ASSIGNMENT 1

Q:1 Outline the reasons why a business may wish to adopt e-commerce?
Explain with at least one real corporate case study example.
The size and scale of e-commerce is increasing day by day as a greater number of people are
becoming active internet users and are availing benefit of e-commerce services in their daily
lives. It is believed that by 2025 there will be more than 2.6 billion people who will shop and
purchase goods and services via e-commerce platforms. With e-commerce becoming so
popular and effective in such a short span of time it is becoming a necessity for businesses
to adopt this innovative model of selling and connecting with customers. Let us look at some
compelling reasons which will stir companies and businesses to go for e-commerce:
1. Offers more convenience – An e-commerce platform is open and available to its
customers throughout the day. They can shop 24 x 7, 365 days of the year.
Nowadays as daily schedules of people are becoming busy, they get little to no time
to go for physical shopping, moreover going for physical shopping incurs other costs
e.g., travelling cost if the store is located at a faraway place from your residence or
office which is not the case when people are shopping online. Instead of roaming in a
large megastore wasting their essential time in search of a product customers can
search for the desired good on an e-commerce platform in just seconds and can
order the item with just a click while enjoying their tea or coffee.

2. Provides better reach – With internet penetrating to every nook and corner of the
entire globe, e-commerce provides opportunity to businesses to deepen the reach of
their products to millions of people who have easy access to internet. It would be
very difficult for an enterprise to have such a reach through brick-and-mortar stores
or offline medium as it would require huge financial investments which is next to
impossible for medium and small business owners but with e-commerce this is not a
problem as more and more businesses choose to operate through e-commerce
platforms.

3. A medium to strengthen the brand – E-commerce serves as a powerful medium to

transform, innovate and energize a brand. Businesses can quickly introduce and offer
new products online and can also increase their product lines without worrying
much about space and inventory costs which are a big pain in the offline medium of
selling. Also, through online customer service, advertisements, social media blogs e-
commerce helps to strengthen and communicate the brand in a short span of time.
An online presence also provides numerous opportunities of marketing for other
brands and thus helps in generation of indirect revenue through different streams
e.g. pay per click advertising.

4. Reduces Cost – An e-commerce store is extremely cheap and affordable to setup and
maintain. In physical stores sellers have to pay huge costs for upkeep like rent,
 maintenance, inventory, store redesigning from time to time, insurance etc. but this
isn’t the case with online stores. E-commerce is an ideal medium to start/expand
business for small scale business owners and start up founders who generally lack
capital to run large sized physical stores.

5. Several payment modes, product and price comparison – E-commerce provides

buyers the option to make payments via different modes like cash on delivery, credit
cards, debit cards, internet banking, UPIs, payment in installments etc. This allows
customers to purchase the goods and services through their preferred medium and
adds to enhanced customer buying experience. Moreover, there are various tools
available online which sellers can use to compare their products with that of
competitors. This helps sellers to bring new products, change prices and add more
features to existing products resulting in better sales and greater profits.

REAL CORPORATE EXAMPLE

Mamaearth is an Indian company which sells toxin free personal care products
through E-commerce as well as through retail stores. Today it sells about 80% of its
products through e-commerce and about 20% through retail stores. This company
started with a small investment of Rs 25 lakh and in less than 5 years it grew into a
company whose valuation today is more than 2000 crores. Its revenue from E-
commerce during the pandemic crossed Rs 400 crore. One of the key factors behind
Mamaearth’s quick success is that it started by selling its products online and by
doing so it was able to deliver its products to more than 30,000 PIN codes. Today
Mamaearth is giving tough competition to FMCG giants like P&G, Hindustan
Unilever Ltd., Patanjali in the baby care, personal care and beauty segments
because of its aggressive marketing, quality products with focus on purity and
environment safety and a prominent online presence delivering products at the door
step of customers in an efficient manner.