A project Report on

RISE OF E-COMMERCE IN THE INDIAN SCENARIO

Submitted to U.G. Department of Commerce Khallikote (Autonomous) College
Berhampur in partial fulfilment for the award of Bachelor of Degree in
Commerce

By
Deepak Kumar Subudhi
Exam Roll.no: 011803CM101
Class Roll.no : BC-18-109
Under the guidance of
Sri Pravat Sahoo, OES
Assistant Professor of Commerce

U.G. DEPARTMENT OF COMMERCE,

KHALLIKOTE (AUTONOMOUS) COLLEGE, BERHAMPUR

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Sri Pravat Sahoo, OES
Assistant Professor of Commerce
Post Graduate Department of Commerce
Khallikote(Autonomous) College,
Berhampur

CERTIFICATE

This is to certify that the project report entitled STUDY ON RISE OF E-COMMERCE
IN THE INDIAN SCENARIO is a record of research done by Deepak Kumar Subudhi
during the period of study under my guidance and supervision. This thesis has not formed the
basis for the award of any degree, diploma, fellowship or other similar title. It represents an
independent work on the part of the candidate.

Berhampur

Date:

Signature of the guide

2
 DECLARATION

I hearby declare that the thesis entitled STUDY ON RISE OF E-COMMERCE IN THE
INDIAN SCENARIO Submitted to U.G. Department of Commerce, Khallikote
(Autonomous) College, Berhampur for the award of Bachelor Degree in Commerce is a
bonafide record of independent work done by me under the guidance and supervision of of Sri
Pravat Sahoo, Assistant Professor of Commerce, U.G. Department of Commerce, Khallikote
(Autonomous) College, Berhampur and that this work has not been submitted either in whole
or in part elsewhere for any other degree.

Berhampur

Date:

Deepak Kumar Subudhi

Signature of the
Candidate

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 Contents
CHAPTER- INTRODUCTION Page
1 no.
1.1 Introduction 6
1.2 Importance of study 8
1.3 Objectives of the study 9
1.4 Research Methodology 9
1.5 Limitations of the study 10
CHAPTER- E commerce Development in India
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2.1 Growth of B2B E Commerce in India 18
2.2 GST for Growth of E Commerce 18
2.3 Rise in Internet users giving fillip to E Commerce 19
2.4 Merger and Acquisitions in E Commerce Industry 19
2.5 Recommendations for Improvement of E Commerce 20
CHAPTER- Impact of E Commerce
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3.1 Impact on markets 21
3.2 Impact on Retailers 22
3.3 Impact on Supply chain management 23
3.4 Impact on Employment 24
3.5 Impact on Customers 24
3.6 Social Impact 25
CHAPTER- A Successful E Commerce in India (Flipkart)
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4.1 Acquisition 27
4.2 Regional Market 28
4.3 Factors that lead to the grands success of Flip kart 29

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 4.4 Flipkart Marketing Strategy 30
4.5 Flipkart awards & recognition 30
Chapter-5 DATA ANALYSIS 32-44
Chapter-6 FINDING & CONCLUSION 45-47
BIBILOGRAPHY 48

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 CHAPTER-1
1.1 INTRODUCTION

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

• The gathering and use of demographic data through Web contacts

• Electronic Data Interchange (EDI), the business-to-business exchange of data

• E-mail and fax and their use as media for reaching prospects and established customers
(for example, with newsletters)

• Business-to-business buying and sellingThe security of business transactions

Today Ecommerce is an integral part of business because of various reasons like:

• Ease of use & Accessibility all across the globe

• Great variety & easy compassion of products from different vendors

• Trusted payment channels

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 • Shopping can be done sitting in the convenience of home shopping, hence it is less time
consuming.

It is therefore very important for any new entrepreneur to understand the significance of E-
Commerce and should know how to utilize this tool for the growth and development of
business. So, whether you have an existing business or launching a brand new business,
whether the volume of your business is large or small, you can always generate profit by
+demonstrating your products or services online, thereby acquiring a large amount of viewer
exposure. In concise, buying and selling will result in profits and returns. There are so many
factors which makes ecommerce to come to the fore front in today's world. Saving precious
time involved in business transactions is really a prominent factor. Like for instance, net
banking makes it easy to carry out money and baking transactions in a break neck speed as
compared to the real banking scenario. This asserts the fact that Ecommerce is beneficial to
both business and consumer wise as payment and documentations can be completed with
greater efficiency and reliability. Another important factor determining the flow of whole
business is connectivity. Connectivity is very important for both consumers and business.
Ecommerce provides better connectivity for all the potential candidates all over the globe, thus
helping in enhancing the business without any geographical barriers. From the view point of
the customer, Ecommerce is a good platform for hassle free shopping by sitting in your home.
The customer can browse through all the products and services available and can review and
compare the prices of the similar products available in the online space. In global market
scenario, the emergence of Ecommerce as a forerunner has opened up various windows of
opportunities for a variety of online companies and investors. More and more resources are
being directed into electronic securities, internet facilities, business plans and new technologies
due to the boom in the space of E-commerce. As a result various new markets have emerged

from Ecommerce itself giving a boost to the global market.

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1.2 Importance of the ECommerce –

1. Exploitation of new Business-

Broadly speaking, electronic commerce emphasizes the generation and exploitation of new
business opportunities and to use popular phases: “generate business value” or “do more
with less”.
2. Enabling the Customer-
Ecommerce is enabling the customer to have an increasing say in what products are
made, how products are made and how services are delivered movement from a slow
order fulfillment process with little understanding of what is taking place inside the
firm, spaceto a faster and open process with customers having greater control.
3. Improvement of Business Transaction-
E commerce endeavors to improve the execution of Business transaction over various
networks.
4. Effective Performance-
It leads to more effective performance i.e. better quality, greater customer satisfaction
and better corporate decision making.
5. Increasing of Revenue-
Firm use technology to either lower operating cost or increase revenue. E commerce has the
potential to increase revenue by creating new markets for old products, creating new
information-based products, and establishing new service delivery channels to better serve
and interact with customers. The transaction management aspect of E commerce can also
enable firms to reduce operating costs by enabling better coordination in the sales,
production and distribution processes and to consolidate operations and reduce overhead.

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 1.3 Objective of E commerce-
 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 behavior of consumers in
India.

 To identify who are the online shoppers in terms of demography.

 To understand the customer awareness on Flipkart.com

 To determine the factors responsible for customer satisfaction.

1.4 Research Methodology

Sources of Data

For having the detailed study about this topic, it is necessary to have some of the secondary
information, which is collected from the following:-Books, Websites and Newspapers. So in
this basically secondary data is used in collecting the information. The sources of data are:

Books

• Wiki books

• Kalyani Publishers

Websites:

• Wikipedia
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 • Citizendium

Newspapers:

• Hindustan Times

Type of Study
The research design or type of study specifies the methods and procedures for conducting a
particular study. The type of research design applied here are “Descriptive” and “Desk
Analysis” as the objective is to have knowledge about the ecommerce in global Scenario.
Descriptive study means situation, but not
the causal linkages among its different elements. Descriptive studi es (such as a cross-section
study) help in generating hypothesis on which further research may be based. Desk analysis is
to Gather and analyze information, already available in pint or published on the internet.

1.5Limitations of the E commerce-

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

 The study was restricted to Bangalore city only.

 The study is mainly concentrated on Flipkart.com.
 The sample of the size will be limited to time and resources.
 The information will be collected valid until there is no any technical change or any
innovation.
 The result is assuming that respondents have given accurate information.

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What are the different types of e-commerce?

The major different types of e-commerce are:

• Business-to-business (B2B);
• Business-to-consumer (B2C);
• Business-to-government (B2G);
• Consumer-to-consumer (C2C); and Mobile commerce (m-
commerce).

What is B2B e-commerce?

Business-to-consumer e-commerce, or commerce between companies and consumers, involves

customers gathering information; purchasing physical goods (i.e., tangibles such as books or

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consumer products) or information goods (or goods of electronic material or digitized content,
such as software, or ebooks); and, for information goods, receiving products over an electronic
network.
It is the second largest and the earliest form of e-commerce. Its origins can be traced to online
retailing (or e-tailing).Thus, the more common B2C business models are the online retailing
companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and
ToysRus. Other B2C examples involving information goods are E-Trade and Travelocity.
The more common applications of this type of e-commerce are in the areas of purchasing
products and information, and personal finance management, which pertains to the
management of personal investments and finances with the use of online banking tools (e.g.,
Quicken).
B2C e-commerce reduces transactions costs (particularly search costs) by increasing consumer
access to information and allowing consumers to find the most competitive price for a product
or service. B2C e-commerce also reduces market entry barriers since the cost of putting up and
maintaining a Web site is much cheaper than installing a “brick-and-mortar” structure for a
firm. In the case of information goods, B2C e-commerce is even more attractive because it
saves firms from factoring in the additional cost of a physical distribution network. Moreover,
for countries with a growing and robust Internet population, delivering information goods
becomes increasingly feasible.

What is B2G e-commerce?

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Business-to-Government e-commerce or B2G is generally defined as commerce between
companies and the public sector. It refers to the use of the Internet for public procurement,
licensing procedures, and other government-related operations. This kind of e-commerce has
two features: first, the public sector assumes a pilot/leading role in establishing e-commerce;
and second, it is assumed that the public sector has the greatest need for making its
procurement system more effective.
Web-based purchasing policies increase the transparency of the procurement process (and
reduce the risk of irregularities). To date, however, the size of the B2G e-commerce market as
a component of total e-commerce is insignificant, as government eprocurement systems remain
undeveloped.

What is C2C e-commerce?

Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals

or consumers.

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This type of e-commerce is characterized by the growth of electronic marketplaces and online
auctions, particularly in vertical industries where firms/businesses can bid for what they want
from among multiple suppliers.16 It perhaps has the greatest potential for developing new
markets.
Consumer to consumer ecommerce has many benefits. The business model of C2C is very
interesting. The primary benefit which consumers get is reduction in cost as compared to
buying space of their ads on other ecommerce sites which seem to be quite expensive. People
interested in selling their items can post their respective items for free or with minimal charge
depending on the c2c website. This leads to formation of a profitable customer base. C2C
websites form a perfect platform for buyers and sellers who wish to buy and sell products of
similar interest. This leads to increase in visitor to customer conversion ratio. Another benefit
is that business owners can easily afford the low cost of maintaining C2C websites and earn
good profits instead of buying or hiring a shop which could cost a lot. Another major plus point
these websites have is that personal items like watch ,shoesetc can be purchased and sold with

ease which is not in case of other types of ecommerce.

What is M-commerce?

M-commerce (mobile commerce) is the buying and selling of goods and services through
Wireless technology-i.e., handheld devices such as cellular telephones and personal digital
assistants (PDAs). Japan is seen as a global leader in m-commerce. As content delivery over
wireless devices becomes faster, more secure, and scalable, some believe that m-commerce
will surpass wire line e-commerce as the method of choice for digital commerce transactions.
This may well be true for the Asia-Pacific where there are more mobile phone users than there
are Internet users.

BENEFITS OF E-COMMERCE

Few innovations in human history encompass as many potential benefits as E-Commerce does.
The global nature of the technology, low cost, opportunity to reach hundreds of millions of
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people, interactive nature, variety of possibilities, and resourcefulness and growth of the
supporting infrastructure (especially the web) result in many potential benefits to organisations,
individuals, and society. These benefits are just starting to materialize, but they will increase
significantly as ECommerce expands. It is not surprising that some maintain that the E-
Commerce revolution is just 'as pro- found as the change that came with the industrial
revolution.

Benefits to Organizations

• Electronic commerce expands the market lace to national and international market with
minimal capital outlay, a company can easily and quickly locate more customers, the
best suppliers, and the most suitable business partners worldwide.

• Electronic commerce decreases the cost of creating, processing, distributing, storing,

and retrieving paper-based information. For example, by introducing an electronic
procurement system, companies can cut the purchasing administrative costs by as much
as 85 percent.

• Ability for creating highly specialized businesses. For example, dog toys which can be
purchased only in pet shops or department and discounts stores in the physical world
are sold now in a specialized www.dogtoys.com (also see www.cattoys.com).

• Electronic commerce allows reduced inventories and overhead by facilitating “pull”

type supply chain management. In a pull-type system the process starts from customer
orders and uses just-in-time manufacturing.

• The pull-type processing enables expensive customization of products and services

which provides competitive advantage to its implementers.
Customers can receive relevant and detailed information in seconds, rather than days or
weeks.

• Electronic commerce makes it possible to participate ate in virtual auctions.

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 • Electronic commerce allow customers to interact with other customers in electronic
communities and exchange ideas as well as compare experiences.

• E-commerce facilitates competition, which results in substantial discounts..

Benefits to Society

The benefits of E-Commerce to society are as follows:

• Electronic commerce enables more individuals to work at home and to do less traveling
for shopping, resulting in less traffic on the roads and lower air pollution.

• Electronic commerce allows some merchandise to be sold at lowest prices, so less

affluent people can buy more and increase their standard of living.

• Electronic commerce enables people in third world countries and rural areas to enjoy
products and services that otherwise are not available to them.

Electronic commerce facilitates delivery of public services, such as health care, education, and
distribution of government social services at a reduced cost and/or improved quality. Health
care services, e.g., can reach patients in rural areas.

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 CHAPTER-2

E-commerce development inIndia

E-commerce Size in India

The E-commerce business is expected to form the largest part of Indian economy with a value
of approximately USD 100 billion by 2020. E-commerce is facilitating MSMEs to scale up
their operations by providing a means of financing, technology and training. Evolution of
technology led innovations such as digital payments, hyper-local logistics, mass customer
engagements and digital advertisements have enabled the E-commerce industry to grow
speedily.
Within the E-commerce industry, the Gross Merchandise Value (GMV) is an important metric
for valuations, especially during the early stages of growth. The majority of B2C E-commerce
companies report low profitability even in developed economies and the situation in India is no
different. While the GMV is rising, the companies have to suffer an overall loss as the
Ecommerce companies establish themselves. The GMV for B2C segment in India was
approximately USD 16 billion in 2015.

E-commerce size ($ billions) in India

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2.1 Growth of B2B E-commerce in India

The growth of the B2B E-commerce segment is relatively slower compared to the B2C
Ecommerce segment in India. This is because the entry barriers in the B2B E-commerce are
more than those in the B2C E-commerce industry. A B2B E-commerce company has to have a
strong business model, long term logistical arrangements with rail, road and ports and also
adhere to stringent regulatory and taxation laws. With an aim to tap the huge potential in the B2B
Ecommerce market in India, apart from the existing B2B companies, leading B2C companies
have also started to build their own platforms for small business owners and traders. This is
expected to be supported by rising expectations among a growing number of companies buying
and selling online and a shift to conduct procurement transactions through the Internet.
Understanding this untapped potential of the B2B Ecommerce industry, the Government has
allowed 100% FDI in B2B E-commerce, which has enabled globally successful B2B
Ecommerce companies such as Walmart and Alibaba to evince interest in the India B2B
Ecommerce industry.

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2.2 GST for Growth of E-commerce
The Government of India is going to undertake a big taxation reform by way of introducing a
Goods and Services Tax (GST) which is expected to enhance the growth of E-commerce. GST
will enforce a single comprehensive indirect tax regime that will be applicable across all states
on the supply of goods and services. The implementation of GST is expected to subsume all
taxes like the central excise duty, service tax and additional customs duty at the central level
and VAT, CST, entry tax etc. At the state level. GST will enhance operational efficiency of the
Ecommerce industry in many ways like:

• Transparency and simplification of taxes across the borders in India

• Elimination of the incidence of double-taxation and improvement in the efficiency of

supply chain.
Logistics service providers can leverage seamless hub-and-spoke models for delivery resulting
in lower costs and fewer bottlenecks. Warehouses can be set-up keeping in mind business
objectives rather than for reduction in incidence of tax.

2.3 Rise in Internet Users Giving Fillip to E-commerce

In 2014, the number of internet users in India stood at around 280 million and it was estimated
that the number would rise to around 640 million by 2019. An increase of almost 70 million
Internet users in a year is very significant. The rise of mobile internet users is also expected to
touch 457 million by 2019. Comparing this with the projected growth, the E-commerce in India
by the year 2020 is expected to touch USD 100 billion.

2.4 Mergers and Acquisitions in E-commerce Industry

E-commerce companies in India have also witnessed consolidation in the past 2-3 years. Larger
E-commerce companies have been acquiring smaller companies to either diversify their
product range or to enhance business operations. Such mergers and acquisitions have mainly
centered on companies in the logistics, payment solutions and digital advertising areas. It is
estimated that a total of 930 M&A deals with a cumulative value of USD 26.3 billion took

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place in India in 2015, of which, 259 deals worth USD 2.43 billion pertained to the E-
commerce industry. Also, many strategic deals took place in the hyper-local, food-tech and real
estate listing segments.

Private Equity/Venture Funding of E-commerceCompanies in India

Private equity and venture fund investments reached an all-time high in 2015 at USD 20 billion
in India. The key sectors that saw investments were Information Technology with 666 deals
worth USD 4.49 billion, followed by consumer goods with 280 deals worth USD 4.69 billion.
The majority of these investments have been concentrated in e-tailing (70% of investment),
followed by online classifieds (17%) and lastly online travel and taxi (9%). This aggressive
drive comes at a point when capital is becoming scarce for top venture-backed online retail
companies. There is also a reduction in the dependence on discounts as a growth strategy.
Investors are currently focusing on start-ups that may scale slowly but have sound
fundamentals and strong business models. In essence, these start-ups should have the ability to
survive any scenario. Therefore, investors today are interested in start-ups in sectors like health
care and education which, by the nature of their offerings, will provide sustainable models and
create legacy firms.

2.5 Recommendations for Improvement of E-commerce

As a result of the initiatives taken by the government, the country can soon become the fastest
growing E-commerce market in the world as both the number of Internet users as well as the
number of online shoppers/users is expected to grow in coming years. While in India only
about 25% of the Internet users buy or sell goods and services online, it is nearly 55% in China.
This indicates the huge growth potential of the Indian E-commerce sector. Moreover, with
growth of the Indian economy and subsequent improvement in the per capita income in future,
aspirations of Indian consumers will increase which will have a positive impact on E-
commerce sales.

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 CHAPTER-3
IMPACT OFECOMMERCE
3.1 Impact on Markets
• Promotion of Products-Through Ecommerce product can be promote in an interesting
way and with lots of information directly to the customers which reduces the cost of
offline promotion because internet can interact a lot of customers and save amount of
cost of advertisements can be used in different areas of business.

• Customer Service-Customer service can be enhanced because customers can search

detailed information about product or marketplace which offers the product and can
compare the prices of different market places.

• Brand Image- New business men can establish their brands on internet by using
attractive images at an affordable price.

• Advertisement- Traditionally the advertisements were one- way to attract customers

and let them know about the new product or market place but now through e-commerce

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 advertisements are two-way in which customer can browse the market place and
product, can compare the prices and also can ask questions to the online retailers.

• Customization-Customized products can be made available according to the needs of

customers. It will make a good place of business in market and new customers will be
attracted.

• Order Making Process-Traditionally to take orders from customers, intermediaries are

used which takes a lot of time and expenses but with e-commerce the order taking is so
easy which reduces a lot of time and expenses and they can make more sales.

• Customer Value-Traditionally attaining a big value from the customers was the main
interest. Only customers were attracted and it was the biggest target but now sellers
make long term relationships with customers to attain long term value by offering them
special discounts.

3.2 Impact on Retailers

• Turnover-Due to e-commerce the turnover of offline retailers has reduced which is a

warning signal for the enterprise.

• Profit Margin-On the arrival of online shops in the market offline retailers are
suffering from pricing. To survive in market, they have to sell product in law prices
which covers only their operational costs and they do not get any profit margin.

• Discount-Offline retailers sell their products at discounted rates because online stores
offer heavy discount to the customers and to stay in the market and to attract the
customers they have to sell the products at discounts.

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 • Variety of Stocks-Variety of goods is offered by online stores to which offline retailers
cannot compete because at the end of year the left over stock can give a huge loss to the
retailer.

• Customer Services-Offline retailers are providing different services at which online

stores fails. Repair and goods of services, home delivery and after sales services also
like online shops.

• Window Shopping-Low prices offered by online stores leads to window shopping by

customers at physical stores and they buy product online. Due to which they have
prospective customer’s more than actual customers.

Advertisement-Offline retailers focus only on the advertisements so that they can attract
customers and increase their sales. They do not leave a single chance to advertise

3.3 Impact on supply chain management

For a long time, companies had been troubled by the gap between the benefits which supply
chain technology has and the solutions to deliver those benefits. However, the emergence of e-
commerce has provided a more practical and effective way of delivering the benefits of the
new supply chain technologies.

E-commerce has the capability to integrate all inter-company and intra-company functions,
meaning that the three flows (physical flow, financial flow and information flow) of the supply
chain could be also affected by e-commerce. The affections on physical flows improved the
way of product and inventory movement level for companies. For the information flows, e-
commerce optimized the capacity of information processing than companies used to have, and

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for the financial flows, e-commerce allows companies to have more efficient payment and
settlement solutions.

In addition, e-commerce has a more sophisticated level of impact on supply chains: Firstly, the
performance gap will be eliminated since companies can identify gaps between different levels
of supply chains by electronic means of solutions; Secondly, as a result of e-commerce
emergence, new capabilities such implementing ERP systems, like SAP ERP, Xero, or
Megaventory, have helped companies to manage operations with customers and suppliers. Yet
these new capabilities are still not fully exploited. Thirdly, technology companies would keep
investing on new e-commerce software solutions as they are expecting investment return.
Fourthly, e-commerce would help to solve many aspects of issues that companies may feel
difficult to cope with, such as political barriers or cross-country changes. Finally, e-commerce
provides companies a more efficient and effective way to collaborate with each other within the
supply chain

3.4 Impact on employment

E-commerce helps create new job opportunities due to information related services, software
app and digital products. It also causes job losses. The areas with the greatest predicted jobloss
are retail, postal, and travel agencies. The development of ecommerce will create jobs that
require highly skilled workers to manage large amounts of information, customer demands, and
production processes. In contrast, people with poor technical skills cannot enjoy the wages
welfare. On the other hand, because e-commerce requires sufficient stocks that could be
delivered to customers in time, the warehouse becomes an important element. Warehouse
needs more staff to manage, supervise and organize, thus the condition of warehouse
environment will be concerned by employees.

3.5 Impact on customers

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E-commerce brings convenience for customers as they do not have to leave home and only
need to browse website online, especially for buying the products which are not sold in nearby
shops. It could help customers buy wider range of products and save customers’ time.
Consumers also gain power through online shopping. They are able to research products and
compare prices among retailers. Also, online shopping often provides sales promotion or
discounts code, thus it is more price effective for customers. Moreover, e-commerce provides
products’ detailed information; even the in-store staff cannot offer such detailed explanation.
Customers can also review and track the order history online.

However, e-commerce lacks human interaction for customers, especially who prefer face-to-
face connection. Customers are also concerned with the security of online transactions and tend
to remain loyal to well-known retailers. When the customer regrets the purchase of a product, it
involves returning goods and refunding process. This process is inconvenient as customers
need to pack and post the goods. If the products are expensive, large or fragile, it refers to
safety issues.

3.6 Social impact

E-commerce has huge impact on the economy and society. Ecommerce allows for the
globalization of markets and created a society based on knowledge and information.

B2B is rapidly growing in the world, that leads to lower cost and then improves the economic
efficiency and also bring along the growth of employment.

Employment growth is based on the increase of jobs in specific markets related to e-

commerce, such as, new products, market research, software sales, and online service. These
jobs affect many countries where e-commerce is thriving. Specific institutions (education,
health, government services) may also be affected by e-commerce.

E-commerce is not a new industry, technically speaking, but it is creating a new economic
model. Most people agree that ecommerce will positively impact economic society in the
future, but in its early stages its impacts are difficult to gauge. Some have noted that e-
commerce is a sort of incorporeal revolution. Ecommerce has numerous social benefits: one,
the cost of running an e-commerce business is very low when compared with running a
25
physical store; two, there is no rent to pay on expensive premises; and three, business processes
are simplified and less man-hours are required to run a typical business smoothly. In the area of
law, education, culture and also policy, e-commerce will continue to rise in impact. E-
commerce will truly take human beings into the information society.

CHAPTER-4

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 A successful E-COMMERCE in India – Flipkart

Flipkart is an electronic commerce company headquartered in Bangalore. It has launched its

own product range under the name "DigiFlip" with products including tablets, USB flash
drives, and laptop bags. As of April 2017, the company was valued at $11.6 billion.
Flipkart was founded on 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian
Institute of Technology Delhi. They worked for Amazon.com, and left to create their new
company incorporated in October 2007 as Flipkart Online Services Pvt. Ltd. . Flipkart started

27
by selling books online and popularised the idea of buying books online in India. Flipkart now
employs more than 33,000 people.

In October and November 2011, Flipkart acquired the websites Mime360.com and
Chakpak.com. Later, in February 2012, the company revealed its new Flyte Digital Music
Store. Flyte, a legal music download service in the vein of iTunes and Amazon.com, offered
DRM-free MP3 downloads. But it was shut down on 17 June 2013 as paid song downloads did
not get popular in India due to the advent of free music streaming sites.

After its 2014 Big Billion Sale, Flipkart carried out a second Big Billion Sale. Where it is
reported that they saw a business turnover of $300 million in gross merchandise volume.

In 2015, Flipkart bought a minority stake in navigation and route optimization start-up

MapmyIndia to help improve its delivery using Map my India assets.

4.1 Acquisitions
• 2010: WeRead, a social book discovery tool.
• 2011: Mime360, a digital content platform company.
• 2011: Chakpak.com, 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, an Indian e-retailer in electronics. Flipkart has bought the company for
an estimated US$25 million. Letsbuy.com was closed down and all traffic to Letsbuy has
been diverted to Flipkart.
• 2014: Acquired Myntra.com in an estimated ₹20 billion (US$310 million) deal.
• 2015: Flipkart acquired a mobile marketing start-up Appiterate as to strengthen its mobile
platform.
• 2016: Flipkart’s Myntra acquires rival fashion shopping site Jabong for $70 million.
• 2016: In April, Flipkart acquired payment start-up PhonePe.
• 2017: In January, Flipkart funded Parenting Network TinystepWith $2 Million.

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• 2017: In April, in exchange for an equity stake in Flipkart, eBay agreed to make a $500
million cash investment in and sell its eBay.in business to Flipkart; however, according to a
company statement eBay.in would continue to operate as a separate entity from Flipkart.
• 2017: In July, Flipkart offered Snapdeal a amount of $700$800 million, but Snapdeal
rejected its deal as they wanted a sum of minimum $1billion cash.

4.2Regional Market
The company is also busy switching to selling music, Movies, mobile phone and game, besides
books. Flipkart is also deepening its presence in book selling by targeting the regional language
book market; which has largely been untapped "More books are rending in regional languages.
It is tough to get a book supplier on board, but once that is in place, this business will further
explode.

Things are easier said than done! To realize our dreams and that also in such a grand manner is
really a tough task. The founders of Flipkart have probably conquered their dreams with the
amazing Success of Flipkart. Flipkart is something which has really opened up the Indian e-
commerce market and that also in a big way.

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

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The company started from 2 employees and now has around 30000 employees. 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 mote investments. The company opened its first warehouse in
Bangalore and later on opened warehouses in Delhi, Kolkata 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 helps 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. 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, lndiaplaza, Tradus, Infibeam, Yebhi etc. The electronic market share is distributed
among them in different unknown proportions.

4.3 Factors that lead to the grand success of Flipkart

• They always strove to provide great customer service. Flipkart customers are happier
than with some of their competitors like Tradus.in, IndiapJaza.eom; I have myself
experienced this couple of times.

• Their website is great, easy to use, easy to browse through the products, add products to
wish list or to a cart, get product reviews and opinions, pre-order products, make
payments using different method, in short hassle-free and convenient,

• A very important point is that they introduced the option of cash on delivery and card
on delivery methods, this way people demonstrated more confidence in buying
products. An interesting is that fact; today Flipkart sells 20products/min and has a

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 massive customer base, still more than 60% of the Flipkart’s customers use Cash on
Delivery and card on delivery methods. This is because of two reasons, one is many
people do not know how to make payments online. And secondly people do not have
immense trust in e-commerce in India. Flipkart also provides a 30 day replacement
guarantees on its products and EMI options to its customers for making payments.

• Flipkart's reason of success is that it has a great custom retention rate, it has around 15
lack individual customers and more than 70% customers arc repeat customers i.e. they
shop various times each year.

4.5 Flipkart Marketing Strategy

Flipkart has been mostly marketed by word of mouth advertising. Customer satisfaction has
been their best marketing medium, Flipkart very wisely used SEO (Search Engine
Optimization) and Google Ad-words as the marketing toots to have a far reach in the online
world. flipkart.com official Face book page has close to 9 lack 'likes'. Flipkart recently
launched a series of 3 ads with the tag line- "No Kidding No worries". Kids were used to create
the adverts to send out the message- if a kid can do it, you can also do it. The message is very
clear to make people more comfortable with Flipkart, to generate a great customer relationship
and loyalty on the basis of great product prices and excellent customer service. All in all to
create a great customer experience.

4.6 Flipkart Awards and recognition

• In April 2016, Sachin Bansal and Binny Bansal were named to Time Magazine's list of The
100 Most Influential People.
• In September 2015, the two founders entered Forbes India Rich List debuting at the 86th
position with a net worth of $1.3 billion each.

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• Sachin Bansal was awarded Entrepreneur of the Year 2012–
2013 from Economic Times, a leading Indian Economic Daily.
• Flipkart.com was honored as the Young Turk of the Year at CNBC TV 18's 'India Business

Leader Awards 2012' (IBLA)

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 CHAPTER-5

Data & Analysis

On the basis of the answers received from the annexed questionnaire the
following analysis has been made.

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 CHAPTER-6

Findings& Conclusion
Findings:

1) 90% of respondents feel safe in online shopping they have no fear and have started
shopping online while still 1O% arc hesitant of shopping online they are the late majority type
of customers who adopt the technology and advancement in later stage.

2) 85% of respondents prefer online shopping as they get variety of products of good
quality at one place while remaining respondents feel that they prefer shopping in stores in
which they get opportunity to physically observed the products and then buy

3) Even though Flipkart doesn't have a big list of competitors but there are stores which
have grabbed attention of buyers namely Jabong, eBay, Myntra, Amazon, Zovi

4) 80% of the respondents said that they have excellent first time experience with Flipkart
while 15% said they have overall good and remaining said that they have average experience
while shopping first time with Flipkart

5) More than majority of respondents had an amazing first experience with the site and
prefer Flipkart over its competitors due to the quick services, wide variety safety reasons cash
on delivery facility, low prices and most importantly being an Indian venture which as wide
availability of products.

6) Respondents are satisfied by the business model of flipkart as it is a very systematic

organization

'7) Flipkart is a very price efficient company because offers the products directly from the
manufacture and eliminates the profit margin of the mediators' Products at prices lower than
the market price

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1) The respondents is very satisfied with the homogeneous list and options Flipkart offers
to its customers

2) More than 50% of the consumers feel that products of by Flipkart are of excellent
quality, durable and worth the cost

3) Flipkart is a consumer friendly site and offers special after sale services which includes
replacement of goods in 7 days

4) Flipkart offers warranty for its goods, depending on the type of product. Flipkart is very
punctual in delivery their goods on time but a very small percentage of respondents have faced
problems regarding the timely delivery or goods. Similarly regarding the return policy a small
percentage of the respondents have faced delays but the larger section of the respondent had a
great experience regarding the returns policy of the goods

12)On a scale of 10 Flipkart user have rated its behaviour 6 points to 9.5 points depending on
their personal experiences

1) Flipkart users are not hesitant in recommending the site to any friends

14)2% of customers had a bad experience with Flipkart, regarding the timely delivery and the
delay in return of goods, which is not a bad ratio and can be improved further

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Conclusion:

Online shopping is the new mantra of this age and the ,people of India are applying this in their
lives to a great extent nowadays. As we progress further, the growth race of online marketing
in our country will leap to the stars. According to a research report - State of e-commerce in
India by Commerce for ASSOCHAM,
"India's Internet base is already the third highest jn the world after China and the US, is
growing by nearly 40% every year". Hence, the rise of online shopping in the Indian
subcontinent has been meteoric in the recent years. The number of shopping websites has
increased and so has the total number of persons who prefer shopping online

At the end it can be said that Flipkart has become the fate of online business in India. The
company is currently valued at around 11.6 billion dollars. More importantly Flipkart has
ushered in the e-commerce era in India. This has generated massive interest in e-commerce
sector; people are opening websites to sell anything from shoes to apparels to jewels to baby
care products etc. This has helped in creating a lot of job opportunities and thus helps the
Indian Inc. growth story as well.

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BIBLIOGRAPHY
Information and data related to the project has been taken fromsources below, special thanks to
the editors for making the task
easier:-
1) www.sxccal.edu/msccs/ecommerce1.pdf
2) www.scribd.com/doc/172706499/Questionnaire-Flipkart#scribd
3) www.euroasiapub.org/IJRIM/Mar17/7.pdf
4) www.wikipedia.org/wiki/E-commerce
5) www.flipkart.com/about-us

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