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Top Factors - Growth of Internet Marketing

INTERNET USAGE STATISTICS The Internet Big Picture World Internet Users and Population Stats

121m internet users in India by 2011 end: Report

NEW DELHI: With increasing affordability of PCs and internet penetration, India is all set to have 121 million internet users by December 2011, a study by internet and Mobile Association of India (IAMAI) and IMRB has said.

According to the annual I-Cube Report jointly published by IAMAI and IMRB, India's internet population is expected to grow to 121 million users by December 2011 from 100 million in September this year.

Out of 121 million, 97 million are expected to be active Internet users, who access Internet at least once in a month.

"A 100 million internet users is considered a critical landmark for the country. With this internet use in India is expected to enter a critical period of growth with the possibility of becoming the largest internet using country in the world in this decade," the study said. Internet Usage and Population Statistics: YEAR 1998 1999 2000 2001 Users Population % Pen. 0.1 % 0.3 % 0.5 % 0.7 % Usage Source ITU ITU ITU ITU

1,400,000 1,094,870,677 2,800,000 1,094,870,677 5,500,000 1,094,870,677 7,000,000 1,094,870,677

2002 2003 2004 2005 2006 2007 2009 2010

16,500,000 1,094,870,677 22,500,000 1,094,870,677 39,200,000 1,094,870,677 50,600,000 1,112,225,812 40,000,000 1,112,225,812 42,000,000 1,129,667,528 81,000,000 1,156,897,766 100,000,000 1,173,108,018

1.6 % 2.1 % 3.6 % 4.5 % 3.6 % 3.7 % 7.0 % 8.5 %


The following chart highlights quarterly ad spend by businesses since 1999; dollar figures are rounded. (source: iab.net). Similar trend exists throughout the world.

Changes in Consumer Behaviour ECommerce sales are growing faster than traditional high street sales in many countries. According to Forrester, E-Commerce sales, which currently make up nearly 10% of total retail sales, is set to reach nearly $300 Billion in U.S by 2015.

Forrester have also stated that in Europe, online sales grew by 18% in 2010 compared to 2009, and 13% in 2011. The number of online buyers in Europe is expected to grow from 157 million to 205 million by 2015.

Executive Summary

Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

The B2C/ C2C E-Commerce market is defined as Buying and selling of products & services on the Internet or on any other application that relies on the Internet. In other words, it comprises transactions for which Internet acts as a medium for contracting or making payment or for consuming the service/product by the end consumer, who is an individual.

The meaning of electronic commerce has changed over the years. The earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.

Although the Internet became popular worldwide in 1994, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. And by the end of 2000, a lot of European and American business companies offered their services through the World Wide Web. Since then people began to associate a word

"ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services.

A wide variety of electronic commerce is conducted in the following way: Electronic funds transfer, Supply chain management, Internet marketing, Online transaction processing, Electronic data interchange (EDI), e-Tailing Inventory management systems, Automated data collection systems, etc.

India has already a part of the E-commerce revolution and has gained a strong foothold in this sector. The arrival of the Internet followed by the escalating growth of Web-based businesses is leading to e-commerce both on the B2B and the B2C sides. The Ecommerce trends in India are in perfect accordance with the sweeping changes taking place in the global markets. Even the IT-Friendly government has taken significant strides in the past few months to ensure that the economic climate is ripe for ebusiness.

Online retailing or e-tailing has been a distant concept in India, except in the travel and ticketing sector. The Future Group has been an early mover while others such as Reliance Retail, RPG Cellcom, and Tata Woolworths are gearing up to launch their own online shopping portals.

Just like the way Railways pioneered online ticketing in India, it is the public sector enterprises that are championing the cause of e-procurement, the biggest factor in ecommerce adoption in the industry.

Although most current use of Electronic Commerce occurs at the inter-corporate and inter-organisational levels, Electronic Commerce services aimed at individual consumers are developing rapidly. The Internet is a major catalyst in the diffusion of Electronic Commerce into an increasing number of economic spheres and is rapidly harmonising the general environment in which electronic transactions of all kinds take place.

It is certain that Electronic Commerce is here to stay. Many major participants in the international marketplace and in government are now actively pursuing enterprise development strategies centered on the increasingly sophisticated commercial capabilities of the ICT network infrastructure. The potential and the problems of Electronic Commerce are now becoming central to the agendas of business and governments alike.

Evolution of Commerce

Commerce has evolved over the centuries. Prior to the evolution of money it was a simple barter process where things could be exchanged, say milk for grains. The evolution of money brought with it, the concept of a marketplace. In a marketplace, Commerce is function of 4 Ps Product, Price, Place and Promotions. All these four components play a vital role in a transaction to take place. Different combinations of 4Ps determine different forms of Commerce.

Once the marketplace came into existence, a few pioneers realised that people would be ready to pay extra if they could deliver products at customers doorsteps. A slight modification on Price and Place led to the convenience of getting products at their homes. This concept delighted the customers and thus, the concept of Street Vendors was born.

When the Postal System came into being the sellers decided to cash in on the new opportunity and started using mailers giving description of their products. It led to the concept of Mail Order Cataloguing. From here, the evolution of the Tele shopping networks was inevitable with the development of media vehicles.

The latest generation of commerce is one that can be done over the internet. Internet provides a virtual platform where sellers and buyers can come in contact for sale and purchase of goods and services. They can be thousands of miles apart, may belong to different parts of the world, might speak different languages, E-Commerce emerged as the boundary-less trade medium in the era of globalization.

Since, Internet has the ability to reach the customers home; the Distribution Channel has started to assume new meaning to the B2C and C2C eMarketer. The Physical delivery got converted to electronic delivery; physical products were now electronic products, displayed on a website. With options of paying online through debit and credit cards, even the transaction was purely electronic.

Another important P for the e marketer, the Promotion, assumed importance, especially because there is no face to face interaction between the buyer and seller. The focus of online promotions is the great deals, discounts, convenience offered by the eMarketers. *


Basic Overview of E-Commerce Electronic Business, commonly referred to as "eBusiness" or "e-Business", may be defined as the utilisation of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and hence can be seen as one of the essential activities of any business. Hence, electronic commerce or eCommerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses. Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well. A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web. Electronic commerce that is conducted between businesses is referred to as Business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce is generally considered to be the sales aspect of ebusiness. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions. Thus, E-commerce is a subset of an overall ebusiness strategy. E-commerce seeks to add revenue streams using the World Wide

Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems.*

'Electronic Commerce (EC) is the paperless exchange of business information using Electronic Data Interchange (EDI) and related technologies. If one is familiar with Electronic Mail (E-Mail), computer bulletin boards, facsimile machines (faxes), Electronic Funds Transfer (EFT) one can very well understand what is e-commerce. These are all forms of EC. All EC systems replace all or key parts of paper-based work flow with faster, cheaper, more efficient, and more reliable communications between machines. In today's Defense Department procurement arena, however the most important EC technology to know about is Electronic Data Interchange, or EDI.

The key role of the digital economy and electronic commerce is to help your traditional organizational processes and daily routines and automate them through the Internet. The use of electronic commerce can very well share the burden and can help minimize


the expense and difficulty. It stimulates a potential relationship for furthering business behavior.*


The Growth of E-Commerce As mentioned earlier E-commerce is commerce, but it is commerce accelerated and enhanced by IT, in particular the internet. It enables customers, consumers, and companies to form powerful new relationships that would not be possible without the enabling technologies. But let's not forget that, fundamentally, it's all still about commerce, people buying and selling products and services from and to each other. The Internet facilitates commerce by its awesome ability to move digital information at low cost. As illustrated in Figure 9.1, there are four main perspectives for e-commerce: Business to Business (B2B), Business to Consumer (B2C) Consumer to Business (C2B), and Consumer to Consumer (C2C). B2C is what you read about the most in the popular press. These are the e-commerce sites that sell products and services, or provide information services directly to consumers. They include such well-known companies as Yahoo!, Amazon.com, and LandsEnd.com.

Four Categories of E-Commerce


Even though most of the media's attention is focused on B2C, the dollar volume of ecommerce has always been widely expected to be concentrated in the B2B segment, where businesses buy and sell from and to each other. This is because the B2B segment is so much larger, regardless of whether we're talking about e-commerce or traditional commerce.

The C2C sector is where consumers deal with each other. Probably the best examples of C2C e-commerce are the online auction sites. EBay is the most well-known such site and is one of the real success stories of e-commerce.

Finally, the C2B sector is the one in which the Internet makes it possible for many consumers who want to buy the same or similar products to band together in order to obtain volume discounts from a business. This process is known as demand aggregation. *


Evolution of Marketing

At the beginning of the century, social life was mostly local. It was followed by a period in which commodities were produced on a mass scale. Consumer Marketing operated on mass marketing principles, and business primarily concerned itself with how to built the best sales force. At the end of the century, there is an emerging global culture. The major driver of these changes is technology. Technological change has moved steadily back focussing on the individual. These changes shape the possibility and conduct of business. Marketing is especially tied to communication transportation revolution. As the tools and reach of marketing increase, the job and responsibilities of marketers have evolved with them. Kotler formalized this evolution with his book "Marketing Management." His key stages are production, sales and brand management. Each of these is strongly motivated by technological opportunities, which permit new methods new opportunities. A fourth stage, a focus on the individual customer, is also important. As the new technology of the Internet develops, it reinforces the new marketing emphasis - which in many ways is a return to business at the turn of the century. and and

In todays technology driven world, a new fast paced digital economy is emerging. Tomorrow there will be companies that will exist only inside computer networks. Most business transactions will be made electronically, directly from the producer to the consumer, bypassing the supply chain. In the digital marketing environment, the consumer becomes an integral player in the development of the product. In fact, a consumer might build the product himself from a wide array of parts provided by the Company. It is e-commerce that is changing the way products and services are conceived, manufactured, promoted, priced, distributed and sold. The reason being that it is much cheaper; it allows vast coverage and helps in serving the customer bette r.

India Online
For many of us, the Internet is now an indispensable part of our lives and we hardly even notice the touch points some of the important milestones in the evolution of the internet / digital consumer industry in India.

Till last year, however, the Indian Internet story was limited to virtual goods and services tickets, classifieds and ringtones - physical retail had been stubbornly slow to take off. Issues around connectivity, consumer trust, supply chain capabilities and payment solutions were generally cited as insurmountable dampeners.

India A country going digital

80 million Internet users 10 million 3G connections within 6 months of launch, almost equal to the base of wireline broadband connections The 2nd largest user base for Google+ and Orkut in the world 28% of travel gets booked online; 117 million transactions on IRCTC alone 47% of the classifieds business is online 7% of bank users in India access their accounts online 25% of IT returns were filed online in 2010-11 Close to 50% of music revenues in India comes from mobile download


Access - The big story

80 million users, a long way to go 1 There are an estimated 80 million Internet users in India today, which represents a penetration of 7% of the population (17% of urban population). This is significantly lower than global benchmarks (average 31% of total population).


Fortunately, this is an aspect of the ecosystem that is witnessing heightened activity on various counts. This includes the commercial launch of 3G mobile services in early 2011 and the launch of 4G broadband recently by one player (with others slated to launch in early 2012). There is also the National Broadband Plan 2010 conceived by the government, which envisages government investments of Rs 20,000 Crore ($4.5 billion) to build a National Fiber Optic Network. We have conducted a detailed analysis of the growth trends of various technologies, and expect the number of unique Internet users in India to reach 376 million by 2015 close to 5 times the current number.


PC-broadband is an important factor for driving growth in e-commerce Among the multiple parameters that determine status of Internet access/connectivity in a country, PC broadband is perhaps the most significant. This is because, at least from a rear view mirror perspective, there has been a high level of correlation between penetration of e-tailing and penetration levels of PC broadband across countries. This is understandable, considering that broadband plays a vital role in improving the online experience of users. That results in increasing the time spent by users online, which in turn leads to an increase in online spends.

* E-tailing and broadband penetrations are shown on different scales Source: US Census Bureau E-stats


PC broadband penetration vs. online retail penetration (%) - China*

Number of PCs is not a constraint Availability and costs (device and usage charges) are the two key factors determining Internet adoption. Currently, there are 55 million PCs in India as against 15 million PC broadband connections. PC penetration, though low, has not been the constraining factor. A BCG estimate suggests that the number of PCs in India will reach 216 million by 2015, making it a non-constraining factor.


Broadband availability and cost are the major constraints

Prices of broadband connections as well as availability have been the bigger constraints to the growth of broadband in India. Broadband prices in India remain among the highest in the world. Unfortunately, the expectation that the success of Indias telecom sector in driving mobile penetration would be leveraged to drive broadband penetration has not been realized this far. Availability has also been a sore issue, as the infrastructure to reach homes through DSL, digital cable or fiber was just not present across a major portion of the country. The problem is being faced even in the metros, with several areas still facing service gaps.

Competition between different technologies is likely to fuel growth Currently, the number of PC broadband connections is estimated to be 15 million. DSL has been the primary driver of this - accounting for 10 million connections. While cable and wireless fixed connections have struggled to gain significant traction, CDMA dongles have grown very rapidly to become the second biggest contributor at 4 million connections. 2 The introduction of 4G in the Indian markets is expected to be the next game changer . We expect the growth in PC broadband to be driven by Dongles and 4G Broadband. Dongles have gained significant traction through attractive pricing, and the quality of connections offered. This has been possible due to the declining voice usage on the CDMA space, freeing bandwidth for data usage. There have also been significant investments in moving towards next generation technologies, which help in reaching speeds close to 10 Mbps. 4G is projected to achieve a 9% penetration globally by 2015, and is likely to translate into 28 million connections in India by 2015. However, we remain cautious on our estimates for 4G since the technology is new and no country has seen mass adoption as yet. We estimate around 17 million 4G connections with half of them catering to PCs by 2015


Cable broadband, though a significant contributor to broadband Internet access in other countries, has seen lukewarm performance in India. This is because the Indian cable industry is highly fragmented and unorganized. Large parts of the cable network still work on analog technology. Local cable operators (who control last mile connectivity to the consumer) have been resisting adoption of digital technology to protect their turf. We therefore remain guarded in our projections of cable broadband as well.

Having said that, there could be a significant upside to our projections of cable broadband subscribers, because several factors (including government regulations and demand from consumers) could fall in place leading to mass digitization of cable networks in India. Once that happens, the industry could attract the much needed investment from institutional players to drive cable broadband penetration.

We also expect the growth of DSL to slow down due to the continuous decline seen in wireline phones over the last decade. Having said that, if the National Broadband Plan even partly succeeds in what it intends to do - provide 10 Mbps connections to all homes in top 63 cities through Fiber-to-Home connections, and Fiber-to-Kerb in all other cities - we may have a significant fiber optic upside as well.

PC broadband penetration to reach 15.6% of households by 2015 Summing up, we estimate India will have 39.3 million broadband connections, a penetration of 15.6% of households, by 2015. We believe this is a reasonably conservative estimate that doesnt factor in the upside of various initiatives that are underway translating into hypergrowth.


Mobile broadband to be the primary driver of overall Internet penetration - 3G to reach 22% of the population by 2015
Besides PC broadband, there is a massive mobile broadband phenomenon underway. 3G services have acquired 9 million connections within 3 months of launch. We expect this number to improve significantly in the coming years. Smartphones are becoming more and more prevalent, with the lowest priced smartphone being available at Rs 3,000 (~$65) already. This number is expected to further go down to reach Rs 2,000 (~$45) in early 2012, potentially opening the floodgates for smartphone adoption. A McKinsey estimate puts the number of smartphones in India at 450 million in 2015 . The declining voice ARPUs of Indian mobile operators and the need for increased data revenues is a well-documented story. Mobile operators are under immense pressure to make 3G work in India due to the investments (Rs 67,719 Crore - $15 billion - in license fees) which they have made and the cost of infrastructure building (estimated at Rs 248,000 Crore ($55 billion), similar to China). We expect operators to continue their marketing push on 3G services and drive

innovation on pricing - resulting in 279 million connections by 2015. This is in line with global penetration trends.


Total number of users transacting online in India at 8-10 million, expected to increase to 38 million by 2015 The number which matters most to e-commerce players is the number of users actually transacting online. At present, the total number of such users is estimated at 8-10 million - about 11% of the online universe in India - a large part of this universe are users transacting on Travel sites.

Number of unique users transacting on travel sites (only) are estimated to be around 67 million and for non-travel e-commerce sites is around 2-3 million today. The total number of unique transacting users is expected to reach 38 million by 2015.


Access in 2015 :: The facts that matter

80 million online users today, 376 million by 2015 Device costs - PCs or smartphones are not going to be limiters to growth. Access and pricing will play the major role PC broadband - the key driver for e-commerce growth - to have 15.6% household penetration

Conventional wireline broadband likely to be eclipsed by the introduction of 4G and the growth of CDMA dongles 3G will change the face of Internet access - creating access for 22% of the population Shared, or public access will reduce in proportion as more people get personal Internet access The time spent online will grow by 27% per user - driving advertising and commerce Number of transacting users to grow from 9 million at present to 38 million


Demographics :: Beyond metros

Tier I cities dominate, but penetration increasing fast across tier II/III cities and towns The geographic distribution of Internet users has been skewed towards tier I cities till date. However, the number of users in other cities and towns has been increasing steadily, and this trend is expected to accelerate as the next 100 million users get added.

This augurs well for the e-tailing industry as 30-40% of their total sales already come from tier II/III cities. The penetration of modern retail in tier II/III cities is much lower than that in tier I cities. The Internet has the potential to solve the availability issue faced in these places.


Younger consumers driving growth

There is, expectedly, a bias towards a younger demographic online. We expect this trend to accelerate, since technology adoption rates tend to be higher among younger people. At the same time, the number of Internet savvy people in higher age groups will continue to rise - improving the potential for commerce.


The e-governance imperative

The Indian government is also playing its part in promoting digitalization of everyday life. While the primary role of the government is to ensure the right infrastructure and policy framework in any industry, the Government of India is playing an important secondary role too, by driving wide-scale usage of Internet technologies. E-governance is a key focus area of the government, as technology adoption can help bridge the vast infrastructure gaps that exist between urban and rural India. With inclusive development being the key theme in India over the last decade, this assumes increased significance. 25% of income tax filings are now online

A case in point would be the movement towards e-filing of income tax returns, which was made mandatory for companies and firms requiring statutory audit from assessment year 2007-08. In this case, the chances of voluntary consumer adoption are high since there are still multiple pain points in most of the services delivered by the government.

For the government, there is the advantage of improving the efficiency and transparency of the government machinery. While refunds from the government took an eternity to reach an assessee in the past, e-filing has helped accelerate the process significantly - with refunds being processed even within a week of filing in some cases. The process of filing income tax returns has also become much easier, with multiple websites offering do-it-yourself services for filing returns. Consumer adoption rates show that the consumers are more than happy with the movement towards e-filing of income tax returns. Almost 25% of the returns filed last year were in the electronic form and it is estimated that nearly three-fourths of all tax filings in assessment year 2015-16 will be done online.



Advertising :: A well developed market

There are multiple forms of advertising which get utilized in the online space, the most prominent ones being search, display, rich media, video, and classifieds.

Online advertising market estimated at Rs 1,850 Crore ($410 million), 7% of the overall advertising pie The Indian online advertising market accounts for 7% of the overall advertising industry. This is less than the global average of 15.5%, but is probably ahead of where it should have been relative to the Internet penetration in the country. Several leading advertisers in India are now spending 5-10% of their advertising budget on the Internet.


Globally, online advertising is growing at the cost of a decline in print advertising . That trend is different in India, where print and Internet are both in growth mode.


Online Advertising spends in Japan

Online advertising spends in the US

Advertising is leading consumption

In the US, online advertising has traditionally lagged the time spent online. But that gap is now narrowing.



The Indian story has been different - with growth of online advertising leading the time spent by Indian internet users online.

Time spent vs. Ad spends - India (2010)


Composition of Indian advertising market (% share of total revenues)


A Global Megatrend
For those who came in late :: There are over 2 billion Internet users in the world (almost 1/3rd of the world population) If Facebook were a country, it would be the third most populous in the world Taobao has over 400 million registered users, more than the population of United States iTunes has become the biggest music vendor in the world within 6 years from its launch Pandora (an Internet radio website) is the largest radio station in the world today Zyngas valuation is now believed to be higher than that of offline games veteran Electronic Arts m-Pesa processes more transactions than Western Union all around the world Internet is now the single largest channel for advertising in the UK

Today, there are over 2 billion Internet users across the world, spending over 23 hours a month online. In the US, the Internet accounts for one-third of all media consumption. 6% of the worlds retail sales and 14% of advertising are now over the Internet. In the UK, the Internet is the single largest advertising channel.

The UK, US and Japan have traditionally been the front-runners in online adoption. Inevitably, China has come to the party - doubling its online market size every year over the last 3 years, with 4% of retail sales having moved online in China by 2010.

Besides the obvious significance of the numbers, the Internet has also brought significant changes to the way businesses are being conceptualized and run. Zynga, for instance, combines gaming and social networks. Streaming services from Netflix and Hulu are disrupting the TV business in the US (and we dont even know the real story on iTV as yet).

Social media is assuming center stage in how businesses are engaging with customers. Most companies have a social media strategy in place. Coca-Cola expects to spend as much as 20% of

its advertising on social media this year. Cloud based technologies are becoming a reality with high levels of adoption across enterprises and consumers. Salesforce is a leading CRM solution in the enterprise space, while newer players like Dropbox and Sugarsync are witnessing increased traction among SMEs and consumers.

Location and mobility based services are also beginning to evolve, with players like Zipcar, Foursquare and Zagat getting significant traction. Adding to the excitement is the growth of smartphones and tablets. In 2012, cumulative sales of such devices shall overtake those of PCs. 1 in 4 persons in the world shall be accessing Internet on a smart phone. In Japan, over 20% of online advertising spends have already moved to the mobile Internet.

The impact of the Internet is everywhere - to the point where we dont even notice it anymore.


CHAPTER ===:DATA ANALYSIS AND TABULATION 1. How many hours do you surf the internet in a day?
Age group 16-20 21-25 26-30 Total Percentage 0-1 hr 2 5 8 15 25% 2-4 hrs 12 2 7 21 35% 4-6 hrs 6 4 3 13 22% Rarely 9 2 11 18%

This question was asked to know the age group which is more inclined to the internet usage.People inbetween the age group of 16-20 yrs surf on internet the most.Overall,35% of people browse on internet daily for 2-4 hrs.
10 8 6 4 2 0 2 0-1 hr 12 2-4 hrs 6 4-6 hrs Rarely 21-25 26-30


18% 25% 0-1 hr 2-4 hrs 22% 35% 4-6 hrs Rarely

2.What do you log on to the internet the first thing in the morning?
Age group Social networking 16-20 21-25 26-30 Total Percentage 16 14 7 37 62% 5 9 7 21 35% Email Business networking 1 7 8 13% 2 2 3% News

This question was basically asked to know the prime site that a person log on to .Maximum number of people browses on social networking sites.


18 16 14 12 10 8 6 4 2 0 Social networking Email Business networking News

16-20 21-25 26-30

3% 13% Social networking Email 35% 62% Business networking News

3. Do you prefer shopping online?

Age group 16-20 21-25 26-30 Total Percentage Yes 9 10 15 34 57% No 11 10 5 26 43%


Almost 57% of the people prefer shopping online.People Between the age group 26-30 shops online the most.
16 14 12 10 8 6 4 2 0 16-20 21-25 26-30 yes No


43% 57%

yes No

4.Why do you prefer shopping online?

Age group 16-20 21-25 Convenience 3 8 Wide range of options 6 3 Others 2 I dont 10 9


26-30 Total Percentage

13 24 40%

2 11 18%

2 4 7%

3 22 37%

Most of the people prefer shopping online due to the comfortability. They find it more convenient shopping online rather than buying products from a shop.
14 12 10 8 6 4 2 0 Convenience Wide range of options Others I dont 16-20 21-25 26-30



convinience 40% Wide range of options Others


I dont 18%

5.According to you is it safe shopping online?


Age group 16-20 21-25 26-30 Total Percentage

yes 4 8 10 22 37%

No 4 3 2 9 15%

May be 12 9 8 29 48%

Most of the people were confused about it.They think it may be or may not be safe shopping online depending upon a company branding their product and their brand image 37% of the people replied positively.


35 30 25 20 15 10 5 0 16-20 21-25 26-30 Total yes No May be


37% 48%

yes No May be


6.Do you think companies are doing better job by marketing their products through internet?
Age group 16-20 21-25 26-30 Yes 19 18 19 No 1 2 1


Total Percentage

56 93%

4 7%

Maximum number of the population believes that companies are doing better by selling their products online.
20 15 10 5 0 16-20 21-25 26-30 Yes No

7% Yes No 93%

7.Are you convinced with the services provided online?

Age group 16-20 Yes 11 No 9


21-25 26-30 Total Percentage

2614-30 16 41 68%

5 4 18 30%

Majority of the people are convinced with the services provided online. Where some of them have not been through such sites yet.
18 16 14 12 10 8 6 4 2 0 16-20 21-25 26-30

Yes No


30% Yes No 68%


8.What kind of products do you prefer buying online?

Age group 16-20 21-25 26-30 Total Percentage Gadgets 9 10 9 288% 47% Online trading 5 6 11 18% Accessories 4 6 3 13 22% Real estate 1 1 2% None 5 5 8%

Most of the people are inclined towards buying gadgets.Mostly inbetween the age group of 21-25.


12 10 8 16-20 6 4 2 0 Gadgets Online trading Accessories Real estate None 21-25 26-30

2% 8% Gadgets 22% Online trading 47% Accessories Real estate 18% None

9.Which form of marketing do you think is most effective?

Age group Internet mkting Tele marketing Door to door mkting Others

16-20 21-25

9 9

2 1

9 3

1 4


26-30 Total Percentage

13 31 52%

3 6 10%

1 13 22%

1 6 10%

52% of the people thinks that internet marketing is most effective than others and it has a long way to go.
14 12 10 8 6 4 2 0 Internet marketing Tele marketing Door to door marketing Others 16-20 21-25 26-30

10% Internet marketing 22% 52% 10% Tele marketing Door to door marketing Others

10.Is online shopping time saving?

Age group Yes No


16-20 21-25 26-30 Total Percentage

16 16 16 48 80%

4 4 4 12 20%

80% of people prefers shopping online rather than buying products from a shop.
18 16 14 12 10 8 6 4 2 0 16-20 21-25 26-30 Yes No

20% Yes No 80%


11.Does Internet Marketing has future in the competitive marketing field?

Age group 16-20 21-25 26-30 Total Percentage Yes 11 12 17 40 67% No 3 1 1 5 8% May be 6 7 1 14 23%

I basically asked this question to know that whether the people from different age groups appreciate internet marketing and are ready to welcome its innovations in future and 67%of the people think it has a bright future in the coming years.


18 16 14 12 10 8 6 4 2 0 Yes No May be

16-20 21-25 26-30

23% 8% 67%

Yes No May be

12.How impact does internet marketing have on your online shopping ha or on your online experience? Depending upon the brand image and the creativity of the website, internet marketing has an immense impact on a consumer regular to this site. Number of people gets attracted towards it .Most of them are obsessed by how creatively the page is designed and majority of the people considers comfort level more than price rates .On the basis of this survey it is proved that internet marketing


plays a very important role in the society it acts as a major supporter to the public as well as the companies. People feel safe and secured shopping online. Till today how many ever people have shopped online according to their experience its time saving and it acts as a good social server in providing services.



Benefits of Internet Marketing Internet Marketing is a hot topic especially in these days of instant results. The reason why i-marketing has become so popular is because they provide three major benefits to potential buyers: 1. Convenience: Customers can order products 24 hours a day wherever they are. They dont have to sit in traffic, and a parking space, and walk through countless shops to find and examine goods. 2. Information: Customers can find reams of comparative information about companies, products, competitors, and prices without leaving their office or home. 3. Fewer hassles: Customers dont have to face salespeople or open themselves up to persuasion and emotional factors; they also dont have to wait in line. Internet Marketing also provides a number of benefits to marketers:


1. Quick adjustments to market conditions: Companies can quickly add products to their offering and change prices and descriptions. 2. Lower costs: On-line marketers avoid the expense of maintaining a store and the costs of rent, insurance, and utilities. They can produce digital catalogs for much less than the cost of printing and mailing paper catalogs. 3. Relationship building: On-line marketers can dialogue with consumers and learn from them. 4. Audience sizing: Marketers can learn how many people visited their on-line site and how many stopped at particular places on the site. This information can help improve offers and ads. Clearly, marketers are adding on-line channels to find, reach, communicate, and sell. I-marketing has at least five great advantages. First, both small and large firms can afford it. Second, there is no real limit on advertising space, in contrast to print and broadcast media. Third, information access and retrieval are fast, compared to overnight mail and even fax. Fourth, the site can be visited by anyone from any place in the world. Fifth, shopping can be done privately and swiftly.


The Internet is a powerful tool for strengthening relationships. By offering customers content and time value, E-Marketing has opened new vistas for marketers. The greatest feature of the digital economy is that it enables the EMarketer to eradicate man traditional barriers before entering new markets. These barriers include economies of scale and geographic positioning. The innate strength of an E-Market comes not from the seamless flows of goods and services from the producer to the customer but in the geometrically increasing returns from converging ideas and technological change the strength of online communities has never been so great, and companies have used them to develop new markets. Notice how Linux distributed free on the Net has been able to build up a faithful customer base. Ultimately here also the marketer has to realize that nothing sells as well as a good product. But the beauty of the Internet is that it offers constant opportunities for product enhancement based on continuous customer feedback. Companies who have tuned their business processes to incorporate these customer responses have been able to leverage the power of the Web to gain competitive advantage. All this will help build a relationship with the customer and it will ultimately help the marketer to achieve his objectives.


Internet has opened up new avenues for reaching the consumer. It is true that there is never a fixed way or strategy that a marketer can use to market its products and services on the internet but it is still very much an arena where creative thinking can take the company reach new heights. Thus we can say that marketing has not changed its shape. It is the same, unpredictable, unusual and creative field that needs constant change and open inputs that can work wonders for the company. HYPOTHESIS 1: Internet Marketing is one of the most fastest growing marketing firm. Proved: Internet marketing is on the edge of proving that it has become the top priority of all the business firms and the common people depending on the internet for various services due to its compatibility. Whenever any new company emerges into market their first initiative is to make their own website and attract as much customers as possible.


HYPOTHESIS 2: Internet Marketing has become an integral part of consumers online experience. Proved: As most of the people are dependent on the internet for buying different products. They mostly rely on the services provided online. Most of the working people prefers shopping online according to them it is easier to buy through internet. Internet Marketing provides convenience and services to consumers at the tip of their fingers.Thus,internet marketing has become an integral part of consumers online experience.


HYPOTHESIS 3:Most of the people spend time online browsing on networking sites related to business, news or are mostly inclined towards the branding of new products online. Not proved: Most of the people still browse on social networking site in spite of business, news etc. Business networking sites are mostly used by the professionals or those who own a company in order to brand their products. Whether it be a student, a professional or a businessman everyone have their own account in social networking site. So that a businessman can spread the awareness of his brand through social networking site, a professional owns an account in order to be in touch with his/her colleagues and to know about the emergence of any new brand in society.


HYPOTHESIS 4: Internet is going to be the communication medium of the future. Proved: Internet marketing has an immense effect on the people. It is welcomed in the society. The companys are doing well. They contact people through internet by making their websites more creative. Some of the companys have their own websites which are much more similar to a social networking site in order to spread awareness among the public and to know the trends in society and develop a product according to their needs. Before internet was just used for contacting friends, relatives, checking out the e-mails, sending e-mails but now it has become more specialized integral part incase of marketing where it has become of an extreme importance.



1. How many hours do you surf the internet in a day? o 0-1hr o 2-4hr o 4-6hr o Rarely

2. What do you log on to the internet the first thing in the morning? o Social networking site o E-mail o Business networking o News

3. Do you prefer shopping online? o o Yes No

4. Why do you prefer shopping online? o Convenience o Wide range of options o Others o I dont

5. According to you is it safe shopping online? o Yes o No o May be 63

6. Do you think companies are doing better job by marketing their products through a. Yes b. No


7. Are you convinced with the services provided online? o Yes o No

8. What kind of products do you prefer buying online? o Gadgets o Online trading o Accessories o Real estate

9. Which form of marketing do you think is most effective? o Internet marketing o Tele marketing o Door to door marketing o Others

10. Is online shopping time saving? o Yes o No


11. Does Internet Marketing has future in the competitive marketing field? o Yes o No o Maybe

12. How much impact does internet marketing have on your online shopping habit or on your online experience?


Marketing Management Philip Kotler Marketing.Com Vijay Mukhi E-Business Essentials- Matt Haig

Business Today-March3, 2002 subscription

Economic Times -December 15, 2001 Indian Express-September 3, 2000



www.hungama.com www.fabmart.com www.j-info.com www.marketingterms.com www.internetworldstats.com

rapidly growing eCommerce marketin India as improvements 11thon eBusiness organiza international markets. 1 While Internet penetration is low at just 10% o Five Disruptive Forces Five forces that have driven eCommerce penetration up until now. 1. Price Many retail items are pure commodity products consumers like to buy such items at the lowest possible price. The Internet and smartphones have taken price comparison to an entirely new level. Companies like Amazon have capitalized on the preference for low prices by working to be able to afford to offer low prices over time on an ever-broadening variety of products. 2. Selection Online offers the opportunity for vast selection given there is no constraint of shelf space. The selection preference favors online, although offline retailers are now expanding their own virtual shelf space using their own websites. 3. Convenience Online offers a level of convenience not available in offline retail, particularly in the current environment of accelerated delivery programs. Offline retail has pushed back with initiatives such as ship-to-store to leverage store footprint.

4. Distribution Online offers the ability for a merchant to gain global distribution in an instant it is not limited by the constraint of a store footprint. To be sure, a store base heightens brand awareness, which has led to online aggregation points online. 5. Cost structure Traditional retailers require stores, while online retailers require marketing spend to become a destination. At scale, there are benefits to online in that sales marketing efficiency leads to an overall lower cost structure than offline peers. Achieving scale is the difficult part.
Indias eCommerce market is small but will grow Strongly An increasing number of global companies are eyeing the rapidly growing eCommerce market in India as improvements in infrastructure are made and Indias economy grows. As the worlds 11th-largest economy (and fourth-largest emerging economy after BRIC peers China, Brazil, and Russia), India is starting to appear on eBusiness organizations lists of key international markets.1 While Internet penetration is low at just 10% of the overall population, the government is building infrastructure to improve and enable connectivity in metropolitan and rural areas.2 And with the 2001 census showing an estimated English-speaking population of 125 million, India currently appeals to global companies looking to sell online using their English-language websites.3 Currently, shoppers in metropolitan India are driving eCommerce: These consumers are primarily buying travel, consumer electronics, and books online.4 And although spending per online buyer remains low, some 59% of online consumers in metropolitan India already make purchases online at least monthly.5 Consumers in nonmetropolitan areas will also help fuel growth; unlike online consumers in cities, they are more likely to shop online for goods that are unavailable at local stores.


eRetail Trends in India

The current size of the e-commerce market in India is about $ 11.2 billion.There are about 360 e-commerce portals offering services in India. The numbers of sites have now tripled from about 120 in 2010. The industry is ridding on a growthwave with around 30-35 per cent growth. Every day, we get to hear about an e-commerce sites coming up. But its not the same gold rush now as was the case in 1999 or 2000, this time, the fundamentals are much stronger; ecommerce is for real its lot more sustainable now and here to stay. eRetail and e-commerce in India have all branched out from the dotcom story thattook roots around two decades ago in the Indian business ecosystem. The online companies that were just aggregating useful information for the consumer have moved to create their own product offering. eRetail today stands as a mode to fulfill purchase demand. The added convenience and growing credibility is sure to shape a new economic sub-system, where the demand connects to supply and renders growth to the industry.

The Indian government plans to invest` 20,000 crore to build a national fibre optic network as part of its National Broadband Plan, which will provide a further fillip to the growth of Internet usage in the country. It is expected that the number of unique Internet users in India will grow five times to reach 376 million by 2015. This growth of the online retail market is bound to have direct implications on the standing of the organised retail players. The first effect is seen on the price sensitivity created with the involvement of the internet as a selling mode. The internet becomes the standard for competition, it works to reduce the consumers cost of accruing information about products & prices- thus making it difficult to sell overpriced goods. The second economic paradigm shift led towards the growth of offline larger firms and smaller online businesses. The ones that suffered were those who had neither scale nor ability to innovate technology (going virtual to penetrate market better). The third trend is over all growth of the industry- through the consumer got price and convenience sensitive the market share has only grown.

Working to create a strong network of merchandising, sourcing, payment modes & delivery techniques

The eRetail ecosystem is a combination of connecting with the consumers, managing regulatory setup, creating trustworthy and credible payment modules, and last but not the least delivering the promised proposition. This

would require getting deep into the working of the eRetail ecosystem that consists of these stakeholders.The primary requirement of an online business is to manage its orders well.They are required to keep a tab on the inventory levels, reduce pilferage, delivervia swift distribution channels, and most importantly sourcing from the right vendors. But even here the largest costs are incurred by the inventory or stocks held, as it directly impacts the supply chain and warehouse levels. The best way to analyze the optimum inventory level is understand the consumers demand which is backed by detailed market research. Further merchandising is all about product display and bundling them together to create a solution which looks salable. Consumers are always looking for ways to make their shopping more convenient and enjoyable. Applying some traditional merchandising techniques to online shopping helps consumers become more comfortable shopping at a Web site, which increases revenue and long-term loyalty. The delivery infrastructure includes the entire set of supply chain services storage, warehousing, bulk transportation and courier services. Specialised large scale provider of end to end supply chain solutions have been the backbone of successful e-commerce activities in developed countries.

business models
Internet usage on mobile phones is growing at a scorching pace, giving rise to predictions that mobile internet usage will soon overtake desktop computers. We are witnessing a second innings of e-commerce in India, and there is also a quiet revolution taking place. The Indian consumer has matured and is no longer hesitant of shopping online. Till now PCs and laptops were used for browsing and looking for the best deals. But with information about most products readily available, most online purchase decisions are made quickly. What this means is that you dont really need a 17-inch screen to complete an online purchase; you can do it on your mobile phone app.

The engagement with internet further increases on weekends with 69 per cent youngsters spending more than two hours as compared to 35 per cent spending more than three hours watching television.

the consumption story

Quick shopping remedy Online shopping suffices the get-in-getout approach to compensate the inadequacy to shop for the restless male mind. Men treat shopping as instrumental and retailers are cashing in on this observation to provide a way around the problem. Online fashion portals facilitating a faster, hassle-free shopping experience seem to be the best way forward. Majority of the online trend (about 48 per cent), is fuelled by male ranging from 21 and 29

years, followed by 28 per cent of users between the ages of 31 and 39 years and 11 per cent between 40 and 49 years. Luxury solutions for the affluent middle aged Consumers in late forties and fifties are choosing e-retail for better luxury bargains. There is a growing prominence of older demographic in India's nascent e-commerce industry. Consumers in their late forties and fifties, it is becoming apparent, are turning to the internet lured by the combination of access to global luxury brands, bargain pricing and the convenience of shopping. Studies have shown that 18 per cent of customers buying the steeply discounted products on these sites were over the age of 45; just three months ago this number was in single digits. Credit card flexibility One of the most unique features of the Indian payment card market is the sharing of cards. People will borrow the card of a family member or friend, make an online purchase, and remit cash to the friend or family member. Online kids retail booming The Indian kids-wear market is growing at a compounded annual growth rate of about 20 per cent and is likely to reach Rs 80,000 crore by 2015. Multi brand online stores generate about 10 to 12 per cent of their revenue from the kids segment. More and more e-commerce sites are entering to tap the market and the early birds are expecting a double digit growth over the next 12 months. Smaller towns and cities going online to fulfill aspirations People from Tier II towns are not the only ones being driven by aspirations. Transaction is also being seen from Tier III cities and towns such as Nasik, Asansol, Dibrugarh, Haldia and Lucknow. the blue-eyed sectors The online market in India had been skewed in favour of online travel, which accounted for 76 per cent of the entire consumer e-commerce market in. However, there are other categories which are also growing at a significant rate. In the past year, the increase in Internet sales was sharpest in the non-travel category, which made shopping the second most popular online activity among Indians after emailing. According to the study, there are 13.5 million shoppers ordering non-travel products online compared with 8.6 million buyers of travel products (train and air tickets) on the Internet. Travel & Leisure Travel is still the most successful consumer e-commerce categories in India. It has seen a growth of 40 to 45 per cent year-on-year with air ticketing and railway bookings being the major activities, other segments such as bus ticketing, hotels bookings and packages are still very small.

Retail Retail is the second largest consumer e-commerce category in India and has seen a rapid growth. The internet audience has grown 13 per cent from November 2010 and November 2011, while retail has grown by 18 per cent during the same period. CDIT The third largest category is of consumer durable electronics. There is high online demand for mobile phones, software purchases and also electronics like Coupons These are gaining prominence with the increase in the need for digital marketing and promotion by traditional retailers. This is the trend of discounting or gifting services which have purchased online. This lures the customer by offering best discounted deals for exclusives products and services. This is a new edition to the online market map of Indian, but has been fueled by robust growth of 629 per cent in the last one year. Games, devices, etc. This rise owns to availability of latest gadgets online, with a wide variety to choose from as well as credible user reviews that attract the buyer to make the purchase. Gifts, households & books Books, online gifts and small households items are the easiest and most risk free online purchase. The online stores for such products offer more range and convenience then their off line counter stores. Thus, leading to a highly precedential growth pattern in this category as well. Fashion & Lifestyle India ranks third across the globe in terms of online shopping and approximately a third of Indians make online purchases from websites which offer them a diversity of brands, designers and stores to choose from. This sector has also seen a rise by almost 100 per cent in the last one

in business resources eRetail is akin to any business model, which, beyond a healthy market scenario,

seeks for inbound resources that will catapult its structure on the high growth track. Technology is one such enabler for the online business venture. eRetail renders its major support from its infrastructure resting on technology. Technology has invaded all areas of eRetailing; the quintessential support system needs to include customer relationship management software to create a wider base of customer knowledge. RFID tags are important to track product movement; scanners,kiosks, self-serve checkouts form integral part of point-of-purchase engagements.Further enhancing the online shopping experience are web technologies like online shopping carts, purchase recommendations and reviews that add the real time shopping experience to the online exercise.

The retail sector is a fast growing adopter of technology in India, another important in-house facilitator for eRetail growth is marketing. Just like any other business, the eRetail ventures also need promotional support to attract the customer base. In November 2011, 27.2 million online users in India, aged 15 and older, accessed the retail category from a home or work computer, an increase of 18 per cent from the previous year, as consumers continue to turn to the web to shop for and purchase items and retailers continue to increase their online visibility through active marketing campaigns. Technology retail is another growth area. Companies are on a lookout for customer focused solutions for consumer insights/analytics, multichannel integration, social media and personalisation may also become important. Digital platform development,as more Indian consumers begin to buy online, is another growth area. The next paradigm shift that can be seen coming over is the integration of technology and marketing to provide customer centric solution via eRetail model.

growing beyond
eRetail and e-commerce ventures are enjoying the growth wave. Reason behind the scalability of the business model is governed by low startup cost and wider customer base. Private equity investments in the online and ecommerce ventures have gone up by 147 per cent during the last one year. Industry experts opine that the growth trends of the online industry are on a much stronger footing than they were during the dot-com bubble a decade ago. The eRetail industry is built on the fundamentals of consumer base, convenience, innovative solutions and deeper market penetration. Another growth trend that brings out the excitement around the industry is the advent of equity at the incubation stage and even earlier for online retail companies. The reason being that private equity firms do not want to miss on a growth opportunity. An investors backing out at a very early stage helps

limit competition from rivals. A lot of funds are chasing few quality companies and to reduce risks related to execution of the businesses are inducting managers with experience in e-commerce ventures.

Early investment also helps pre-empt the steep rise in valuation expectations as the e-commerce firms grow. For the second and third round of investments, valuations become high ranging- around $ 100 million and $ 200 million. The positives which are peeping from the horizon talk big about some companies getting acquired by global firms wanting to enter India. Another trend that will govern the coming decade also will see online ventures going public in 4-5 years of starting up.