“PERCEPTION OF CUSTOMER REGARDING RETAILER VS ETAILER”

A PROJECT SUBMITTED IN

PARTIAL COMPLETION OF

POST GRADUATE DIPLOMA IN MANAGEMENT STUDIES

TO

TIMSR

BY

AMIT KUMAR SHARMA

UNDER THE GUIDANCE OF

PROF. YESHA MEHTA

TIMSR

FULL TIME -BATCH 2014 – 2016

THAKUR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

KANDIVALI EAST, MUMBAI – 400101

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 CERTIFICATE

This is to certify that that is project report “Perception of Customer regarding Retailer vs
Etailer” is a bona fide work of AMIT KUMAR SHARMA in part completion of the Post
Graduation Diploma in Management and has been done under my guidance.

The Project is in the nature of original work that has not so far been submitted for any degree of
this university.

Reference of work and sources of information have been given at the end of this project report.

Signature of the Candidate

Forwarded through the Project Guide

Signature of the Project Guide

(Prof. Yesha Mehta)

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 ACKNOWLEDGEMENT

This project would not have been a success without the guidance and motivation of my mentor. I
am thankful to all the persons behind this project.

I would like to express my gratefulness to my mentor Prof. Yesha Mehta, who acted as a
mentor throughout my project for providing me valuable information and guidance.
I would also like to thank the Director Dr. RamaKumar Ambatipudi of Thakur Institute of
Management Studies and Research who have been very helpful in getting the required
information related to this project.

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 EXECUTIVE SUMMRY

Etailer touches all major aspects of economic life and presents a series of complex issues. It
involves the integration of many elements of technology, infrastructure, business operation and
public policy. All these elements need to operate together as smoothly as possible to yield the
maximum benefits to public. Most importantly, e-commerce requires new skills and forms of
industrial organization.

The store opened as one retail location in traditional store format. The store in a highly
fragmented and competitive market. It has carefully combined a variety of promotional strategies
into unique marketing mix to gain as much market share as possible.

At present time there are people confusing that which place good for them Etailer or Retailer. In
this project researcher, trying to find that which is better for them either Etailer or Retailer. In
India everyone is trying to buy their product at reasonable price, some people are confusing that
form where they buy their product.

In this research study, researcher trying to find that to whom people give more importance
Etailer or retailer also trying to find out that before buying any product from where people
collect information about the product.

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 CONTENT LIST

S NO. TOPIC PAGE NO.

1 Introduction of Retail 6
1.1 Local term 10
1.2 Indian retail market 11
1.3 Type of retail in India 12
1.4 Top retailers in India 14
1.5 Challenges 15
2 Introduction of Etailer 18
2.1 Advantage of Etailer 20
2.2 Limitation of Etailer 21
2.3 Market size and growth 23
2.4 Infrastructure 24
2.5 Funding 25
2.6 Market data about Etailer 30
2.7 Best Etailer websites in India 34
2.8 Difference between Retailer and Etailer 39
3 FDI in Retail 40
4 Literature review 43
5 Research Objective 45
6 Research Methodology 45
6.1 Primary data collection 46
6.2 Findings and Suggestion 52
7 Conclusion 54
8 Reference 55
9 Appendix 56

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 1. INTRODUCTION OF RETAIL:

Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers
are a part of an integrated system called the supply chain. A retailer purchases goods
or products in large quantities from manufacturers directly or through a wholesale, and then sells
smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations like
stores or markets, door-to-door or by delivery. In the 2000s, an increasing amount of retailing is
done online using electronic payment and delivery via a courier or postal mail. Retailing includes
subordinated services, such as delivery. The term "retailer" is also applied where a service
provider services the needs of a large number of individuals, such as for the public. Shops may
be on residential streets, streets with few or no houses, or in a shopping mall. Shopping
streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to
protect customers from precipitation. Online retailing, a type of electronic commerce used for
business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and browsing
and does not always result in a purchase.

Retail in India:

A textile retail store in India

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A fish retail store in West Bengal, India

A food staple retail shop in Pushkar, India

Modern retailing in India

Punjab Uttar Pradesh West Bengal

Telangana Karnataka Tamil Nadu

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 Gujarat
Madhya Pradesh Maharashtra

Delhi Kerala Haryana

These retail formats are classified on the basis of amount of square feet of floor space they use,
the level of services offer, the width and depth of products they offer or other criteria (Warren
and Mark, 2005).

Definition of Retail formats

Retail Format Area (sq ft)

Convenience stores 500 – 1,000 sq ft

Supermarkets 1,000 – 10,000 sq ft

Hypermarkets Above 10,000 sq ft

(Source: Choudhary, H. and Sharma, V. (2009). Empirical Study on Operational Efficiency in

Retail Stores in Chandigarh Tricity. Prabandhan: Indian Journal of Management, 2(3).

Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its
GDP. The Indian retail market is estimated to be US$ 500 billion and one of the top five retail
markets in the world by economic value. India is one of the fastest growing retail markets in the
world, with 1.2 billion people.

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As of 2013, India's retailing industry was essentially owner manned small shops. In 2010, larger
format convenience stores and supermarkets accounted for about 4 percent of the industry, and
these were present only in large urban centers. India's retail and logistics industry employs about
40 million Indians (3.3% of Indian population).Until 2011, Indian central government
denied foreign direct investment (FDI) in multi-brand retail, forbidding foreign groups from any
ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was
limited to 51% ownership and a bureaucratic process.

In November 2011, India's central government announced retail reforms for both multi-brand
stores and single-brand stores. These market reforms paved the way for retail innovation and
competition with multi-brand retailers such as Wal-Mart, Carrefour and Tesco, as well single
brand majors such as IKEA, Nike, and Apple. The announcement sparked intense activism, both
in opposition and in support of the reforms. In December 2011, under pressure from the
opposition, Indian government placed the retail reforms on hold till it reaches a consensus.

In January 2012, India approved reforms for single-brand stores welcoming anyone in the world
to innovate in Indian retail market with 100% ownership, but imposed the requirement that the
single brand retailer source 30 percent of its goods from India. Indian government continues the
hold on retail reforms for multi-brand stores.

In June 2012, IKEA announced it had applied for permission to invest $1.9 billion in India and
set up 25 retail stores. An analyst from Fitch Group stated that the 30 percent requirement was
likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan
from opening stores and creating associated jobs in India.

On 14 September 2012, the government of India announced the opening of FDI in multi-brand
retail, subject to approvals by individual states. This decision was welcomed by economists and
the markets, but caused protests and an upheaval in India's central government's political
coalition structure. On 20 September 2012, the Government of India formally notified the FDI
reforms for single and multi brand retail, thereby making it effective under Indian law.

On 7 December 2012, the Government of India allowed 51% FDI in multi-brand retail in India.
The government managed to get the approval of multi-brand retail in the parliament despite
heavy uproar from the opposition (the NDA and leftist parties). Some states will allow foreign
supermarkets like Wal-Mart, Tesco and Carrefour to open while other states will not.

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1.1 Local term:

Organized retailing, in India, refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, etc. These include the publicly traded
supermarkets, corporate-backed hypermarkets and retail chains, and also the privately owned
large retail businesses.

Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing,
for example, the local corner shops, owner manned general stores, paan/beedi shops,
convenience stores, hand cart and pavement vendors, etc.

Organized retailing was absent in most rural and small towns of India in 2010. Supermarkets and
similar organized retail accounted for just 4% of the market.

Most Indian shopping happens in open markets or numerous small grocery and retail shops.
Shoppers typically wait outside the shop, ask for what they want, and cannot pick or examine a
product from the shelf. Access to the shelf or product storage area is limited. Once the shopper
requests the food staple or household product they are looking for, the shopkeeper goes to the
container or shelf or to the back of the store, brings it out and offers it for sale to the shopper.
Often the shopkeeper may substitute the product, claiming that it is similar or equivalent to the
product the consumer is asking for. The product typically has no price label in these small retail
shops; all packaged products must display the maximum retail price above which the product
cannot be sold. It is a criminal offence to do so. . The shopkeeper can price the food staple and
household products arbitrarily, and two consumers may pay different prices for the same product
on the same day but never will those prices be above the maximum retail price. Price is rarely
negotiated between the shopper and shopkeeper. The shoppers usually do not have time to
examine the product label, and do not have a choice to make an informed decision between
competitive products.

India's retail and logistics industry, organized and unorganized in combination, employs about 40
million Indians (3.3% of Indian population). The typical Indian retail shops are very small. Over
14 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2)
in size. India has about 11 shop outlets for every 1000 people. Vast majority of the unorganized
retail shops in India employ family members, do not have the scale to procure or transport
products at high volume wholesale level, have limited to no quality control or fake-versus-

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authentic product screening technology and have no training on safe and hygienic storage,
packaging or logistics. The unorganized retail shops source their products from a chain of
middlemen who mark up the product as it moves from farmer or producer to the consumer. The
unorganized retail shops typically offer no after-sales support or service. Finally, most
transactions at unorganized retail shops are done with cash, with all sales being final.

Until the 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Some
retails faced complying with over thirty regulations such as "signboard licenses" and "anti-
hoarding measures" before they could open doors. There are taxes for moving goods to states,
from states, and even within states in some cases. Farmers and producers had to go through
middlemen monopolies. The logistics and infrastructure was very poor, with losses exceeding 30
percent.

Through the 1990s, India introduced widespread free market reforms, including some related to
retail. Between 2000 to 2010, consumers in selected Indian cities have gradually begun to
experience the quality, choice, convenience and benefits of organized retail industry.

1.2 Indian retail market:

Indian market has high complexities in terms of a wide geographic spread and distinct consumer
preferences varying by each region necessitating a need for localization even within the
geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail
space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6
percent is highest in the world.1.8 million households in India have an annual income of
over 4.5 million(US$70,650.00).

While India presents a large market opportunity given the number and increasing purchasing
power of consumers, there are significant challenges as well given that over 90% of trade is
conducted through independent local stores. Challenges include: Geographically dispersed
population, small ticket sizes, complex distribution network, and little use of IT systems,
limitations of mass media and existence of counterfeit goods.

A number of merger and acquisitions have begun in Indian retail market. PWC estimates the
multi-brand retail market to grow to $220 billion by 2020.

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1.3 Type of retail in India:
A marketplace is a location where goods and services are exchanged. The traditional market
square is a city square where traders set up stalls and buyers browse the stores. This kind of
market is very old, and countless such markets are still in operation around the whole world.

In some parts of the world, the retail business is still dominated by small family-run stores, but
this market is increasingly being taken over by large retail chains. Most of these stores are called
high street stores. Gradually high street stores are being re-grouped at single locations called
malls. These are more defined and planned spaces for retail stores and brands.

Department store:

Department stores are very large stores offering a huge assortment of "soft" and "hard goods;
often bear a resemblance to a collection of specialty stores. A retailer of such store carries variety
of categories and has broad assortment at average price. They offer considerable customer
service.
Discount store:

Discount stores tend to offer a wide array of products and services, but they compete mainly on
price offers extensive assortment of merchandise at affordable and cut-rate prices. Normally,
retailers sell less fashion-oriented brands.

Warehouse store:

Warehouses that offer low-cost, often high-quantity goods piled on pallets or steel
shelves; warehouse clubs charge a membership fee.

Variety store:

Variety stores offer extremely low-cost goods, with limited selection.

Demographic:

Retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy
individuals).

Mom-And-Pop:

A small retail outlet owned and operated by an individual or family. Focuses on a relatively
limited and selective set of products.

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Specialty store:

A specialty (BE: specialty) store has a narrow marketing focus - either specializing on specific
merchandise, such as toys, shoes, or clothing, or on a target audience, such as children, tourists,
or oversize women. Size of store varies - some specialty stores might be retail giants such
as Toys "R" Us, Foot Locker, and The Body Shop, while others might be small, individual shops
such as Natters of Seville Row. Such stores, regardless of size, tend to have a greater depth of the
specialist stock than general stores, and generally offer specialist product knowledge valued by
the consumer. Pricing is usually not the priority when consumers are deciding upon a specialty
store; factors such as branding image, selection choice, and purchasing assistance are seen as
important. They differ, from department stores and supermarkets which carry a wide range of
merchandise.

Boutique:
Boutique or concept stores are similar to specialty stores. Concept stores are very small in size,
and only ever stock one brand. They are run by the brand that controls them. An example of
brand that distributes largely through their own widely distributed concept stores
is L'OCCITANE en Provence. The limited size and offering of L'OCCITANE's stores are too
small to be considered a specialty store proper.
General store:
A general store is a rural store that supplies the main needs for the local community;

Convenience store:
A convenience store provides limited amount of merchandise at more than average prices with a
speedy checkout. This store is ideal for emergency and immediate purchases as it often works
with extended hours, stocking everyday;

Hypermarkets:
Provides variety and huge volumes of exclusive merchandise at low margins. The operating cost
is comparatively less than other retail formats.

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Supermarket:
A supermarket is a self-service store consisting mainly of grocery and limited products on non
food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can be
anywhere between 20,000 and 40,000 square feet (3,700 m2). Example: SPAR supermarket.

Mall:
A shopping mall has a range of retail shops at a single outlet. They can include products, food
and entertainment under one roof. Malls provide 7% of retail revenue in India, 10% in Vietnam,
25% in China, 28% in Indonesia, 39% in the Philippines, and 45% in Thailand.

"Category killer" or specialist:

By supplying wide assortment in a single category for lower prices a category killer retailer can
"kill" that category for other retailers. For few categories, such as electronics, the products are
displayed at the centre of the store and sales person will be available to address customer queries
and give suggestions when required. Other retail format stores are forced to reduce the prices if a
category specialist retail store is present in the vicinity.

1.4 Top retailer in India:

A 2012 PWC report states that modern retailing has a 5% market share in India with about $27
billion in sales, and is growing at 15 to 20% per year. There are many modern retail format and
mall companies in India. Some examples are in the following table.

Indian Retail
Market Reach in 2011 and Notes
Group

Pantaloon Retail 65 stores and 21 factory outlets in 35 cities, 2 million square feet space

Shoppers Stop 51 stores in 23 cities, 3.2 million square feet space

Spencer’s Retail 200 stores in 45 cities, 1 million square feet space

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 708 mart and supermarkets, 20 wholesale stores in 15 cities, 508 fashion
Reliance Retail and lifestyle
1206 crore (US$190 million) per month sales in 2013

Bharti Retail 74 Easy day stores, plans to add 10 million square feet by 2017

Birla More 575 stores nationwide

Tata Trent 59 Westside mall stores, 13 hypermarkets

Lifestyle Retail 15 lifestyle stores, 8 home centers

193 stores in 3 cities, one of three largest supermarkets retailer in India by

Future Group sales
916 crore (US$140 million) per month sales in 2013

1.5 Challenges of Retailers:

McKinsey study claims retail productivity in India is very low compared to international peer
measures. For example, the labor productivity in Indian retail was just 6% of the labor
productivity in United States in 2010. India's labor productivity in food retailing is about 5%
compared to Brazil's 14%; while India's labor productivity in non-food retailing is about 8%
compared to Poland's 25%.

Total retail employment in India, both organized and unorganized, account for about 6% of
Indian labor work force currently - most of which is unorganized. This about a third of levels in
United States and Europe; and about half of levels in other emerging economies. A complete
expansion of retail sector to levels and productivity similar to other emerging economies and

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developed economies such as the United States would create over 50 million jobs in India.
Training and development of labor and management for higher retail productivity is expected to
be a challenge.

In November 2011, the Indian government announced relaxation of some rules and the opening
of retail market to competition.

Indian retail reform:

Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand
Indian retail, forbidding foreign groups from any ownership in supermarkets, convenience stores
or any retail outlets, to sell multiple products from different brands directly to Indian consumers.

The government announced on 24 November 2011 the following:

 India will allow foreign groups to own up to 51 per cent in "multi-brand retailers", as
supermarkets are known in India, in the most radical pro-liberalization reform passed by an
Indian cabinet in years.
 Single brand retailers, such as Apple and IKEA, can own 100 percent of their Indian
stores, up from the previous cap of 51 percent.
 Both multi-brand and single brand stores in India will have to source nearly a third of
their goods from small and medium-sized Indian suppliers.
 All multi-brand and single brand stores in India must confine their operations to 53-odd
cities with a population over one million, out of some 7935 towns and cities in India. It is
expected that these stores will now have full access to over 200 million urban consumers in
India.
 Multi-brand retailers must have a minimum investment of US$100 million with at least
half of the amount invested in back end infrastructure, including cold chains, refrigeration,
transportation, packing, sorting and processing to considerably reduce the post harvest losses
and bring remunerative prices to farmers.
 The opening of retail competition will be within India's federal structure of government.
In other words, the policy is an enabling legal framework for India. The states of India have
the prerogative to accept it and implement it, or they can decide to not implement it if they so

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 choose. Actual implementation of policy will be within the parameters of state laws and
regulations.

The opening of retail industry to global competition is expected to spur a retail rush to India. It
has the potential to transform not only the retailing landscape but also the nation's ailing
infrastructure. A Wall Street Journal article claims that fresh investments in Indian organized
retail will generate 10 million new jobs between 2012–2014, and about five to six million of
them in logistics alone; even though the retail market is being opened to just 53 cities out of
about 8000 towns and cities in India.

Single-brand retail reforms approved:

On 11 January 2012, India approved increased competition and innovation in single-brand retail.

The reform seeks to attract investments in operations and marketing, improve the availability of
goods for the consumer, encourage increased sourcing of goods from India, and enhance
competitiveness of Indian enterprises through access to global designs, technologies and
management practices. In this announcement, India requires single-brand retailer, with greater
than 51% foreign ownership, to source at least 30% of the value of products from Indian small
industries, village and cottage industries, artisans and craftsmen.

Mikael Ohlsson, chief executive of IKEA, announced IKEA is postponing its plan to open stores
in India. He claimed that IKEA's decision reflects India’s requirements that single-brand retailers
such as IKEA source 30 percent of their goods from local small and medium-sized companies.
This was an obstacle to IKEA's investment in India, and that it will take IKEA some time to
source goods and develop reliable supply chains inside India. IKEA announced that it plans to
double what it sources from India already for its global product range, to over $1 billion a year,
within three years. IKEA in the near term plans to focus expansion instead in China and Russia,
where such restrictions do not exist.

On 19 Feb 2013 Tamil Nadu became the first state in the country to stoutly resist MNC 'invasion'
into the domestic retail sector. In Chennai, Tamil Nadu CMDA authorities placed a seal on the
massive warehouse spreading across 7 acres that had reportedly been built for one of the world’s
leading multinational retail giants, Walmart.

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 2. INTRODUCTION OF ELECTRONIC RETAILING - E-TAILING:

The sale of goods and services through the Internet. Electronic retailing, or e-tailing, can include
business-to-business and business-to-consumer sales. E-tailing revenue can come from the sale
of products and services, through subscriptions to website content, or through advertising.

E-tailing (less frequently: E tailing) is the selling of retail goods on the Internet. Short for
"electronic retailing," and used in Internet discussions as early as 1995, the term seems an almost
inevitable addition to e-mail, e-business, and e-commerce. E-tailing is synonymous with
business-to-consumer (B2C) transaction.

E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997
when Dell Computer reported multimillion dollar orders taken at its Web site. The success of
Amazon.com hastened the arrival of Barnes and Noble's e-tail site. Concerns about secure order-
taking receded. 1997 was also the year in which Auto-by-Tel reported that they had sold their
millionth car over the Web, and Commerce Net/Nielsen Media reported that 10 million people
had made purchases on the Web. Jupiter research predicted that e-tailing would grow to $37
billion by 2002.

India has an internet user base of about 250.2 million as of June 2014.. The penetration of e-
commerce is low compared to markets like the United States and the United Kingdom but is
growing at a much faster rate with a large number of new entrants. The industry consensus is that
growth is at an inflection point.

Unique to India (and potentially to other developing countries), cash on delivery is a preferred
payment method. India has a vibrant cash economy as a result of which 80% of Indian e-
commerce tends to be Cash on Delivery. However, COD may harm e-commerce business in
India in the long run and there is a need to make a shift towards online payment mechanisms.
Similarly, direct imports constitute a large component of online sales. Demand for international
consumer products (including long-tail items) is growing much faster than in-country supply
from authorized distributors and e-commerce offerings.

In today’s time e-commerce has emerged as a more secure method of transacting and doing
financial transactions what not’s on the net. It has opened up avenues for people who may be in

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any part of the world but can still do business. You might be in a country like Vietnam but you
can import or export goods online. The pace of the global economy is rapidly increasing with the
convergence of e-commerce with the means of better technology. In India a lot of challenges
have been met and a lot are still to be met with the help of the developing e-commerce structure.
Researcher chose this topic because he wanted to showcase the rising popularity and the
preferred convenience of the e commerce culture in developing and developed nations alike. E
commerce involves more than just the financial sector’s help. It is a comprehensive effort
involving various sectors.

Evolution and growth of e-commerce in India:

The importance of "electronic commerce" has changed in the past few years. Initially, it meant
making commercial transactions electronically using the technology such as Electronic Data
Interchange (EDI) and Electronic Funds Transfer (EFT) which were both introduced in the late
1970s.In the later years towards 2000, e-commerce started including enterprise resource planning
systems (ERP), data mining and data warehousing. Amazon and E-bay which were among the
earliest Internet companies to start electronic transactions were Amazon and EBay and the
history of e-commerce is unimaginable without them.

The Indian Government had realized the need for expansion of the IT industry and the
Information structure a long time ago. Today e-commerce for Indians has become a very
important part of their daily lives.

Promoters of E-commerce in India:

Banks and information directories are the main facilitators of e-commerce in India. The
information directories list the products and services with suitable sub-headings so that the
information seeker can quickly access what he wants.

Banks provide Net banking services such as Financial Planning & advice, Electronic Funds
Transfer, loans to account-holders and NRI services, etc.

Banks facilitate E-commerce by providing the most essential trade instruments that is the Credit
or Debit Cards, without which E-commerce would be impossible.

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Issues and challenges in the implementation of E-commerce in India:

Cultural challenges: These challenges are many such as trust between parties involved in a
transaction or trust of parties in the institutions of the economy which may direct the
transactions, corruption, preferences for face-to-face communication.

Policy Challenges: Specific e-commerce policies are essential in regard to the validity of
electronic documents, electronic signature and electronic transactions.

Technology challenges: They consider the level of technological infrastructure and human
resources of requisite ability and expertise.

2.1 Advantages of Etailer:

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

ECONOMY Unlike the brick–and–mortar environment, in e–commerce there is no physical

store space, insurance, or infrastructure investment. All you need is an idea, a unique product,
and a well– designed web storefront to reach your customers, plus a partner to do fulfillment.
This makes e–commerce a lot more economical.

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

BETTER CUSTOMER SERVICE E–commerce means better and quicker customer service.
Online customer service makes customers happier. Instead of calling your company on the
phone, the web merchant gives customers direct to their personal account online. This saves time
and money. For companies that do business with other companies, adding customer service

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online is a competitive advantage. The overnight package delivery service, where tracking
numbers allow customers to check the whereabouts of a package online, is one good example.

QUICK COMPARISON SHOPPING E–commerce helps consumers to comparison shop.

Automated online shopping assistants called hop bots scour online stores and find deals on
everything from apples to printer ribbons.

2.2 Limitations of Etailer:

Though India represents vast unexplored market for ecommerce the current share of ecommerce
in India is marginal restricted to less than 2 percent. According to reasonable estimated it is not
going to exceed even 5 percent in the next two decades because of several limitations of
ecommerce narrated below:

SECURITY continues to be a problem for online businesses. Customers have to feel confident
about the integrity of e-dealers and the payment process before they commit to the purchase.
There are risks of hackings and cybercrimes too.

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

SYSTEM SCALABILITY: A business develops an interactive interface with customers via a

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

E–COMMERCE–NOT FREE So far, success stories in e–commerce have forced large business
with deep pockets and good funding. According to a report, small retailers that go head–to–head
with e–commerce giants are fighting losing battle. As in the brick–and–mortar environment, they
simply cannot compete on price or product offering. Brand loyalty is related to this issue, which
is supposed to be less important for online firms. Brands are expected to lower search costs,

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build trust, and communicate quality. A search engine can come up with the best music deals, for
example, yet consumers continue to flock to trusted entities such as HMV.

CONSUMER SEARCH IS NOT EFFICIENT OR COST EFFECTIVE: On the surface, the

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

CUSTOMER RELATION PROBLEMS: Not many businesses realize that even e–business
cannot survive over the long term without loyal customers. E-commerce does not have human
face. It is an impersonal way of dealing with the people. Moreover customers have wide choice
every time they are in the market. Hence it is uphill task to maintain the brand loyalty with the
customers. Cost of obtaining a new customer is always higher than the cost of maintaining the
existing customer. Therefore the e-business has work out the strategies of maintaining the
customer loyalty.

PRODUCTS PEOPLE WON’S BUY ONLINE: E-commerce has limited range of products and
services to deal with like electronic gadgets or banking services etc. While purchasing many
products the customer wants to feel the touch of the products. Hence he prefers the traditional
commerce to purchase such products. Imagine a website called furniture.com or living.com,
where venture capitalists are investing millions in selling home furnishings online. In the case of
a sofa, you would want to sit on it, feel the texture of the fabric etc. Beside the sofa test, online
furniture stores face costly returns which make the product harder to sell online.

2.3 Market size and growth:

India's e-commerce market was worth about $3.8 billion in 2009, it went up to $12.6 billion in
2013. In 2013, the e-retail market was worth US$ 2.3 billion. About 70% of India's e-commerce
market is travel related. India has close to 10 million online shoppers and is growing at an
estimated 30% CAGR vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the
biggest categories in terms of sales.

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Key drivers in Indian e-commerce are:

 Increasing broadband Internet (growing at 20% MoM) and 3G penetration.

 Rising standards of living and a burgeoning, upwardly mobile middle class with high
disposable incomes
 Availability of much wider product range (including long tail and Direct Imports)
compared to what is available at brick and mortar retailers
 Busy lifestyles, urban traffic congestion and lack of time for offline shopping
 Lower prices compared to brick and mortar retail driven by disintermediation and
reduced inventory and real estate costs
 Increased usage of online classified sites, with more consumer buying and selling second-
hand goods
 Evolution of the online marketplace model with sites like Jabong.com, Flip kart, Snap
deal and

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by
2016 and $850 Bn by 2020, – estimated CAGR of 7%. According to Forrester, the e-commerce
market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57%
between 2012–16.

As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is estimated
at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion
(87%) of this market today. Online travel market in India is expected to grow at a rate of 22%
over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing
industry is estimated at Rs 3,600 Crores (US$800 mn) in 2011 and estimated to grow to Rs
53,000 Crore ($11.8 billion) in 2015.

On 7 March 2014 E-tailer Flipkart claimed it has hit $1 billion in sales, a feat it has managed to
achieve before its own target (2015).

Overall e-commerce market is expected to reach Rs 1, 07,800 Crores (US$24 billion) by the year
2015 with both online travel and e-tailing contributing equally. Another big segment in e-
commerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites.

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2.4 Infrastructure:

There are many hosting companies working in India but most of them are not suitable for
E-Commerce hosting purpose, because they are providing much less secure and threat protected
shared hosting. E Commerce demand highly secure, stable and protected hosting. Cyber security
issues of e-commerce business in India would be required to be managed by Indian e-commerce
stakeholders in the near future. In fact, Indian government is planning to introduce cyber security
breach disclosure norms in India very soon. Recently Target corporation suffered a cyber attack
that has put it under litigation threat in multiple jurisdictions.[ Trends are changing with some of
E Commerce companies starting to offer SaaS for hosting web stores with minimal onetime
costs.

There could be various methods of ecommerce marketing such as blog, forums, search
engines and some online advertising sites like Google ad words and A droll.

India has got its own version Cyber Monday known as Great Online Shopping Festival in
December 2012, when Google India partnered with e-commerce companies including Flip
kart, HomeShop18, Snap deal, India times shopping and Make my trip. "Cyber Monday" is a
term coined in the USA for the Monday coming after Black Friday, which is the Friday
after Thanksgiving Day.

In early June 2013, Amazon.com launched their Amazon India marketplace without any
marketing campaigns. In July, Amazon had said it will invest $2 billion (Rs 12,000 Crore) in
India to expand business, after its largest Indian rival Flipkart announced $1 billion in funding.

2.5 Funding:

As of 2012, most of the e-commerce companies are yet to start making money. However, due to
their growth prospects, many venture capital firms such as Accel Partners have invested
considerably. In one of the biggest fund rising, Flipkart.com, till November 2014, has raised
about USD 2.3 billion. Entertainment ticketing website BookMyShow.com raised 100 crores
investment by Accel Partners.

On 10 July 2013, Flipkart announced it had received $200 million from existing investors Tiger
Global, Naspers, Accel Partners, and ICONIQ Capital. New investors making up the additional

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$160 million include Dragoneer Investment Group, Morgan Stanley Wealth
Management, Sofina, Vulcan Inc. and more from Tiger Global.

In February 2014, online fashion retailer Myntra.com raised $50 million from a group of
investors led by Premji Invest, the investment company floated by Azim Premji, Chairman
of Wipro. May 2014 also witnessed an acquisition of Myntra by Flipkart reportedly for 2,000
crores. However, cyber law and e-commerce due diligence are still being ignored by investors
and financial institutions while investing in India. In October 2014, KartRocket, an Indian e-
commerce platform, announced granting of a Series A round led by technology investor Nirvana
Venture Advisors and 500 Startups, together with Tokyo-based Beenos, previously known as
Netprice.com.

Regulatory violation and unfair practices:

Legal issues of e-commerce in India are generally ignored by e-commerce websites. This may
change in the near future as foreign companies and e-commerce portals would be required to
register in India and comply with Indian laws. E-Commerce websites dealing with
nutraceuticals, Bitcoin, Ayurvedic products, online pharmacies, online payment, online
poker, etc are violating laws of India.

Enforcement directorate (ED) of India has already initiated legal actions against companies
dealing with Bitcoins in India. Tax liability of foreign companies like Google, Facebook, etc is
also under consideration in India

Similarly, illegal online sales of prescribed drugs by illegal online pharmacies of India are also
under scrutiny of regulatory authorities of India.

Myntra, Flipkart and many more e-commerce websites are under regulatory scanner of ED of
India for violating Indian laws and policies. US-based transport application provider Uber Inc
has also been questioned by the service tax department of India.

The Federation of Publishers’ and Booksellers’ Associations in India (FPBAI) has also
questioned the predatory pricing tactics adopted by various e-commerce websites in India. The
Confederation of All India Traders (CAIT) has also decided to approach the Competition
Commission of India to oppose the predatory pricing tactics of Indian e-commerce websites.

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Demands for introducing suitable provisions to regulate taxation, anti competitive practices and
predatory pricing of Indian and foreign e-commerce websites have also been raised.

Asia-Pacific grows fast, while North America and Western Europe remain consistently
strong

Business-to-consumer (B2C) ecommerce sales worldwide will reach $1.471 trillion in 2014,
according to new figures from E Marketer, increasing nearly 20% over 2013. As internet usage
continues to mature across the world, ecommerce growth will slow over time, settling around
10% by the end of our forecast period. However, with sales reaching $2.356 trillion in 2018, a
10% growth rate still represents more than $200 billion new dollars that year.

E Marketer’s definition for B2C ecommerce sales includes all products and services ordered or
booked via the internet on any device, including leisure and unmanaged business travel.

On a regional basis, North America—which includes only the US and Canada—will remain the
leading region in B2C ecommerce sales share in 2014, accounting for around one-third of the
dollars spent on digital purchases worldwide. Previously, E Marketer forecast that Asia-Pacific
would surpass North America in market share this year, but full-year data from 2013 as well as
Q1 2014 data showed China’s B2C ecommerce growth slowing faster than expected due to the

26
market maturing. With China accounting for a significant portion of ecommerce sales in Asia

Pacific, this affected our estimates materially.

E Marketer now expects Asia-Pacific to become the leading region for ecommerce sales in 2015,
representing 33.4% of the total, compared with 31.7% in North America and 24.6% Western
Europe. These three regions combined will continue to take around 90% of the global
ecommerce market throughout our forecast period.

The increase of ecommerce sales in Asia-Pacific is tied to a growing base of digital buyers, and
as more new buyers come online, naturally sales will rise. However, by the end of our forecast
period, nearly 70% of internet users in both Western Europe and North America will purchase
items on digital devices, vs. just over 50% in Asia-Pacific

Buyer penetration in Asia-Pacific translates to the largest number of consumers, but the region is
far more fragmented than North America and Western Europe. In the latter two regions,
ecommerce continues to grow at double-digit rates and will do so for several more years. In
markets as large as these, these points to the fact that individual buyers are making purchases
more frequently and with higher order values, and consumer behaviors are relatively consistent
across countries in both regions.

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Conversely, consumer behaviors are more disparate across Asia-Pacific countries. China alone
will make up more than half of all the region’s ecommerce sales this year, and by 2018, its share
will top 70%. Australia and Japan rival markets like the US, UK and Western Europe in buyer
penetration and average order values. On the other hand, in less mature markets like India and
Indonesia, there are large absolute numbers of digital buyers, but many are new to the market.
Instead of buying high-ticket items, new digital buyers tend to wet their feet with less costly
purchases, due to product availability or simply to income constraints.

E Marketer bases all of its forecasts on a multipronged approach that focuses on both worldwide
and local trends in the economy, technology and population, along with company-, product-,
country- and demographic-specific trends, and trends in specific consumer behaviors. We
analyze quantitative and qualitative data from a variety of research firms, government agencies,
media outlets and company reports, weighting each piece of information based on methodology
and soundness.

In addition, every element of each E Marketer forecast fits within the larger matrix of all of its
forecasts, with the same assumptions and general framework used to project figures in a wide
variety of areas. Regular re-evaluation of each forecast means those assumptions and framework
are constantly updated to reflect new market developments and other trends.

28
29
2.6 Market Data about E-commerce:

This provides facts and market data related to electronic commerce (e-commerce). This includes
information on B2C and B2B e-commerce volume and value, as well as individual sector e-
commerce figures and country-specific e-commerce numbers.

The worldwide expansion of the internet has considerably contributed to the transformation of
trade and store transactions. E-commerce, or electronic commerce, largely means buying and/or
selling products through the internet and is commonly associated with online shopping. E-
commerce also makes use of regular technological maintenance to ensure the smooth functioning
of online store sites, monetary transactions, as well as everything to do with providing and
delivering products. E-commerce statistics confirm the explosive pace at which this industry has
developed as worldwide B2C e-commerce sales amounted to more than 1.2 trillion US dollars in
2013.

There are several different types of e-commerce, the most prevalent being B2B (business-to-
business), B2C (business-to-consumer) and C2C (consumer-to-consumer) e-commerce.
Furthermore, mobile commerce in the shape of buying and selling goods and content via mobile
devices such as smart phonies also on the rise.
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Current e-commerce statistics state that 40 percent of worldwide internet users have bought
products or goods online via desktop, mobile, tablet or other online devices. This amounts
to more than 1 billion online buyers and is projected to continuously grow.

According to popular e-commerce market data, US-founded Amazon is one of the leading e-
commerce platforms worldwide. Asian competitors such as Rakuten or Alibaba are also
constantly expanding their share within the B2C e-commerce market. Online auction website
eBay is the most popular example for C2C e-commerce whilst also providing a platform for
merchants to sell their goods.

Mobile commerce growth is another exciting trend to watch in terms of e-commerce statistics,
considering the popularity and widespread use of smart phones and growing usage of tablets. In
2013, US mobile commerce revenue amounted to more than 38 billion US dollars. This type of
e-commerce includes mobile media and content, retail services, travel purchases and various
other services.

Digital payments are also closely connected to e-commerce. Alternative payment methods such
as digital wallets or online payment providers have seen increased adoption rates and rapid
growth in the past few years. Ebay-owned PayPal is one of the current market leaders with more
than 14 billion US dollars in mobile payment volume alone. Digital payments are not only
convenient for the mobile shopping experience but also for the increasingly available paid digital
content like streaming music, online video subscriptions and apps. For example, global mobile
app revenues are projected to surpass 30 billion US dollars in the coming year.

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Asia-Pacific will surpass North America in web sales, E Marketer says:

Global e-commerce sales reached $1.08875 trillion in 2012, up 21.9% from $893.33 billion in
2011, according to digital marketing research firm E Marketer. While North America continued
to claim most of those sales, this year Asia-Pacific will take the lead, E Marketer says.
The firm forecasts that in 2013, total e-commerce sales worldwide will grow 19.3% year over
year to reach $1.29844 trillion. In its definition of e-commerce sales, E Marketer includes retail,
travel and digital download sales and online marketplace transactions. Here is a regional
breakdown of worldwide online sales share in 2012 and 2013, according to E Marketer:

 North America, 33.5%, 31.5%;

 Asia-Pacific, 30.5%, 33.4%;
 Western Europe, 26.9%, 25.7%;
 Eastern Europe, 3.8%, 3.9%;
 Latin America, 3.4%, 3.5%;
 Middle East and Africa, 1.9%, 2.1%.
China drives most of Asia-Pacific’s e-commerce growth, E Marketer says, and it will pass Japan
to become the world’s second-largest e-commerce market after the United States this year.
China’s nearly 220 million online shoppers in 2012—a number expected to double by 2016—is
greater than the number of online shoppers in any other country, it says.
In 2013, e-commerce sales in China will account for 14% of online sales worldwide, at $181.62
billion, up 65% from $110.04 billion in 2012, E Marketer says. The United States in 2013 will
take 29.6% of all online sales, or $384.80 billion, up 12.2% from $343.43 billion in 2012.

Although China may eventually best other markets for e-commerce based on the size of its
online shopping population, the average Chinese shopper will spend only $670 online this year.
In contrast, online shoppers in the United Kingdom will spend an average of $3,878 each this
year, up from $3,585 per shopper in 2012, when it took the global lead for highest average e-
commerce spending per shopper. E Marketer attributes that to a strong demand for food and
apparel items among U.K. online shoppers and U.K. retailers’ widespread promotion of online
and mobile channels.

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The top five countries ranked by average e-commerce sales per online shopper, with their 2012
and 2013 projected averages, are:

 United Kingdom, $3,585, $3,878;

 Australia, $3,547, $3,802;
 Norway, $2,530, $2,796;
 United States, $2,293, $2,466;
 Denmark, $2,185, $2,286.
Detailed profiles of the leading online retailers in North America, Europe and Latin America are
available in the Internet Retailer Top 500, Top 400 Europe and Top 300 Latin America guides.
Internet Retailer's Top 500 Asia guide will be available in March.
In another report, French trade group Fevad says that 2012 online retail and travel sales in France
reached 45 billion Euros ($60.858 billion), up 19% year over year. Of that, about 2%, or roughly
1 billion Euros ($13.524 billion), came from mobile commerce, it says.

In general, Fevad says it attributes France’s strong e-commerce growth to an at least 5% increase
in the number of online shoppers in 2012 and a 17% year-over-year increase in the number of
French e-commerce web sites in 2012, which numbered 117,500.

Causes of increasing Etailing:

Increase in urbanization: The Indian urban population is projected to increase from 28% to 40%
of the total population by 2020 and incomes are simultaneously expected to grow in these
segment.

Ease of financial available: Retail loans have doubled in the last three years to reach USD 38.7
bn by 2005. All the above figures represent only about the rich and middle class of the country.
Because of the big consumer market that India offers, the government gives no regard to the
concerns of unorganized 97% of the retail trade in India. People of all classes depend upon these
traders for their daily supplies.

Expansion in educational facilities: Education sector has led to an incredible development which
has ultimately led to the growing awareness and demands of the youth regarding the brand

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culture in the country. Few reports depict that among teenagers (aged 17 to 20 years) apparel,
books, footwear and mobiles phones account for nearly around 42% of the total discretionary
spend.

Agricultural Factors: The continuous changes in the environmental factors and the changing
agrarian facilities with the increasing outputs and better yields have also led to the growth in
demands of the consumers.

Role of Media: The change in the thought process of the consumers due to the increased impact
of media on their lifestyle has made the retailers find the market for new and lucrative products
which were earlier not accessible to the consumers.

Efficiencies in Logistics: The various infrastructure development schemes which have led to
better connectivity between different regions have also led to the development of a more
lucrative market for India as a whole.

Overall, the government seems set to consider the option seriously to open retail to FDI. But the
Government should seek for reforms keeping in view the existing framework of India and this
should be done in a phased manner so as to prepare the economy for availing the benefits and
avoiding the pitfalls.

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2.7 Best Etailer Websites in India:

Don't agree with the list? Vote for an existing item you think should be ranked higher or if you
are a logged in, add a new item for others to vote on or create your own version of this list.

1Jabong.com

Jabong.com is one of India's leading fashion and lifestyle ecommerce portals. It retails apparel,
footwear, accessories, beauty products, fragrances, home accessories and other fashion and
lifestyle products. The site started operations in January 2012.

Visit Jabong.com Website

2Myntra.com

Best for fashion apparels. Large pool to choose from at very affordable price. thanks to their
generous coupon policies.

Best options of my choice. User friendly app.

Myntra.com is an Indian online shopping retailer of fashion and casual lifestyle products,
headquartered in Bangalore. Myntra was established by Mukesh Bansal, Ashutosh Lawania, and
Vineet Saxena in February 2007. All three are IIT alumni, and have worked for several start-ups.

Visit Myntra.com Website

3Flipkart.com

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

founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart focused on
online sales of books, but later it 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,
Cash on Delivery and Card Swipe on Delivery.

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It is definitely the best and soon it should go GLOBAL!

Simply it's the best ecommerce store

More comments about Flipkart.com

Visit Flipkart.com Website

4Yuvastyle.com

Yuvastyle has in a short span become the leading destination in online apparel and footwear
sales with its large range of brands in fashion and lifestyle products. Backed up by speedy
delivery, a dedicated mobile app and prompt customer service, Yuvastyle has left no stone
unturned to provide its customer, a hassle free online shopping experience and thus emerged as a
trustworthy name in world of online shopping in India.

Visit Yuvastyle.com Website

5HomeShop18.com

HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group,
headquartered in NOIDA, India. HomeShop18 was launched on 9 April 2008 as India's first 24-
hour Home Shopping T.V. channel, where anchors performed live demonstration of products on
sale. The television channel established HomeShop18's foothold in Indian retail because of high
television penetration. Later, as the internet reach grew all over the country, HomeShop18
expanded to the internet.

Visit HomeShop18.com Website

6OptrixStore.com

Innovative site selling eyeglasses, sunglasses, lenses with lens simulations, try on and great
prices. Discounts and many varieties of products present.

Excellent support and great collection!

Visit OptrixStore.com Website

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7Shopbychoice.com

They delivered in time and if talk about the price people got my product at good price as
compare to other. This is the fourth time that I have used shopbychoice during the past two years
and I have been always very pleased with the service. I consider them reliable.

I'm consistently pleased with ShopByChoice.com lowest prices and timely service. My ordered
product came well packaged and on schedule.

Visit Shopbychoice.com Website

8Buyereshops.com

Buyereshops.com offers a wide range of selective and branded products from different online
stores (E shops) which helps buyer to choose the product easily they want to buy. Whatever you
need, chances are you'll find it at buyershops.com.

9ArihantDigi

ArihantDigi is the best for all kinds of the latest and stylish branded products in the digital
camera genres. You can drive into it.

Amazing website great work had done nice features special products for photographer.

Excellent services from arihantdigi. Fast Delivery and affordable prices.

Yes. This site is very good for photographer, which is fulfilling their needs.

Visit ArihantDigi Website

10BazaarDelight.com

BazaarDelight.com offers the latest brands and the hottest deals across categories ranging from
Durable Home & Kitchen Appliances, Bestselling Games, Professional Cameras, Branded
Watches, Health & Beauty, Gifts, Home Decoration and lots of other amazing products.
Delivering right at your doorstep, shopping at BazaarDelight is a simple, secure, convenient and
hassle free experience.

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BazaarDelight.com also focuses on providing an excellent and friendly customer services and
express delivery for all the orders. The retailer also ensures to sell 100% genuine and brand new
products at reasonable prices!

Visit BazaarDelight.com Website

11WorldRankSolutions.com

12Snapdeal.com

13Yapaa.com

Online store stocking 25,000 baby products (diapers, clothes, gear, carriers, shampoos, diaper
bags, bath wash, diaper rash cream, changing mat & pads, toys, furniture), maternity wear,
apparel etc; brands: Fisher Price, Unspool, Pampers etc.

14Eyevilla.com

Eye villa is an online shopping website offering eyewear. Shop online and buy from varied
collections of sunglasses, eyeglasses, spectacles and contact lenses at best price. Get the best
deals on eyewear from here.

15Kartinmart.com

16Mibusy.com

The world’s First Personal Network

17123giftexpress.com

Best destination to buy elegant & exquisite products in wide range with Call of Duty facility &
shipping all over India.

18Zoogol.in

Zoogol.in is an online and offline shopping website offering 111% cash back on everything for
everyone. Get the best cash back deals on thousand of online or offline store listed.

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2.8 DIFFERNCE BETWEEN TRADITIONAL RETAILERS AND E TAILERS

S. No. Traditional Commerce E-Commerce

1 Scope is local or regional Scope is Global

2 Time required for business transaction is in Time required for business

terms of week. transaction is in terms of minutes
and seconds.

3 Product attributes are selected by seller. Product attributes are selected by

buyer.

4 Prices are listed by taking over view of local Prices are listed by taking over view
market. of global market

5 Service is available in between 9 a.m. to 5 24 hours service is available for all 7

p.m.in weekdays. days.

6 Marking focus is related to product position. Marketing focus is related to

customer relation.

7 Asset for traditional business is location of Asset to e-commerce is customer

shop. database.

8 Value proposition is related to product. Value proposition is related to

product, information and service.

9 Mode of payment is physically transfer of Mode of payment is electronically

money i.e. DD ,Cash, Cheque etc. i.e. electronic transfer of money
using credit cards, digital cash etc.

10 Transactions are taken place with help of Transactions are taken place without
paper. help of paper.

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3. FDI in multi-brand retail – Why government should worry about it?

1. FDI in retailing can upset the import balance, as large international retailers may prefer to
source majority of their products globally rather than investing in local products.

2. The opening up of the retail sector would affect the sales in the unorganized sector. As a
result, the employment it provides would be affected. In addition, by reducing the number of
intermediaries, organized retailing will lead to some job displacement.

3. Global retailers might resort to predatory pricing. Due to their financial power, they often sell
below cost in the new markets. Once the domestic players are wiped out of the market, foreign
players enjoy a monopoly position, which allows them to increase prices and earn profits.

4. It is said that FDI would provide employment opportunities. However, the fact is that they
cannot provide employment opportunities to semi-illiterate people. Though they can provide
employment opportunities like drivers, security guard etc. but this argument gets more attention
because in India semi-illiterate people in quiet large in number.

5. Indian retailers have yet to consolidate their position. The existing retailing scenario is
characterized by the presence of a large number of fragmented family owned businesses, who
would not be able to survive the competition from global players.

6. The organizational form of rural producers as they interact with Big Retail is still not being
done. Small farmers can undertake contract farming, but they have no bargaining power and will
be at the mercy of their buyers. Small producers need to be organized into farmer companies or
producer cooperatives that can deal with Big Retail from a much stronger position. So that their
interests are not lost.

7. Indian retailers have argued that since lending rates are much higher in India, Indian retailers,
especially small retailers, are at a disadvantageous position compared to foreign retailers who
have access to International funds at lower interest rates. High cost of borrowing forces the
domestic players to charge higher prices for the products.

8. Loss of cultural and ethical values due to more influence of the other cultures.

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9. Some fear that, if FDI is allowed in retailing then it would result in lowering of prices because
FDI will result in good technology, supply chain, etc. If prices were lowered then it would lower
the margin of unorganized players. As a result, the unorganized market will be affected.

10. FDI in retail trade would not attract large inflows of foreign investment since very little
investment is required to conduct retail business. Goods are bought on credit and sales are made
on cash basis. Hence, the working capital requirement is negligible. On the contrary; after
making initial investment on basic infrastructure, the multinational retailers may remit the higher
amount of profits earned in India to their own country.

FDI in multi-brand retail - Reasons to be happy

1. The global retailers have advanced management know how in merchandising and inventory
management and have adopted new technologies which can significantly improve productivity
and efficiency in retailing.

2. Entry of large low-cost retailers and adoption of integrated supply chain management by them
is likely to lower down the prices.

3. FDI in retailing can easily assure the quality of product, better shopping experience and
customer services.

4. They promote the linkage of local suppliers, farmers and manufacturers, no doubt only those
who can meet the quality and safety standards, to global market and this will ensure a reliable
and profitable market to these local players.

5. As multinational companies are spreading on their operation, regional players are also
developing their supply chain differentiating their strategies and improving their operations to
counter the size of international players. This all will encourage the investment and employment
in supply chain management.

6. Joint ventures would ease capital constraints of existing organized retailers.

7. FDI would lead to development of different retail formats and modernization of the sector.

8. Industry trends for retail sector indicate that organized retailing has major impact in
controlling inflation because large organized retailers are able to buy directly from producers at

41
most competitive prices. World Bank attributes the opening of the retail sector to FDI to be
beneficial for India in terms of price and availability of products as it would give a boost to food
products, textiles and garments, leather products, etc., to benefit from large-scale procurement by
international chains; in turn, creating jobs opportunities at various levels.

9. As foreign investors exploring their potentials in the retail sector are keen on developing malls
in India, the size of organized retailing is expected to touch $30 billion by 2010 or approximately
10 per cent of the total. This has initiated market-entry announcement from some retailers and
has signaled to international retailers about India‘s seriousness in promoting the sector.

10. India is already a key sourcing country for some global retailers. The entry of foreign
retailers is likely to further promote India‘s manufacturing and export sectors, leading to a
double bonus for the economy.

11. Also, the retail revolution can change country‘s perception across the globe, integrating it
seamlessly into world trade and economy.

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4. LITERATURE REVIEW:

Researchers have speculated that the Internet will serve to reshape the structure of retailing
(Peterson 1997). This is largely due to the fact that the Internet provides a new and exclusively
different method of distribution. The impetus of this phenomenon, as it relates to marketing
products and services to consumers, is the interface that exists between the machine and the
individual. Researchers have attempted to measure the effectiveness of online retailer websites;
included are issues in web atmospherics (Dailey and Heath 1999), as well as effectiveness based
on television advertising models (Eighmey and McCord 1998). In order to gain insight into how
dimensions are perceived by consumers, it is advantageous to investigate consumer perceptions
of retail image.

“FDI IN MULTI-BRAND RETAIL: IS IT THE NEED OF THE HOUR?” By Dr. Mamta Jain,
Assistant Professor, Department of EAFM, University of Rajasthan, Jaipur & Mrs. Meenal
Lodhane Sukhlecha, Assistant Professor, Subodh Institute of Management & Career Studies,
Jaipur. The paper talks about the need of opening FDI in multi-brand retail, facts and figure of
the Indian retail industry. The government is in a process to initiate a second phase of reforms, it
is cautiously exploring the avenues for multi-brand segment. Indians with an ability to spend
over USD 30,000 a year (PPP terms) on conspicuous consumption. Also, the challenges in
implementation of FDI in multi-brand retail have been discussed. The comparison with other
developing countries like China has been done in order to understand the scenarios there.

“FDI in India’s Retail Sector - More Bad than Good?” By Mohan Guruswamy, Kamal Sharma,
Jeevan Prakash Mohanty and Thomas J. Korah. This paper significantly focuses on negative
aspects of FDI in multi-brand retail implementation. It discusses critically the employment
aspect, foreign retailer’s view and their previous strategies, availability of skilled resources,
oppose from unorganized retailers etc.

“FDI in Retail Sector: India, Academic Foundation in association with ICRIER and Ministry of
Consumer Affairs, Food and Public Distribution (Govt. of India)”, by Mukherjee A & Patel N
(2008). The paper talks about the poor distribution system in India and mishaps happened due to
such system. The overall impact on the end consumer is also discussed in greater deal. The time
to market, quantity & quality of the products suffer due to such deficiencies in the food

43
distribution system. How best practices of international retailers, can benefit to overcome such
problems have been talked about and criticized.

Functional and Affective Components

Functional (cognitive) qualities have been characterized as tangible aspects including pricing,
merchandise quality and assortment, personnel, and service (Darden and Babin 1994). The
affective, (gestalt) qualities have been characterized as pleasantness of the shopping experience,
atmospheric attributes, convenience, and the self-concept [congruence] one perceives in
patronizing a given retailer (Darden and Babin 1994)). From this discussion, it is implied that the
image construct consists of two broad components (affective and functional), each consisting of
different dimensions.

Customers are key to a firm’s survival; as a result, several methods have been proposed to attract
new patrons and to maintain old ones. Lu and Moorthy (2007) study the application conditions of
coupons and rebates, whereas Subramaniam and Venkatesh (2009) employ auction-based
models. Among the available tactics, ORS and pricing strategies are two effective approaches
that are gaining popularity.

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5. RESEARCH OBJECTIVE

 To find out the customer perception about the Retailer and Etailer

 To know about the whom people give more importance that is Retailer or Etailer

 To find out before buying any product from where people collect information about
the product

 To find out overall action taken by customer when they are looking out for shopping

6. RESEARCH METHODOLOGY

The purpose of this research study is to find that to whom people give more importance Etailer
or Retailer and also trying to find out before buying any product from where people collect
information about the product. Researcher sends the questionnaire to approximately 200
participants, out of which only 45 participants are responded. A simple random sampling method
is used to select respondents.

Participants:

The current study is a survey study and for the same data was collected from a sample of 45
respondents in Mumbai. Sample includes over 15 years of age.

Data Collection Methods:

Sources of data collection : Primary data

Methods of data collection : Survey method (through Google Forms)
Questionnaire : Structured
Secondary Data
Secondary data refer to the data that has been already collected .the secondary data, which has
been used to carry out this study, are as follow:
Books, Journals, Magazines, Newspapers
Industry Reports
Company‟s internet site
Some other relevant STUDY MATERIAL and websites

45
6.1 Primary Data Collection:

a) Demographic Profile of respondents

Age Group

Age Frequency Percentage

15-25 39 86.67%
26-35 6 13.33%
36-45 0 0%
46 and 0 0%
above

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Gender

Age Frequency Percentage

M 33 73.33%
F 12 26.67%

Education
Education Frequency Percentage
X 2 4.44%
XII 1 2.22%
Graduate 6 13.33%
Post-Graduate 36 80%
Other 0 0%

Occupation
Occupation Frequency Percentage
Business 1 2.22%
Service 1 2.22%

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 Student 42 93.33%
Housewife 0 0%
Others 1 2.22%

Monthly Income (In Rupees)

Income Frequency Percentage
Upto 10000/- 20 44.44%
10001- 20,000 10 22.22
20001- 30,000 8 17.77%
above 30,000 7 15.55%

b) Questionnaire for data collection:

1. Who is the major decision maker for purchasing any product in your family?
Major decision maker Frequency Percentage
You 21 46.67%
Father 15 33.33%
Mother 08 17.77%
Other 0 0%

2. How do you collect information for any product before buying?

Information Frequency Percentage
Visit retailer 10 22.22%
Internet 30 66.67%
Friends and relatives 3 6.67%
Other 2 4.22%

3. What type of product you purchase from retail outlet?

Type of Product Frequency Percentage

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 Personal care 29 64.44%
Clothing 36 80.00%
Electronics 25 55.55%
Footwear 33 73.33%
Home appliances 30 66..66%

4. What type of product you purchase from Etailer (Online buying)?

Type of product Frequency Percentage
Personal care 10 22.22%
Clothing 24 53.33%
Electronics 22 48.89%
Footwear 15 33.33%
Home appliance 12 26.67%
I don't buy Online 4 8.88%

5. Do you negotiate for the product at retail outlet?

Will negotiate Frequency Percentage

Yes 27 60%
No 18 40%

6. Whom do you give more preference to …

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 Preference Frequency Percentage
Retailer 29 64.44%
Etailer (Online buying) 16 35.55%

7. According to you who gives the product at an affordable price?

Product affordable price Frequency Percentage

Retailer 14 31.11%
Etailer (Online buying) 31 68.89%

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8. According to you who gives more discounts?
More discount Frequency Percentage
Retailer 12 26.67%
Etailer (Online Buying) 33 73.33%

9. How do you make payment?

Payment Frequency Percentage
Cash 35 77.77%
Debit 7 15.55%
Credit 2 4.44%
Online 1 2.22%

Measures

The data for survey study was collected through a structured questionnaire filled by the

participants in person. The researcher elucidates the purpose of the study to the respondents and

assured the anonymity and confidentiality of the information they provided. Well established

measures having the necessary properties were used to assess the study.

Demographic Variables:

The demographic questions were used to understand the characteristics of the participants.

Participants were asked to report demographic information including age, education, salary,

marital status.

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6.2 Findings and Suggestions

Finding result shows from the secondary and primary data collection present market condition in
India. There are more number of people who are purchasing there product from the retails but
also other hand purchasing from etails also increasing. More than 50% of the population is less
than 25 years of age and strong growth is expected to continue in this age bracket.

The youngster are more looking out for new products and discount on e commerce platforms
which is available at a finger of the button on the Smartphone or on personal computers.

The most no. of people are attracted towards ecommerce platforms are student as compare to the
working professional and as per my survey 42 out of 45 people are student who look out for
more deals and discount.

There are self decision taken by 21 people out of 45 people for purchasing any kind of products
from Retailer or Etailer.

There are 30 people out of 45 who look out for information about the products on the internet
and 10 people visit retail store for getting the information about the product.

The majority of the people purchasing the cloth from Retail store because they want touch and
feel aspect and the majority of the people purchasing electronic items from the Etailers.

In increasing in number of purchasing of product from the Etail (E commerce) that will effect on
giant retail but that will not effect because small retailer situated in residential area and they are
selling product in small quantities and they are selling like spice, grain, soaps, toothpaste etc;
which is more important for lower and medium people.

We can see this time young generation more interested in Etailing because they get more option
at one place and there are not required to move out of home for purchasing of product also we
can see in Etailing there are lot of numbers of people who are working in office also they can
purchase their product from their office, whatever they want.

52
Suggestions:

So, the government should put some conditions in this game like:

1. The very first condition is if a foreign player will enter then they have to procure goods from
local manufacturers.

2. The second one is there will be 50% reserved employment for rural youth.

3. All the big players need to spend 50% of FDI in Infrastructure, logistic and agro-processing.

4. They need to pay attention towards agriculture food processing to boost Indian economy.

5. For protecting local vendors these retailers should operate only in big cities where minimum
population is one million.

6. Without rural electricity and large-scale new investment in water management, farmers cannot
produce more, even with technical inputs from big retail. These concerns should be addressed
while allowing FDI in retail.

7. The government will have to be fair and evenhanded between domestic and foreign organized
retailers.

If half the jobs in FDI-funded retail outlets should be reserved for rural youth, why not do the
same for Pantaloon, Reliance, or Shoppers Stop? If a percentage of FDI coming in is to be spent
towards building up of back-end infrastructure, logistics or agro-processing, surely the same
should apply to purely Indian players.

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7 CONCLUSIONS

On the basis of analysis of the questionnaire I have found that the maximum no. of people who
Purchasing the products from Retailer or Etailer is in the age group of 15 to 25.
There are maximum no. of customers who are educated and they take self decision for
purchasing any kind of product.
The youngster are more looking out for new products and discount on e commerce platforms
which is available at a finger of the button on the Smartphone or on personal computers.
The majority of the people select Retail outlet at the time of apparel shopping where as the
majority of the people preferred the etailer for the Electronic items.
The more no. of people who negotiate for the products at the Retail outlet but when they are
shopping on ecommerce website they do not negotiate for the products.
The maximum no. of people give preference to Etail rather than Retail store.
The more no. of people believe that the Etailer give the products at affordable prices as compare
to the Retailers.
The maximum no. of people preferred the cash on delivery option for making the payments

Limitations:

Due to time restrictions, data collected from Mumbai only. So, this study cannot represent the
view of entire country. Details survey studies with larger number of participants are required for
appropriate view.

54
8 REFERENCE:

In this project report, while finalizing and for analyzing quality problem in details the following
Books, Magazines/Journals and Web Sites have been referred. All the material detailed below
provides effective help and a guiding layout while designing this text report.

Books

Principles of Marketing –Philip Kotler & Kevin keller edi. 12

Market Research – D.D. Sharma
Research Methodology – C.R. Kothari

Websites

http://en.wikipedia.org/wiki/Retail

http://www.investopedia.com/terms/e/electronic-retailing-e-tailing.asp

http://searchcio.techtarget.com/definition/e-tailing

http://www.quora.com/How-many-e-commerce-websites-are-there-in-India-across-categories

http://en.wikipedia.org/wiki/E-commerce_in_India

http://www.statista.com/markets/413/e-commerce/

http://sbaer.uca.edu/research/sma/2001/67.pdf

http://www.pitt.edu/~ckemerer/optimizing-etailer-profits.pdf

http://www.emarketer.com/Article/Worldwide-Ecommerce-Sales-Increase-Nearly-20-
2014/1011039#sthash.1IwGbVoQ.dpuf

https://www.internetretailer.com/2013/02/05/global-e-commerce-tops-1-trillion-2012

http://www.thetoptens.com/ecommerce-websites-india/

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9 APPENDIX

PERCEPTION OF CUSTOMER REGARDING RETAILER VS ETAILER

Section-A: Demographic Profile:

Name
Age
o 15-25
o 26-35
o 36-45
o 46 and above

Sex
o M
o F

Education
o X
o XII
o Graduate
o Post-Graduate
o Other

Occupation
o Business
o Service
o Student
o Housewife
o Others

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 Monthly Income (In Rupees)
o Upto 10000/-
o 10001- 20,000
o 20001- 30,000
o above 30,000

Section-B: Questionnaire for data collection:

1. Who is the major decision maker for purchasing any product in your family?
o You
o Father
o Mother
o Other

2. How do you collect information for any product before buying?

o Visit retailer
o Internet
o Friends and relatives
o Other

3. What type of product you purchase from retail outlet ?

o Personal care
o Clothing
o Electronics
o Footwear
o Home appliances

4. What type of product you purchase from Etailer (Online buying)?

o Personal care
o Clothing
o Electronics
o Footwear
o Home appliance
o I don't buy Online

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5. Do you negotiate for the product at retail outlet ?
o Yes
o No

6. Whom do you give more preference to ....

o Retailer
o Etailer (Online buying)

7. According to you who gives the product at an affordable price?

o Retailer
o Etailer (Online buying)

8. According to you who gives more discounts ?

o Retailer
o Etailer (Online Buying)

9. How do you make payment ?

o Cash
o Debit
o Credit
o Online

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