A Project Report on

“STUDY OF CONSUMER EXPECTATION & PERCEPTION TOWARDS ONLINE

SHOPPING”

Submitted by
NIKITA PRASAD
Roll No. 4

Under the Guidance of

Prof. SADAF KHAN
Designation: Faculty [Co-coordinator]

Department: Bachelor of Management Studies

Oriental College of Commerce & Management

Submitted in Partial Fulfillment of

UNIVERSITY OF MUMBAI

ORIENTAL COLLEGE OF COMMERCE & MANAGEMENT

BACHELOR OF MANAGEMENT STUDIES
ANDHERI (WEST), MUMBAI.
DECEMBER 2016 – 17

1
 CERTIFICATE

I PROF. SADAF KHAN hereby certify that Miss. NIKITA PRASAD of Oriental College of

Commerce & Management of TYBMS [Semester V] has completed his project, titled

“CUSTOMER EXPERIENCE ANALYSIS IN ONLINE SHOPPING” in the Academic year

2016 - 17.

The information submitted herein is true & original to the best of my knowledge.

_________________________ ________________________

Signature of the Principal Signature of Internal Examiner

& Coordinator

[Mrs. Sadaf Khan]

_________________________ _________________________

Signature of the Project Guide Signature of External Examiner

[Mrs. Sadaf Khan]

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 DECLARATION

I hereby declare that the project titled “STUDY OF CONSUMER EXPECTATIONS &

PERCEPTION TOWARDS ONLINE SHOPPING” is an original work prepared by me & is

being submitted to the University of Mumbai in partial fulfillment of BMS for the academic year

2016 – 17.

To the best of my knowledge, this project has not been submitted earlier to this University or to

any other affiliated college for the fulfillment of BMS Degree. The contents of the project are not

copied from any other source such as Internet, Earlier Project, Text book, etc.

Signature of the student:

Name of the student: NIKITA PRASAD

Roll No.: 4

TYBMS Semester V Examination Seat No.:

Place:

Date:

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 ACKNOWLEDGEMENT

A successful completion of job is based upon the chain of factor combining together to
make an integral Outcome. The cooperation of the factors mixed with sincere effort can lead to
best performance. Our Project is also no exception to this. So it becomes necessary to mention
this before we start writing the study report.

We take the opportunity to express our deep sense of gratitude to all those who have
contributed significantly by sharing their knowledge & experience in the completion of this
project work.

We would like to place on record, our sincere gratitude to Mr. Vipul Vyas (Principal of
our College) for giving us support, guidance & opportunity to make this project. Lastly, our
wholehearted Thanks go to all those people who indirectly or directly helped me.

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 EXECUTIVE SUMMARY

The Online Shopping market in India has enjoyed phenomenal growth of almost 50% in
the last five years. Although the trend of Online Shopping has been making rounds in India for
15 years, the appropriate ecosystem has now started to fall in place. The considerable rise in the
number of internet users, growing acceptability of online payments, and the proliferation of
internet enabled devices and favorable demographics are the key factors driving the growth story
of Online Shopping in the country. The number of users making online transactions has been on
a rapid growth trajectory, and it is expected to grow from 11 million in 2011 to 38 million in
2015.

Venture capitalists (VC) and private equity players have demonstrated their faith in the
growth of Online Shopping in the country. This is amply substantiated by the significant increase
in the total investments (US$305 million in 2011 against US$55 million in 2010).

Online travel has traditionally been the largest Online Shopping sub-sector (by revenue)
in India. Nevertheless, online retail is catching up fast and is expected to match online travel
revenues by 2015. To improve margins, online travel players are diversifying their offerings to
include hotel reservations, along with the regular ticketing services. To make the most of this
move, players will need to develop skill sets that are different from the ones required in the
ticketing segment. They will have to manage challenges associated with a diverse supplier base,
technological constraints, customer experience, authenticity of information and grievance
redressed.

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 The online retail segment has evolved and grown significantly over the past few years.
Cash-on-delivery has been one of the key growth drivers and is touted to have accounted for
50% to 80% of online retail sales. Players have adopted new business models including stock-
and-sell, consignment and group buying; however, concerns surrounding inventory management,
location of warehouses and in-house logistics capabilities are posing teething issues.

Classifieds, the earliest entrant in the Online Shopping space in India, is undergoing a
shift in operational model from vertical to horizontal offering. Players now offer a gamut of
services ranging from buying/selling cars to finding domestic help/babysitter. To ensure that
Online Shopping maintains the steam that it has gained in recent years, the government needs to
focus on the regulatory front. Unlike many other countries, India still does not have dedicated
Online Shopping laws.

The Sales Tax laws need to be revised, as they are posing issues for online retailers while
they decide warehouse location. Online Shopping is set to continue on its growth path on the
back of the stabilization of the ecosystem and interest demonstrated by VC players, combined
with support from the Government of India (GOI).

The next phase of growth would be marked by localized product offerings and making content
available in various Indian languages.
“Watch for the big problem – they may hide big opportunities” – Anonymous

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 INTRODUCTION OF THE STUDY

 OBJECTIVE & SCOPE OF STUDY

This study also provides a clear picture of which shipping and post-purchase services enhance
customer experience. Topics included are:

 What are the most/least important aspects of past online shopping experiences?

 What leads a site user to return to or recommend a site?

 What is important to consumers during the check-out process?

 What shipping services and options do consumers find most valuable?

 How important is tracking and what delivery services are preferred?

 What are consumers’ returns experiences and what aspects are important in a returns
process?

 How do all of the services offer during and after the online purchasing experience impact
the overall impression of that online retailer?

The study analyzes the data from a com Score survey of more than 3,100 U.S. online shoppers
conducted in February 2012. All shoppers surveyed had to meet the criteria of making at least
two online purchases in a typical 3-month period. Additionally, an online focus group was held
on January 12, 2012. Participants met in a virtual online forum where they were asked about a

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series of topics related to online shopping and logistics, including shipping and returns. This
forum allowed participants to respond to online discussion questions as well as other
participants’ comments throughout the course of the focus group. This report will provide
retailers with the necessary insights into what steps they must take to satisfy their customers,
thereby increasing customer loyalty as well as the lifetime value of customers.

 Problem Statement

There are millions of people online any time and they all are a potential consumer in the
online market. Since there are so many providers, the most important thing for organizations is to
understand what are consumer wants and needs in this competitive business environment. In the
Internet shopping market since there is no face-to-face contact, analyzing and identifying factors
that influence the consumer is vital. Moreover, consumers have new demands in the Internet
medium. Therefore, it becomes more important to answer consumer's demands to retain the
customer.

Being aware that customers are performing a major role in marketing, finding out how
the factors that are essentially affecting the purchasing intentions are important. Analyzing the
process of shopping activities, how consumer decide and make purchasing over the Internet and
what they buy need to be identified by online providers in order to satisfy and succeed in the
competitive business environment. Customer behaviors are influenced by different factors such
as culture, social class, references group relation, family, salary level and salary independency,
age, gender etc. and so they show different customer behaviors. These differences are seen more
specific when it is considered between two different consumer groups from different countries.

Previous research streams on online shopping behavior, investigated main factors

influencing online shopping adoption. However there has been limited number of studies on
comparison two different countries. In this study, research has been made comparative online
buying behaviors of consumers that are located two different countries which are United
Kingdom and Turkey and studied on the findings of the research.

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 INDEX

SR NO. CONTEXT PAGE NO.

1 EXECUTIVE SUMMARY 5

2 OBJECTIVE 7

3 CHAPTER 1 – LITERATRE REVIEW 11

4 CHAPTER 2 – INTRODUCTION TO ONLINE SHOPPING 13 – 52

2.1 Concept of Online shopping
2.2 History of Online Shopping
2.3 Characteristics of Online shopping
2.4 Services Provided Under Various Modes of Online shopping
2.5 Benefits of Online Shopping
2.6 Drawback of Online shopping
2.7 Factors Responsible for the Growth of Online Shopping
2.8 Issues in Implementing Online Shopping & Their Solution
2.9 Myths of Online Shopping
2.10 The Impact of Online Shopping Website Made on Business
2.11 Mobile Commerce
2.12 Present Trends of Online Shopping

5 CHAPTER 3 – COMPANY PROFILE 53– 75

3.1 Introduction Of Amazon.in
3.2 Amazon’s Vision & Mission Statement
3.3 History of Amazon & Logos
3.4 Why Amazon.in is Betting on India
3.5 Amazon’s Logistics Service
3.6 Amazon.in knows Why Social Media is Important
3.7 Amazon Indian Advertising & their Power of Consumer
Insight
3.8 Brands Associated with Amazon.in

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 3.9 Amazon’s SWOT Analysis
3.10 Competitors of Amazon

6 CHAPTER 4 – RESEARCH METHODOLOGY 76

7 CHAPTER 5 – DATA ANALYSIS & INTERPRETATION 78

8 CHAPTER 6 – CONCLUSION 79

9 CHAPTER 7 – SUGGESTION & RECOMMENDATION 80

10 BIBLOGRAPHY 82

11 ANNEXURE 83

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 CHAPTER 1

REVIEW OF THE LITERATURE

Online buying behavior is affected by various factors like, economic factors,

demographic factors, technical factors, social factors, cultural factors, psychological factors,
marketing factors and legislative factors. Customers choose an online-shop mainly based on
references, clarity terms of delivery, graphic design and additional services. Problematical
customers read discussions on the Internet before they spend their money on-line and when
customers are incapable to purchase the product fast and with no trouble they leave online-shop.

Kotler, (2003) described Consumer buying method as learning, information-processing

and decision-making activity divided in several consequent steps: Problem identification,
Information search, Alternatives evaluation, Purchasing decision, Post-purchase behavior.
Efthymios, identified the main constituent of the online shopping experience as follows: the
functionality of the Web site that includes the elements trade with the site’s usability. The
emotional elements planned for lowering the customer’s hesitation by communicating trust and
credibility of the online seller and Web site and the content elements including the aesthetic
aspects of the online presentation and the marketing mix.

Usability and trust are the issues more regularly found to influence the online consumer’s
behavior. Karayanni, 2 examined that discriminating of potential determinants between web-
shoppers and non-shoppers. Free shipping is a great motivator to purchase the products and
customers are willing to pay nominal charges for getting their products. While compare online

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shopping with others shopping, consumers take product price and shipping charges almost
equally into deliberation. There are some ways that retailers can do to improve the experience for
their online shoppers. The first is to write the expected delivery date of the order, customers are
willing to wait for their orders but want to know just how long that force is.

Timely coming of product shipment encourages shoppers to recommend an online

retailer. Consumers also want to track updates and delivery notifications to understand when
their package is incoming. Online shoppers want flexibility in their shipping, mainly the ability
to give special delivery instructions or schedule a delivery time .Customers are also want to get
the address changing option for filling the wrong address when they are purchasing online.

FICCI, (2012) stated that India’s large No. of middle class peoples, 300 million
individuals want products through online. 500 million people under the age of 25 have contact to
more money that has moreover resulted in independence, aspirations and a demand for product.
The Indian retail sector accounts for over 20% of the country’s gross domestic product (GDP)
and contributes 8% to total employment. The cumulative foreign direct investment (FDI) inflows
in single brand retail trading, during April 2001to June 2011, stood at 68.26 million USD. The
current status and estimated value of the Indian retail sector is about 500 billion USD and is
pegged to reach 1.3 trillion USD by 2019-2020. The diffusion level of modern retail currently
5% will increase 6% from the current 27to 30 billion USD to 220 to225 billion USD in 2020.

The Indian retail sector is expected to grow at a CAGR of 10 to 20%. India is likely to
have the second largest user base in the world, and the largest in growth, with 330 million to 360
million Internet users in 2015. India is on the verge of an Internet boom where users who access
the Internet only through a mobile or tablet device will constitute around 70 percent of new users
and 50 percent of the aggregate user base in 2015, leading to increasing demand. India has the
latent to double its economic contribution from the Internet in the next five years from 1.5
percent of GDP at present to 2.9 to 3.4 % by 2015 in spite of the large current base of users the
Internet currently contributes a modest, nearby 2percent to India’s GDP.

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 CHAPTER 2
INTRODUTION OF ONLINE SHOPPING

The cutting edge for business today is Online Shopping. E-commerce stands for
electronic commerce. It means Dealing in Goods & Services through the electronic media &
internet. On the internet, it relates to a websites of the vendor, who sells products or service
directly to the consumer from the portal using digital shopping cart or digital shopping basket
system & allows through Cash on Delivery (COD), Debit Card, Credit Card, Electronic Fund
Transfer (EFT) payments. Online Shopping involves carrying on a business with the help of the
internet & using the information technology like Electronic Data Interchange (EDI). More
simply put, E-commerce is the movement of the business on the WORLD WIDE WEB.

Online Shopping has almost overnight become the dominant online activity. There is no
single definition of Online Shopping, it means only commercial activities which is performed or
linked to or supported by electronic communication. The effects of Online Shopping are already
appearing in all areas of business, from customer service to new product design. It facilitates new
types of information based business process for reaching & interacting with customers like
online advertising & marketing, online order taking & online customer service. In now-a-days E-
commerce uses the WWW at least some point in transaction lifecycle.

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 It can also reduce costs in managing orders & interacting with a wide range of supplier &
trading partners’ areas that typically add significant overheads to the cost of products & service.
For developing countries like India, Online Shopping offer considerable opportunity. In India it
is still in nascent stage, but even the most-pessimistic projections indicate a boom. There has
been a rise in the number of companies taking up Online Shopping in the recent past. Major
Indian portal sites have also shifted are now selling a diverse range of product & services from
flowers, greeting cards & movie tickets to groceries, electronic gadget & computers etc. With
stock exchanges coming online the time for true Online Shopping in India has finally arrived.

2.1 DEFINATION OF ONLINE SHOPPING

 Definition by U.S. Executive Office of the President

Online Shopping is commercial interaction over the internet, which can lower costs
dramatically and facilitating new types of commercial transactions. As the Internet empowers
citizens and democratizes societies, it is also changing classic economic paradigms. New models
of commercial interaction are developing as businesses and consumers participate in an
electronic marketplace and reap the resultant benefits. The Internet has the potential to
revolutionize commerce and other areas. The Internet will revolutionize retail marketing.
Shopping on the Internet could total tens of billions of dollars by the turn of the century.
(UNCTAD, 2000)

 Definition by European Commission

Online Shopping is about doing business electronically. It is based on the electronic
processing and transmission of data, including text, sound, and video (UNCTAD, 2000). It
encompasses many diverse activities, including electronic trading of goods and services, online
delivery of digital content, electronic fund transfers, electronic share trading, electronic bills of
lading, commercial auctions, collaborative design and engineering, online sourcing, public
procurement, direct consumer marketing, and aftersales service (European Commission, 1998). It
involves products and services, traditional activities and new activities.

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 2.2 HISTORY OF ONLINE SHOPPING WEBSITES

India had an internet user base of about 354 million as of June 2015 and is expected to
cross 500 million in 2016. Despite being the second-largest user base in world, only behind
China (650 million, 48% of population), the penetration of e-commerce is low compared to
markets like the United States (266 million, 84%), or France (54 M, 81%), but is growing at an
unprecedented rate, adding around 6 million new entrants every month. The industry consensus
is that growth is at an inflection point. In India, cash on delivery is the most preferred payment
method, accumulating 75% of the e-retail activities. Demand for international consumer products
(including long-tail items) is growing much faster than in-country supply from authorized
distributors and e-commerce offerings. Largest e-commerce companies in India are Flipkart.com,
Snapdeal.com, Amazon India, and Paytm

MARKET SIZE OF GROWRH

India’s consumer-facing Online Shopping market (B2C-C2C) grew at a whopping CAGR
of 49.1% from 2007 to 2011 to reach a market size of US$9.9 billion. On the other hand, the
B2B market is a small contributor to the overall domestic E-commerce market, and it was
estimated at US$50.37 million in 2011. The country’s B2C E-commerce sector can be split into
two broad categories — travel and non-travel. Online travel is the largest domestic B2C E-

15
commerce segment, accounting for 81% revenues in 2011. The online non-travel market is
further segmented into e-tailing, digital downloads, financial services and classifieds.

Amount (in billion)

12
10
8
6
Amount (in billion)
4
2
0
2011 2012 2013 2014 2015

Consumer-facing e-Commerce market size (US$ billion)

India’s Online Shopping market is shaping up and what it means for stakeholders. New
opportunities are being generated out of the still-evolving ecosystem and Online Shopping market.
We also analyze some deciding factors for stakeholders while formulating their market
strategies.

TIMELINE:

1971: The ARPANET is used to arrange a cannabis sale between students at the Stanford
Artificial Intelligence Laboratory and the Massachusetts Institute of Technology, later
described as "the seminal act of e-commerce" in John Markoff's book What the
Dormouse Said.
1979: Michael Aldrich demonstrates the first online shopping system.
1981: Thomson Holidays UK is the first business-to-business online shopping system to
be installed.
1982: Minitel was introduced nationwide in France by France Telecom and used for
online ordering.
1983: California State Assembly holds first hearing on "electronic commerce" in
Volcano, California. Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano

16
Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to
become AOL.)
1984: Gateshead SIS/Tesco is first B2C online shopping system and Mrs. Snowball, 72,
is the first online home shopper
1984: In April 1984, CompuServe launches the Electronic Mall in the USA and Canada.
It is the first comprehensive electronic commerce service.
1990: Tim Berners-Lee writes the first web browser, Worldwide Web, using a NeXT
computer.
1992: Book Stacks Unlimited in Cleveland opens a commercial sales website
(www.books.com) selling books online with credit card processing.
1993: Paget Press releases edition No.3 of the first app store, The Electronic AppWrapper
1994: Netscape releases the Navigator browser in October under the code name Mozilla.
Netscape1.0 is introduced in late 1994 with SSL encryption that made transactions
secure.
1994: Ipswich I-Mail Server becomes the first software available online for sale and
immediate download via a partnership between Ipswich, Inc. and Open Market.
1994: "Ten Summoner's Tales" by Sting becomes the first secure online purchase through
Net Market.
1995: The US National Science Foundation lifts its former strict prohibition of
commercial enterprise on the Internet.
1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, Product
Manager for CompuServe UK, from W H Smith's shop within CompuServe's UK
Shopping Centre is the UK's first national online shopping service secure transaction. The
shopping service at launch featured W H Smith, Tesco, Virgin Megastores/Our Price,
Great Universal Stores (GUS), Interflora, Dixons Retail, Past Times, PC World (retailer)
and Innovations.
1995: Jeff Bezos launches Amazon.com and the first commercial-free 24-hour, internet-
only radio stations, Radio HK and Net Radio start broadcasting. EBay is founded by
computer programmer Pierre Omidyar as Auction Web.
1996: IndiaMART B2B marketplace established in India.
1996: ECPlaza B2B marketplace established in Korea.

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1998: Electronic postal stamps can be purchased and downloaded for printing from the
Web.[13]
1999: Alibaba Group is established in China. Business.com sold for US $7.5 million to
eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer file
sharing software Napster launches. ATG Stores launches to sell decorative items for the
home online.
2000: The dot-com bust.
2001: Alibaba.com achieved profitability in December 2001.
2002: eBay acquires PayPal for $1.5 billion. Niche retail companies Wayfair and
NetShops are founded with the concept of selling products through several targeted
domains, rather than a central portal.
2003: Amazon.com posts first yearly profit.
2003: Bossgoo B2B marketplace established in China.
2004: DHgate.com, China's first online b2b transaction platform is established, forcing
other b2b sites to move away from the "yellow pages" model.
2007: Business.com acquired by R.H. Donnelley for $345 million.
2009: Zappos.com acquired by Amazon.com for $928 million. Retail Convergence,
operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180
million, plus up to $170 million in earn-out payments based on performance through
2012.
2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group
buying websites went ahead with an IPO on 4 November 2011. It was the largest IPO
since Google.

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 2.3 CHARACTERISTICS OF ONLINE SHOPPING

1. Payment Options
Most visitors to online stores prefer to pay by credit card. If you want to use your Online
Shopping cart software to process credit card transactions with a real-time payment gateway,
you'll have to open a merchant account. Although the majority of shoppers at online stores will
make a credit card transaction, choosing an Online Shopping cart that also allows you to accept
alternative payments will please customers who remain resistant to providing such information
online. Offering options such as PayPal, Google Checkout, checks, and/or money orders allows
more people to feel comfortable checking out on your site.

2. Site Search & Browse

Visitors to online stores have a need for speed - and it starts with time-saving search. Consumers
expect online stores to allow them to search for a product and quickly find the product they want.
Customers also navigate via categories, along with browsing by price, category and brand
distinctions. If your ecommerce shopping cart does not include a search feature for your site,
your visitor may simply decide to look elsewhere.

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 3. Product Reviews
No matter how well online stores promote their own products, reviews by other customers will
have a greater impact. In fact, 63% of consumers indicate that they are more likely to purchase
from a site if it has product ratings and reviews, according to a CompUSA and iPerceptions
study. Choose an Online Shopping cart that allows for product ratings and reviews - and let "word
of mouth" work for you.

4. Wish List/Registry
Customers at online stores often buy gifts for special occasions, which is why many Online
Shopping carts feature a registry option that makes the process easier. Also, so-called "wish lists"
allow customers to save items at online stores and return at a later date to purchase those items.
In general, when your ecommerce shopping cart allows your customers to manage their items the
way they want, the result is higher satisfaction.

5. Order Tracking
An Online Shopping cart can help you keep customers informed every step of the way - even after
their order is placed. Automated order confirmation emails and shipping notification emails build
customer's confidence in their purchase and in your brand. If a customer registers, they should be
able to track their order by logging into an account created upon registration.

6. Special Offers
Looking for a way to woo new customers - or existing customers you haven't seen in a while?
Online Shopping carts can help you promote special offers like order discounts, coupon codes,
free shipping and gift cards. These offers serve a dual purpose -they encourage customers to take
advantage of a "good deal" while also helping you compete in today's competitive online
marketplace.

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2.4 SERVICES PROVIDED UNDER THE VARIOUS MODES OF ONLINE SHOPPING

There are a variety of different types of e-commerce and many different ways to
characterize these types. For the most part, we distinguish different types of e-commerce by the
nature of the market relationship who is selling to whom. The exceptions are P2P and m-
commerce, which are technology-based distinctions.

1. Business to Business E-commerce (B2B)

B2B e-commerce is simply defined as e-

commerce between companies. This is the type of
e-commerce that deals with relationships between
and among businesses. About 80% of e-commerce
is of this type, and most experts predict that B2B
e-commerce will continue to grow faster than the
B2C segment.

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 2. Business to Consumer E-commerce (B2C)

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 consumer
products) or information goods(or goods of
electronic material or digitized content, such
as software, or e-books); 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, and Beyond.com

3. Customer to Business E-commerce (C2B)

Consumer to Business E-commerce is a business

model in which consumers (individuals) create value
& business consumes that value. C2B, also called a
reverse auction or demand collection model, enables
buyers to name or demand their own price, which is
often binding, for a specific goods or service. The
website collects the demand bids then offers the bids
to participating sellers.

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 4. Consumer to Consumer E-commerce (C2C)

Consumer to Consumer E-commerce is creation of a

product or service with the specific promotional
strategy being for consumer to share that product or
service with others as brand advocates based on the
value of the product. The investment into conceptions
& developing a top of the line product or service that
consumers are actively looking for is equitable to
retail pre-launch product awareness marketing.

This type of e-commerce comes in at least three forms:

1. Auctions facilitated at a portal, such as eBay, which allows online real-time bidding on
items being sold in the Web.
2. Peer-to-peer systems, such as the Napster model (a protocol for sharing files between
users used by chat forums similar to IRC) and other file exchange and later money
exchange models.

5. Business to Government E-commerce (B2G)

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

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

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 2.5 BENEFITS OF ONLINE SHOPPING

 Convenience
The convenience is the biggest perk. Where else can you comfortably shop at midnight while in
your pajamas? There are no lines to wait in or shop assistants to wait on to help you with your
purchase and you can do your shopping in minutes. Online shops give us the opportunity to shop
24/7, and also reward us with a ‘no pollution’ shopping experience. There is no better place to
buy informational products like e-books, which are available to you instantly, as soon as the
payment goes through. Downloadable items purchased online eliminate the need for any kind of
material goods at all, as well, which helps the environment!

 Better prices
Cheap deals and better prices are available online, because products come to you direct from the
manufacturers or seller without middleman being involved. Many online shops offer discount
coupons and rebates as well. Apart from this, online shops are only required to collect a sales tax
if they have a physical location in our state, even if we buy from a store across the world.

 More variety
The choices online are amazing. One can get several brands and products from different sellers
all in one place. You can get in on the latest international trends without spending money on
airfare. You can shop from retailers in other parts of the country, or even the world, all without
being limited by geography. A far greater selection of colors and sizes than you will find locally

24
are at your disposal. Apart from that, the stock is much more plentiful. Some online shops even
provisions in place to accept orders for items out of stock and ship it when the stock becomes
available. You also have the option of taking your business to another online store where the
product is available.

 You can send gifts more easily

Sending gifts to relatives and friends is easy, no matter where they are. Now, there is no need to
make distance an excuse for not sending a gift on occasions like birthdays, weddings,
anniversaries, Valentine's Day, Mother's Day, Father's Day, and so forth.

 Fewer expenses.
Many times, when we opt for conventional shopping, we tend to spend a lot more than planned.
There are other outside expenses on things like eating out, transportation, and let's not forget
impulse buys!

 Price comparisons
Comparing and researching products and their prices are so much easier online. Also, we have
the ability to share information and reviews with other shoppers who have firsthand experience
with a product or retailer.

 No crowds.
If you are like me, you hate crowds when you're shopping. Especially during festivals or special
events, they can be such a huge headache. Also, it tends to be more chaotic when there are more
crowds out and this sometimes makes us feel rush or hurried. Grumpy, annoying, and smelly
people also annoy me when I'm out shopping. Plus, parking becomes a huge issue. All of these
problems can be avoided when you shop online.

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 2.6 BACKDRAW OF ONLINE SHOPPING

 Internet does not come free of cost

Many of us have a specific internet scheme, as a result of which, we have to shell out a fixed
amount at the end of every month. The scheme allows us to have unlimited internet access in
return for the fixed amount of money but what if somebody does not have such a scheme ? In
that case, every time you open a page on an Online Shopping portal to choose a specific item, you
get charged for it. Make sure that the internet usage cost does not topple the price of the
purchased item itself. Be economical and be wise.

 Shipping costs
Many websites deliver your orders without charging the shipping cost but many of them do not
do that. A number of websites, as a part of a smart marketing gimmick, do not include the
shipping cost while giving out the price of an item. It may be minutely mentioned at the end of
the screen which many would not even notice. The valuable gets delivered at your house and you
are asked to pay more than what you are prepared for. You have no option but to oblige with it.
Shipping costs in most cases raise the price of an article and you may end up buying it at a rate
higher than the market price.

 No hanging out with friends and family while shopping

Usually when we go out shopping to a market-place, our ambling does not remain restricted to
shopping of only one kind. Maybe we are trying to select a top but our roving eyes may get
enamored by a chunky piece of jewelry put on display. As a result of that, we end up buying both
and a lot more. In case of online shopping, that cannot be a possibility as you do not have more

26
than one screen to concentrate on each time. Shopping for clothes and jewelry is usually a full-
day plan. We eat at our favorite food-joints and indulge in a lot of gossiping besides shopping.
Unfortunately, Online Shopping does not offer such a thing so far but who knows online shopping
and hanging out simultaneously may become a reality soon. Till then, we have to wait.

 Deprives you of tangibility

That moment when you touch and feel the thing you want to own, it is something irreplaceable.
In case of clothes and shoes, you can touch the item and understand how good or bad a material
it has been made of. When it comes to gadgets, during a real shopping experience, you can try
them out and know if they are working properly. Online shopping makes it extremely difficult to
exchange items as well, in case of discrepancies.

 Lack of opinion
What do we do when we like a particular thing but we are not totally impressed with it? At that
moment we ask for variety in terms of more color options, shape and size. You can wear a piece
of garment and check if it fits you but with online shopping, that option seems like a distant
dream. In online shopping, you do not get the same item spread out in varied forms and shape,
vying for your attention. Sometimes being spoilt for choice is quite a coveted thing.

 Deceptive pictures
I am sure that many of you must have faced a situation where you have been delivered
something, which is a distant-cry from what you were expecting it to be. This happens because
pictures of items on online shopping portal are often deceptive in nature. What may appear to
have a matte texture in the picture may actually turn out to be quite glossy and shiny in reality. If
you do not keep a copy of the confirmation e-mail sent by the company and of the code number
of the ordered article, things may turn out to be quite difficult for you in adverse situations.

27
 2.7 FACTORS RESPONSIBLE FOR THE GROWTH OF ONLINE SHOPPING

 Curated Online Shopping

Shopping for lifestyle is more engaging and richer as analysis sees it across Online Shopping
industries. The powerful influence of various social media tools such as Pinterest or Facebook
allows consumers to organize their favorite items and segment it into themed collections to share it
with others. This fuels personal expression in shopping and makes others reflect on their purchase
decision. This is the evolution of influential personal recommendation.

 Adoption of Multi-Channel Investments

Cross-channel investments are highly aggressive in augmenting both online and offline buying
strategies. Multi-channel E-commerce business is an environment in which a company can sell
through two or more online channels. Many stores are pushing endless-aisle initiatives and are
being used as a warehouse for an online catalogue to enhance the speed of home delivery.
Sometimes a company also inherits legacy Web store from an acquisition.

 Unique or Commoditized Products

Establishing a reputation and brand for quality products always drives demand. Commoditized
products such as mainstream tools, consumer electronics or other equipment’s generally show less
success while selling online. Even though these are the most popular online items, consumers
prefer to buy them from renowned retailers such as eBay or Amazon. Some small businesses have
found success through affiliation with major retailers.

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  Remarketing
Businesses of any size have to be creative to stand out of the crowd. Online Shopping creativity
emerges from multiple touches to produce continued interests in the products. In one word, this
technique is popularly known as Remarketing. When any potential customer visits a website but
leaves it without purchasing any items, companies follow them online. The attitude of the
customers can be changed through Remarketing. Remarketing can convince an online shopper to
revisit a website to complete their purchase that they have previously failed to do. It is a method of
conversion marketing which is a receptive marketing technique that endeavors to appeal a
consumer response. One can experience Remarketing if they notice any ads that are extremely
reflective of their interests.

 Maintaining E-commerce Sites by the Third-Party Provider

Creating an attractive and functional E-commerce site is quite a challenging task. However, a
third-party E-commerce provider will make this task simple for you. They offer site set up and
maintenance to entice businesses. For instance, some of the third-party E-commerce site providers
do not charge any transaction fees once the items are sold. Instead, they offer monthly plans.
Besides, the emergence of digital services is gradually proving to be the leading driver for E-
commerce growth. The rise of portable mobile devices and advanced videos is increasing the
desire of the consumer to spend more time researching online for price matching and ultimately on
their buying decision.

Let us find out the impact of M-commerce to drive E-commerce future progress. Research shows
that 81% of the Smartphone users access the Internet on their mobile devices. Does the E-
commerce store need any other reason to make their sites mobile optimized? (I guess NO). With
the discovery of different innovative apps every day, E-commerce has matured extensively. It is
not just the phones that are driving retail Web traffic, but, tablets are equally responsible in this
context. Tablets are mostly used during evening prime-time hours, when the consumers are in
their leisure state of mind.

29
 2.8 ISSUES IN IMPLEMENTING ONLINE SHOPPING & THEIR SOLLUTIONS

The phenomenal growth of the Online Shopping sector is accompanied by the challenges
mentioned below.

 Cloud surrounding e-Commerce laws in India

Laws regulating e-Commerce in India are still evolving and lack clarity. This poses a challenge
for potential entrants and existing players. Furthermore, the lack of law firms or lawyers
specializing in Online Shopping laws compounds the problem. The onus is, therefore, on the
government to formulate dedicated e-Commerce laws so that current issues in the sector’s legal
environment can be addressed.

 Low entry barriers leading to reduced competitive advantages

The rapid growth of the Online Shopping sector is attracting new players. The initial investment
required to start an online venture is as low as a US$10,000–20,000.87 the sector is also
attracting the interest of VCs and entrepreneurs to secure funds easily. This enables new
companies to easily replicate the existing business models and, thereby, increases competition in
the sector. Furthermore, some operational aspects such as free shipping of products and COD,
which were differentiators earlier, have now become hygiene factors.

30
  Rapidly changing business models
Business models have been changing rapidly in the Online Shopping sector. This could be due to
heightened competition and the inability of players to sustain high costs. Some businesses, such
as online DVD rentals, have gone into obsolescence; some companies in the online retail
segment have shut shop due to their inability to sustain price wars with their competitors. Group-
buying companies, which started off by providing deals at high discounts, have now begun
selling products. Therefore, players in the Online Shopping space need to adapt to changing
business models and innovate constantly to sustain their businesses.

 Shortage of manpower
The Online Shopping sector is growing rapidly, but scarcity of trained manpower is threatening
to slow down this growth. The lack of specialized courses on Online Shopping at college or
university levels limits the talent pool available to Online Shopping players. Therefore, the
senior management of e-Commerce companies needs to expend a considerable amount of time
on hiring (the conversion rate is very low). The attrition rate at some Online Shopping companies
is as high as 65% at the junior level and 20% at the mid-senior management level.88
Furthermore, due to the competitive nature of the industry, companies poach from their
competitors. This drives up the cost of retention for companies, which sometimes offer employee
stock options (ESOPs) and other incentives to retain their employees.

 Customer loyalty
Online Shopping players offer huge discounts to lure people to shop online. However, since
Indian consumer looks for the lowest price before making a purchase, the cost of customer
acquisition is high for these companies. Moreover, since a large number of players offer the
same products at the same prices, switching cost is non-existent. Consequently, a customer’s
lifetime value is low. This poses a challenge for players in their effort to develop sound strategies
to attract and generate repeat customers. A major Online Shopping player in Japan has developed
a loyalty program, which has helped it grow significantly. Under this program, buyers receive
bonus points on purchases they make from different online shops on the player’s website. They
can redeem these at any of the shops on the website.

31
SOLLUTION:
 Personalization:
Personalization, while a challenge, if addressed well can be a huge differentiator in how the
customer experience is shaped in the online world, we have written multiple time
so this.. Here and here...more said the less. Utilize intelligent tools like web analytics, study
customer behavior online, reward and reach out to customers... the more personalization you can
out into your web-store... more the customers will love you.

 Segmentation:
Customer segmentation is important. All customers should not be treated in the same way. It is
good to divide customers based on first-time users, high valued active users and inactive
customers, based on which you can provide offers and promotion campaigns. Use analytics to
target the right to the right customers.

 Make Your Site Navigable:

Customers sometimes tend to get lost in your site. Provide proper navigation in your site to make
things easier for your customers. Try to make your Online Shopping site properly structured.

 Delivered Duties Paid:

Online Marketers pay duties and taxes for what they sell. It is better to sell products
internationally on an all-inclusive price basis and hassle free services though all international
courier facilities. Product registration and reduction is shipping cost is another good solution.

 Shipping:
It is better to deliver in bulk in one go to a single hub and distribute based on domestic shipping
charges. This is called regionalization.

32
 2.9 MYTHS OF ONLINE SHOPPING

 Myth One: Setting up a business on the web is easy and inexpensive.

While practically anyone with a computer and internet access can set up a website, most of them
offered freely by web hosting services, creating an on-line transactional Online Shopping
business required months of back office work and investment in hardware and software.

 Myth Two: Launching a website automatically means that customers will flock onto
your site.
Setting up a website is not enough. Promotion is keys in getting potential customers to check
out your site. There are millions of websites on the web and just like in a traditional store; you
need to market your site. The key to marketing your website is networking and building
relationships with customers, other sites, trade organizations, on-line directories, and social
media sites so that people can find you.

 Myth Three: Making money on the web is easy.

There are many “entrepreneurs” who are selling get rich quick schemes on the web. Making
money on the web is not easy except if you are selling “make a $100 000 a month”, schemes
to desperate people. Respect should be given to and lessons learned from those companies that
have invested time and resources to making e-commerce work for them and their customers,
honestly.

33
  Myth Four: Privacy is not an important issue on the web.
The web allows companies to gain access to unbelievable amounts of information about
customers. Companies use this information to gain insight into product preferences and how they
can market their services. Customers are increasingly becoming concerned about their online
security and this is a constant topic for governments and internet service providers. Online
companies should therefore protect their customers from on-line fraud, identity theft and abuse
of information by other third parties. It is important to set up firewalls to safeguard your business
against hacking and theft of customer’s information.

 Myth Five: The most important part of any e-commerce site is technology.
While the technology for setting up the business is critical, the most important part is creating a
business model that offers customers value at a reasonable price while producing an acceptable
return for the business. Entrepreneurs that are successful in e-commerce know their companies
inside out and have been able to build their online business around this information. While you
can hire people to build your site, nothing will substitute for your intimate knowledge of your
industry, your internal systems, your competitors, your customers, your suppliers and how to
make all of these things work for you.

 Myth Six: I don’t need a strategy to sell on-line.

Building an on-line business is the same as building a brick and mortar company. You need a
strategy. You need to build a clear definition of the company’s target markets, a thorough
understanding of your customers’ needs, likes and dislikes. Your website must be appealing to
the customers that you want to attract. An Online Shopping website should be created with your
customers in mind.

 Myth Seven: Myth Seven: Bling bling makes a website better.

Entrepreneurs falling into this trap create flashy websites with the thinking that more is better.
This is not necessarily so. Bright colored graphics, streaming headlines, videos and spinning
icons can attract attention, but can also slow down the site and that is frustrating for customers in
a hurry.

34
 2.10 THE IMPACT OF ONLINE SHOPPING WEBSITE HAVE MADE ON BUSINESS

The comings of online website have left a powerful impact on the business front today.
People now can shop from the comfort of their doorstep which cannot be imagined a few years
back. Now small businesses urge to switch to an online store to withstand the reassure putting
forward by the big online retailers. An online store is a dire necessity to survive and grow in any
form of business. In the context of this, a Virtue art website Development Company becomes an
ideal choice for organizations to create a quick business identity in the market. Here, we will
discuss some of the impacts E-commerce has left in the direct marketing field-

 The first thing that we can notice this change is in terms of product promotion. Now, the
promotions are becoming very direct, information based and carry out in an active
interaction with the customers.

 It creates various new sales channels for the distribution of products and services in a
very effective manner. Now, customers can have direct reach to the products they want
which leads to happiness and satisfaction among them.

 The electronic delivery process has led to some sort of saving in the process of delivery
of products. It is cost effective compared to physical delivery of products.

35
 A reduced processing time can be noticed with electronic delivery of goods and services.
The time required to carry out the administrative formalities associated while delivering a
product internationally has also reduced tremendously.

 Customer service has also improved with the Online Shopping concept. Now, customers
can find detailed information online about their order status and delivery. Any sort of
customer query can now be resolved quickly with a support desk and this makes them
content.

 Online Shopping Website helps to sustain a corporate image which indicated the trust on
the products and services of an organization. This brand image helps in the direct sales
activities. It is easy for new organizations to create a mark on the web with increasing
sale purchase activities.

 Also customization has become easy with Online Shopping. It enables organizations to
deal with a lot of items easily and it creates a competitive environment.

 A change can be noticed in the ordering status of customers. It is easy to take orders
electronically which can be done within a few seconds. It saves time and reduces
expenses also which allow sales personnel to concentrate more on selling.

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 2.11 MOBILE COMMERCE (M-COMMERCE)

The phrase mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of
the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities
directly into the consumer’s hand, anywhere, via wireless technology. Many choose to think of
Mobile Commerce as meaning "a retail outlet in your customer’s pocket."

 Mobile money transfer

In Kenya money transfer is mainly done through the use of mobile phones. This was an initiative of a
multimillion shillings company in Kenya named Safaricom. Currently, the companies involved are
Safaricom and Airtel. Mobile money transfer services in Kenya are now provided by the two
companies under the names M-PESA and Airtel Money respectively. A similar system called Mobile
Pay has been operated by Danske Bank in Denmark since 2013. It has gained considerable popularity
with about 1.6 million users by mid-2015.

 Mobile ticketing

Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their
tickets immediately, by presenting their mobile phone at the ticket check as a digital boarding pass.
Most number of users is now moving towards this technology. Best example would be IRCTC where
ticket comes as SMS to users.

37
  Mobile vouchers, coupons and loyalty cards
Mobile ticketing technology can also be used for the distribution of vouchers, coupons, and loyalty
cards. These items are represented by a virtual token that is sent to the mobile phone. A customer
presenting a mobile phone with one of these tokens at the point of sale receives the same benefits as
if they had the traditional token. Stores may send coupons to customers using location-based
services to determine when the customer is nearby.


Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones,
wallpapers, and games for mobile phones. The convergence of mobile phones, portable audio
players, and video players into a single device is increasing the purchase and delivery of full-
length music tracks and video. The download speeds available with 4Gnetworks make it possible
to buy a movie on a mobile device in a couple of seconds.

 Mobile banking

Banks and other financial institutions use mobile commerce to allow their customers to access
account information and make transactions, such as purchasing stocks, remitting money. This service
is often referred to as mobile banking, or m-banking.

 Mobile brokerage
Stock market services offered via mobile devices have also become more popular and are known as
Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and
irrespective of their physical location.

38
  Auctions
Over the past three years mobile reverse auction solutions have grown in popularity unlike traditional
auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a
bid. Many mobile SMS commerce solutions rely on a one-time purchase or one-time subscription;
however, reverse auctions offer a high return for the mobile vendor as they require the consumer to
make multiple transactions over a long period of time.

 Mobile browsing
Using a mobile browser—a World Wide Web browser on a mobile device—customers can shop
online without having to be at their personal computer. Many mobile marketing apps with geo-
location capability are now delivering user-specific marketing messages to the right person at the
right time.

 Mobile purchase
Catalog merchants can accept orders from customers electronically, via the customer's mobile device.
In some cases, the merchant may even deliver the catalog electronically, rather than mailing a paper
catalog to the customer. Consumers making mobile purchases can also receive value-
add upselling services and offers. Some merchants provide mobile sites that are customized for the
smaller screen and limited user interface of a mobile device.

 In-application mobile phone payments

Payments can be made directly inside of an application running on a popular smartphone operating
system, such as Google Android. Analyst firm Gartner expects in-application purchases to drive 41
percent of app store (also referred to as mobile software distribution platforms) revenue in 2016. In-
app purchases can be used to buy virtual goods, new and other mobile content and is ultimately billed
by mobile carriers rather than the app stores them.

39
 2.12 PRESENT TRENDS OF E-COMMERCE IN VARIOUS SECTORS

1. ONLINE RETAILING / E-TAILING

Organized retail is growing at a faster pace than total retail.

Organized retail still forms a small portion of the total retail market.
Online retailers are moving to the inventory-holding model from the
consignment model.
Online retailers are developing in-house logistics capabilities.
Logistics players need to gear up their operating models to tap the huge
opportunity presented by online retail.
Online retail players need to focus on innovative business models to increase
their margins.
The share of apparels is expected to increase in online retail.
Underpenetrated segments, such as online groceries, are expected to grow.
COD has emerged as a preferred payment choice for customers.

Online retail, in its various forms, has been drawing the maximum interest among all the
segments of the internet commerce market. A recent report by comScore Inc. indicated that 60%
of online users in India visited retail sites in November 2012. The Indian retail industry was
estimated at US$528 billion in 2020(growing at 11% per annum). A significant portion (90.4%)
of Indian retail is unorganized. Nevertheless, the share of organized retail is growing at 24% per
annum. Currently, online retail constitutes 1% of the total organized retail market in India and is
set to make a higher contribution to the growth of organized retail in the country.

40
 Total retail market: market size of the organized and unorganized
segments (US$ billion)

1000
800
600
400
200
0
2012
2013 ORGANIZED RETAIL
2014
2015
2020
UNORGANIZED RETAIL

According to IAMAI, online retail clocked sales of nearly US$572 million in 2015 and
accounted for 6% of overall internet commerce revenues in India (grew at a CAGR of 25% since
2011). The market is expected to witness rapid growth in years to come. While travel is the
largest segment among all the internet commerce categories, internet retail would reportedly
match the travel segment, by the value of goods sold, within three to four years and, thereafter,
surpass it.

Break-up of online retail market (2015)

46%

54% Vertical focused players

Multi-category players

Vertical-focused v/s multi-category players

41
 The choice of categories ranges across books, electronics, apparel, baby care products,
perfumes and even prescription lens. Players that emerged as category leaders were those that
were able to penetrate their target category deeply to offer a large range of products by spreading
their operations beyond the top cities.

Players adding categories or getting acquired by multi-category players

Categories such as books and electronics saw early traction, with market leaders moving
toward multi-category models. There has also been consolidation in the market, with larger
players acquiring small single-category ones to enhance their portfolios.

Top categories driving online retail

Electronics is the largest category of products selling online in India, with a market share
of 24%. Electronics include computers, peripherals, televisions, cameras and mobiles. While
electronics goods enjoy the maximum popularity in India, apparel and accessories seem to be the
largest-selling categories in leading markets such as the US, the UK and Germany. This is
because of the higher margins that this category generates for e-Commerce players. As is the
case in leading e-Commerce markets, we can expect online retailers to shift to selling higher-
margin products such as apparel. The preference for apparels in online shopping is a global
phenomenon. According to a survey conducted by Nielsen in March 2010, books and
clothing/accessories/shoes emerged as the most preferred product categories to be bought online
in the next six months. A total of 44% of the respondents claimed to buy books online in the next
six months, while 36% preferred clothing/accessories/shoes.

42
 50%
44%
45%
40%
36%
35% 32%
30% 27%
26%
25% 22%
19% 20%
20% 18% 18%
16%
15%
10%
5%
0%

Underpenetrated segments in online retail…

Product categories sold in organized retail indicate a slightly different scenario from
online retail. Certain segments that command a significant share of the organized retail market
are underpenetrated in the online retail sector. Food services and beverages have a share of 20%
of the organized retail market. However, these product categories are still at a nascent stage in
the online retail world.

43
 E-COMMERCE IN TOURISM SECTOR

 Growth in India’s travel and tourism industry is the second fastest worldwide.
 India is poised to feature among the top five civil aviation markets in the world
over the next decade.
 The entry of LCCs in the country made air travel affordable for a large number
of people.
 Ticketing accounts for the largest share of the online travel market.
 Domestic air tickets are driving the online ticketing market. Opaque pricing is
shifting the focus of airlines away from differentiation.
 OTAs are shifting their focus to hotel reservations and packages.
 Players need to acquire new competencies to succeed in hotel reservations, as
they previously limited their scope to ticketing. India is witnessing the entry of
international players and mushrooming domestic OTAs.
 An increasing number of challenges are marring the growth of existing players.

Indian travel industry among the fastest growing in the world Growth in India’s travel and
tourism industry is the second fastest worldwide. According to a Deutsche Bank report, the
industry would grow at a CAGR of 10% to reach US$111 billion by 2020.The growth of the
services sector (thereby leading to rising household income, an expanding middle class and more
inbound and outbound tourism) is responsible for this rapid growth.

Decade of air travel the civil aviation sector in India has witnessed favorable developments in
the last decade. India is the ninth-largest civil aviation market in the world and is poised to
feature among the top five global markets over the next decade. Airline passenger traffic rose
rapidly from 59.3 million in 2011 to 162.3 million in 2015.

Market size and revenue sources

44
The online travel market grew rapidly at a CAGR of 51.8% from US$1.5 billion in 2007 to US$8
billion in 2011. OTA market penetration increased from 2.2% in 2005 to 28% in 2011.

Online travel market size (US$ billion)

10
9
8
7
6
5 Online travel market size
4 (US$ billion)
3
2
1
0
2010 2011 2012 2013 2014 2015 2016

Airlines either sell their tickets directly to customers or through GDS and OTAs. GDS
offer air and railway tickets, car rental information and hotel rooms. This makes it compelling
for OTAs to partner with them. OTAs also directly partner with airlines, hotels, railways and bus
services. Meta search engines partner with airlines and hotels to provide customers with a
common portal that encompasses information from all OTAs and airline portals. This helps their
customers obtain information on the best prices available on a single website.
.
Online purchase of air tickets the highest among the different online travel segments
OTAs derive the bulk of their revenues from the airline industry. Among the various
modes of transport, more than 50% of air tickets and 40% of train tickets are bought online .This
is not surprising, considering that a larger number of air travelers have internet access. Airline
tickets has benefited from the rapid growth of the overall airline Industry in India, especially
LCCs, which maintain focus on online booking.

45
 Online travel penetration by segments(2014)
4%
6%

TRAIN TRAVEL
40%
AIR TRAVEL

HOTEL RESERVATION &

TOUR PACKAGES
50% BUS TRAVEL

Domestic air ticket segment driving online ticketing…

The Indian Railways website is the most visited travel site in India. However, since the
average price of a railway ticket is less than that of an airline ticket, online booking of domestic
air tickets has emerged as the largest segment of the online travel industry (with a 65% share in
2009).37 OTAs form a significant portion of this segment with a 34% market share.

Growth in online hotel reservations and hotel packages

Mushrooming OTAs posing questions to segment leaders

Low entry barriers in the online travel market have resulted in a number of small players
entering this space. The market is now cluttered with a mix of large Indian OTAs, as well as
several smaller players and international players. Recent entrants are mainly competing on price
to capture market share. This has put pressure on the margins of players across the segment.

Low margins and declining airline commissions fueling shift to online hotel reservations
Commission rates in the air travel segment are low (around 7%). The margins of hotel
reservations and tour packages are the highest among all the segments of online travel and are
often as high as 25%.

46
 Online travel: margins by segment

Margins in the ticketing business for OTAs in India are expected to erode further, with
airlines increasingly raising their voice against giving commissions to the former. The airline
commission model has already been done away with in Japan.

Leading international airlines flying to India have already decided to adopt a zero-
commission structure for travel agents. As of January 2012, 17 international airlines had stopped
paying commission to travel agents. We foresee continued pressure on the margins of OTAs
from domestic airlines as well.

47
 Shift in business model of OTAs required for them to expand their operations in the hotel
reservation and tour package segment

KEY SUCCESS FACTOR IN ONLINE

HOTEL RESERVATION SEGMENT

TRAINING TO CUSTOMER CARE

EXECUTIVE & ON-FIELD WORKFORCE

OFFLINE PRESENCE

ENSURING AUTHENCITY OF
INFORMATION ON PORTALS

Higher margins in the hotel reservation segment have lured many OTAs. However,
players need to be aware and step up to the competencies required in the hotel reservation space
in terms of supplier partnerships management, operational requirements of workforce and
information management. These requirements are different from those posed in the ticketing
segment.

48
 ONLINE CLASSIFIEDS

The online classifieds segment is expected to overtake the offline classifieds sector by
2012.
Subscription revenues constitute the main source of revenues for the online
classifieds segment.
Online recruitment is the largest category in the online classifieds segment,
followed by online matrimonial.
Online recruitment players are increasing their focus on providing enhanced
search functionalities and value-added services.
The “big fat” Indian wedding industry is providing new sources of revenues to
online matrimonial companies.
The evolution of the real estate classifieds segment is dependent on how well it
piggybacks the growth in Indian real estate.
The Indian auto classifieds market is still at its nascent stage

1. Market size and revenue sources

The online classifieds market in India grew at a CAGR of 29% from 2008 to 2011.

Online classifieds market size (US$ million)

2015

2014

2013

2012

0 50 100 150 200 250 300

49
The primary target audience of the classifieds segment is restricted to urban areas due to the
concentration of companies, real estate players and automobile players (willing to advertise
online). The major sources of revenues for the online classifieds segment depend on the segment
and are listed below

•CHARGES OF JOB LISTING & EMPLOYER

BRANDING
•CHARGES FOR RESUME DATABASE ACCESS
RECRUITMENT •CHARGES FOR JOB SEEKING VALUE- ADDED
SERVICE
•ADVERTISING FEES

• SUBCRIPTION FEES FROM CUSTOMER

MATRIMONIAL • ADVERTISING FEES

• SUBCRIPTION FEES FROM

DEVELOPER, BUILDER & BROKER FOR
REAL ESTATE PROPERTY LISTING
• ADVERTISING FEES

•LEAD GENERATED FOR NEW CARS, AUTO

INSURANCE & AUTO FINANCE
AUTOMOBILES •SUBCRIPTION & BROKERAGE FEES
•CHARGES FOR AUTOMOTIVE LISTING
•ADVERTISING FEES

• SUBCCRIPTION CHARGES WHICH INCLUDES

SERVICE LIKE CREATING WEBSITES, MICRO-
B2B SITES CATALOG & SEARCH ENGINE
OPTIMIZATUION
• ADVERTISING FEES

Subscription revenues in the online classified segment constitute the bulk of the revenues
generated by these players, while revenues from value-added services (VAS) and no contextual

50
advertising form a minuscule portion. Companies in this space are also expected to increase their
revenue share from VAS.

Classifieds market

2015

ONLINE
OFFLINE
2012

0%
10%
20%
30%
40%
50%
60%

…led by easy search functionalities, a young internet population and low online advertisement
costs
Databases and search functionality
Access to huge databases and advanced search functionalities, which make the process of
searching for relevant information much easier than in the offline mode, are driving the success
of the online classifieds segment.

Young internet population

Around 40% of internet users in India are aged 25–34 years and spend a significant time on
internet. They are part of the country’s working population and the main consumers of
recruitment and matrimonial classifieds. This makes online classifieds an attractive medium to
target the young population.

Online recruitment classifieds — largest category in online classifieds

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The online recruitment or e-recruitment segment is the largest category in the online classifieds
segment in India, with a market size of US$99.2 million and a 62.5% share of the online
classifieds market in 2009.

Expected growth of jobs in India bodes well for the segment

The number of jobs is expected to increase across sectors in India. According to the
industry body, the Associated Chambers of Commerce & Industry (ASSOCHAM), 87.37 million
jobs would be created by 2015. This holds promise for the growth of the online recruitment
classifieds segment, since players have only scratched the surface of the job market and the full
potential of the sector is yet to be realized.

Online recruitment classifieds benefiting employers and offline recruitment agencies

The segment offers various benefits, including reduced advertisement costs, wider
geographical reach and easy search options, to companies. Employers are increasing their
budgets for online recruitment, realizing the convenience and efficacy of the mode. Online
recruitment classifieds are also proving beneficial for the growth of offline recruitment agencies,
which are using online portals to build databases of candidates and jobs.

Increased focus on providing enhanced search options…

Online recruitment classified players are increasing their investment on search
functionalities, since providing enhanced search options is high on their list of priorities.
Furthermore, they are developing separate portals to cater to varying verticals such as financial
services, technology and BPO to enable focused searches.

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 CHAPTER 3
COMPANY PROFILE

3.1 INTRODUCTION TO AMAZON.IN

At Amazon.in, our vision is to be Earth's most customer centric company; to build a place
where people can come to find and discover virtually anything they want to buy online. With
Amazon.in, we endeavor to build that same destination in India by giving customers more of
what they want vast selection, low prices, fast and reliable delivery, and a trusted and convenient
online shopping experience and provide sellers a world-class e-commerce platform. We are
committed to ensure 100% Purchase Protection for your shopping done on Amazon.in so that
you can benefit from a safe and secure online ordering experience, convenient payment options
such as cash on delivery, easy returns and enjoy a completely hassle free online shopping
experience.

We launched with Books and Movies & TV shows and have expanded our offerings to
include the Kindle family of E-Readers, the Amazon Fashion Store and various products under
different categories. Customers can now buy products from popular brands across categories
such as Samsung mobiles, Dell laptops, Canon cameras, Fastrack watches and many more at
Amazon.in. Don’t forget to check out the Amazon Exclusives Store and also, shop for Today's
+Deals on Amazon and save big every day.

Customers can also shop our full selection of products using the Amazon App for
Android, iOS and Windows which offers customers a convenient, fast and secure way to search,
browse, compare offers, and shop online quickly and easily, at anytime from anywhere. It is still
“Day 1” and we continue to relentlessly focus on using our investments in technology and

53
innovation to transform the lives of our customers and all our partners. We strive to transform
the way India shops and the way India sells.

 AMAZON.IN INC’S VISSION & MISSION STATEMENT

Amazon.in Inc.’s vision and mission statements have pushed the company to become the largest
online retailer in the world. This success is attributed to stringent measures to ensure that the
mission and vision statements are fulfilled. The vision statement provides organizational
direction toward a desired future condition of the business. The mission statement presents
business goals and guides strategic formulation in the company. Amazon’s vision statement
shows a future of global dominance in the online retail industry. On the other hand, Amazon’s
mission statement focuses on effective and high-quality service. The fulfillment of these official
statements facilitates further enhancement of the e-commerce business for long-term success in
the global market.

 Amazon. In’s Vision Statement

“To be Earth’s most customer-centric company, where customers can find and discover
anything they might want to buy online.” This vision statement underscores the organization’s
main aim of becoming the best e-commerce company in the world.

The following components or characteristics are emphasized in Amazon’s vision statement:

1. Global reach
2. Customer prioritization
3. Widest selection of products

The “global reach” component in Amazon.com Inc.’s vision statement is all about international
leadership in the e-commerce market. For example, in stating the “Earth” as the market, the
company shows that it aims to continue expanding globally. Thus, a corresponding strategic
objective is global expansion, especially through market penetration and market development
[Read: Amazon.com Inc.’s Generic & Intensive Growth Strategies]. The “customer

54
prioritization” component of Amazon’s vision statement shows that the firm considers customers
as the most important stakeholder group in the online retail business. Moreover, the vision
statement indicates continuing efforts to broaden the product mix, under Amazon.com Inc.’s
marketing mix approach.

 Amazon. In’s Mission Statement

Amazon’s mission statement is as follows: “We strive to offer our customers the lowest possible
prices, the best available selection, and the utmost convenience.” This mission statement
promises an attractive e-commerce service to satisfy customers’ needs.

The following components or features are identifiable in Amazon’s mission statement:

1. Lowest prices
2. Best selection
3. Utmost convenience

The “lowest prices” component of the mission statement guides Amazon.in Inc.’s pricing
strategy. Such low prices are a selling point that makes the company’s e-commerce website and
service attractive. A corresponding strategic objective is to reduce operational costs. Amazon’s
mission statement also points to having the best selection. The availability of a wide variety of
products on the company’s website is a major factor that attracts customers. Moreover,
Amazon.in Inc.’s mission statement emphasizes convenience. Convenience is a common
criterion that consumers use in evaluating the quality of the online retail service.

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 3.2HISTORY OF AMAZON.IN

The company was founded in 1994, spurred by what Amazon founder Jeff Bezos called
his "regret minimization framework," which described his efforts to fend off any regrets for not
participating sooner in the Internet business boom during that time In 1994, Bezos left his
employment as vice-president of D. E. Shaw & Co., a Wall Street firm, and moved to Seattle. He
began to work on a business plan for what would eventually become Amazon.com.

Jeff Bezos incorporated the company as "Cadabra" on July 5, 1994. Bezos changed the
name to Amazon a year later after a lawyer misheard its original name as "cadaver". In
September 1994, Bezos purchased the URL Relentless.com and briefly considered naming his
online store Relentless, but friends told him the name sounded a bit sinister. The domain is still
owned by Bezos and still redirects to the retailer. The company went online as Amazon.com in
1995.

Bezos selected the name Amazon by looking through the dictionary, and settled on
"Amazon" because it was a place that was "exotic and different" just as he planned for his store
to be; the Amazon River, he noted was by far the "biggest" river in the world, and he planned to
make his store the biggest in the world. Bezos placed a premium on his head start in building a
brand, telling a reporter, "There's nothing about our model that can't be copied over time. But
you know, McDonald's got copied. And it still built a huge, multibillion-dollar company. A lot of
it comes down to the brand name. Brand names are more important online than they are in the
physical world." Additionally, a name beginning with "A" was preferential due to the probability
it would occur at the top of any list that was alphabetized.

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 Since June 19, 2000, Amazon's logotype has featured a curved arrow leading from A to
Z, representing that the company carries every product from A to Z, with the arrow shaped like a
smile. After reading a report about the future of the Internet that projected annual Web
commerce growth at 2,300%, Bezos created a list of 20 products that could be marketed online.
He narrowed the list to what he felt were the five most promising products which included:
compact discs, computer hardware, computer software, videos, and books. Bezos finally decided
that his new business would sell books online, due to the large worldwide demand for literature,
the low price points for books, along with the huge number of titles available in print. Amazon
was originally founded in Bezos' garage in Bellevue, Washington.

Amazon was incorporated in 1994, in the state of Washington. In July 1995, the company
began service and sold its first book on Amazon.com: Douglas Hofstadter's Fluid Concepts and
Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. In October
1995, the company announced itself to the public.[34] In 1996, it was reincorporated in Delaware.
Amazon's initial business plan was unusual; it did not expect to make a profit for four to five
years. This "slow" growth caused stockholders to complain about the company not reaching
profitability fast enough to justify investing in, or to even survive in the long-term. When
the dot-com bubble burst at the start of the 21st century, destroying many e-companies in the
process, Amazon survived, and grew on past the bubble burst to become a huge player in online
sales. It finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share),
on revenues of more than $1 billion. This profit margin, though extremely modest, proved to
skeptics that Bezos' unconventional business model could succeed. In 1999, Time magazine
named Bezos the Person of the Year, recognizing the company's success in popularizing online
shopping.

Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the
world's largest bookstore" was false. Barnes and Noble asserted, "[It] isn't a bookstore at all. It's
a book broker." The suit later settled out of court, and Amazon continued to make the same
claim. Wal-Mart sued Amazon on October 16, 1998, alleging that Amazon had stolen Wal-
Mart’s trade secrets by hiring former Wal-Mart executives. Although this suit was also settled

57
out of court, it caused Amazon to implement internal restrictions and the reassignment of the
former Wal-Mart executives.

HISTORY OF AMAZON.COM LOGO

Founded in 1994, Amazon was once nothing but a tiny online bookstore. Today however
it is multi-billion dollar company that sells thousands of products all over the world. From sports
equipment to DVDs and even streaming movies, Amazon has become a company to be reckoned
with. Amazon has grown incredibly powerful and is sure to be a player on the national stage for
many years to come.

One factor that has helped Amazon in its climb to the top is the uniqueness of their logo.
People from across the globe can recognize the Amazon logo on sight and, should they need to
buy a present or the latest piece of technology, the image is sure to stick in their mind. Anyone
who wants to create a branding empire of their own should pay attention to what Amazon has
accomplished with their simple but effective logo.

LOGO 1 – EARLY DAYS

When Amazon first started, it was only an online bookseller. To that end they created a logo that
advertised their specialty. Under a translucent “A” were the words “Amazon.com, Earth’s
biggest bookstore.” The entire background of this first logo was a pleasing water texture. The
water effects made the entire logo into a soothing image, surely meant to attract attention in the
crowded market that Amazon was trying to make its mark in.

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LOGO 2 – BOOKS, MUSIC & MORE

In 1998, Amazon started to expand. A large music selection was added to their collection of
books and Amazon decided to market these new products. To that end that created a logo that
advertised exactly what they offered. They also simplified the background to a plain white one,
with the Amazon letters in gold upon it. This was made so as to be more pleasing to the eye
online hopefully reaching a wider audience.

LOGO 3 – THE ARROW

In 2000 Amazon introduced the logo that most people can probably recognize. The logo was just
shortened to include the web address against a white background with a yellow arrow
underneath. The arrow, which points from A to Z in the Amazon logo, symbolizes how a
customer could find everything they needed at Amazon. This logo was meant to be simple and
easy to understand, catering to the customers who were interested in 1-stop shopping.

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LOGO 4 – AND YOU’RE DONE

In 2002 Amazon created its current logo. This logo borrows heavily from the previous logo but
adds the words “and you’re done” to the bottom left-hand corner. This served to better illustrate
to people that Amazon had a huge selection of merchandise and, no matter what they were
looking for, Amazon was most likely to have it.

Why the Logo Works

There can be no doubt that the logo is extremely effective. People from around the world can
recognize that it’s an Amazon logo and company can and do spend billions of dollars for that
kind of brand recognition. The reason that it probably works so well is because it’s simple but
offers consumers exactly what they want. To put it plainly, what they want is place where they
can find everything from A to Z.

Mergers and acquisitions

Investment
 2008: Engine Yard, a Ruby-on-Rails platform as a service (PaaS) company.
 2010: Living Social, a local deal site.
 2014: Acquired the '.buy' domain in an auction for $4,588,888
 2014: Amazon Announces Additional US $2 Billion Investment in India in June 2014
 2016: Amazon Announces Additional US $3 Billion Investment in India in June 2016

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 3.3 WHY AMAZON IS BETTING ON INDIA?

Amazon CEO Jeff Bezos recently announced an additional investment of $3 billion in

India, taking its net investment to over $5 billion in the country. To put things in perspective, this
is almost equal to the company’s global marketing costs in 2015, and is higher than its total
capital expenditures last year ($4.5 billion). Amazon has stated that it intends to use this money
to improve its position in the e-commerce space as well as build its web services business in the
country. India presents an opportunity both in terms of a growing market as well as a skilled
workforce, considering its 7%-plus GDP growth, relatively stable political environment and a
relatively young working population. Below we take a look at why Amazon is betting big on
India:

 E-Commerce Growth: Amazon has been operating in the e-commerce market in India
since 2013, and has seen significant growth in the last three years. It is now among the top
three e-commerce platforms in the country, along with Flipkart and Snapdeal, both in terms
of Gross Merchandise Value and the number of site visits. With an estimated current market
size of $38 billion, e-commerce in India is expected to grow to about $120 billion by 2020,
which presents a massive growth opportunity for AMAZON.

61
AWS Growth: In addition to e-commerce, Amazon’s focus on expanding its web services
business in emerging markets stems from the business’s robust profitability and Amazon’s
growing list of global customers which now includes Sales force, Netflix, Uber and Apple.

 International Growth: Amazon’s international business has not been able to match North
America in terms of either top line or bottom line growth. In 2015, Amazon’s international
revenues increased just 5.7% year-over-year to $35.4 billion compared to growth of over
25% in North America to $63.7 billion. In the first quarter this year, sales in international
markets grew 24% but operating income remained negative.

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 3.4 AMAZON’S LOGISTICS SERVICE

Amazon could be on the brink of diving into another enormous business opportunity.
Earlier this week, The Seattle Times reported that the ecommerce giant is in talks to lease 20
cargo planes to build its own overnight-air-logistics operations.

The report was the latest in a series of hints that Amazon could be gearing up to create an
in-house logistics department that would allow it to take full control of its fulfillment process.
Amazon would be able to sidestep carriers like UPS and FedEx to avoid the shipment delays that
it has previously dealt with (most notably during the 2013 holiday season, when many customers
didn't receive orders in time for Christmas).

Analyst Colin Sebastian from Baird Equity Research writes that Amazon has
"powerhouse potential" in the transportation and logistics market, and that it could be "Amazon's
next 'AWS' opportunity." Sebastian's idea here is that Amazon could turn its in-house logistics
network into a business in the same way that it grew Amazon Web Services, its insanely fast-
growing (and profitable) cloud computing offering. Amazon built AWS out of the infrastructure
it had created to support its own operations, and now runs a business expected to pull in $8
billion in revenue this year. In the same vein, it could build a logistics network to clear up its
own delivery bottlenecks, and then, eventually, offer services to other companies.

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 3.5 AMAZON KNOWS WHY SOCIAL MEDIA IS IMPORTANT

In this crazy world that social media has taken over, businesses need to understand why social
media is important to a thriving internet marketing strategy. There are many businesses that have
the key to a successful social media presence. There are four key things that you need to
remember when creating a strategy. Be engaged, create great content, be strategic and stay up-to-
date with social media changes and trends.

At the time of writing, Amazon.com has over 26.5 million likes on

Facebook. Their central account has a product listing of Retail and
Consumer Merchandise, and is used to market their own products and
highlight deals, competitions and offers to their consumer community.
Often these are optimized to coincide with relevant events and
holidays, providing enticing and valuable content for their customers.
For example, on International Beer Day they posted a high quality video on How to brew your
own beer. Amazon also has specific Facebook accounts related to their products, such as Prime
Video. Much like the central account, these are used to draw attention to relevant products and
offers in order to increase intrigue, drive engagement through reach and ultimately gain sales.

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 Amazon use Twitter to understand how Social Media is not
only a marketing tool but can also be integrated directly into
e-commerce. Whereas other retailers are reluctant to invest
time integrating, Amazon have done so by allowing users to
send items to their shopping basket directly from Twitter by
responding to product tweets with the hash tag #AmazonCart.
Alongside the predominant B2C aspect of their business,
Amazon also has a clear grip on the B2B. This can be seen on their Amazon Web Services
(AWS) Twitter account.

Pinterest is a great platform for Amazon because it

sells stuff. It's able to share pictures of its products
without needing a large explanation for why people
should buy the products. Sometimes all people need is
to see a product and in a blink of an eye that product is
in their shopping cart at Amazon.com. Keeping picture
Vibrant and looking sensational is what attracts people to those Amazon products on Pinterest.
Take a look at Amazon’s social media accounts and you can see why it has a large number of
followers and higher engagement. Making social media a priority is important to create a kickin’
internet marketing strategy. Not every social media platform is right for every business but there
has to be a few social media platforms that can help promote your business if you do it
strategically.

Other Social Media Channels

Amazon Inc. remains very active on many other Social Media channels, investing time into
network-specific content. For example, on Snapchat they provide Snap Deals - exclusive, one-
off style offers that lend themselves perfectly to the network. On Instagram they focus on
visually appealing content and products that doesn’t seem out of place, alongside a tremendous
amount of pictures of animals playing around on Amazon branded boxes. They are fully aware
that animals are appealing and shareable, and so use Instagram to increase their brand reach.

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3.6 AMAZON INDIA’S ADVERTISING & THE POWER OF CONSUMER INSIGHTS

E-Commerce is very much an offshoot of retail, with an added degree of consumer

convenience and access. With the boom of e-Commerce in India, shopping has become an
inseparable part of everyone's lifestyle.

Though the e-commerce revolution has changed the way people shop, the consumer
behavior majorly remains the same. The kind of expectations that people have from these e-
commerce players now is quite the same when they used to shop in offline retail stores, and
hence, e-commerce players have adopted such positioning which is very well understood by the
Indian retail consumer. A case in point is Amazon India's advertising and the positioning the
platform has taken in the recent past. To familiarize with its Indian consumers, Amazon, in the
past too, had adopted positioning like 'Aur Dikhao' and 'Kya Pehnu''. Following the same
strategy of taking up every day phrases from the consumers' lives, the online portal has now
rolled out another one positioning, '#ApniDukaan'.

Now, Phrases like Aur Dikhao, Kya Pehnu and the recent Apni Dukaan are so well
embedded in the daily lingo of a traditional retailer in India that these almost second what Indian
retail stands for. "In order to convey features like easy returns and access to genuine products
that essentially build customers' trust and confidence in shopping on Amazon.in, we decided to
use a phrase from Indian popular culture "Yeh apni dukaan Hai"(This is our own shop). In daily
parlance, customers generally use 'Apni Dukaan' in reference to those stores that they are more
familiar with and have complete trust in. We want to make people aware that Amazon.in is one
such store," elaborates Amazon India spokesperson.

Conceptualized and executed by Orchard India and directed by Anurag Kashyap, the one
minute video shows Amazon as a reliable place to shop from with original products, easy return
policies and on-time delivery. The video comes along with a song with lyrics by Amitabh
Bhattacharya and music by Amit Trivedi.

66
 3.7 BRANDS WITH AMAZON

World's largest e-retailer Amazon is India's most trusted online shopping brand followed
home grown Snapdeal and Flipkart, a survey said. Other firms to figure in the top 10 trusted
online shopping brands are Ebay, Myntra, Yepme, Jabong, Naaptol, Shopclues and
Askmebazaar. The survey was conducted among 2,500 respondents; aged 21-50, across 16 cities
and its findings have been compiled in The Brand Trust Report, India Study 2016. The report is
issued annually by TRA (formerly Trust Research Advisory). "Amazon is India's most trusted
online shopping brand with 36 per cent of the trust pie. Together, these three brands make up for
76 per cent of online shopping trust pie," TRA Chief Executive Officer N Chandramouli told
reporters here today. Overall, South Korean smartphone maker Samsung Mobiles has emerged as
the most trusted brand in the country followed by Sony and LG, while Tata Group is the only
Indian corporate to figure in the top five.

As per the study, the top five most trusted brands are Samsung Mobiles, Sony, LG, Nokia
and Tata. The top 20 most trusted brands which have improved their ranking over last year
include Samsung Mobiles, Sony, Nokia, Honda, ICICI Bank Maruti Suzuki, HDFC
Bank, Airtel, Hero MotoCorp, Dove, Lux, Samsung, Pepsi and Puma. Top 20 trusted brands
which slipped in rankings are LG, Tata, Bajaj and Apple. In the diversified FMCG space,
Cavinkare has emerged as the most trusted brand, followed by Nirma, while Patanjali claimed
the fourth position. Maggi leads the FMCG food category, gaining 42 ranks from 2015 to occupy
the 65th position in the overall trust rank list.

67
 Mobiles: OnePlus, Google Nexus 5, iPhone6, Samsung Mobiles, Sony Mobiles, Nokia
Mobiles, Micromax Mobiles, Lenovo Vibe S1 , OnePlus2, OnePlus X , HTC Mobiles.

 Kindle: Kindle PaperWhite Wi-Fi, Kindle Paper white 3G, Kindle Oasis Wi-Fi, Kindle
Oasis Wifi+3G, Kindle, Kindle Voyage, Kindle Store, Kindle Accessories.

 Electronics: HP Laptops, Dell Laptops, Acer Laptop, Bose Audio, Sony Audio, Canon
Cameras, Nikon Cameras, Sony Cameras, Smarts TVs, Sony TVs, Samsung TVs

 Household Needs: Dove Shampoos, L’Oreal Paris, Whisper, Air Conditioner, Gillette,
Refrigerators, Washing Machines, Hamleys, Whey Proteins.

 Watches: Casio Watches, Titan Watches, Fastrack Watches, Timex Watches, Maxima
Watches, Fossil Watches, Citizen Watches, Sonata Watches, Tommy Hilfiger Watches

 Shoes: Bata Shoes, Woodland Shoes, Fila Shoes, Crocs Shoes, Nike Shoes, Adidas
Shoes, Puma Shoes, Reebok Shoes.

 Lifestyle: Fastrack Bags, Baggit, Sky Bags, Wild craft Bags, Lavie, VIP Bags, American
Tourister, Hidesign, Ray Ban, Fastrack Sunglasses, Idee Sunglasses, and Amazon
Fashion.

 Apparel: Formal Shirt, Casual Shirts, Saree, Men’s Jeans, Capris, Men’s Polo’s,
Women’s Dresses, Boy’s Clothing, Girl’s Clothing, Men’s Clothing.

 Top Searches: Noble TV, Moto G4 Plus, Meizu m3 Note, Lenovo K4 Note, Redmi
Note3, Refurbished Mobiles, Coolpad Note 3, Google Nexus 9, Honor Mobiles, Redmi
Note 4G.

 Others: Sofas, Amazon Basics, Huggies Diapers, Pampers Diapers, Fragrances, Xbox
One, Xbox 360, International Brand Store, Seller Blog, Amazon Sale.

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Customers Queries

What can I return?

You may request returns for most items you buy from Amazon.in, except those that are explicitly
identified as not returnable. For details of time frame for requesting returns please refer to our
returns policy.

When will I get my refund?

Refunds back to Credit Cards, Debit Cards, Net Banking or Bank Accounts (NEFT) are fully
refunded within 3-5 days after we receive and process your return. Refunds in form of cheques
can take 10-12 business days to arrive via post. Refund in the form of Gift Cards can take 1
business day.

Does Amazon do replacements?

Amazon offers free replacement for FBA orders including Kindle. Follow the steps in the Return
Center to request a replacement for your FBA order.

100% Purchase Protection

We are committed to ensure 100% Purchase Protection for customers by offering genuine
products, secure payments and easy returns for items shopped on Amazon.in.
 Easy Returns
 How Easy Returns Work
 Genuine Products
 Secure Payments and Safe Ordering

Easy Returns
Returns are easy with our online Returns Support Centre.

General Returns Guidelines

1. Some products cannot be returned and are marked on the product detail page. View the list
of non-returnable items.

69
2. Damaged/ defective items must be returned in the original condition they were received in
with all the accompanying accessories and in the original manufacturer's box/packaging.
3. Items that you no longer need must be returned in new and unopened condition with all the
original packing.
4. Only items that are fulfilled by Amazon may be eligible for replacement. For more details,
please refer About Free Replacements.
5. Visit Kindle help pages for Kindle-specific returns policy.

Refund or Replacement Categories, 30-day Return Window (applies to Fulfilled by

Amazon Items including Prime Eligible items)

Product Categories Return Conditions/Exceptions

Used Books and Watches Can be returned for a refund only.

Refunds applicable only if determined that the item
was not damaged while in your possession, or is not
different from what was shipped to you.

Books, Movies & TV Shows, Any luggage items with locks must be returned
Apparel, Watches, Fashion unlocked.
Jewelry, Shoes, Luggage &
Handbags

Music, Beauty, Sports, Fitness

and Outdoors

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 3.8 AMAZON SWOT ANALYSIS

Amazon is a profitable organization. In 2005 profits for the three months to June dipped 32% to
$52m (£29.9m) from $76m in the same period in 2004. Sales jumped 26% to $1.75bn. Until
recent years Amazon was experiencing large losses, due to its huge initial set up costs. The
recent dip is due to promotions that have offered reduced delivery costs to consumers.
This SWOT analysis is about Amazon.

STRENGTHS

 Amazon is a profitable organization. In 2005 profits for the three months to June dipped 32% to
$52m (£29.9m) from $76m in the same period in 2004. Sales jumped 26% to $1.75bn. Until
recent years Amazon was experiencing large losses, due to its huge initial set up costs. The
recent dip is due to promotions that have offered reduced delivery costs to consumers.

 Customer Relationship Management (CRM) and Information Technology (IT) support

Amazon’s business strategy. The company carefully records data on customer buyer behavior.
This enables them to offer to individual specific items, or bundles of items, based upon
preferences demonstrated through purchases or items visited.

 Amazon is a huge global brand. It is recognizable for two main reasons. It was one of the
original dotcoms, and over the last decade it has developed a customer base of around 30
million people. It was an early exploiter of online technologies for e-commerce, which made it

71
 one of the first online retailers. It has built on nits early successes with books, and now
has product categories that include electronics, toys and games, DIY and more.

WEAKNESS

 As Amazon adds new categories to its business, it risks damaging its brand. Amazon is the
number one retailer for books. Toy-R-Us is the number one retailers for toys and games. Imagine
if Toys-R-Us began to sell books. This would confuse its consumers and endanger its brands. In
the same way, many of the new categories, for example automotive, may prove to be too
confusing for customers.

 The company may at some point need to reconsider its strategy of offering free shipping to
customers. It is a fair strategy since one could visit a more local retailer, and pay no costs.
However, it is rumored that shipping costs could be up to $500m, and such a high figure would
undoubtedly erode profits.

OPPURTUNITIES

 The company is now increasingly cashing in on its credentials as an online retail pioneer by
selling its expertise to major store groups. For example, British retailer Marks and Spencer
announced a joint venture with Amazon to sell its products and service online. Other recent
collaborations have been with Target, Toys-R-Us and the NBA. Amazon’s new Luxembourg-
based division aims to provide tailored services to retailers as a technology service provider in
Europe.

 There are also opportunities for Amazon to build collaborations with the public sector. For
example the company announced a deal with the British Library, London, in 2004. The benefit is
that customers can search for rare or antique books. The library’s catalogue of published works is
now on the Amazon website, meaning it has details of more than 2.5m books on the site.

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 In 2004 Amazon moved into the Chinese market, by buying china’s biggest online retailer,
Joyo.com. The deal was reported to be worth around $75m (£40m). Joyo.com has many
similarities to its new owner, in that it retails books, movies, toys, and music at discounted
prices.

Threats

 All successful Internet businesses attract competition. Since Amazon sells the same or similar
products as high street retailers and other online businesses, it may become more and more
difficult to differentiate the brand from its competitors. Amazon does have its brand. It also has a
huge range of products. Otherwise, price competition could damage the business.

 International competitors may also intrude upon Amazon as it expands. Those domestic (US-
based) rivals unable to compete with Amazon in the US, may entrench overseas and compete
with them on foreign fronts. Joint ventures, strategic alliances and mergers could see Amazon
losing its top position in some markets.

 The products that Amazon sells tend to be bought as gifts, especially at Christmas. This means
that there is an element of seasonality to the business. However, by trading in overseas markets
in different cultures such seasonality may not be enduring.

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 3.9 COMPETITORS OF AMAZON

MYNTRA is an India Fashion E-commerce Company head quartered

in Bengaluru, Karnataka, India. The company was founded in 2007 by Indian Institute of
Technology graduates with a focus on personalization of gift items. By 2010, Myntra shifted its
focus to the online retailing of branded apparel. In May 2014, Myntra.com merged
with Flipkart to compete against Amazon which entered the Indian market in June 2013 and
other established offline retailers like Future Group, Aditya Birla Group and Reliance Retail.

FLIPKART was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of
the Indian Institute of Technology Delhi. They worked forAmazon.com, and left to create their
new company incorporated in October 2007 as Flipkart Online Services Pvt. Ltd. The first
product they sold was the book Leaving Microsoft to Change the World to a customer from
Hyderabad. Flipkart now employs more than 33,000 people. Flipkart allows payment methods
such as cash on delivery, credit or debit card transactions, net banking, e-gift voucher and card
swipe on delivery.

JABONG was co-founded by Arun Chandra Mohan, Praveen Sinha, Lakshmi Potluri.
All co-founders have left the company. In March 2013, Jabong was shipping 6000-7000 orders a
day. According to The Economist, Jabong clocked gross sales of around US $100–150 million in
2012. As per the live mint article, during September 2013 Jabong was shipping 14,000 orders on
a daily basis out of which 60% were from small towns. Jabong was one of the most visited e-

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commerce sites during the Great Online Shopping Festival 2013. Company representatives
claimed that its revenues increased five to six times compared to a usual day.

SNAPDEAL was started on 4 February 2010 as a daily deals platform, but expanded in
September 2011 to become an online marketplace. Snapdeal has grown to become one of the
largest online marketplaces in India offering an assortment of 10 million products across diverse
categories from over 100,000 sellers, shipping to more than 5,000 towns and cities in India. In
March 2015, Snapdeal brought actor Aamir Khan for the promotion of its website in India.

SHOPCLUES is an online marketplace, headquartered in Gurgaon, India. The company

was founded in California's Silicon Valleyin 2011. It has over 12,000 registered merchants retail
2,00,000+ products on the platform to over 42 million visitors every year across 9500 locations in
the country. The e-commerce company is incorporated in Delaware. ShopClues joined as 35th
entrant in the Indian e-commerce in 2011. The company employs about 700 people across
different locations.

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 CHAPTER 4

RESEARCH METHODOLOGY

1. DATA COLLECTION

This report is based on primary as well secondary data, however primary data collection was
given more important since it is overhearing factor in attitude studies. One of the most
importance users of research methodology is that it helps in identifying the problem, collection
analyzing the required information data & providing as alternative solution to solution to the
problem also helps in collecting the vital information that is required by the top management to
assist them for the better decision making both day to day.

 DATA SOURCE

Research is totally based on primary data. Secondary data can be used only for the
reference. Research has been done by primary data collection, & primary data has been
collected by interacting with various people. The secondary data has been collected
through various journals & websites.

 DURATION OF THE STUDY

The Study was carried out of a period of 3 months from 1st July to 29th September 2016.

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2. SAMPLING

Sampling procedure:

The sample was selected of them who are the customer / visitor of Ecommerce company
irrespective of them being investors or not availing the service or not. It was also collected
through personal visits to persons, by formal & informal talks & through filing up the
Questionnaire prepared. The data has been analyzed by using mathematical / statistical tools.

 Sample Size

Sample Size of my project is limited to 40 people only. Out of which only 25 people had
done Online Shopping. Other 15 people are not interested in online Shopping.

 Sample Design

Data has been presented with the help of Bar Graph, Pie Diagram.

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 CHAPTER 5
DATA ANALYSIS & INTERPRETATION

In this section, we will analyze the data which is obtained through the different Questionnaire.

Since the survey is related to the Ecommerce Industry, So people related to it like Common Man
& from Professional Fields. The Data analysis Section is done with help of different Charts, Bar
& other techniques Available.

For doing the Survey, A Questionnaire Designed as a Specific tool so as to know the customers
knowledge & awareness towards the Online Shopping.

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Q1. HAVE YOU EVER USED DONE ONLINE SHOPPING?

Interpretation:

YES
NO

Blue indicates 62.5%

Red indicates 37.5%

Above interpretation indicate that Out of 100%, Majority 65.5% people have done Online
Shopping & 37.5% people have not done Online Shopping.

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Q2. IF YOU NEVER HAD ONLINE SHOPPING, PLEASE SPECIFY THE REASON?

Interpretation:

I Don’t know about Online

Shopping
Risk of credit card transaction

Internet Illiteracy

Risk of Identity Theft

Other Reason

Above interpretation indicate that Out of 100%, 20% people don’t know about online
shopping, 33.3% have risk of credit card transaction, 13.3% people have internet illiteracy
issues, 26.6% have risk of Identity theft & 6.6% have other reasons.

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Q3. WHICH OF THESE WEBSITES HAVE YOU ALREADY USE?

Interpretation:

AMAZON
FLIPKART
MYNTRA
SNAPDEAL
OTHERS

Above interpretation indicate that Out of 100, majority 40% use Amazon, 25% use
Flipkart, 16% use Myntra, 12% use Snapdeal & 8% use other shopping websites.

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Q4. HOW OFTEN YOU DO ONLINE SHOPPING?

Interpretation:

Every 15 Days
Monthly
Every 3 months
Every 6 months
Annually

Above interpretation indicate that Out of 100, 4% people does Online Shopping in every 15
days, 12% people does Online Shopping on Monthly basis, 32% people does Online
shopping in every 3 months, 24% people does Online shopping in every 6 months & 28%
people does Online Shopping Annually.

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Q5. WHAT TYPE OF PRODUCT DO YOU BUY THROUGH ONLINE SHOPPING?

Interpretation:

Grocerries
Cosmatic Product
Clothes/Footwear
Books/CDs
Electronics
Cinema Tickets
Airlines/ Railways/Bus Ticket

Above interpretation indicate that Out of 100%, 8% buy groceries, 16% buy cosmetic
product, 35% buy clothes or footwear, 8% buy books or CDs, 11% buy electronic, 15%
buy cinema tickets & 8% buy travelling tickets.

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Q6. HAVE YOU FELT ANY PROBLEM WHILE CONDUCTING ONLINE PURCHASE?

Interpretation:

YES
NO

Above interpretation indicate that Out of 100, 72% people did not face any problem during
online Shopping & 28% people faced problem during Online Shopping.

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Q7. IF YES, WHAT KIND OF PROBLEM?

Interpretation

Delay in Delivery Cheap products Product damage Wrong Product Others

Above interpretation indicate that Out of 100, 28% people had issue of delay in delivery,
14% people faced issue of receiving cheap quality products, 29% people faced issue of
receiving damaged products, 29% people faced other issues.

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Q8. APPROXIMATE AMOUNT YOU WOULD SPEND ON SINGLE ONLINE
PURCHASE?

Interpretation:

Less Than 1000

1000 - 3000
3000 - 5000
5000 - 10000
More than 10000

Above interpretation indicate that Out of 100, 32% people buy product of amount less than
1000, 28% people buy product of amount 1000 – 3000, 20% people buy product of amount
3000 – 5000, 8% people buy product of amount 5000 - 10000, 12% people buy product of
amount more than 10000.

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Q9. WILL YOU RECOMMAND OTHERS TO USE ONLINE SHOPPING ?

Interpretation:

20%

Yes
No

80%

Above interpretation indicate that Out of 100, 80% people recommend others to do online
shopping, 20% people does not recommend others to do online shopping.

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Q10. FEATURE YOU THINK NECESSARY FOR ONLINE SHOPPING SITE.

Interpretation:

Multiple Payment Gateways

Social Networking Integration
Credibility privacy
Design Customer Friendly
Others

Above interpretation indicate that Out of 100, 24% likes multiple payment gateway, 20%
likes social networking integration, 12% likes Credibility privacy, 36% customer friendly
website design & 8% likes other features.

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 CHAPTER 6

CONCLUSION

 The current study is descriptive in nature and it has made an attempt to understand the
behavior of Indian consumers towards online shopping.

 This research shows that online shopping is having very bright future In India.

 Perception towards online shopping is getting better in India.

 The generalized results obtained through data analysis have given close indication of
increasing significance of online stores in the life of Indian people and their online
shopping behavior.

 The e-stores are frequently visited by the shoppers.

 The ease and convenience provided by these stores for 24X7 has made very easy
shopping for consumers.

 With the use of internet consumer can shop anywhere, anything and anytime with easy
and safe payment option.

 Consumers can do comparison shopping between products as well as online stores by

saving time and money.

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 CHAPTER
SUGGESTION & RECOMMEDATION

 More awareness towards online shopping:

We find through this study that the demo-graphical issues like age, education and income
were agreed for online shopping but the rate is higher when the respondents are young, when the
education is higher the respondents agreed for the same and the higher income group respondents
strongly agree for the same. It means an awareness program for online shopping is very much
necessary. The retail online shoppers should be planned for awareness towards online shopping
through different ways.

 Varied payment options:

In order to attract more and more customers, online shoppers have to increase the
payment options as there are only small sections of people in India who have credit cards so this
also hampers some who are willing to shop online. More options like Cash-on-delivery, money
transfer, cheques or demand drafts, end-to-end payment should be made available to the
customer who can adopt the best suited method.

 Awareness regarding security measures

Security issues still continue to be a major drawback and trends like AVS (Address
Verification System), PIN for credit cards, smart cards, digital signatures, e-cards, and easier
infra-and inter-bank transactions online need to be made more prominent. Teaching consumers
to transact only on secure internet connections is also necessary.

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  Highlight the benefit of shopping at home

Potential customers should be convinced of the benefits of shopping from home without
having the pain of going out in the crowded placed.

 Make the prices more competitive

The price offered for online shopping should be made more competitive as compared to
the prices of the goods available in the local shops then only the customers will feel motivated to
buy online.

 Emphasis on after sale service

As the biggest hindrance in the path of online shopping becoming more popular is the
question “who is to blame” If the product is not functioning well? Therefore, there should be
more stress on the quality of products and the durability of the products, which are offered for
sales and along with that assurance for after sales service.

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BIBLIOGRPHY

1. Dr. Anukrati Sharma, “A Study on E-Commerce and Online Shopping: Issues and
influences” Ijcet, vol 4, Issue 1, pp 364-376 January – February (2013).

2. Internet Shopping “An OFT market shopping” June 2007

3. http://www.nextbigwhat.com/online-shopping-india-297

4. http://articles.economictimes.indiatimes.come/keyword/online-shopping

5. http://articles.timesofindia.indiatimes.com/keyword/online-shopping

6. thetechgears.com/top-online-shopping-websites-in india

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ANNEXURE

NAME: OCCUPATION:

Q1. HAVE YOU EVER USED DONE ONLINE SHOPPING?

o YES
o NO

Q2. IF YOU NEVER HAD ONLINE SHOPPING, PLEASE SPECIFY THE REASON?
o I DON’T KNOW ABOUT ONLINE SHOPPING
o RISK OF CREDIT CARD TRANSACTION
o INTERNET ILLITERACY
o RISK OF IDENTITY THEFT
o OTHER REASON

Q3. WHICH OF THESE WEBSITES HAVE YOU ALREADY USE?

o AMAZON
o FLIPKART
o MYNTRA
o SNAPDEAL
o OTHERS

Q4. HOW OFTEN YOU DO ONLINE SHOPPING?

o ONCE IN TWO WEEK
o MONTHLY
o EVERY 3 MONTHS
o EVERY 6 MONTHS
o ANNUALLY

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Q5. HAVE YOU FELT ANY PROBLEM WHILE CONDUCTING ONLINE PURCHASE?
o YES
o NO

Q6. WHAT TYPE OF PRODUCT DO YOU BUY THROUGH ONLINE SHOPPING?

o GROCERRIES
o COSMATICS PRODUCT
o CLOTHES / FOOTWEARS
o BOOKS / CDs
o FURNITURE
o ELECTRONICS
o CINEMA TICKETS
o AIRLINES/ RAILWAYS/ BUS TICKET

Q7. IF YES, WHAT KIND OF PROBLEM?

o DELAY IN DELIVERY
o CHEAP QUALITY OF PRODUCT
o PRODUCT DAMAGE
o DELIVERY OF WRONG PRODUCT
o OTHERS

Q8. APPROXIMATE AMOUNT YOU WOULD SPEND ON SINGLE ONLINE

PURCHASE?
o LESS THAN 1000
o 1000-3000
o 3000-5000
o 5000-10000
o MORE THAN 10000

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Q9. RANK YOUR FAVOURITE ONLINE SHOPPING WEBSITE
o AMAZON
o FLIPKART
o SNAPDEAL
o MYNTRA
o OTHERS

Q10. FEATURE YOU THINK NECESSARY FOR ONLINE SHOPPING SITE

o MULTIPLE PAYMENT GATEWAYS
o SOCIAL NETWORKING INTERGRATION
o CREDIBILITY PRIVACY & SECURE CHECOUT
o DESIGN CUSTOMER FRIENDLY
o OTHERS

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