1

Industrial Awareness report on eCommerce"

Industry :- eCommerce

Submitted by,

Group No 10. Sec: A

2

E-Commerce
Executive Summary:
Online activities have been growing at an exponential rate with the advent of Internet (Gefen, 2000).
Internet has facilitated the emergence of ecommerce and the companies who have survived the dot-
com bubble burst are thriving well. E-commerce provides an interface to the e-enterprises to do the
business with the global customers over a large market space. Due to low penetration and diffusion of
other socio-economic and political landscape, there has been little growth of ecommerce models in
developing countries. There have been other issues like privacies, trust and lack of low hanging fruits,
which impede the idiosyncrasies in the minds of customers. Online retailing has become a perfect
substitute of their own traditional mortar and brick industries and the vice-versa. This report attempts
to provide an overview on the various determinants of the industry. It also provides a literature review
on the market segmentation, valuation and channels etc. It also proposes a brief study on various
industry, players and macroeconomic profile.
Online markets or electronic markets are profligate with the online customers and retailers who are
engaged in different transaction based commercial activities such as shopping, financing, marketing,
servicing and retailing. Tendency of these markets are visible in various Business-to-Business (B2B)
and Business-to-Customer (B2C) sector.Research on online buying behaviour has indicated that over
time, online consumers can grow to be very loyal shoppers (Brynjolfsson and Smith, 2000).Online
retail markets are referred to as perfectively competitive markets (The Economist, 1999). Different
online sellers tend to charge significantly different prices for the similar item. (Baye, 2008). It also has
unchartered new frontier to develop competitive advantages.
Fundamentally, the electronic commerce business model has changed little over time; however, key
trends like mobile, social and digital are growing tremendously both horizontal and vertical market.
Three basic business models of e-commerce are market place model, group buying or deals model and
online retailing. Various players of ecommerce are online travel (Lufthansa, Make my trip.com), e-
Bookstore (Amazon, Barnes and Noble), matrimonial (Shaadi.com).
According to the Global Competitive Report 2011-2012 (Schwab 2011), although the overall index
(GCI) of India is 56 (five down from the year 2010-11), in certain sectors, it is far ahead of even
developed economies. Being the second most populous country of the world, it derives substantial
advantage from its huge consumer market size (ranked 3rd) that allows economies of scale and attracts
investments. CRISIL Research has estimated the market size of online retail in India (excluding
marketplaces and deal / group buying sites) at Rs.32 billion in 2011-12. This market is set to grow at a
compounded rate of 45-48 per cent to reach Rs.100 billion in 2014-15 (CRISIL, 2012).
Industry Profile
Overview
3

Internet has been used to share information for quite some time, but the idea of using it for commercial
exchange and as a supplier of commercial value matured in the mid to late 1990s. Reasons were that,
initially, the Internet lacked both the necessary security and the degree of standardization needed to
share data safely. In the late 1990s, companies scrambled to create their online shopping centers,
allowing them to bypass intermediaries. This enabled cost savings, often passed on to customers.
Internet provided value by increasing processes efficiency, shortening lead times, and automating
processes that previously required personnel. The ease of establishing companies online (e-business)
and marketing products through the internet became a tremendous lure for many technically inclined
with entrepreneurial interests. This affected the economy through the proliferation of companies whose
core competency is partially or fully associated with Internet. Despite the recent demise of a
considerable number of dot-coms, many traditional brick-and-mortar companies have invested and
continue to invest heavily in e-Commerce technologies. (Mahmood, M 2008). These companies will
spend by 2002, over $200 billion dollars on ecommerce business projects (Stuart 1999). While sizeable
investments in ecommerce enabled initiatives are being made, it has been extremely difficult to
measure the benefits received from these initiatives mainly because of the difficulty involved in
collecting data.
Electronic business consists of all strategic and tactical online activities, which are transforming the
traditional ways of doing business. E-business is any Internet initiative that transforms business
relationships: business-to-business, business-to- customer, or between two intra-consumers. The e-
business is a new way of managing efficiencies, speed, innovation and creating new value in a
company (Hartman et al., 2000). Electronic commerce includes all electronic business initiatives
merely focused on online business transactions, especially B2B and B2C (Turban et al., 2002). Online
marketing refers to analysis, planning, implementation, and control to meet specific online objectives
by information technology means (Chaffey & Smith, 2008).
An exploratory model of e-Commerce business value is proposed depicting the possible effect of
management support for ecommerce enabled initiatives, efficient ecommerce support systems (e.g.,
automated data transmittal and retrieval system, automated order processing system, and online
procurement system), and effective ecommerce presence on business operational efficiency and
financial success. The model is fully grounded in IT business value and productivity literature
(Kauffman & Kriebel, 1988) and validated using data from companies that have ecommerce
experience. There are three business models that use internet as a sales channel. One is the market
place model used by 'eBay' where the retailer provides an online platform that connects the buyers
with the sellers. The revenues earned are in the form commissions received from each
completed transaction. Another is the group-buying or deals model used by 'groupon'. In this
model, the retailer acts as an aggregator of services such as restaurants and spas for the buyers and
4

negotiates with the sellers for deals on bulk purchases. Revenues earned are in the form
of commission received for every deal executed. The third model is the online retailing model wherein
the player, a traditional retailer, sells products to customers using the internet and also takes ownership
of the delivery of those products either through his own network or through a third-party. (CRISIL
2012)
Kauffman & Dai (2002) sought to identify viable business models that work in the world of B2B
ecommerce. B2B ecommerce accounted for about 70% of the total ecommerce transaction volume in
1999. Boeings electronic intermediary allowed it to process 20 percent more shipments per month in
1997 than in 1996 with the same number of data entry people and resulted in elimination of 600 phone
calls per day to telephone service staff (Teasdale, 1997). Cisco claims it is the single largest user of
ecommerce in the world, with 90% of its 2000 sales, which amounts to about $18.9 billion, coming
online. It also says that 82% of its customer inquiries are handled online (McIlvaine, 2000).
Over the past decade, policy makers, scholars and practitioners agree that ecommerce is an essential
ingredient for socio-economic advancement in developing countries (Avgerou, 2002). Yet little is
known about the conditions and contingencies surrounding ecommerce adoption in developing
countries (Straub et al., 1997). Of particular interest is the growing global popularity of ecommerce.
Lawrence et al. (1998) dene ecommerce as the purchase and sale of information, products, and
services using any one of the thousands of computer networks that make up the internet.
CRISIL research has estimated the market size of online retail in India (excluding marketplaces and
deal / group buying sites) at Rs. 32 billion in 2011-2012.This market is set to grow at a compounded
rate of 45-48 per cent to reach Rs 100 billion in 2014-15. Growth is expected to be driven primarily by
the increasing internet penetration in India, aggressive growth plans of existing players and an increase
in the comfort levels of customers in carrying out online transactions. CRISIL expects Internet
penetration and 3G mobile service penetration in India to increase at a compounded rate of over 60 per
cent between 2011-12 and 2014-15, allowing 180 million people to access online retail. Further, the
strong growth witnessed in travel ecommerce (online booking for airline and railway tickets) has
helped Indians become familiar and comfortable with online transactions. Further, online retailers are
trying to overcome the most inhibiting factor for a customer for transacting online-the fear of fraud in
online monetary transaction by using enablers like cash on delivery. Moreover, increasing aspirations
and brand consciousness among the youth in smaller cities where organized retail is not well
developed will fuel the growth of online retail in India. Online retailers, funded mainly through the
private equity/ venture capital channel in India have chalked out aggressive growth plans to tap this
opportunity (CRISIL 2012)

Importance to the economy
5

According to a research paper (Bansal R, 2013), during the past decade, India has witnessed fast
economic growth emerging as a global player with the worlds fourth largest economy in purchasing
power parity terms and made progress towards achieving most of the Millennium Development Goals.
Even during the worst global economic recession, India could sustain GDP at approximately 6%. It has
set a goal of 7.8% GDP growth for the period of 2010-2014. However, poverty remains a major
challenge and according to official estimates for 2009-10, the combined all India poverty rate was 32%
compared to 37% in 2004-05 (World Bank, 2011). According to the Global Competitive Report 2011-
2012 (Schwab 2011), although the overall index (GCI) of India is 56 (five down from the year 2010-
11), in certain sectors, it is far ahead of even developed economies. Being the second most populous
country of the world, it derives substantial advantage from its huge consumer market size (ranked 3rd)
that allows economies of scale and attracts investments. According to The Economist, in terms of
GDP-composition by sector, services sector contribute 56%, agriculture sector and Industry sector
contribute 22% each. Indian economys Real GDP growth (on an expenditure basis) is forecast to slow
from an estimated 7.8% in fiscal year 2007/2008 (AprilMarch) to an annual average of 7.5% in
2008/20092012/2013). As per IMRB the cybercaf market has grown at higher rates, averaging a
year on year growth of 45% over the last 5 years.(IAMAI report)

2001 2002 2003 2004 200E
Number of
Cybercafes
18,000 33,400 48,750 74,000 105,350

2006E 2007E 2008E 2009E 2010E
Number of
Cybercafes
126,420 151,704 182,045 218,454 262,145
Source : I MRB - CI I Report Broadband

As per datamonitor report (2013), the Indian Internet access market generated a total revenue of
$1612.4 million in 2012, representing a compound annual growth rate (CAGR) of 27.6% for the period
spanning 2008-12.According to the TRAI report (TRAI 2012), at the end of 2010, India ranked fourth
amongst Internet users in the world accounting for 4.56 percent of the total Internet users.




India Internet Access Market volume: $million,2008-12
6










Source: Datamonitor, marketline
Technological Trends:
An international ecommerce survey conducted by Econsultancy (2008) on ecommerce businesses
revealed that most of these companies develop marketing plans electronically 54%.(Adam
2011).Currently, ecommerce businesses do not operate as they used to ten years ago, each business
having its uniqueness on the market (Lager, 2006). Electronic commerce practices include the
following (Williams et al., 2009):
Assessing and maintaining the value offered during the whole customer life cycle
Maximizing loyalty and trust
Focus on improving customer experience
Customization
Creating a balance between human and online interactions
Effective communication
Website maintenance
Pricing and payment trends, Return On Investment (ROI)
Increasing importance of customer service
The use of CRM tools and technologies to integrate all activities
With the plethora of new technologies, retailers continue to invest in technology-enabled Web
functionalities and services with an expectation that their efforts will result in an increase in business
performance. The relationship between the web site functionality and its effects on performance is an
important topic with important implications for practitioners as well as academics. (Licker 2001)
Depending on the nature of the e-commerce model underlying the system, the product offering and the
purpose of the e-commerce system, it is possible to differentiate between two main facets of customer
e-commerce satisfaction- (1) satisfaction with the core product and service and (2) satisfaction with the
process and system used to deliver the core product and service. Whereas such distinctions are easy to
detect and investigate when organizations are marketing tangible products such as books, CDs, home
7

appliances and so on, the distinction is blurred for services such as on-line banking, content
aggregators, electronic stock market. For example, retailers operating along an Amazon.com type of
model (that is, using e-commerce systems as channels for selling products that they themselves do not
produce) may have no or little influence over the actual quality of the products they are marketing.
Beside the quality of the site and content (attributes of e-commerce systems) e-commerce use and
satisfaction could be affected by customers disposition towards security and privacy issues. Real
and/or perceived fears of divulging personal information and customers feelings of insecurity provide
unique challenges to e-commerce operators to find ways in which to initiate e-commerce relationships.
Customers are concerned about the level of security present when providing sensitive information
online (Warrington et al, 2000) and will use e-commerce only when they develop a certain level of
trust (Ferraro, 1998). Trust refers to the two important issues that are identified across studies in
affecting the future of e-commerce systems security and privacy
Merger & Acquisition activities in the industry (ISI Emerging Market)
Flipkart recently raised $200 million from existing investors, making it the single largest round
of funding in the Indian ecommerce market. The Bangalore-based company is on a growth
track without worrying about profits for a next few years. It is bracing itself for challenges
arising from its transition to being a market place from being just a book e-tailer
Former Infosys director TV Mohandas Pai and his partner Ranjan Pai have invested $35mn in
4 startup firms. The duo announced their $100-million (Rs 500 crore) private equity fund in
August 2011 that will invest $3-10 million in startup firms. Of the $35million investment, $8
million has been in California-based medical technology company Insightra and another
investment is ecommerce store, Bookadda startup
Baby care products e-tailer Hushbabies.com has acquired MangoStreet.com, another online
store for kids, for an undisclosed amount.
Earlier this year, Flipkart acquired Letsbuy.com, electronics and gadgets
focused ecommerce store
Snapdeal acquired sports brand firm Esportsbuy.com, effectively closing down both the
acquired companies
Kishore Biyanis Future Group is close to acquiring online and telephone shopping portal
Chaupaati Bazaar
Market Assessment
E-commerce % of total
Sales Retail sales
2004 $69.3 billion 2.0 %
2005 $86.3billion 2.3%
8

2006 $114.6 billion 2.8%
2007 $132.8 billion 3.2%
2008 $132.3 billion 3.3%
2009 $134.9 billion 3.7
2010 $167.7 billion 4.3%
2011 $194.7 billion 4.7%
2012 $225.5 billion 5.0%
(Source: 2013-14 Retail Market research handbooks)
Players profile
Online travel portals:
As we have seen in the industry profile, the major players in this space are Indian railways
(www.irctc.co.in), MakeMyTrip limited (www.makemytrip.com), yatra online limited
(www.yatra.com), Expedia India (www.expedia.co.in), cleartrip travel service pvt ltd.
(www.cleartrip.com)
MakeMyTrip limited:
Inception: MakeMyTrip limited was incorporated by founder Deep Kalra (IIM A Post Grad) on
April 28, 2000 in Gurgaon, Haryana. The Company conducts its business principally through its
Indian subsidiary, MakeMyTrip (India) Private Limited (MMT India). Through its primary
Website, www.makemytrip.com, and other platforms, travelers can research, plan and book a range
of travel services and products in India, as well as overseas.
Headquarters: MakeMyTrip Limited is a Company domiciled in Mauritius. The address of the
Companys registered office is C/o Multiconsult Limited, Les Cascades Building, Edith Cavell
Street, Port Louis, Mauritius. Its Indian Headquarters are located at 2nd Floor, Plaza Cinema
Building, H - Block, Connaught Place, Delhi
Board of Directors: Deep kalra, Philip wolf, Ravi Adusumalli, Frederic Lalonde, AdityaGuleri,
GyaneshwarnathGowrea, Mohammad Janally, Vivek Narayan Gour, Ranodeb Roy, Rajesh
Magow, Keyur Joshi
Services: Its services and products include air tickets, hotels, packages, rail tickets, bus tickets, car
hire and ancillary travel requirements, such as facilitating access to travel insurance. The Company
provides its customers with access to all major domestic full-service and low-cost airlines
operating in India and all major airlines operating to and from India, over 4,700 hotels in India and
a selection of hotels outside India, Indian Railways and several major Indian bus operators.
Subsidiaries (mergers and acquisitions):It operates in two segments: air ticketing and hotels and
packages. In July 2011, it incorporated Luxury Tours (Malaysia) Sdn Bhd. In August 2011, it
acquired 19.9% of Le Travenues Technology Private Limited. On May 9, 2011, it acquired
9

approximately 79% of Luxury Tours & Travel Pte Ltd. In March 2010, it acquired certain assets of
Travis Internet Private Limited. In November 2012, the Company's MakeMyTrip India Pvt Ltd has
acquired the Hotel Travel Group (HT Group). In November 2012, the Company acquired a
majority interest in a group of companies known as the ITC Group.
Financial status: It was listed in NASDAQ stock exchange market on 13
th
august, 2010 at an offer
price of 14$, selling 5 million shares and garnering a valuation of $800 million. As of 6
th

September, 4:00 PM IST, its shares were valued at $13.79, with a volume of 4,880. 52 week low
and high being $10.77 and $18.50 resp. total market capital is $518 million. Its Fiscal year 2012-13
income is $27.59 million (Loss), and that for 2011-12 is $7.05 million.

Table- Income and profits of MMYT for fiscal year 2011-12 and 2012-13




Figures in USD ($). Sources: Reuters finance report on MMYT.O- June, 2013
Yatra Online Private Limited
Inception: Yatra.com is an Indian online travel agency and a travel search engine based
in Gurgaon, Haryana, founded by Dhruv Shringi, Manish Amin and Sabina Chopra in August
2006. As of 31
st
march 2013, the company has around 1500 employees.
Market share: In April 2012, it was the second largest online travel website in India, with 30 per
cent share of the 370 billion (US$5.9 billion) market for all online travel-related transactions.
Key persons: Sonia Mehta (Chief Customer Experience Officer), Dhruv Shringi (Co-Founder &
CEO), Manish Amin (Co-Founder & CIO), Sabina Chopra (Co-Founder and EVP Operations) and
Srinivas Muktevi (CTO)
Services: The Company is engaged in the business of providing reservation and booking services
relating to transport, travel, tours and tourism and developing customized solutions in the areas of
transport, travel, tours and tourism for all types of travellers in India or abroad through the Internet,
call centre and retail lounges.




Date Target Deal Buyer Seller Deal Industries
10


Mergers and acquisitions: As of 2013
Source: Euromonitor report on yatra online services.
Financial status: Company is not listed in any stock exchange. The main investors In its
operations are Reliance Venture Asset Management Ltd,
[8]
Web18 of TV18 Group (a joint
venture of NBC Universal and the Network 18),Norwest Venture Partners and Intel Capital. As
it is a private limited company, the shareholders profile is as follows: (as on 31
st
march, 2011)

Names of Shareholders No. of Shares
Yatra Online (Cyprus) Limited, Cyprus 5463879
Yatra Online Inc.(Cayman Islands), Cayman Island 1
Total 5463880
Sources: Mira Inform report dated 28.12.11
Some of the Key financial Indicators:
Item Year ending march 2010
figures in 000
Rs.(thousands)
Year ending march 2011
figures in 000
Rs.(thousands)
Net profit loss before tax -82600 -389500
Company Type
9-Jan-
12
BuzzInTown
.com
Acquisit
ion Yatra Online Pvt Ltd
Wortal
Technologies
Pvt Ltd
All Other
Professional,
Scientific, and
Technical Services
1-
Aug-
11
MagicRooms
Solutions
Acquisit
ion Yatra Online Pvt Ltd
Intech Hotel
Solutions
Internet Publishing
and Broadcasting
20-
Apr-
11
Yatra Online
Pvt Ltd
Minorit
y stake
purchas
e
Valiant Capital
Management LP,
Norwest Capital
Partners, Intel Capital N/A
Travel Arrangement
and Reservation
Services
21-
Oct-
10
Travel
Services
International
Pvt Ltd
Acquisit
ion Yatra Online Pvt Ltd N/A
Travel Arrangement
and Reservation
Services
11

extraordinary items
Net cash flow used in
investing activities
-292400 101200
Net cash flow from used
in financing activities
-15900 229200
Cash and cash equivalents -201100 87700
Current Ratio 201.43% 101.47%
Debt to total assets 100% 100%
Debt to equity 120.01% 110.04%
Long Term Debt to Capital 40.79% 20.73%
Cash Flow to Debt 41.78% 20.10%
Net worth 542137 388866
ROI (PBT/Net Worth) -0.15 -0.99



Online Job search and matrimonial:
Major players in this markets are Monster Worlwide Inc.(www.monster.com), Info edge India
limited (www.naukri.com) (www.jeevansaathi.com), BharatMatrimony group
(www.bharatmatrimony.com), and Shaadi matrimonial limited (www.shaadi.com)
Info Edge India Limited
Inception: Info Edge India Ltd was incorporated on May 1, 1995 as Info Edge India Pvt Ltd and
they went public on April 27, 2006. In March 1997, the internet portal naukri.com was launched
and in December 1998, jeevansathi.com was launched.
Key persons: KapilKapoor, Chairman; Sanjeev Bikhchandani, Executive Vice Chairman; Hitesh
Oberoi , Managing Director & CEO; Ambarish Raghuvanshi ,Whole Time Director & CFO
-400
-300
-200
-100
0
2009 2010 2011
-145.34
-81.815
-389.535
Yatra.com- Profit/Loss 2009-11
Profit/Loss
after Tax in
million Rs.
0
200
400
600
800
2009 2010 2011
623.951
542.137
388.886
Yatra .com- Net worth 2009-11
Net worth in
million Rs.
12

Services: Info Edge India Ltd is India's premier on-line classifieds company. The company is the
leading provider of online recruitment, matrimonial, real estate & education classifieds in India.
The company has three wholly-owned subsidiary companies namely Naukri Internet Services
Private Ltd, Jeevansathi Internet Services Private Ltd and Info Edge (India) Mauritius Ltd. Also,
they have established 67 offices located in 41 cities throughout India, as well as 2 offices in Dubai,
1 in Riyadh, which primarily engage in sales, marketing and payment collection activities for our
business divisions. The company provides recruitment classifieds and related services through
Naukri.com, Naukrigulf.com and Quadrangle business divisions. They also provide matrimonial
and property related classifieds and related services through their Jeevansathi.com, 99acres.com
and Allcheckdeals.com divisions respectively. In November 2000, the company acquired the
business of Quadrangle division. In September 2004, the company acquired Jeevansathi Internet
Services Pvt Ltd and they became the wholly owned subsidiary company. The internet portal
99acres.com was launched on September 15, 2005. In July 2006, the company launched the
internet portal naukrigulf.com and in July 2007, they launched the internet portal asknaukri.com. In
August 2007, the company entered the domain of professional networking services by launching
the internet portal brijj.com and in May 2008, they forayed into the online education by launching
the internet portal shiksha.com.
Headquarters:GF-12A 94 Meghdoot Building, Nehru Place, New Delhi
Financial Status: As of March 2013, Info edge India, is one of the very few solely e-commerce
companies to be listed. It is listed in BSE and NSE market with share value of Rs. 296 and Rs.
297 respectively. Its total market capital as on March 2013 is Rs. 3,241 cr.
Sales and profit figures 2008-13(in Rs. Cr.):

Item March-13 March-12 March-11 March-10 March-09 March-08
Operating
profit
167.02 183.34 133.25 96.71 95.56 85.28
Adjusted
Net profit
75.37 117.51 80.60 59.34 53.94 54.59
Sales
Revenue
437.26 377.08 294.01 232.22 245.17 218.94
Source: indiainfoline company database-2013




13

Cash flow statements 2011-13:

Source: indiainfoline company database-2013
Online shopping and E-tailing: The Major players in online shopping segments includes giants like
Amazon.com Inc. (www.amazon.com), eBay Inc. (www.ebay.com), flipkart online services pvt. Ltd.
(www.flipkart.com), and some young players like Jasper Infotecpvt. Limited (www.snapdeal.com),
Myntra online pvt. Limited (www.myntra.com), jabong online pvt limited (www.jabong.com),
Bennette coleman & co. ltd. (www.shopping.indiatimes.com), Big Shoe Bazaar India pvt. Ltd.
(www.yebhi.com)
Amazon.com Inc.
Ebay.com Inc.
Flipkart online services pvt. Ltd.
Amazon.com Inc.
Inception: Jeff Bezos incorporated the company (as Cadabra) in July 1994 and the site went online as
Amazon.com in 1995. Amazon.com, Inc. is an American international multibillion dollar electronic
commerce company with headquarters in Seattle, Washington, United States. It is the world's
largest online retailer and a fortune 500 company. It started its dedicated Indian website and Indian
operations on 5
th
june, 2013.
Key person: Jeffrey Bezos - Chairman of the Board; Thomas J. Szkutak - Senior Vice President;
Shelley Reynolds - Vice President, Worldwide Controller; Tom A. Alberg Director; John Seely
Brown Director;Patricia Q. Stonesifer Director; Jonathan J. Rubinstein Director Indian
operations: Amit Agarwal, Vice President and Country Manager, Amazon India
Services:Amazon.com started as an online bookstore, but soon diversified,
selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics,
apparel, furniture, food, toys, and jewelry. The company also produces consumer electronicsnotably
Amazon Kindle e-book reader and the Kindle Fire tablet computerand is a major provider of cloud
computing services. Amazon has separate retail websites for United States, Canada, United
Kingdom, France, Germany, India, Italy, Spain, Brazil, Japan ,China and Austria with international
14

shipping to certain other countries for some of its products. In 2011, it had professed an intention to
launch its websites in Poland, Netherlands, and Sweden, as well.
Mission statement: Our Mission is to be the earths most consumer-centric company where people can
find and discover virtually anything they want to buy online. By giving customers more of what they
want- low prices, vast selection, and conveniences.
Mergers and acquisitions: Amazon in early 2013 acquired Poland's IVONA Software, a leading text-
to-speech technology firm offering voice and language portfolios with 44 voices in 17 languages.
Acquisitive amazon has spent more than $1.4 billion over the past two years on acquisitions. Looking
to improve its automation fulfilment centres, as well as cut processing times and personnel costs,
Amazon in 2012 acquired Massachusetts-based Kiva Systems, a warehouse technology company, for
around $678 million.
Notable purchases in 2011 included UK-based online bookseller The Book Depository in the fall.
The Book Depository was founded by a former Amazon.co.uk employee, and acquiring it strengthened
Amazon's market share in the UK and bolstered its position in the e-book market. Raising its
entertainment stakes in Europe, Amazon in 2011 acquired the remaining shares it did not already
own in LOVEFiLM International, Amazon previously held a 42% stake in LOVEFiLM.
Financial status:
Statement of cash flow of Amazon.com, Inc 2008-12

Sources: Consolidated report: amazon.com-2012, reuters.uk
Sales breakup of amazon.com, Inc 2010-12 (in millions)

Sources: Consolidated report: amazon.com-2012, reuters.uk

15

Flipkart online services pvt. Ltd.
Inception: Flipkart was founded in 2007 by SachinBansal and BinnyBansal, both alumni of the Indian
Institute of Technology Delhi. They worked for Amazon.com before quitting and founding their own
company. The first book the company sold was John Woods' Leaving Microsoft to Change the
World. Today,as per Alexa traffic rankings,Flipkart is amongst the top 20 Indian Web sites and has
been credited with being India's largest online bookseller.
Key persons: Mr. Sachin Bansal Co-Founder and Chief Executive Officer; Mr. Binny Bansal Co-
Founder and Chief Operating Officer; Mr. Kalyan Krishnamurthy Interim Chief Financial Officer; Mr.
Sujeet Kumar President of Operations; Mr. Mekin Maheswari President of Technology
Services: Flipkart is an online shopping destination for India. Categories include Books, Music and
Movies. Mobile phones and electronics are also in the pipeline.
The site provides clean user experience and is backed up by reliable service, including on-time
delivery, no-questions-asked return policy, and a wide catalogue.
Mergers and acquisition:
2010: WeRead, a social book discovery tool.
2011: Mime360, a digital content platform company.
2011: Chakpak.com is a Bollywood news site that offers updates, news, photos and videos. Flipkart
acquired the rights to Chakpaks digital catalogue which includes 40,000 filmographies, 10,000
movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved with the
original site and will not use the brand name.
2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart has bought the company
for an estimated US$25 million.Letsbuy.com had been closed down and all the traffic of Letsbuy is
diverted to Flipkart.

Financial status:
Funding:
Date Type and corporate Amount ($ mln)
September 2009 VC- Accel India 1
June 2010 VC-Tiger global 10
June 2011 VC-Tiger global 20
August 2012 Tiger Global Management ,Naspers, Accel
Partners, Iconiq Capital
150
July 2013 Tiger Global Management ,Naspers, Accel
Partners, Iconiq Capital
200
Sources: www.crunchbase.com/flipkart
16


eBay Inc.
Inception: eBay Inc., incorporated on March 13, 1998, is a global technology company that enables
commerce through three reportable segments: Marketplaces, Payments, and GSI. With more than 100
million active users globally (as of Q4 2011), eBay is the world's largest online marketplace operating
in more than 30 countries. The company enabled $175 billion of commerce in 2012, which represents
about 18 percent of e-commerce worldwide and about 2 percent of global retail.
It was launched in India in 2005 marking the final integration of Baazee.com's technology platform
with eBay's platform.
Headquarter: San Jose, California
Key Persons:
President and Chief Executive Officer, eBay Inc.: John Donahoe
Managing Director eBay India: Latif Nathani
Chief Financial Officer, Senior Vice President - Finance of eBay Inc.: Robert Swan
President, eBay Global Marketplaces: Devin Wenig
Services: The Company by providing online platforms, tools and services to help individuals and
small, medium and merchants around the globe engage in online and mobile commerce and payments,
the Company can facilitate transaction. The three major segment to provide services are:
Marketplace: Market places bring buyers and sellers closer. Marketplaces segment includes its core e-
commerce platform eBay.com, its vertical shopping experiences such as StubHub, Fashion, Motors
and Half.com, its classifieds websites such as Marktplaats.nl and mobile.de, and advertising services.
Payments: The Companys Payments segment has three primary payments brands: PayPal, Bill Me
Later and Zong. PayPal enables individuals and businesses to securely, easily and quickly send and
receive payments online. It provides credit offering through the Bill Me Later service.
GSI: GSI is a provider of e-commerce and interactive marketing services to enterprise clients, which
include brands and retailers. GSI offers a range of solutions designed to power merchants' online
businesses. GSI operates two business units: Global ecommerce Services (GeC), and Global Marketing
Services (GMS)
Recent mergers and acquisitions:
2013: Decide Inc.( effective Sept, 06,2013)
2011: Hunch- New-York Based personalisation start-up
2011: eBay Inc. acquires GSI- a leading provider of ecommerce and interactive marketing services


Macroeconomic profile
17

It is often assumed that e-commerce adoption is a global process, driven by a common set of actors.
However, there is a theoretical basis for expecting that some industries and business activities will tend
toward global convergence while others will be marked by local divergence. Porter (1990) emphasizes
that the prosperity and competitive advantage of a nation is no longer as a result of a nation's natural
resources and its labor force, but rather the ability of its industry to innovate and upgrade. This can be
seen as a disruptive technology on a macro environmental level. And today, the impact of new
technology on the economy of a nation is indisputable. Continuous growth of E-commerce is expected
to have deep impact on structure and functioning of economies at various levels and overall impact on
macro-economy
It leads to the automation of some job functions and replaces others with self service operations,
raising output per worker and dampening employment requirements in some occupations, as well as in
the industries in which these occupations are concerned (Hecker, 2001).But, perhaps the larger impact
of Ecommerce on labour market can be seen in the form of online job search. However, little is known
about the importance of online job applications or direct employer initiated contracts with potential
candidates. Even then, online job posting has grown spectacularly (Autor, 2001). Estimates place the
number of online job boards at over 3000, the number of active resumes online at over 7 million, and
the number of job posting at 29 million (Boyle et al., 1999; Computer Economics, 2000). Kuhn and
Skuterud (2000) reported that 7 per cent of employed workers regularly use the web to search for a
new job in 1998. The leading job board, Monster.Com, offered 3.9 million resumes and 4, 30,000 jobs
in August 2000 (Nakamura and Pugh, 2000).E-Commerce technologies have the potential to
significantly increase competition by increasing consumers' choice of products and traders .Indian
government is playing an important part in promoting digitalization of the country. Adoption of
technology in income tax processing in IT act 2000 not only brings Indian close to the technology but
also helps in building trust over digital medium, the most significant factor for e-commerce
development. Government e- payment gateway (GePG) introduced to handle all government payment
transactions by the pay and accounts office of government of India is other important initiative to bring
Indian close to the technology. Government focus on e governance and aim to digitalize all services
will facilitate more internet acquaintance and will help Indian e commerce market. Indian industry has
grown at an astonishing rate over past decade. It has seen a variable metamorphosis from offline to
online market. Many shops like shoppers stop and future bazar couldnt do very well in online
retailing.On the one hand, the sites are gaining customers as people become more comfortable with
buying things online. But on the other, the governments decision in September to bar foreign direct
investment (FDI) in the online retail business has led to some amount of desperation among
shopping sites, especially the smaller ones.(Mint)
18

The ecommerce market in India is expected to grow by 33 per cent to reach Rs 62,967 crores by the
end of 2013. (IAMAI, 2013).The ecommerce market was valued at Rs 47,349 cr in December
2012. (Indian digital review)
E-com giant Amazon recently launched its India marketplace and eBay has been present in the country
for years. However, an opening of the sector to FDI would raise hopes for other existing firms to raise
fresh cash.(VC Circle) With ban in FDI many firms have shutdown in India.
Tables:
Mergers & Acquisition in Indian ecommerce industry







Source:
eTailing India Research

Source: IAMAI-IMRB
International
Reference:
1. Gefen, D. (2000) E-commerce: the role of familiarity and trust International Journal of
Management Science, 725-737
2. Brynjolfsson, Erik and Michael D. Smith (2000), "Frictionless Commerce? A Comparison of
Internet and Conventional Retailers", Management Science, 46.
3. The Economist, 1999. Accessed on Sep 5
th
, 2013 http://www.economist.com/node/346410
4. Baye,M. (2008), Market Definition and Unilateral Competitive Effects in Online Retail
Markets, v. 4, iss. 3, pp. 639-53
Snapdeal Grabbon.Com Group Buying Site
Flipkart WeRead Social Book Discovery Tool
Flipkart Mime360 Digital Content Platform
Flipkart Letsbuy Electronics Goods
Snapdeal eSportsBuy Sports Goods
Yebhi StylishYou.in Fashion Jewellery
Myntra Shersingh Sports Apparel
19

5. Bansal,R (2013), Prospects of Electronic Commerce in India v.3,pp 11-20
6. World Bank 2011. Accessed on Sep 5
th
,2013
http://www.worldbank.org/en/country/india/overview
7. Schwab, K. (2011). The Global Competitiveness Report 2010-2011: Highlights, Geneva:
World Economic Forum. http://www3.weforum.org/docs/WEF_GCR_Highlights_2010-11.pdf
8. CRISIL
2012.https://www.crisilresearch.com/industryasync.jspx?serviceId=497&State=null#storyId#1
329978091321#sectionId#831#newsFeedId#undefined
9. Mahmood,M (2008). Measuring e-Commerce technology enable business value: an
exploratory research v.4,pp. 47-68
10. Stuart (1999). http://www.cio.com.au/article/105277/leaders_pack/
11. Hartman A., Kador, J., Sifonis, J.G. and Chambers, J (2000), Net Ready Strategies for
Success in the E-conomy, p. xvii. McGraw-Hill, USA.
12. Turban, E., D. King, J. Lee, M. Warkentin, and H.M. Chung, Electronic Commerce: A
Managerial Perspective, New York: Prentice Hall, 2002.
13. Chaffey,D and Smith P. R (2008) eMarketingeXcellence: Planning and optimising your digital
marketing. A Butterworth-Heinemann Title; 3 edition
14. Kauffman, R.J. and C.H. Kriebel, (1988), Modeling and Measuring the Business Value of
Information Technology, in P.Berger, J.G. Kobielus and D.E. Sutherland (Eds.), Measuring
Business Value of Information Technologies, ICIT Press, Washington, D.C., pp. 97-119
15. VC Circle http://techcircle.vccircle.com/2013/08/26/pmo-in-favour-of-fdi-in-e-commerce/
16. http://pib.nic.in/newsite/erelease.aspx?relid=92976
17. Kauffman, R.J. and C.H. Kriebel, (1988), Modeling and Measuring the Business Value of
Information Technology, in P.Berger, J.G. Kobielus and D.E. Sutherland (Eds.), Measuring
Business Value of Information Technologies, ICIT Press, Washington, D.C., pp. 97-119
18. Dai, Qizhi and Kauffman, R . Business Models for Internet-Based B2B Electronic
Markets INTERNATIONAL JOURNAL OF ELECTRONIC COMMERCE 6.4 (Summer
2002):41-72
19. McIlvaine B. John Chambers. (2000) Electron Buy News ;42.
20. Avgerou, Chrisanthi (2002) Information systems and global diversity Oxford University Press,
New York. ISBN 0199240779
21. Straub, D., Keil, M. and Brenner, W.(1997) "Testing the Technology Acceptance Model across
Cultures: A Three Country Study." Information & Management, Vol. 33, 1-11
22. Lawrence, E., Corbitt, B., Tidwell, A., Fisher, J., and Lawrence, J. (1998) Internet Commerce:
Digital Models for Business, John Wiley & Sons, Brisbane.
20

23. IAMAI report titled "Online Activities & E-commerce from Cyber-
cafes" http://www.iamai.in/Research.aspx?Fileid=r5_home.htm
24. Datamonitor-Marketline report (2013).
http://web.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=3&sid=8b43f189-8523-4220-9192-
12dd9bd934b7%40sessionmgr15&hid=12
25. TRAI Report (2012)
http://www.trai.gov.in/WriteReadData/Miscelleneus/Document/201301150318386780062Ann
ual%20Report%20English%202012.pdf
26. Adam C. (2011). Influence of adoption factors and risks on ecommerce and online marketing.
The Proceedings from International Conference Marketing from Information to decision. 21-35
27. Lager, M. (2006). E-commerce best practices. Customer Relationship Management, Medford,
22-27.
28. Williams, K.C., Hernandez, E.H., Petrosky, A.R. & Page, R. (2008) Fine-Tuning E-Commerce
Practices, Journal of Technology Research, 1-19
29. Licker,P (2001), "E-Commerce system success:An attempt to extend and respecify the Delone
and Mclean model of success," Journal of Electronic Commerce research, 2 (4), 131-41.
30. Warrington, T, Abgrab, N and Coldwell, N (2000), Building Trust to Develop Competitive
Advantage in E-business Relationships, Competitiveness Review, Indiana, 10 (2) 160 168.
31. Ferraro, A. (1998), Electronic Commerce: The Issues And Challenges to Creating Trust And
A Positive Image in Consumer Sales on the World Wide Web, Vol. 3 No. 6
32. Porter,M (1990)"The Competitive advantage of nations". Boston: Harvard Business School
Press
33. Hecker, D. E. (2001).Occupational employment projections to 2010. Monthly Labor Review,
124 (11), 57-84.
34. Autor,D.H. (2001) Wiring the labormarket, Journal of Economic Perspectives 15(1), 2540.
35. Boyle, H. Perry Jr.; Lynn A. Summer and Benjamin Koby (1999), E*Cruiting: From Job
Boards to Meta Markets, Thomas Wiesel Partners.