect India to add 30 million new Internet users

in 2013 and total Internet population to touch 180mm. This implies a 20% growth in

the Internet population.


 Time spend online will rise and directionally become comparable to US and China.

As per research estimates, an Internet user in India on average is spending 13 hours

per week and this number will likely reach 16 hours per week. The incremental time

spend online will largely be spent on social media, photo/video sharing, E-Commerce,

and utilities/banking/bill payments.


 Mobile Internet users to touch 100M. India has nearly 950 million mobile subscribers

and close to 50 million or fewer than 6 per cent of these mobile subscribers’ access

Internet via mobile handsets. And estimate that in 2013 the mobile Internet

penetration will go up from close to 6 per cent to 10 per cent and India could double

its mobile Internet population in 2013 at 100 million estimated mobile Internet users

by end of 2013.

 Internet usage will likely grow faster for female and from home. So far India Internet

usage is heavily screwed towards male gender and from work and educational

establishments. In 2013, Internet usage will grow much faster for female and from

home access. This acceleration will likely happen due to overall Internet adoption

moving to masses.

 E-Commerce will likely touch $900M in 2013. As per the estimates, in 2012 India E-

Commerce reached $550 million in gross revenue and we expect E-Commerce to

touch $900 million in gross revenue by end of 2013.


 Majority of E-Commerce growth will come from emerging cities. While, top 8 cities

in India may remain at 45 per cent to 65 per cent of total E-Commerce for various E-

Commerce companies, we believe that higher growth delta for E-Commerce in 2013

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 will come from emerging cities. We define emerging cities as the cities other than

Top-40 cities in India e.g. Bhatinda in Punjab or Kota in Rajasthan.

 Internet advertising will be the fastest growing sub-sector of the India Internet. As per

the estimates, India Internet advertising generated $300 million in revenue in 2012

and can double in 2013 to reach $600 million. Also believe that lots of Internet

advertising growth will come due to the rise in social media, mobile Internet, and

non-search and content driven online ad formats such as lead generation, affiliate

marketing, and email marketing etc.


 Funding environment for the Internet start-ups to remain challenging in 2013.

Funding environment for the Internet start-ups to remain challenging in 2013 in India.

In last 17 years, India has created less than $5 billion in Internet market capitalization

vs. $600 billion by US Internet sector and $250 billion by Chinese Internet sector. Lot

many Internet companies have to become a lot bigger for the funding environment to

ease off.

 E-Commerce will likely see emergence of disruptive business models and

consolidation. E-Commerce companies that are focusing on fundamental issues will

likely disrupt the E-Commerce industry in 2013. On one hand, the fundamental issues

are the issues that matter for improving customer experiences and the state of the

ecosystem, on other hand focusing on fundamentals of business vs. throwing money

at the problem will become absolutely imperative. Majority of the inventory led E-

Commerce business models will likely either merge with each other or take a niche

vertical position.

 Start-up culture and ecosystem to become more widespread. In our view, the start-up

culture and start up ecosystem are becoming more widespread. The seed and angel

rounds are no longer limited to Mumbai, Delhi or Bangalore and emergence of start-

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 up is no longer limited to IITs or big cities. While, India has long way to go vs.

having a true Silicon Valley start-up culture, ecosystem and support system, India is

headed in that direction. Founding a start-up immediately after graduation or leaving a

rewarding corporate job to join a start-up, or find or become an angel investor is no

longer uncommon. While, the 2013 Internet funding environment will likely be

challenging, the overall Internet start-up ecosystem will become stronger and more

ubiquitous.

1.2 RETAILING

Retailing is selling of merchandise and certain services to the consumer. Retailing began

several thousand years ago.The activities involved in the selling of goods to ultimate

consumers for personal or household consumption. It is extremely competitive, and the

failure rate of retail establishments is relatively high. Price is the most important arena of

competition, but other factors include convenience of location, selection and display of

merchandise, attractiveness of the establishment, and reputation. The diversity of retailing is

evident in the many forms it now takes, including vending machines, door-to-door and

telephone sales, direct-mail marketing, the Internet, discount houses, specialty stores,

department stores, supermarkets, and consumer cooperatives.

Whatever form it takes, however, the essence of good retailing remains the same: attractive,

appropriate merchandise offered for sale in an attractive, eye-catching manner at a reasonable

price at a convenient location.

It ordinarily involves the selling of individual units or small lots to large numbers of

customers by a business set up for that specific purpose. In the broadest sense, retailing can

be said to have begun the first time one item of value was bartered for another. In the more

restricted sense of a specialized, full-time commercial activity, retailing began several

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thousand years ago when peddlers first began hawking their wares and when the first

marketplaces were formed.

As with most other business activities, retailing is extremely competitive, and the mortality

rate of retail establishments is relatively high. The basic competition is price competition, but

this is moderated somewhat by such non-price forms of competition as convenience of

location, selection and display of merchandise, attractiveness of the retail establishment itself,

and intangible factors such as reputation in the community. Competition for sales has led to a

blurring of traditional product lines in retailing, and many establishments offer a much wider

variety of merchandise than their basic classification would indicate (e.g., drugstores may

carry food, clothing, office supplies, hardware, etc.).

Terms Defined:

Vending Machine- a coin-operated machine for selling small articles, beverages, etc.

Direct-mail marketing- reaching the desired clients using print ads in a form of leaflets, e-

mails.

Discount houses- retail store that offers merchandise for sale at lowerprices than conventional

stores that sell merchandiseat list prices or suggested retail prices;

Specialty stores- are small stores which specialise in a specific rangeof merchandise and

related items.

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1.3 INTRODUCTION TO ONLINE SHOPPING

Online shopping is the process whereby consumers directly buy goods, services etc. from a

seller interactively in real-time without an intermediary service over the internet. Online

shopping is the process ofbuying goods and services from merchants who sell on the Internet.

Since the emergence of the World Wide Web, merchants have sought to sell their products to

people who surf the Internet. Shoppers can visit web stores from the comfort of their homes

and shop as they sit in front of the computer.Consumers buy a variety of items from online

stores. In fact, people can purchase just about anything from companies that provide their

products online. Books, clothing, household appliances, toys, hardware, software, and health

insurance are just some of the hundreds of products consumers can buy from an online store.

Many people choose to conduct shopping online because of the convenience. For example,

when a person shops at a brick-and-mortar store, he has to drive to the store, find a parking

place, and walk throughout the store until she locates the products she needs. After finding

the items she wants to purchase, she may often need to stand in long lines at the cash register.

Despite the convenience of online shopping, not everyone chooses to purchase items and

services online. Some people like the idea of physically going to a store and experiencing the

shopping process. They like to touch the merchandise, try on clothing, and be around other

people. Online shopping doesn't permit shoppers to touch products or have any social

interaction. It also doesn't allow them to take the merchandise home the same day they buy it.

Online shopping allowsbrowsing through endless possibilities, and even offers merchandise

that's unavailable in stores. If someone is searching for a niche product that may not be

distributed locally, they're sure to find what they're looking for on the internet. What's even

more useful is the ability to compare items, similar or not, online. He can search through

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multiple stores at the same time, comparing material quality, sizes and pricing

simultaneously.

Shopping via the internet eliminates the need to sift through a store's products with potential

buys like pants, shirts, belts and shoes all slung over one arm. Online shopping also

eliminates the catchy, yet irritating music, as well as the hundreds, if not thousands, of other

like-minded individuals who seem to have decided to shop on the same day.

Online shopping transactions occur instantly-saving the time to get your other errands done!

Additionally, unlike a store, online shopping has friendly customer service representatives

available 24 hours a day, 7 days a week to assist you with locating, purchasing and shipping

your merchandise.

1.3.1 Factors influencing consumer to shop online

Though there are several factors that influence consumers to shop online, but there are mainly

four factors which influence consumer to shop online after reading literature in the field on

consumer attitudes towards online shopping and these factors are discussed below in brief

1.3.1.1 Convenience

Convenience factor refers that it is easy to browse or search the information through online is

easier than the traditional retail shopping. Through online, consumers can easily search

product catalogue but if the consumer look generally for the same product or item in a

traditional store manually it is difficult to visit physically and time consuming also.

Convenience has always been a prime factor for consumers to shop online. According to the

Robinson, Riley, Rettie and Wilsonz (2007) the major motivation for online purchasing is

convince in terms of shop at any time and having bundles of items delivered at door step.

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Rohm and Swaminathan’s (2004) claims in “typology of online shoppers into”: Convenience

shoppers, balanced buyers, variety seekers and store-oriented shoppers, based upon their

present shopping motivation. Through online purchase consumers can easily compare the

price than the traditional purchase. So price comparison is also another convenience factor of

online shopping.

1.3.1.2 Time saving

Time savings is one of most influencing factors of online shopping. Browse or search an

online catalogue can save time and patience. People can save time and can reduce effort by

shopping online. One possible explanation that online shopping saves time during the

purchasing of goods and it can eliminate the travelling time required to go to the traditional

store. On the other side, some respondent think that it is also time taken for delivery of goods

or services over online shopping.

Unexpectedly time saving is not the motivating factor for the consumers to shop online

(Corbett, 2001) because it takes time receiving goods or delivery. But time saving factor can

be seen through different dimensions i.e. “person living in Florida can shop at Harod’s in

London (through the web) in less time than it takes to visit the local Burdines department

store”. So the importance of the time saving factor cannot be neglected as motivation behind

online purchasing. Additionally Goldsmith and Bridges (2000) emphasize that there is a

discrimination between online shopper and non-online shoppers, online shoppers are more

worried about convenience, time saving and selection whereas non online shoppers are

worried about security, privacy and on time delivery.

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1.3.1.3 Website design/features

Website design and online shopping activity is one of the vital influencing factors of

onlineshopping. Website design, website reliability/fulfilment, website customer service and

website security/privacy are the most attractive features which influence the perception of the

consumer of online buying Shergill & Chen (2005). Kamariah and Salwani (2005) claims the

higher website quality, the higher consumer intends to shop from internet. Web design

quality has important impacts on consumer choice of electronic stores, stated by Liang and

Lai (2000). Website design one of the important factor motivating consumers for online

shopping.

Website design features can be considered as a motivational factor that can create positive or

negative feelings with a website. If website is designed with quality features it can guide the

customers for successful transactions and attract the customers to revisit the website again.

However, worse quality website features can also hamper online shopping. According to

Liang and Lai (2000), web design quality or website features has direct impact on user to

shop online.

1.3.1.4 Security

Security is another dominant factor which affects consumers to shop online. However many

internet users avoid online shopping because of credit card fraud, privacy factors, non-

delivery risk, post purchase service and so on. But transaction security on the online shopping

has received attention. Safe and secured transaction of money and credit card information

increases trust and decreases transaction risk. In 1995, UK has introduced Fraud free

electronic shopping and later on Europe and Singapore introduced secured electronic

transaction (SET). According to Bhatnagar and Ghose (2004) Security is one of the

attributewhich limits buying on the web as they claim that there is a large segment of internet

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shoppers who don’t like to buy online because of their thinking about the security of their

sensitive information.

1.4 INTRODUCTION TO ECOMMERCE

Electronic commerce, commonly known as ecommerce, is a type of industry where buying

and selling of product or service is conducted over electronic systems such as the Internet and

other computer networks. Electronic commerce draws on technologies such 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.

E-commerce can be divided into:

 E-tailing or "virtual storefronts" on websites with online catalogues, sometimes

gathered into a "virtual mall"


 The gathering and use of demographic data through Web contacts and social media

 Electronic Data Interchange (EDI), the business-to-business exchange of data

 E-mail and fax and their use as media for reaching prospective and established

customers (for example, with newsletters)


 Business-to-business/ Business-to-Customer buying and selling

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 

1.4.1 Growth and progression of E-commerce in India

The e-commerce market in India has grown by 34% in the last seven years, was about USD

600 million in 2011-12 and is expected to touch USD 9 billion by 2016 and USD 70 billion

by 2020. According to Forrester, the Indian e-commerce market is expected to grow at a

CAGR of over 57% between 2012 and 2016, which is the fastest within Asia-Pacific region.

The key factors that are driving this growth are the rise of Internet usage (growing at 20%) &

3G penetration, and increasing smartphone users with availability of Internet on mobile

phones. It is estimated that currently there are 27 million mobile Internet users in India out of

which 4% are buying products on mobile. This figure is expected to increase to 20% mobile

shoppers in the next four years. These factors accompanied by busy lifestyles, traffic

congestion, lack of offline shopping time, great deals and discounts offered online, and use of

innovative e-commerce models such as group buying and second-hand sales have led to more

and more consumers switch to online shopping. With the rising middle class incomes, global

exposure and changing demographics (close to 50% of the population is less than 25 years of

age), this trend also holds true for the Tier II & III cities.

Online travel (76 percent) and financial services (10 percent) form the biggest component of

online shopping followed by e-tailing (8 percent). While services such as travel tickets,

movie tickets, restaurant discount vouchers, hotel bookings, utility payments, insurance

policies, and premium payments lead the wallet share of the amount spent online, product

categories such as computers & accessories, cameras & mobiles, electronic durables, and

books are picking up. But, product categories such as apparel, jewellery and footwear

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(require high touch and feel), which offer maximum potential in terms of market size, faces

challenges such as high return rate and negative cash cycles due to COD (cash on delivery).

However, the e-commerce industry today faces certain challenges. Firstly, there is a very low

penetration of credit/debit cards in India, which restricts the online purchasing power. Even

though strategies such as cash on delivery have been introduced, they have their own nuances

and pose high working capital issues to the companies. Secondly, high volume items such as

refrigerators require high freight & shipping costs and because the e-commerce model in

India is based on free shipping concept, sale of such items online could suffer a setback.

Finally, the distribution & logistics in India is not very well organized and prone to fraud.

Hence, buying of high value items such as jewellery, electronic goods (LCDs), which require

travel insurance adding up to the total costs may not be one of the bestsellers in the digital

space.

The key to success in this segment is delivering high quality user experience which includes

differentiated and detailed product catalogue, order fulfilment, website performance, different

modes of transaction(credit cards, payment gateways, cash on delivery etc.), and simple and

sensible checkout. Furthermore, with the increase in competition in this segment, the e-

commerce players need to invest in research and development of differentiated product

catalogues, innovative service and customer engagement concepts, and cost effective supply

chain and logistics models.

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3.1 INDUSTRY PROFILE

3.1.1 RETAIL INDUSTRY

India is the second fastest growing economy in the world. It is third largest economy in the

world in terms of GDP and fourth largest economy in terms of Purchasing Power Parity.

India presents a huge opportunity to the world at age, to use as a hub. Standing on the

threshold of a retail revolution and witnessing a fast changing retail landscape, India is all set

to experience the phenomenon of global village. India is the “promised land” for global

brands and Indian retailers A “Vibrant economy”. India tops in the list of emerging market

for global retailer and India’s retail sector is expanding and modernizing rapidly in line with

India’s economic growth. The future is promising; the market is growing, government

policies are becoming more favourable and emerging technologies are facilitating operations.

Retailing in India is gradually inching its way toward becoming the next boom industry. The

whole concept of shopping has altered in terms of format and consumer buying behaviour,

ushering in a revolution in shopping in India. Modern retail has entered India as seen in

sprawling shopping centres, multi-storied malls and huge complexes offer shopping,

entertainment and food all under one roof. The Indian retailing sector is at an inflexion point

where the growth of organized retailing and growth in the consumption by the Indian

population is going to take a higher growth trajectory. The Indian population is witnessing a

significant change in its demographics. A large young working population with median age

of 24 years, nuclear families in urban areas, along with increasing working-women

population and emerging opportunities in the services sector are going to be the key growth

drivers of the retail sector in India. Retailing in India is evolving rapidly, with consumer

spending growing by unprecedented rates and with increasing no of global players investing

in this sector. Organized retail in India is undergoing a metamorphosis and is expected to

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scale up to meet global standards over the next five years. India’s retail market has

experienced enormous growth over the past decade. The most significant period of growth

for the sector was between year 2000 & 2006, when the sector revenues increased by about

93.5% translating to an average annual growth of 13.3%.The sectors growth was partly a

reflection of the impressive Indian economic growth and overall rise in income level of

consumers. Apparels and consumer durables are the fastest growing vertical in the retail

sector. Mobile phone as a product category has witnessed the highest growth in the consumer

demand amongst all retail products offering, with increasing penetration of

telecommunication in towns and villages. The telecommunication sector has been adding on

an average 5 million new users every month. The other product categories are gaining

traction predominantly in the urban areas and emerging cities, with increasing average

income and spending power of young urban India.

3.1.1.1History of Retailing

Store; commonly a shop or stall for the retail sale of commodities, but also a place where

wholesale supplies are kept, exhibited, or sold. Retailing—the sale of merchandise to the

consumer—is one of the oldest businesses in the world and was practiced in prehistoric

times.

Total retail sales, which include retail stores and eating establishments, topped $2.7 trillion in

the United States in 1998. Currently, there are over 1.5 million retail establishments

employing over 19.8 million people. Most are small. One third of all retail establishments

have no paid employees; about 43% have fewer than 10 employees. Larger stores, with over

$500,000 in annual sales, account for three quarters of all retail sales. The 50 largest retailers

control about one fifth of the market, and stores with ten or more branches account for 95%

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of all department store sales, 56% of all drugstore sales, half of all shoe sales, and 57% of all

grocery store sales.

3.1.1.2 The Development of Retail Stores

The earliest form of retail merchandising was probably the exchange of food and weapons;

later came traders and peddlers, and by 3000 BC shops had become common. During the

Greek and Roman period, stores, including many specialty shops, developed in the form of

open booths, attracting large cosmopolitan crowds. After the decline of the Roman Empire,

barter became more important, but by the 14th cent. Retail trade again assumed importance.

Merchants, who in early times were viewed with suspicion, rose in the social scale. Small

stores, each carrying its special line of goods, reached their peak in the 18th cent. The

wholesale business developed, and travelling salesmen and standard prices came into general

use.

In the United States the general store preceded the single-line store and is still common in

small rural communities. In late 19th cent, the department store came into being—a large-

scale general store or a combination of single-line stores in which each line of merchandise is

operated as a separate department. Such stores provide the convenience of easy accessibility

to a large variety of goods. Modern department stores have been vital to the development of

shopping centres and malls, huge retail developments that contain a wide variety of stores

and services.

Retail concerns that do business principally through the mail are called mail-order houses. In

the United States among the first and largest were Montgomery Ward (founded 1872) and

Sears, Roebuck, & Company (founded 1886), which sold their goods to rural residents by

means of annual catalogues. Both later developed warehouses and retail stores in many urban

communities; Montgomery Ward closed in 2001, and Sears was merged with Kmart to

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become a subsidiary of the Sears Holdings Corporation in 2005. Many mail-order houses

now also depend on orders placed over the telephone and via the Internet. Development of

the World Wide Web on the Internet has given rise to companies, such as Amazon.com, that

sell goods exclusively through an Internet site, or on-line "store," shipping purchases by mail

or other carriers.

Chain stores, though known in earlier times, first developed their modern form in 1859, when

the Great Atlantic and Pacific Tea Company (A&P) standardized the quality and price of all

merchandise sold in its stores. Through central management, quantity purchasing,

standardization of business methods, and limited individual service, the chains are often able

to sell their goods well below prices charged by independent stores. Chain stores were once

typified by five-and-ten-cent stores (e.g., F. W. Woolworth Company, which operated such

stores until 1998), but the most common forms now are discount superstores (e.g., Wal-Mart;

see Walton, Sam), bakeries, tobacco stores, drugstores, groceries, and department stores.

Consumers' cooperative stores (see cooperative movement) have been established in Europe

and the United States. Discounting merchandise became widespread after World War II, and

stores specializing in discounted merchandise have become the fastest growing segment of

the retail industry. The "discount club," where shoppers must pay a fee to become members

and name-brand products are sold at a discount (often packaged in multiples or very large

containers), became popular in the 1990s.

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1.2 ONLINE SHOPPING

Online shopping is the process whereby consumers directly buy goods, services etc. from a

seller interactively in real-time without an intermediary service over the internet.

3.1.2.1 Introduction to the E-Commerce & Internet Business

The global Internet audience continues to grow rapidly, with the worldwide base of Internet

users in the 2 billion range as 2012 began, including a large base of mobile broadband users.

This vast base of Internet users encourages businesses to innovate and to offer an ever-

evolving array of online services. Sectors that are growing very rapidly online include the

sale of entertainment, event tickets, travel, apparel and consumer electronics. The most

powerful trends on the Internet include access via wireless devices, migration of

entertainment to the web and cloud-based software as a service.

Today, as a result of the recent recession, consumers are more focused than ever on finding

the best prices. Consequently, e-commerce firms like Amazon that are known for their high

value at low prices are well positioned to prosper. The standout winner in e-commerce

continues to be Amazon, where sales have soared thanks to aggressive discount pricing, free

shipping for its “Prime” members and an ever-growing variety of merchandise categories.

Amazon’s revenues rose by 41% in 2011 to $48.0 billion, and profits grew substantially as

well. Books, movies, music and other media now account for only 35% of Amazon’s sales,

while electronics and general merchandise bring in the largest share by far. Amazon’s sales

outside of North America are booming, and now account for 44% of total revenues. Clearly,

there is growing adoption of online consumer purchases throughout the world’s major

economies.

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Online advertising leader Google’s recent results are a good indicator of the strong growth in

online advertising during 2011. The firm saw revenues soar 29.3% in fiscal 2011, to $37.9

billion, while profits rose 14.1% to $9.7 billion.

Growth in broadband subscriptions worldwide continues at a strong pace. Analysts at the

International Telecommunications Union (ITU) estimate that there were 1.78 billion

broadband subscribers worldwide by the end of 2011 (both fixed and wireless).

The number of American homes and businesses with broadband access capabilities topped 88

million by the end of 2011, thanks in part to modest monthly fees at Internet service

providers. This number does not include mobile broadband users, estimated at another 105

million.

Online advertising in 2011 in the U.S. reached $31.3 billion, according to eMarketer,

accounting for 20% of all advertising spending in America. eMarketer estimates total online

sales of merchandise during 2011 at $188.1 billion, expected to grow to $269.8 billion by

2015. These numbers do not include online sales of travel, which was an estimated $107.4

billion in the U.S. in 2011. Plunkett Research estimates global travel expenditures online at

$320 billion for 2011.

A significant evolution is taking place in the world of business, as more and more

telecommunications move to the Internet. VOIP continues to grow in popularity, both at

home and at the office. Meanwhile, the concept of “unified communications” threatens to

completely revolutionize business communications by combining all communications into

one screen on the desktop, including phone, fax, e-mail, IM, voice mail and teleconferencing.

Voice communications will be digitized and archived, just as e-mail is today. A user’s

communications tools will move seamlessly from the desktop to the mobile device.

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Convergence: The Internet is about saving time (and therefore saving money), and the

potential of the Internet has barely been tapped. New methods of taking advantage of

efficiencies are becoming widely accepted, as access to high-speed broadband Internet

connections becomes commonplace. Users of the Internet (both business and consumer) are

multiplying around the globe, and many companies are earning terrific profits in the process

of serving those users. The long-awaited phenomenon of “convergence” of entertainment,

computing and communications arrived around 2004 and has been moving forward at high

speed ever since. Now, the latest televisions come equipped with built-in Internet

connections. This is going to create radical changes in the way TV viewers obtain their

movies and TV programming over the near term. For example, subscribers to Netflix are able

to stream downloaded movies directly to their Internet-connected TV sets.

Top selling product and services categories online include travel, clothing and accessories,

books, music, videos, electronics and specialty foods including wines. In these markets,

online shopping amounts to a significant share of sales. Meanwhile, many of the world’s

largest storefront retailers now operate some of the most-visited Internet sites.

1.2.2 A Brief History of the Online Sector:

The e-commerce and Internet sector has evolved rapidly, going through several distinct

stages since its beginnings in the 1970s:

The Internet is born: First, there were the early days, when the Internet was seen by many as

a realm for techies only, one that would produce few, if any, and commercial enterprises.

Initially designed in 1973, the Internet was a series of communication protocols written by

Vinton Cerf as part of a project sponsored by the U.S. Department of Defence’s “Defence

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Advanced Research Projects Agency” (DARPA). The first demonstration of a three-network

Internet protocol-based connection occurred in November 1977. Eventually, a well-enabled

Internet was rolled out in 1983, primarily as a failsafe method of defence communications

and as a means for researchers at various universities to communicate.

The Web is Created: Next, the World Wide Web and the coding language of HTML were

conceived in 1989 and implemented between 1990 and 1993 by Tim Berners-Lee, enabling a

never-ending hyperlinked cyber world where sharing unlimited data became user-friendly

thanks to the magic of linked pages.

The Boom Ensues: Starting in 1993 and 1994, entrepreneurs and financiers realized that

hyperlinked, electronically posted data could be commercialized with vast, global potential.

A dramatic revolution in retailing, publishing and entertainment was visualized, one in which

consumers and business people alike would eagerly pay for the convenience of online

shopping, trading and viewing of published data. An economic boom ensued, the likes of

which hadn’t been seen since the beginnings of earlier technological breakthroughs:

electricity, the railroad, the telephone, the automobile and the passenger-carrying airliner.

Thousands of hopeful new businesses were launched. Capitalization for these new Internet-

enabled companies ranged from cash-strapped ventures launched with Visa card credit lines, to

companies like Web Van that received vast sums from professionally managed venture capital

firms only to fail miserably. Roughly 6,000 new firms of significant size raised a cumulative total

of more than $100 billion in venture capital in the boom period (1994-2000). About 450 of these

companies sold their stock to the public via IPOs (initial public offerings). Stock markets soared

and instant billionaires were made. Individuals and families from all walks of life bet their

savings on technology stocks and watched their wealth rise quickly. Venture funds that cashed

out early reaped phenomenal gains, and financiers easily found

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additional investors for new venture capital pools. The NASDAQ index of stocks rose to

5,000 by early in the year 2000, and the Chairman of the Federal Reserve warned of

“exuberant optimism.” Some said this boom couldn’t last—others said it was the beginning

of a “new economy” that would last forever.

The Bust: In mid-2000 the Internet industry entered a bleak and dreary phase after the

NASDAQ collapsed in March, bringing the entire sector to its knees. Hundreds of thousands

of people lost their jobs. Stock portfolio values plummeted. Thousands of firms closed their

doors, filed bankruptcy, downsized or were scooped up at bargain prices by competitors.

Sellers of hardware, software, consulting and telecommunications services suffered mightily.

Entrepreneurs found it nearly impossible to raise funds to launch or sustain their businesses.

The dream of a “new economy” became a nightmare for some—profits still matter; business

cycles still happen.

The Reality Phase: By early 2003, this sector’s dark clouds were abating, and a “reality

phase” was taking shape. Well-conceived, Internet-based businesses were proving their

value. Consumers had become devoted fans of buying over the Internet. Businesses of all

types were finding that the Internet creates true operating efficiencies and drives profitability.

For example, while most of the airline industry suffered terribly in recent years, value-based

discount airlines southwest and JetBlue enjoyed superior financial performance, in no small

part because of their use of e-commerce to efficiently book reservations and sell tickets

online. “Efficiency” is the most important factor in the e-commerce and Internet sector’s

newfound success. Consumers find the Internet to be a terrific way to efficiently expend their

shopping and banking efforts. Travellers find the Internet to be an efficient way to book

hotels rooms and airplane seats. Corporate procurement managers find the Internet to be the

most efficient way to purchase needed goods and inventory. Hundreds of millions of people

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worldwide find e-mail, instant messaging and VOIP telephony to be the most efficient ways

to communicate.

Low Costs Fuel the Steady Global Growth Phase: Today, access to fast Internet, both wired

and wireless, is available at bargain prices in a growing footprint across the globe. Even in

relatively undeveloped nations, both consumers and businesses have grown to rely on the

Internet for everyday needs. The “second billion” set of users worldwide has been reached,

and the third billion is clearly in sight over the mid-term, as cheaper devices continue to

proliferate. Mobile computing is accelerating at blazing speed thanks to inexpensive cell

phone plans offering enhanced Internet access.

Meanwhile, the cost of developing and maintaining web sites has plummeted, opening the

door to millions of self-funded entrepreneurs, and making it easier for venture capital firms to

fund start-ups using low amounts of cash. Trends such as open software and cloud

computing, along with modular development tools, have made it easier, faster and cheaper to

start sophisticated web sites.

1.2.4 Online Shopping in India

Online shopping is quite common these days in the developed world than it was about 5 years

ago but it is not the same in India for its own set of reasons. In developed economies

consumers find the worldwide web a great place for bargain-hunting, with most goods

available at lower prices than in a bricks-and-mortar store. But convenience appears to be an

even bigger attraction as revealed in surveys because most online shoppers find the crowded

high street too stressful.

Though online shopping has witnessed growth in India but it is still not pervasive like the

west and the growth is also limited to certain areas like online travel booking and perhaps

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stock trading (which actually is not pure e-commerce). The main reason why shoppers in

India are not willing to shop online is that they don't get any real value or incentive. Also

they are wary about fraud, delivery and customer service and their fears are not imaginary.

Online shopping India sites offer a wide variety of products to choose according to your

tastes and budget. Shopping online in India always offer benefit of price as online stores do

not have to spend on building and maintaining showrooms. In addition heavy discounts are

offered on various popular products to attract worldwide customers to one site. Some online

shopping India sites also offer online coupons, gift certificates and promotional codes as

special offers through which the products prices are reduced to a great extent. Online

shopping in India is easy and quick as wide variety of products are categorized in a very

convenient manner, so that it will be easy for you to find the exact product you want.

One of the biggest advantages of online stores is that they provide complete and specific

information like, product description, specification, model, size, colours, prices, customer

reviews and various other details about each and every product offered by them. The best part

is that they are available 24*7; therefore, you can shop at your own convenience.

Today more and more people prefer to buy products from online stores in India, as you can

find wide categories of products right from gadgets, clothes, footwear, furniture, jewellery,

books, music, and gifts to many more. So, whichever product you wish to buy, you simply

need few clicks and the product will be delivered to your doorstep.

1.3 E-COMMERCE: A MAJOR INDUSTRY TREND

Electronic commerce, or e-commerce, involves the sale of goods and services via electronic

means—principally over the internet, although sales via television (terrestrial, cable, and

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satellite) are also included. E-commerce can be further divided into the following sectors:

business-to-business (B2B), business-to-government (B2G), consumer-to-consumer (C2C),

government-to-business (G2B), government-to-citizen (G2C), and business-to-consumer

(B2C). Retailers that rely primarily on e-commerce to sell goods or services are often referred

to as e-tailers.

The term "Electronic commerce" (or e-Commerce) refers to the use of an electronic medium

to carry out commercial transactions. Most of the time, it refers to the sale of products via

Internet, but the term ecommercealso covers purchasing mechanisms via Internet (for B-To-

B).

A client who purchases on the Internet is called a cyber- consumer.E-commerce is not only

limited to online sales, but also covers:

 Preparation of estimates online



 Consulting of users


 Provision of an electronic catalogue


 Access plan to point of sales


 Real-time management of product availability (stock)


 Online payment


 Delivery tracking


 After-sales service

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In certain cases, electronic commerce makes it possible to highly customize products, in

particular when the electronic commerce site is linked with the production system of the

enterprise (e.g. business cards, customized items such as T-shirts, cups, caps, etc.)

Finally, insofar as electronic services and products are concerned (mp3files, software

programs, e-books, etc.), electronic commerce makes it possible to receive the purchase in a

very short time, if not immediately.

1.3.1Online stores

Most electronic commerce sites are online stores which have at least the following elements

at the front-office level:

 An online electronic catalogue listing all products for sale, their price and sometimes

their availability (product in stock or number of days before delivery);


 A search engine which makes it possible to easily locate a product via search criteria

(brand, price range, key word, etc.) ;


 A virtual caddy system (sometimes called virtual cart): This is the heart of the e-

commerce system. The virtual caddy makes it possible to trace the purchases of the

client along the way and modify the quantities for each reference; 


 Secure online payment (accounting) is often ensured by a trusted third party (a bank)

via a secure transaction;


 An order tracking system, which allows tracking of order processing and sometimes

provides information on pickup of the package by the shipper.

A back office system allows the online dealer to organize its offerings online, modify prices,

add or remove product references as well as manage and handle client orders.

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Retailing over the internet generally takes one of two forms:

 Cybermalls—the most famous cybermall is eBay, which offers access to products

from a variety of independent retailers.


 Individual websites—most major retailers now have their own websites, which

complement their traditional “bricks-and-mortar” outlets. Some retailers operate

solely over the internet.

In terms of television sales, programs on dedicated shopping channels generally feature a

presenter who demonstrates products on air. Viewers can buy these products by telephoning

an order line with their credit card details, or, in the case of interactive television services, by

using their remote control. Recent years have seen the development of a variety of selling

techniques, including on-air auctions.

1.3.2 About E-commerce

E-commerce is most closely associated with the internet, and has developed in tandem with

the growth of the medium. Indeed, e-commerce initially became possible with the opening up

of the internet to commercial users in the early 1990s. However, it wasn’t until the latter half

of the decade that companies really began to exploit the internet’s commercial potential.

A number of start-up companies, such as Amazon and eBay, have exploited the power of the

internet to emerge as retailing behemoths in their own right. However, e-commerce has

largely been developed by established large retailers, which regard it as simply another sales

channel. The gigantic grocery retailers that have expanded away from food and into a wide

variety of other areas, such as clothing and electronic goods, have been particularly quick to

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appreciate its potential. The medium has also created opportunities for very small businesses.

It is now possible to buy over the internet a wide range of specialized products that are not

available in shopping malls. Thus, the internet has provided a lifeline for many small

producers, and has allowed entrepreneurs to enter the retailing sector without the need to

invest heavily in physical retail outlets.

E-commerce has proven so successful because it offers significant advantages to both

consumers and retailers. Consumers can compare a vast array of retailers in a few minutes—

something that it would be impossible to do physically. Online retailers often sell products

and services at a significant discount to those offered by traditional outlets, and buying online

is convenient: consumers can make their purchases from the comfort of their own home, and

have them delivered to their door. Furthermore, online shopping appeals to the

environmentally conscious. In March 2009, researchers at Heriot-Watt University in the

United Kingdom revealed that online shopping is 24 times “greener” than taking the car to

the shops, and seven times “greener” than taking the bus. The researchers compared the

carbon footprint of a typical delivery from a local depot with average carbon footprints for

shopping trips by car and bus, and found that home deliveries involved much lower levels of

carbon emissions. In June 2009, a study by the Carnegie Mellon Green Design Institute in the

United States found that shopping online can reduce “our environmental impact by as much

as 66%.”

For businesses, the advantages of e-commerce lie mainly in the low cost of setting up and

maintaining a business. Firms do not need to invest heavily in a physical presence, or in sales

staff. However, they do have to organize payment systems, distribution, and returns.

1.3.3E-commerce today

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Ecommerce today is a remarkable experience. It has transformed traditional shopping beyond

recognition. It is so much better than any other way of shopping that it has already attracted a

great many of ecommerce-lovers.

If some years ago ecommerce was a buzz word, now it has become the order of the day.

People seem to shop literally everywhere – at their workplaces during lunch times, in rush

hour when there is nothing else to do but switch on their laptops and start surfing.

Ecommerce today gained so much popularity because its underlying technologies are

evolving at giant steps. We are even offered to “feel” the product with a 3D mouse to better

understand its shape, size and texture. Why go somewhere out when all you have to do is

make an order, choose the shipping method, put up your feet and wait till the order is

delivered right to your door-step?

Ecommerce today offers so much luxury that even conventional stores have already signalled

the alarm. Although, everyone agrees that it is a long way for an ecommerce to replace

“brick-and-mortar” stores, it has every chance to happen in the future. Ecommerce which we

are witnessing today brings in so much adventure into our lives that it is enjoyed by the

whole online community.

Ecommerce today does have some drawbacks but they say “he that fears every bush must

never go a birding”. A lot of consumers do put up with minuses since they trust the online

world and want it to be a better place.

1.3.4Future of E-commerce

Experts predict a promising and glorious future of ecommerce in the 21st century. In the

foreseeable future ecommerce will further confirm itself a major tool of sale. Successful

ecommerce will become a notion absolutely inseparable from the web, because e-shopping is

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becoming more and more popular and natural. At the same time severe rivalry in the sphere

of ecommerce services will intensify their development. Thus prevailing future trends of

ecommerce will be the growth of Internet sales and evolution.

Each year number of ecommerce deals grows enormously. Sales volumes of on-line stores

are more than comparable with those of “brick-and-mortar” ones. And the tendency will

continue, because a lot of people are “imprisoned” by work and household duties, while

Internet saves a lot of time and gives opportunity to choose goods at the best prices. Present-

day Internet sales boom is the foundation for magnificent ecommerce future.

The “quantity to quality” tendency of ecommerce is also becoming more and more obvious,

as the Internet has excluded geographical factor from the sale. So it doesn’t matter anymore

whether your store is situated in New York or London or in a small town. To survive,

merchants will have to adapt rapidly to the new conditions. To attract more customers e-

store-owners will have not only to increase the number of available services, but to pay more

attention to such elements like attractive design, user-friendliness, appealing goods

presentation, they will have to opportunely employ modern technologies for their businesses

to become parts of ecommerce future.

Of course, those, who acquire e-stores earlier, get better chance for future success and

prosperity, though an ecommerce site itself doesn’t guarantee you anything. Only an

appropriate ecommerce solution in combination with thorough emarketing and advertising

can buy the business insurance.

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1.4Leading online websites in India

Online shopping has become a popular trend in India now. People have been enjoying the

convenience of having their order shipped right to their doorstep. But people often get

confused in selection of reliable sites as there are a plethora of sites, and everyone claims to

be reliable. But in actual only few are up to the mark. Thus to facilitate you, here is our pick

of leading 10 online shopping sites.

eBay.in is one of India's leading online marketplace. It is an online marketplace where

anyone can trade practically anything. It is a platform for the sale of goods and services by a

diverse community of individuals and businesses. eBay users trade in more than 50,000

categories including collectibles, antiques, sports memorabilia, computers, IT and office, art,

antiques, toys, dolls, stamps, comics, magazines, music, pottery, glass, photography,

electronics, jewellery and gemstones, claims the company.

Fashion and You is an invitation-only online destination. It features the best International &

Indian designer brands in luxury, hi-fashion and lifestyle experiences for men, women,

children and your home.

Flipkart.com is an online chopping site that lets users shop various items including books,

mobile accessories, cameras, game consoles, MP3 players, home and kitchen appliances and

much more, online at discounted prices. It offers multiple methods to make payments for

order: credit card, debit card, net Banking, e-gift voucher and cash on delivery. The order is

generally delivered within 3-4 working days.

MyGrahak.com is said to be India's largest online Supermarket. It sells a wide range of

products like FMCG, Food, Non Food, Grocery, Rice, Gourmets and others. Attractive offers

are also available for shopping online at MyGrahak.com

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Futurebazaar.com is one of India's largest online retailers and is part of Future Group owner

of brands like Big Bazaar, Pantaloons & Central. It offers a wide range in cameras, consumer

durables, home decor, home entertainment, appliances and electronics, mobile.

Homeshop18 is a virtual retailer operating in a multimedia environment that includes

television, web, catalogue and print to sell high quality products and services directly to

consumers across the country. It deals in books, movies and music, gifts and flowers, mobiles

and accessories, camera and camcoders, electronics, computers and peripherals, toys and

games and much more.

Myntra.com is an online shopping destination for fashion and lifestyle products. It lets you

shop online from the latest catalogue of original branded products in apparel, footwear and

accessories for men, women and kids.

Snapdeal.com website claims to offer 50-90 per cent off daily discount deals in major cities

of India. It is touted to be the one-stop-shop for availing discount coupons/vouchers for

restaurants, spa, gyms, travel/holiday packages and other cool things in your city.

Letsbuy.com is an Internet retailer of branded Consumer electronics and IT products, which

claims to offer more than 9000 products from top international and domestic brands. The

company deals in technology products like notebooks, printers, networking, digital cameras,

storage and Consumer electronics such as LCD TVs, mobile phones, MP3 players, gaming

and home electronics.

Mydala.com is a platform which gets you great deals you want in your city. It claims to offer

deals each day - 40-95 per cent off on the best of restaurants, shopping, and salons in your

city.

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1.5COMPANY PROFILE

1.5.1 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 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.

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3.2.2 History of Flipkart.com

Flipkart was founded in 2007 by Sachin and BinnyBansal, 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 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

Page | 45
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.

3.2.3 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 inBangalore, and entered then

consumer electronics category with the launch of mobilephones, in September 2010. Since

then it kept on adding more new productscategories including books, mobiles, computers,

cameras, home & electronic gadgets& appliances, In addition to these very Recently,

Flipkart.com has also widened itsforay by entering into the emerging digital content market

with the recent launch ofFlyte, 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

differentcategories, 3 million plus registered users and sale of 30000 items a day.It provides

online-shoppers a memorable online-shopping experience because of itsinnovative services

like:

Page | 46
 • 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 2014 and C&S homes are expected to be 14 crore by 2014. 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.

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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 2014.

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 2015.

1.2.4 Evolution of Logos

Page | 48
3.2.5 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.

3.2.6 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.


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.

Page | 49
3.2.7 Teams at Flipkart

3.2.7.1 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

3.2.7.2 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 atall times.

3.2.7.3 Warehouse &FulfillmentCenter

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 inFlipkart, on the other hand, is where these products are inspected with a fine

tooth-comb. Afterall, we have a promise to keep - original products with original warranty.

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And this is all done withthe highest level of automation because for us, technology is

everything.

3.2.7.4Logistics

Flipkart ship 30,000 items every day. That’s 20 items a minute, to nearly every single pin

code inthis 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

allabout.

3.2.7.5 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.

3.2.7.6 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

Page | 51
$1 billion in revenue by 2014. So can there be any doubt that Finance plays a really important

role in their development.

3.2.7.7 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 counting! In

the last year alone we have added 4000 people to the team. With the demand for high quality

talentacross departments showing no signs of slowing down, the Talent Acquisition Group,

or TAG asFlipkart like to call them, have their hands full.

3.2.7.8 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 possiblebecause

of a high caliber, energetic and agile workforce. Today Flipkart attracts highly

talentedprofessionals 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

teamalso builds strategic relationships with the corporate functions to drive pan-

organizationinitiatives.

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

theHR team at Flipkart busy.

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3.2.8 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.

They can keep track of your Wallet balance by either heading over to theirFlipkart 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 MobiKwik 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

MobiKwikBalance allows customers to add money into their account to allow multiple

purchases like online recharge for prepaid mobile phones, DTH and datacards, 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.

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3.2.9Interesting 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 approxRs 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.

3.2.10Flipkart Success Factors

The site is very easy to navigate, which helps users to easily search for the contents

orproducts online, it even allows users to search by using various filters like by pricerange,

search by brands, by age group, by hot-selling etc. If a certain product is notavailable or is

out of stock it even ask users to input its details & then when theproducts 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 Flipkartsearch 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 paymentmechanisms of the portals.

Page | 54
Approximately 60% of orders are placed in cash ondelivery system. So there is high

possibility scams & frauds, so users have to havetheir email account linked & with verified

details & receives a confirmation codemessage 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 theconfirmed mailing address.

Flipkart manages to deliver the item in 2-3 business days. If the order placed is notdelivered

in the specified time, immediate enquiry goes to nearest supplier and theitem becomes

available. It will then be delivered within 24 hour depending on thecause of delay.

Flipkart is continuously aiming to bring down the delivery time of regular orders, indoing so

it is investing in its own delivery system & network, as the time to delivery isone of the

important aspects of selling products online as users want a fast turnaroundtime. An excellent

marketing strategy by Flipkart marketing team is to increase thesales revenues & to optimize

the user shopping experience & increasing loyalty byrepeat purchases.

The portals offers a good pricing offers & deals to its users by the means of cashrewards,

loyalty points, discounts, coupons, Frequent buyer rewards points. It evenoffers

goodsrelatively cheaper pricing points than it is available in the physicalmarket which in total

helps users save money & at the same time get benefited by themeans of rewards points.

3.2.11Future Road Map

• They aim at 10 times growth and eyes at $ 1Billion sales by 2015.

• 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.

Page | 55
 • 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.

3.2.12Threats 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

Page | 56
1.6OBJECTIVE OF STUDY

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.


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

Page | 57
 SCOPE OF THE STUDY


Scope of study is a general outline of what the study (e.g. class or seminar) will cover.

 "Scope" defines the parameters of this can be an object, or a theory process, activity,

describing either future, current or past knowledge or statements of descriptive

activity, experience etc. The topic chosen for this particular study is to analyze the

customer perception towards online shopping on Flipkart.com. The sample size

chosen was according to the convenience and the objectives of the study. To know

about various aspects of Flipkart in market, the improvements needed in case of

features and process, and the effect of factors on the buying behavior of online

customers. The geographical area that this study covers is Delhi ncr (India).

1.7 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 Delhi ncr 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

Page | 58
CHAPTER- 2

REVIEW OF LITERATURE

Page | 59
 REVIEW OF LITERATURE

practices,. Users show different behavior in an array of characteristics, according to the

brand of the mobile phone they are using. As such, there is a categorization of areas,

different for each brand, where users are clearly lacking security mind, possibly due to lack

of awareness. Such a categorization can help phone manufacturers enhance their mobile

phones in regards to security, preferably transparently for the user.

process of deciding over (choosing) a brand may be influenced by situation and content. The

findings suggest a significant relationship between the variables “brand attitude”, “corporate

attitude”, and “product (cell phone) choice”. In addition, no significant relationship was

found between individual decision making processes (independent or mediated) and product

choice.

had focused on to measure the effects of

customer satisfaction and trust on customer loyalty, and the direct and indirect effect of

“switching cost” on customer loyalty. The findings of this study show that the switching cost

Page | 60
factor directly affects loyalty, and has a moderator effect on both customer satisfaction and

trust

of switching costs in the customer satisfaction-loyalty link; and to identify customer segments

and to retain them. Thus the purposes of this paper are: to examine the moderating role of

switching costs in the customer satisfaction-loyalty link; and to identify customer segments

and then analyze the heterogeneity in the satisfaction-loyalty link among the different

segments. An empirical example based on the mobile phone service market in France

indicates support for the moderating role of switching costs. Managerial implications of the

results are discussed.

features included on phones students already owned were predictive of young consumers'

perceptions of bundled features. In addition, this study set out to determine if there were any

significant differences in students' perceptions of bundled features across demographic

variables (rural vis-a-vis HBCU, gender, grade level, cellular telephone brand, major, and

age).

- Abioudun, Abolaji Joachim (2010) emphasis on customer

loyalty and customer switching cost. Switching cost is one of the most discussed
contemporary issues in marketing in attempt to explain consumer behaviour. The present
research studied switching cost and its relationships with customer retention, loyalty and
satisfaction in the Nigerian telecommunication market. The study finds that customer
satisfaction positively affects customer retention and that switching cost affects significantly
the level of customer retention.

Page | 61
CHAPTER- 3

RESEARCH METHODOLOGY

Page | 62
RESEARCH METHODOLOGY

3.1 Research Design

“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.

Data collection

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

Page | 63
a partial picture or another aspect may be that data may be quite old and also the data quality

could be unknown.

3.2 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.

3.3 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.

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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.

3.4Data collection

The data collection would be:

PRIMARY DATA: Questionnaire

SECONDARY DATA: Journals, Internet, newspaper etc.

3.4.1 Sample design

Online customers of delhi ncr are included under this research and tell their satisfaction level.

Data source

Both Primary and Secondary source of data would be used .The major type of information is

used from primary data.

Page | 65
CHAPTER- 4
DATA ANALYSIS

AND INTERPTATION

Page | 66
 4.1 DATA ANALYSIS

AND INTERPTATION
This chapter aims obtain the objective of the study by critically analysing the qualitative data
through thoroughly examining the interviewee’s responses and beliefs. This has been
achieved through evaluating the most relevant responses by the participants. The data has
been analysed and discussed by comparing the comments made by the respondents with the
literature review keeping in mind the research objective of the study. Thus, the rationale of
this analysis is based on the personal answers provided by the respondents.

An appropriately designed questionnaire was used to collect the primary data for the study.
The data for 100 respondents was organized systematically in tables and graphs and then was
subjected to analysis using appropriate statistical tools. The results of the analysis are
presented in the following section in order to assess the customer perception towards online
shopping on Flipkart.com in India.

Here for analysing, we are considering two factors. That is:

 Demographical factors

 Behavioural factors

Page | 67
Demography:
1. Gender of Respondents:

Table 4.1: Gender wise respondents

Male Female Total

Responses 58 42 100
Percentage 58 42 100

Graph 4.1: Gender wise respondents

Gender

42%

58% Male
Female

Analysis and Interpretation:

According to demography profile, in this study 70 % male and 30% female respondents are
part of my target population and they help me to fulfil my questionnaire from different area

Page | 68
of Bangalore city. From these groups total respondents are 100. So, according to the survey
result,the male respondents are more and can be told that they interested to shop online than
female, even though both of them shop online.

2. Age Group:

Table 4.2: Age wise respondents

15 -25 25 -35 35 - 45 45 & above Total

No of respondents 63 24 12 1 100
Percentage 63 24 12 1 100

Graph 4.2: Age wise respondents

Age Group
1%
12%

15 -25
24%
25 -35
63%
35 - 45
45 & above

Analysis and Interpretation:

Page | 69
Below figure shows that 63% respondents are between 15-25 years old, 24% respondents are
between 25-35 years old, 12% respondents between 35-45 years old, and 1% respondents are
between 45&above. Overall result shows that between all of them the respondents who has
age limit between 15 to 35 years (63%+24%= 87%) people are more familiar to shop online
on my target population.

3. Occupation:

Table 4.3: Occupation wise respondents

Business House wife Salaried Student Total

person
No. of respondents 8 7 46 39 100
Percentage 8 7 46 39 100

Graph 4.3: Occupation wise respondents

Occupation

7%
8%
39%
Business person
House wife

46% Salaried
Student

Analysis and Interpretation:

In this survey, 46% of the respondents are salaried and 39% are students. So they both
together made majority of respondent’s percentage (85%). 8% are business persons and 7%

Page | 70
are House wife. Salaried persons and students will always look for new technologies and new
services which make them more comfort.

4. Educational Qualification:

Table 4.4: Educational wise respondents

Graduate post SSC or Others

graduate Equivalent (PhD)
Number of respondents 63 36 0 1
Percentage 63 36 0 1

Graph 4.4: Educational wise respondents

Educational Qualifications
0% 1%

36%
Graduate
post graduate
63%
SSC or Equivalent
PhD

Analysis and Interpretation:

Page | 71
All of them in this survey are graduate and above qualified peoples only. Among these 63%
are graduates, 36% are post graduates and one person is PhD.

5. Annual Income:

Table 4.5: Income wise respondents

0- 3 L 3-6L 6-9L 9 & above

Number of respondents 60 23 13 4
Percentage 60 23 13 4

Graph 4.5: Income wise respondents

Annual Income
4%

13%

0- 3 L
23% 3-6L
60%
6-9L
9 & above

Analysis and Interpretation:

Page | 72
Since 39% of this survey is students most of them are of 0-3L income range, ie 60%. 23% of
them are in 3-6Lincome range, 13% in 6-9L and 4% is 9 & above.

Behavioural factors:

This survey is conducted on those people who do online shopping and are aware of Flipkart.
So everyone answered ‘yes’ for those two questions.

6) Frequency of purchase from online:

Table 4.6: online shopping usage

Always Often Sometimes Seldom Never Total

Male 5 21 29 3 0 58
Female 4 14 23 1 0 42
Total 9 35 52 4 0 100

Graph 4.6: online shopping usage

35
29
30

25 23
21
20
14
15

10
5 4
5 3
1 0 0
0
Always Often Sometimes Seldom Never

Male Female

Analysis and Interpretation:

More than half of them use online shopping sometimes, ie 52%. People who always and
mostly shop through online shopping are also good in number, 9 and 35, together 44%. And
who use online shopping rarely is very less in number 4%. Since only 44% are mostly using

Page | 73
this, there is a wide space to fill and to make online shopping a great success. And there is not
much gender difference inonline shopping, which means both males and females enjoying
online shopping and its benefits.

7)Mode of awareness about Flipkart.com:

Table 4.7: Modes of awareness about Flipkart

Word of Advertisements, Blog Links Promotional Search Total

Mouth newspapers, TV recomme- from emails engines(like
ndations other Google)
websites
No: of 39 22 2 15 5 17 100
respondents
Percentage 39 22 2 15 5 17 100

Graph 4.7: Modes of awareness about Flipkart

Page | 74
 No: of respondents
45
40
35 39
30
25
20
15 22
10 15 17
5 2 5
0 No: of respondents

Analysis and Interpretation:

Most of them are awareabout Flipkart through word of mouth (39%) followed by television
and online advertisements (22%). Customers got awared through blog recommendations
(2%) and promotional e-mails (5%) are very less in number.

This means a good communicaton about Flipkart is going on through friends and families,
which proves that word of mouth strategy by them is the most successful means of making
people aware about their products. Success can only be gained through delighted customers
who act as advocates for their products and there is a wide scope of other digital
advertisement techniques like search engine marketing, email- marketing, providing links and
blog recommendations inorder to make more customers.

Page | 75
8) Frequency of usingFlipkart.com while online purchasing:

Graph 4.8: Frequency of using Flipkart

Every Occasionally Most of the Hardly Total

time time ever
No: of 17 45 32 6 100
respondents
Percentage 17 45 32 6 100

Graph 4.8: Frequency of using Flipkart

Page | 76
 No: of respondents
50
45
45
40
35
32
30
25
No: of respondents
20 17
15
10
6
5
0
Everytime Occasionaly Most of the time Hardly ever

Analysis and Interpretation:

Here on this survey 17% are always choosing Flipkart for online shopping, while 45% are
using it occasionally. Hardly ever using members are very less, and 32% are using it most of
the time. Since more than half of them prefer Flipkart while thinking of online shopping, it
means branding had done successfully by them either through advertisements, services or
providing good experience to customers.

9) Category that mostly prefer to buy from Flipkart.com:

Graph 4.9: Category mostly prefer to buy from Flipkart

Electronics Apparels & Books, Stationaries Healthcare Home & Total

Accessories Movies & Kitchen
& Music personalcare items
No: of 39 20 30 3 4 4 100
respondents

Page | 77
 Percentage 39 20 30 3 4 4 100

Graph 4.9: Category mostly prefer to buy from Flipkart

No: of respondents
45
40
39
35
30
25 30

20
20
15
10 No: of respondents
5
3 4 4
0

Analysis and Interpretation:

Electronic items, Books and Stationery, Apparels& Accessories, cameras, watches and others
(bags, belts, etc.) are purchased more. 39% of respondents are preferred to buy Electronics
items followed by Books and Stationery (30%) and Apparels and Accessories (20%). Books
& stationery and electronics items are more famous among the students and that may be the
reason for large purchase of those items from Flipkart.com.

Page | 78
10) Reason for customer’s preference on Flipkart.com than others:

Table 4.10: Customers expecting feature of Flipkart

Fast Availability After Sales Easy Portal Total

Delivery Services Payment Features
options
Responses 41 29 8 17 5 100
Percentage 41 29 8 17 5 100

Graph 4.10: Customers expecting feature of Flipkart

Page | 79
 Responses
45

40
41
35

30
29
25

20 Responses

15 17

10
8
5
5
0
Fast Delivery Availability After Sales Easy Payment Portal Features
Services options

Analysis and Interpretation:

One of the most efficient features in Flipkart is fast delivery when compared to other online
shopping websites. So, most of the customers prefer this website for shopping with the
perception of quick delivery (41%) and availability of product (29%), followed by easy
payment options (17%). And there is a scope of increasing after sales services and portal
features when comparing with other features.

11) Product selection from the categories given by Flipkart.com:

Table 4.11: On the basis where product is chosen

Rating of the Discounts and Review about the Brand of the Total
product features product product
No: of 14 48 26 12 100
Responses
Percentage 14 48 26 12 100

Page | 80
Graph 4.11: On the basis where product is chosen

No: of Responses
60

50
48
40

30
No: of Responses
26
20

10 14
12

0
Rating of the Discounts and Review about the Brand of the
product features product product

Analysis and Interpretation:

Customer perception varies while using Flipkart; it is one of the online shopping sites which
give high discounts and offers. Most of them in this survey (48%) are looking for good
featured product with high discounts while purchasing products from Flipkart. And also
customers more often go through the product review (26%) before making their decision
topurchase. Product review is a kind of word of mouth strategy where product usersleave
their review on their experiences with Flipkart. Customers are giving priority to these two
features while brand of product (12%) and rating of product (14%) also taken care by some
other customers.

Page | 81
12) Rating of services on Flipkart.com (in a scale of Excellent, Good, Average,
below average, Poor)

Table 4.12: Rating of Flipkart services

Excellent Good Average Below Poor

Average
Cash on delivery 46 45 5 2 2
30 days replacement 23 55 20 2 0
policy
EMI options 21 48 25 5 1
Free shipping 35 34 17 12 2

Page | 82
Graph 4.12: Rating of Flipkart services

60

50

40

Cash on delivery
30 30 days replacement policy
EMI options
Free shipping
20

10

0
Excellent Good Average Below Poor
Average

Analysis and Interpretation:

46% of respondents are rated excellent for cash on delivery service, while for 30 days
replacement policy 55% rated good and 23% rated excellent. For EMI options 48% rated
good and 21% rated excellent, and for free shipping 35% rated excellent.

While analysing the data, customers have more interest in two services of Flipkart: That is,
30 days replacement policy and EMI options.

Since Flipkart is providing 30 days replacement policy for all the products in the platform.
And this combined mix service increased the customer trust.

In case of EMI options, Flipkart is the only site which accepts all credit cards and thus it
provides a better payment options to the customers.

Page | 83
Cash on delivery is a compactable service that provided to the customers and they are much
satisfied on that service also. Even some rated less for this service, may be because of less
customised experience on cash on delivery.

In case of free shipping, Flipkart provide this service for total purchase of rupees 300 and
above only. So it may affect some of the customers who purchase less price products
frequently.

13) Issues faced by customers while shopping in Flipkart.com?

Table 4.13: Issues faced when purchased from Flipkart

Out of Payment Replacement Delay in Faulty No Others Total

stock issues issues Delivery product issues
No of 37 6 6 12 8 30 1 100
Responses
Percentage 37 6 6 12 8 30 1 100

Page | 84
Graph 4.13: Issues faced when purchased from Flipkart

40 37

35
30
30

25

20

15 12
8
10 6 6
5 1

No of Responses

Analysis and Interpretation:

In this survey, 30% of customers didn’t face any of those problems that mentioned, while
37% of customers faced out of stock issue. This is one of serious issue faced by most of
customers. Since discounts and features are the one feature that most of the customers
looking for and when a good product with high discount is displayed in Flipkart platform,
customers brought it as soon as they could. Thus the products will be out of stocked.

Flipkart started notifying the customers about the product when the stock got available.

Payment issues and replacement issues are less in number (total 12%) since different
payment options like EMI options, card payments, Cash on delivery, Wallet payments etc…
are provided by Flipkart and customers are satisfied with those.

Page | 85
 In case of replacement also only less issues are happened, thus shows most of them are
satisfied with that service.

Delay in delivery happens because of shipping and courier service issues. It is a problem
with supply chain. Mostly it happens in the end part of the supply and in rural areas where
courier services are less active.

Faulty product issue also happened to 8% of the customers and one of the policies to
overcome this issue is 30 days replacement policy of Flipkart.

14) Recommending this website to others:

Table 4.14: Recommending Flipkart to others

Yes No Total
No: of 95 5 100
Responses
Percentage 95 5 100

Graph 4.14: Recommending Flipkart to others

Page | 86
 95
100

80

60

40
5
20

0
Yes No

No: of Responses

Analysis and Interpretation:

In this survey, most of them (95%) are happy to recommendFlipkart to others like friends and
family. And this shows word of mouth publicity is successfully running and this is one of the
great advantages for Flipkart.

15) Customer’s rating about services onFlipkart.com: (in a scale of 5, 5 as highest and 1
asleast)

Table 4.15: Rating the experience fromFlipkart

1 2 3 4 5 Total
No of 7 11 16 49 17 100
Responses
Percentage 7 11 16 49 17 100

Page | 87
Graph 4.15: Rating the experience fromFlipkart

49
50

40

30
17
20 16
11
7
10

0
1 2 3 4 5

No of Responses

Analysis and Interpretation:

While analysing the rating of experiences, Flipkart provides a good and excellent
experiences to most of the customers.

Mode of given data: 4 & Median of given data: 4

49% of customers rated 4 as the experience and more than half of the population (66%) rated
4 & 5 as experience.

16) Satisfaction of customers while Flipkart services are used:

Table 4.16: Satisfaction on services of Flipkart

Yes No Total
No: of responses 81 19 100
Percentage 81 19 100

Graph 4.16: Satisfaction on services of Flipkart

Page | 88
 81
100

80

60
19
40

20

0
Yes No

No: of responses

Analysis and Interpretation:

81% of the population is satisfied with the service of Flipkart. This helpsFlipkart to retain the
customers and also shows that the branding and marketing techniques of Flipkart also got
succeed.

Page | 89
 FINDINGS
4.2 FINDINGS:

 There is not much difference in gender for using online shopping.


 Students and salaried persons are most frequent users of Flipkart.

 Frequency of purchase for electronics, books and music, apparels and accessoriesare
more in Flipkart.

 Word of mouth was more influential in promotion as many people were made aware
by their friends and family when customers recommend this website to them.

 Highly discounted products got out of stock quickly, since customers purchased it as
soon as they could when they see high discount on good featured product.

 The services provided by Flipkart are good and even more scope of development is
there for increasing the customer strength.

 Digital marketing techniques like search engine marketing, links providing other
website and advertisement also functioned well for promotion of this website.

 Fast delivery is one of best service Flipkart is providing.

 Different payment options available in Flipkart made customers more satisfied and
comfort for paying while purchasing product.

 Customers feeling more secured when purchasing through Flipkart because of
different policies and services they have.

 In comparison with competitors, Flipkart is charging free shipping for the purchase of
300 plus rupees, while others free ship the service without any barrier.

 Out of stock is the main issue faced by Flipkart.

 Most of customers have good experience with Flipkart while purchasing products.

 Most of them are satisfied with the services of Flipkart and so that they succeed in
retaining the customers.

 Advertising is an important way to have the brand and products familiarto consumers.

 Convenience and time saving are two important factors that customer looking for
while purchasing through online.

Page | 90
CHAPTER- 5
CONCLUSIONS

Page | 91
 5.1 CONCLUSION:
 The thorough study is based on the consumer behaviour analysis which serves a great
idea regarding consumer perception when they go for online shopping. In order to
satisfy themselves consumer perceive many things before buying products and they
will be satisfied if the company meet their expectation.

 The Overall Brand Value of Flipkart is good, but it is facing some tough competition
from its global competitors like Ebay and Amazon. Talking about domestic market i.e
India, it is the most superior E-business portal which is aggressively expanding &
planting its roots deep into the Indian market & at the same time shifting the mind-set
of the people from going & shopping from physical store to online stores, which is
magnificent!.

 Be very focused on consumers and build amazing experiences for the customers.

Page | 92
5.2 RECOMMENDATIONS:
 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.

Page | 93
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.

 Methods, 6
Cooper, Donald R. and Schindler , Pamela S. (1999), Business Research
 Tata McGraw-Hill Publishing Company Limited, New Delhi, India.
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Creswell, J. W. (2003). “Research Design: Qualitative,
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 R. & Lowe, A. (2002), Management Research 2nd
Easterby-Smith, M., Thorpe,
 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, 2013 (The Economic

Times)

Page | 94
WEBSITES:
www.Flipkart.com
www.commodityindia.com
www.marketoperation.com
www.nextbigwhat.com
www.britannica.com
en.kioskea.net
www.ecommerce-land.com
www.commodityindia.com
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www.marketoperation.com
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