DISSERTATION REPORT

ON
“A COMPARATIVE STUDY ON CONSUMER BUYING BEHAVIOUR

TOWARDS FLIPKART AND AMAZON”

Submitted in Partial Fulfilment for the Degree

Of
Post-Graduation in Diploma in Management
(Approved by AICTE, Govt. of India)
Academic Session
2015-2017

Submitted To Submitted By
Dr. Tushar Mahajan Aman Maheshwari
Professor BM-015035
IMS Ghaziabad

1
PREFACE

2
CERTIFICATE

3
 ACKNOWLEDGEMENT

As a student of IMS Ghaziabad, I would like to extend my sincere gratitude to Dr. JP Sharma
(Director, IMS Ghaziabad), Dr. Tushar Mahajan (Faculty of Marketing, IMS Ghaziabad) to
shape my understanding towards the project. It was because of their immense help and support
that this project has been duly completed.

However, I accept the sole responsibility for any possible error and would be extremely grateful
to the readers of this project report if they bring such mistakes to my notice.

…………………......
AMAN MAHESHWARI

4
 TABLE OF CONTENTS
Chapter Topic Page No.
No.
1. Executive Synopsis 06-12

2. Literature Review 14-18

2. Industry Profile
2.1) About E-commerce Industry 19-21
2.2) E-Commerce in India 21-25
2.3) Future E-commerce in India 25-27
2.4) Why E-commerce? 28-30
2.5) Opportunities and challenges 31-34

3. Company Profile
3.1) About the company-Flipkart 35-41
3.2) About the company-Amazon 42-46

4. Research Methodology
4.1) Research Objective 47
4.2) Research Design 47
4.3) Data Sources 47
4.4) Sampling-Method, Size, Location 47
4.5) Data Collection 47
5. Data Analysis & Interpretation 48-62

6. Findings 63

7. Conclusion 64-67

8. Recommendations 68-70

9. Bibliography 71

10. Annexure 72-74

5
 EXECUTIVE SYNOPSIS

INTRODUCTION
Online shopping is a different experience everyone can make the shopping creative over the
internet as you get used to it. There can be lot of anxieties about online shopping when you get
into it for the first time. As you experience more and more of it those apprehensions get
disappeared slowly. Remember that if you stick to the basics, online shopping becomes more
enjoyable and easier than real world shopping.
Having access to online shopping has truly revolutionized and influenced our society as a whole.
Use of technology has opened new doors and opportunities that enable for a more convenient
lifestyle today. Variety of products, quicker services and reduced price are the three significant
ways in which online shopping influenced people in India and world as a whole. However, this
concept of online shopping led to the possibilities of fraud and privacy conflicts. Unfortunately,
it has shown that it is possible for v and criminals to manipulate the system and access personal
information. Today with the latest features of technology, measures are being taken in order to
stop hackers and criminals from accessing private databases. Through privacy and security
policies, website designers are doing their best to put an end to this unethical practice. By doing
so, society will continue to depend upon online shopping, which will allow it to remain a
tremendous success in the future.
Online shopping in India is an emerging trend for marketers to promote their merchandise in
wide geographical area using internet and the trend looks likely to grow upwards over the
coming decade.
India is the 5th country in world ecommerce and 2nd country in Asia. India seems to have grasped
the ability to shop merchandise through internet. Mobile internet is being enormously
responsible for opening up the online world to Indian consumers. There are reports suggesting
that by the end of 2017 over 500 million Indians will have access to the internet through mobile
phone technology and other platforms, about the same amount of people in USA to put that into
context.

ABOUT FLIPKART AND AMAZON

FLIPKART

Back in 2007, when Flipkart was launched, Indian e-commerce industry was taking its
beginner steps. The company is registered in Singapore, but their headquarters are in the
city of Bangalore, India. Sachin Bansal and Binny Bansal who were working for Amazon
had an idea to start an e-commerce company in India. Both are alumni of IIT Delhi and are
native of Chandigarh, India. They left their jobs in Amazon to start their own business.
One can easily call that a risky move. In a country where people have various tastes and
preferences, an ecommerce start-up will always have enormous challenges. In India, people
often prefer to shop in person and buy goods they see and like. Today, thanks to Flipkart,
e-commerce has become one of the fastest growing sectors in India. Flipkart began selling

6
books to begin with. It soon expanded and began offering a wide variety of goods.
Innovating right from the start, Flipkart has been home to few of the striking features of
Indian e-commerce. In the first few years of its existence, Flipkart raised funds through
venture capital funding. As the company grew in stature, more funding arrived. Flipkart
repaid the investors’ faith with terrific performances year after year. In the financial year
2008-09, Flipkart had made sales to the tune of 40 million Indian rupees. This soon
increased to 200 million Indian rupees the following year.

Their last round of Fundraising had increased their value to $ 15 billion, h owever, as of
February 2016, according to Morgan Stanley, their estimated value stands at $11 billion.
Back at the time when Flipkart was launched, any e-commerce company faced two major
difficulties. One was the problem of online payment gateways. Not man y people preferred
online payment and the gateways were not easy to set up. Flipkart tackled this problem by
introducing cash on delivery and payment by card on delivery in addition to others.
Flipkart was the first to implement the popular ‘Cash-On Delivery’ facility, which every
online shopping website in India offers as an option today. The second problem was the
entire supply chain system. Delivering goods on time is one of the most important factors
that determine the success of an ecommerce company. Flipkart addressed this issue by
launching their own supply chain management system to deliver orders in a timely fashion.

Today as it stands, Sachin Bansal is the Chairman of the company and Binny Bansal is the
CEO of Flipkart.

Flipkart also acquired few companies like Myntra.com, LetsBuy.com etc., to better their
presence in the market. With the entry of Amazon.com in India, the competition between
the companies has seen many takeovers. Flipkart’s journey from a small book e-retailer to
India’s largest e-commerce platform inspires a generation of start-ups. In a country where
stereotypes are common, Flipkart managed to break the norm and change the ecommerce
industry in India for ever. Flipkart’s story proves that if you have a great idea, and you are
a doer and not a thinker, success is not far off.

AMAZON

Amazon was started by the name Cadabra in 1994 by Jeff Bezos. It went online as
amazon.com in 1995. What started out as an online bookstore today has turned out to
become the largest online retailer on the planet. The company’s name Amazon has truly
become as big as the Amazon River from which it took inspiration. What was it that made
the difference and today makes Amazon accepted globally as the best place to buy goods
online. It was the focus on the customer and correct prediction of future shopping trends
that helped Amazon take the distinct edge and get ahead of its competitors. The initial
business plan of founder Jeff Bezos was itself different from the others. At the start of the
21st century, when many of the e-companies couldn’t survive, it was Amazon that was
leading the market from being a start-up just a few years back. It was accepted that Bezos’
unusual plan worked after all.

7
Amazon soon started selling everything from music CD’s, software, tools, toys, sporting
goods and even groceries. But Amazon’s biggest invention was Kindle e -book which it
launched in November 2007. With its easy usability and the availability of online editions
increasing day by day, the customers shifted from hardcover to e-books comfortably. The
Kindle sales contributed heavily to Amazon’s revenue.

But what made all the difference in Amazon’s growth to have profits of 61 billion dollars
and 97,000 employees in 2012 is because of the customer experience they deliver. Je ff
Bezos’ masterstroke was in cutting down on marketing expenses and invest it in keeping
the customer happy. He cut down on advertising expenses and thus gave shipping free for
the customers. Free shipping and the lowest prices on the planet made it a difficult option
to ignore. Everyone was attracted to buy at Amazon. But the secret to the success of
Amazon is how they maintained their relationship with the customer.

This is a story of a man who wanted to give his son a PS3 as a surprise gift. After 4 days of
not receiving it, he called the customer representative and explained to him the whole
story. And the representative assured him of delivery the very next day. When the man
asked how much should he pay, the representative replied, “Nothing”. And this man went
on to write an article in the New York Times which was read by millions of potential
customers.

This is what Amazon stands for and this attitude has taken the company where no other
company has reached. Amazon relies on the word of mouth and positive reviews that
customers give. This helps millions of other people to make the right decision and at the
end of the day be satisfied with their purchase.

Amazon is the leader in innovation and is the first in making things simpler and attractive
for their customers. They provide an option for creating a wish list and also suggest
products we would be interested in based on the products and services we have
bought. Today Amazon offers cloud-based storage and computing services and also
streaming of movies and songs for a flat annual subscription. Amazon provides people the
option to sell their products using their platform. The way Amazon treats its customers has
been at the heart of the unbelievable success it has experienced. Amazon truly has been a
company that has understood the needs of the customer and showed how to do business in
the best way possible.

LITERATURE REVIEW

1. Online Shopper Behaviour: Influences of Online Shopping Decision

8
According to Chayapa and Wang, recent research has shown an interest in investigating
consumer motivations that affect the online shopping behaviour. It is yet to understand what
factors influence online shopping decision process. The objective of this study is to provide an
overview of online shopping decision process by comparing the offline and online decision
making and identifying the factors that motivate online customers to decide or not to decide to
buy online. It is found that marketing communication process differs between offline and online
consumer decision. Managerial implications are developed for online stores to improve their
website.

2. A STUDY OF ONLINE PURCHASE BEHAVIOUR OF CUSTOMERS IN INDIA

According to the latest study on Online Purchase Behaviour of Customers in India, the recent
growth of e-commerce and the consumer’s increasing interest in purchasing over the net have
significantly changed the landscape of Indian retail market. Today customers are inclined to
accept the changes and keep their eyes on the benefits they can obtain from online retailers. The
recent example of changing consumer purchase pattern is the Flipkart’s ‘Big Billion day’ Sale.
The growth in online sales can be partially attributed to the Internet’s advantages of providing
large amounts of information quickly and inexpensively and its growing accessibility. Yet, to
reach its full potential, business owners who use ecommerce as a distribution channel need a
clearer understanding of who buys online, what they buy online, why they buy online, and how
the non-Internet buyer can be transformed into an online buyer in order to increase online sale.
The purpose of this study is to understand and analyse the factors effecting online purchase
decisions of Indian customer. The paper attempts to identify the determinants of online purchase
intentions of youths in Indian context. Based on extensive literature review, factors effecting
online purchase intentions, antecedents of service quality and consumer attitudes were identified
and a structured-non-disguised questionnaire was prepared. The data was collected through
survey of 200 students of graduation and post-graduation courses in Bareilly region of Uttar
Pradesh. The questionnaire contained questions about consumer demographics, security and
privacy concerns, technological familiarity, past online shopping experiences and intentions to
buy various types of products through internet in future. The findings of the study indicate that

9
customer online purchase intentions are significantly related to their gender, education, age,
security concern, technological familiarity, and past online purchase frequency. Consumer
buying behaviour is also affected by product type, purchase frequency and expensiveness. Their
purchase decisions are also found to be related with the online retailer’s services like return,
refund and delivery services. The framework of the research enhances understanding of the
factors affecting customer online shopping behaviour, helps in profiling typical Indian online
shoppers and may help e-marketers developing more specific marketing strategies to increase e-
commerce sales.

3. ECONOMIC TIMES ARTICLE: DATED-OCT,03 2016

Flipkart
According to Economic Times dated October 03, 2016, Flipkart is offering massive discounts in
its home appliances segment today with 25-30 per cent discounts in the category. For instance, a
refrigerator by Godrej (185 L Direct Cool Single Door) has a discount offer of 25 per cent on it
while a washing machine by IFB is available at Rs 19,990 after 13 per cent off on it.
Home entertainment is another segment with big deals on offer - a Sony Bravia LED television is
available at Rs 45,410 after 21 per cent off. Multiple brands are offering upto 60% discount in
the clothing and accessories segment.

Flipkart has also tied up with Jet Airways and its loyalty programme where consumers get flat
500 JPMiles for your first transaction ever by shopping on shop.jetprivilege.com before October
7. Shoppers can also earn 16 JPMiles for every Rs 100 spent through shop.jetprivilege.com,
which in turn redirects you to Flipkart.
Amazon
According to Economic Times dated October 03, 2016, Amazon's Great Indian Festival Sale is
more focussed on pushing electronics today with a 38 per cent discount on Lenovo Vibe S1
mobile phone available at Rs 9,999 and One Plus 2 from One Plus brand attracting a 13 per cent
off discount as well. One of the best deals available in the computer category is on the HP laptop
(15-be003TU 15.6-inch) available at Rs 25,990 after a 20 per cent discount. Home appliances
like washing machines have special offers some brands offering over 20 per cent discount like a

10
top loading washing machine from LG(T7270TDDL) available at Rs 15, 582. The newest Kindle
is also on offer at Rs 4,999 after 17 per cent discount.

OBJECTIVES OF THE STUDY

1. To study the consumer buying behaviour towards Flipkart.

2. To study the consumer buying behaviour towards Amazon.

3. To study the comparison in consumer buying behaviour towards Flipkart and

Amazon.

RESEARCH METHODOLOGY

Research Design- Descriptive Research

Sample Size-100

Sample Location-Ghaziabad

Sampling Method- Convenient Sampling Method

Data Collection Methods- Questionnaire Method

REFERENCES

1. Asian Journal of Business Research Volume 1 Number 2 2011

Chayapa Katawetawaraks
SCG Trading Services Co. Ltd
Cheng Lu Wang
University of New Haven

11
http://www.magscholar.com/joomla/images/docs/ajbr/ajbrv1n2/Online%20Shopper%20B
ehavior%20Influences.pdf

2. http://ictactjournals.in/paper/IJMS_paper_4_pp_136_142.pdf
3. Hawkins L. Del, Mookerjee Amit (2012), “Consumer Behaviour”, McGraw Hill
Publications.

4. http://economictimes.indiatimes.com/small-biz/startups/ecommerce-sales-what-
does-flipkart-amazon-snapdeal-have-on-offer-today/articleshow/54640255.cms

12
 LITERATURE REVIEW

1. Online Shopper Behaviour: Influences of Online Shopping Decision

According to Chayapa and Wang, recent research has shown an interest in investigating
consumer motivations that affect the online shopping behaviour. It is yet to understand what
factors influence online shopping decision process. The objective of this study is to provide an
overview of online shopping decision process by comparing the offline and online decision
making and identifying the factors that motivate online customers to decide or not to decide to
buy online. It is found that marketing communication process differs between offline and online
consumer decision. Managerial implications are developed for online stores to improve their
website.

2. A STUDY OF ONLINE PURCHASE BEHAVIOUR OF CUSTOMERS IN INDIA

According to the latest study on Online Purchase Behaviour of Customers in India, the recent
growth of e-commerce and the consumer’s increasing interest in purchasing over the net have
significantly changed the landscape of Indian retail market. Today customers are inclined to
accept the changes and keep their eyes on the benefits they can obtain from online retailers. The
recent example of changing consumer purchase pattern is the Flipkart’s ‘Big Billion day’ Sale.
The growth in online sales can be partially attributed to the Internet’s advantages of providing
large amounts of information quickly and inexpensively and its growing accessibility. Yet, to
reach its full potential, business owners who use ecommerce as a distribution channel need a
clearer understanding of who buys online, what they buy online, why they buy online, and how
the non-Internet buyer can be transformed into an online buyer in order to increase online sale.
The purpose of this study is to understand and analyse the factors effecting online purchase
decisions of Indian customer. The paper attempts to identify the determinants of online purchase
intentions of youths in Indian context. Based on extensive literature review, factors effecting
online purchase intentions, antecedents of service quality and consumer attitudes were identified
and a structured-non-disguised questionnaire was prepared. The data was collected through
survey of 200 students of graduation and post-graduation courses in Bareilly region of Uttar
13
Pradesh. The questionnaire contained questions about consumer demographics, security and
privacy concerns, technological familiarity, past online shopping experiences and intentions to
buy various types of products through internet in future. The findings of the study indicate that
customer online purchase intentions are significantly related to their gender, education, age,
security concern, technological familiarity, and past online purchase frequency. Consumer
buying behaviour is also affected by product type, purchase frequency and expensiveness. Their
purchase decisions are also found to be related with the online retailer’s services like return,
refund and delivery services. The framework of the research enhances understanding of the
factors affecting customer online shopping behaviour, helps in profiling typical Indian online
shoppers and may help e-marketers developing more specific marketing strategies to increase e-
commerce sales.

3. ECONOMIC TIMES ARTICLE: DATED-OCT,03 2016

Flipkart
According to Economic Times dated October 03, 2016, Flipkart is offering massive discounts in
its home appliances segment today with 25-30 per cent discounts in the category. For instance, a
refrigerator by Godrej (185 L Direct Cool Single Door) has a discount offer of 25 per cent on it
while a washing machine by IFB is available at Rs 19,990 after 13 per cent off on it.
Home entertainment is another segment with big deals on offer - a Sony Bravia LED television is
available at Rs 45,410 after 21 per cent off. Multiple brands are offering upto 60% discount in
the clothing and accessories segment.

Flipkart has also tied up with Jet Airways and its loyalty programme where consumers get flat
500 JPMiles for your first transaction ever by shopping on shop.jetprivilege.com before October
7. Shoppers can also earn 16 JPMiles for every Rs 100 spent through shop.jetprivilege.com,
which in turn redirects you to Flipkart.
Amazon
According to Economic Times dated October 03, 2016, Amazon's Great Indian Festival Sale is
more focussed on pushing electronics today with a 38 per cent discount on Lenovo Vibe S1
mobile phone available at Rs 9,999 and One Plus 2 from One Plus brand attracting a 13 per cent

14
off discount as well. One of the best deals available in the computer category is on the HP laptop
(15-be003TU 15.6-inch) available at Rs 25,990 after a 20 per cent discount. Home appliances
like washing machines have special offers some brands offering over 20 per cent discount like a
top loading washing machine from LG(T7270TDDL) available at Rs 15, 582. The newest Kindle
is also on offer at Rs 4,999 after 17 per cent discount.

4. SMALLER E-COMMERCE COMPANIES ANGRY WITH THE HEAVY

DISCOUNTS OF FLIPKART AND AMAZON, DATED-MAR 4, 2017
If you are happy buying your favorite products on Flipkart and Amazon – that’s the reason of
headache for smaller ecommerce companies. In a written complaint to the Competition
Commission of India, a group on online sellers have alleged that Flipkart's WS Retail
and Amazon's Cloudtail are offering heavy discounts when selling private label products.

The retailers of private labels Amazon Basics and Flipkart Smart Buy have been tendered special
benefits that haven't been disclosed publicly, the All India Online Vendors' Association, a group
of 2,000 sellers on various online platforms, contended in a letter to the CCI.

"Flipkart has always conducted its business with transparency, integrity and in full compliance of
all applicable laws,” a company spokesperson told The Economic Times. "Our private label,
Smart-Buy, has enjoyed rapid success primarily due to the superior quality of products.

When Indian startups are complaining against predatory pricing of foreign players, it’s ironic to
see, the same ecommerce company indulging in predatory pricing and destroying the ecommerce
ecosystem of the country.

5. FLIPKART SLASHES WITH MYNTRA BUDGET TO COMPETE WITH

AMAZON, DATED-JAN10,2017

Flipkart is slashing its budget for unit Myntra as it reallocates resources in its fight against
rival Amazon, which is closing in on it and ploughing billions of dollars into India.
“In the war between Flipkart and Amazon, most of the money will be poured into Flipkart and
they have told Myntra that they will not get the same amount of money which they used to get
earlier.

Myntra said no budget changes were planned. “There has been no budget cut for this fiscal and
we do not expect any changes going forward,” A Flipkart spokesperson said the matter was
unfounded speculation. “Budgets are decided on the basis of annual operating plans and there
are/has been no change/reduction in planned budgets for the year,” he said. Another person said

15
the Bengaluru-based firm, asked by the board to fix its financial situation, decided to reduce
Myntra’s budget by 10% as part of the process. Flipkart was asked to bring down the amount
spent on advertising and offering discounts, among other expenses – known as the burn rate – to
one-fourth by March after the October sale, the person said. “While it has streamlined its own
operations to achieve the target, the company also decided to trim down the supply to Myntra,”
the person said.

6. BATTLE WITH AMAZON COSTS FLIPKART INTERNET RS 2,306 CRORE

LAST FISCAL

Flipkart Internet Private Limited, the locally registered marketplace unit of the online retail giant,
has seen its losses more than double to Rs 2,306 crore in the financial year ended March 31,
2016.
Losses were up by 110%, as the Bengaluru-based company continued to ramp up spending to
fend off US-based online retail giant Amazon’s $5-billion war chest for India.

Sales were up at a much faster clip of 153% during the year to Rs 1,952 crore, according to
regulatory filings with Registrar of Companies (RoC). The pace of increase in both revenues and
losses has come down as compared to the three-times jump in losses and four-times increase in
revenues between FY14 and FY15. Flipkart Internet owns Flipkart.com and registers sales from
seller commissions and other services like advertisements.
Both Flipkart and Amazon have a slew of companies registered in India, which run their business
across commerce, logistics, whole-sale and payments.

These units gets capital infusion from investment holding companies registered overseas.
Flipkart’s commerce business in India is housed under two companies, of which the first one is
Flipkart Internet. Singapore-registered Flipkart Marketplace, which in turn is owned by the
parent company Flipkart Limited, owns 99.74% stake in Flipkart Internet.

The other main commerce unit is Flipkart India Private Limited, the wholesale cash-and-carry
unit which is owned by Flipkart Limited directly and registers product sales.
In FY15, Flipkart India and Flipkart Internet reported a combined a loss of Rs 2,000 cr ore.
Combined sales trebled to Rs 10,390 crore in FY15, with Flipkart India accounting for over 90%
of the sales. The numbers for financial year ending March 2016 for Flipkart India are yet to be
filed.

7. IS FLIPKART LOSING OUT TO AMAZON? HARESH CHAWLA RINGS THE

WARNING BELLS FOR INDIAS TOP E-RETAILER

16
Flipkart has been hit by a "storm of its own making", says India Value Fund Advisors Partner
Haresh Chawla in a scathing article for Founding Fuel that meticulously dissects what ails
India’s leading e-commerce company. According to the signed article, which is being widely
shared on social media, Flipkart is facing significant turmoil in terms of top-level management.
Growth, the article adds, has been elusive since the “middle of last year”, while innovation has
been absent.

For an e-commerce firm which saw its gross merchandise value (GMV) grow by "200% per
annum for the past three years", the article argues, the current lack of substantial growth in GMV
shows that the very "culture" which made Flipkart successful earlier is "hindering" it now.
"Flipkart is the market leader. But Amazon is snipping at its heels and Flipkart has no clue which
way to go," Chawla warns in the no-holds-barred analysis.

The article argues that Amazon has been focusing on the fact that over half of Flipkart's GMV
comes from sales of smartphones — an area the latter has focused on, according to the article,
"to the exclusion of everything else". Amazon, through its efforts, is just "months away from
beating" its rival, the article adds.
The article points out that in comparison to the user experience with Amazon's app, Flipkart's
app is less than satisfactory. The "search is poor", says the piece, adding that the user experiences
is non-intuitive. Additionally, difficult to find products are simply not available with Flipkart.

Flipkart's drive to transform itself into a mobile-first platform recently suffered a serious blow
with the exit of Chief Product Officer Punit Soni, who had been brought in from Google in
February, 2015, on a million-dollar compensation package to push the marketplace’s mobile
strategy. In May, 2015, Soni had pushed for Myntra – the fashion subsidiary of Flipkart – to shut
down its website on both desktop and mobile and function as an app-only platform.

The move drew flak from users and the industry, but the company had said that it didn’t mind
dealing with the slight drop in revenues because it was building for the future. Back then, Sachin
Bansal, the then CEO of Flipkart, had said that the parent platform intended to do the same.

17
However, the strategy was scrapped soon after. While the app-only move might not have worked
at the time, Flipkart did become the first Indian app to cross the 50 million mark on the Android
platform.

18
 INDUSTRY PROFILE

ABOUT E-COMMERCE INDUSTRY

E-commerce refers to the purchase and sale of goods and/or services via electronic
channels such as the Internet. E-commerce was first introduced in the 1960s via an
electronic data interchange (EDI) on value-added networks (VANs). The medium grew
with the increased availability of Internet access and the advent of popular online sellers
in the 1990s and early 2000s. Amazon began operating as a book-shipping business in
Jeff Bezos' garage in 1995. EBay, which enables consumers to sell to each other online,
introduced online auctions in 1995 and exploded with the 1997 Beanie Babies frenzy.

Like any digital technology or consumer-based purchasing market, e-commerce has

evolved over the years. As mobile devices became more popular, mobile commerce has
become its own market. With the rise of sites like Facebook and Pinterest, social media
has become an important driver of e-commerce. As of 2014, Facebook drove 85 percent
of social media-originating sales on e-commerce platform Shopify, according to Paymill.
The changing market represents a vast opportunity for businesses to improve their
relevance and expand their market in the online world. By 2013, worldwide e-commerce
sales reached $1.2 trillion, and U.S. mobile sales reached $38 billion, according to
Statista. More than 40 percent of Internet users — 1 billion in total — have purchased
goods online. These figures will continue to climb as mobile and Internet use expand
both in the U.S. and in developing markets around the world.

E-commerce businesses may employ some or all of the following:

 Online shopping web sites for retail sales direct to consumers

 Providing or participating in online marketplaces, which process third-party business-to-
consumer or consumer-to-consumer sales
 Business-to-business buying and selling
 Gathering and using demographic data through web contacts and social media
 Business-to-business (B2B) electronic data interchange
 Marketing to prospective and established customers by e-mail or fax (for example,
with newsletters)

19
 CATEGORIES OF E-COMMERCE

As with traditional commerce, there are four principal categories of e-commerce: B2B, B2C,
C2B and C2C.

 B2B (Business to Business) — This involves companies doing business with each other. One
example is manufacturers selling to distributors and wholesalers selling to retailers.
 B2C (Business to Consumer) — B2C consists of businesses selling to the general public through
shopping cart software, without needing any human interaction. This is what most people think
of when they hear "e-commerce." An example of this would be Amazon.
 C2B (Consumer to Business) — In C2B e-commerce, consumers post a project with a set budget
online, and companies bid on the project. The consumer reviews the bids and selects the
company. Elance is an example of this.
 C2C (Consumer to Consumer) — This takes place within online classified ads, forums
or marketplaces where individuals can buy and sell their goods. Examples of this include
Craigslist, eBay and Etsy.

Getting started

If you have a simple product to sell and a desire to expand your sales online, there are a few tools
you can use to get started.

Websites such as Square Space and Word Press offer mobile-friendly ready-to-go e-commerce
templates that help you get a store up and running quickly. As a shop owner, you will need a way
to collect credit card payments from consumers online. PayPal, Square and Google Wallet are all
popular ways of accepting and managing online payments.

If you are selling physical goods, you'll need to consider how you're going to ship them. PayPal
and other processors have worked with shipping merchants, including USPS and UPS, to offer
one-stop postage processing. You will also need to research your state laws to determine if you
are required to obtain a permit for selling online, or if you need to collect sales tax for your state
or municipality.

As your company grows, you may want to consider more advanced ways to process payments,
such as using a merchant account and a service such as Authorize.net. Services that integrate
more fully with your bank frequently offer discounted transaction costs when compared to
processors such as PayPal.

20
E-COMMERCE STRATEGY

As in any new venture, the first step in succeeding in e-commerce is to set goals. Do you plan to
increase revenue from existing customers? Gain new customers? Increase the average order
value? Sell through new channels? Lower prices? Once you have figured out your goals, it's time
to set a plan.

A SWOT analysis can help you assess the strengths, weaknesses, opportunities and threats of
your company's current environment. Review your entire business, not just segments of it.
Evaluate external opportunities, because this is the often the primary place to invest time and
money. Be honest with yourself when analysing weaknesses and threats, or else the analysis will
not be helpful. After the SWOT analysis is done, see how it fits into your overall vision.

This will help you set business objectives for the current year, where you set objectives for sales,
profits, customers, traffic, new systems and new staff. After the objectives are set, you can set a
strategy into place yourself, or hire an e-commerce consultant to help you. Other tools that can
help you determine how to best grow your company into a new segment include PEST (Political,
Economic, Social and Technological), MOST (Mission, Objective, Strategies and Tactics), and
Porter's Five Forces analyses.

E-COMMERCE LAW

In addition to having a strong business strategy, it's important to have a basic understanding of e-
commerce law. Online sellers, particularly those selling internationally or across state lines, face
different legal and financial considerations, especially in regard to privacy, security, copyright
and taxation.

The Federal Trade Commission (FTC) regulates most e-commerce activities, including the use of
commercial emails, online advertising and consumer privacy. Businesses collect and retain
sensitive personal information about their customers, and your company is subject to federal and
state privacy laws, depending on the type of data that you collect. There are also online
advertising laws that protect consumer privacy and ensure truthful marketing practices online.

As an e-commerce business, online advertising is a major part of your strategy. Over the past
decade, federal and state governments have passed new online advertising laws. As you expand
into online marketing, it is important to be familiar with these. In addition to protecting
consumers from data leaks and misleading online advertising, digital works are also protected on
the Internet via the Digital Millennium Copyright Act (DMCA). There are a number of
provisions that e-commerce businesses need to be aware of, including copyright infringement
liability and a service provider's responsibilities.

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E-COMMERCE INDUSTRY IN INDIA

With $681 billion in online retail sales in 2016, China is the largest market for e-commerce
globally, followed by the US, and the fastest growing one is India.

We live in a world where we communicate with each other over mobile phones than we do face
to face. For keeping in touch, shopping, hailing a cab, or ordering food… everything begins and
ends with that smartphone.

And it is only getting bigger. According to a new study by Forrester Research, approximately a
fifth of total retail sales will take place online by 2021 in Asia Pacific, with 78 percent of that
coming from mobile, up from 63 percent in 2016. The study adds that online retail via mobile
will grow at a CAGR of 15.6 percent, to reach $1 trillion in 2020, up from $539 billion in 2016.

According to Forrester, Asia Pacific continues to be the largest region for online retail sales.
Their data shows that with $681 billion in online retail sales in 2016, China is the largest market
for e-commerce globally, followed by the US; but it is India that is the fastest-growing e-
commerce market.

China vs. India?

China accounts for nearly 80 percent of online retail sales in Asia Pacific, and Forrester expects
it to become the first market to reach $1 trillion in online retail sales in 2020. More than 19
percent of all retail sales in China takes place online, and it will reach 24 percent by 2021.

22
Indian market is expected to reach $64 billion by 2021, growing at a five-year CAGR of
31.2 percent.

But Satish Meena, Forecast Analyst at Forrester Research, warns that India will take more than
10 years to reach the level of the US and China markets in online retail. “About 70 percent of
our population still lives in tier III cities and beyond. Our customer is different: they will evolve
at their own pace, in the next 10 years, with more disposable income,” he says, adding that China
has a mature market.

“Comparatively, Internet and e-commerce penetration is still small in India, so is population and
total retail. So it is unfair to compare China and India. We will not grow fast enough to take over
China,” Satish explains. India has had its advantages in e-commerce.

In China, Alibaba took off in the 2000s, when the global economy was not at its best. India
entered the e-commerce market after 2010, when the GDP was showing healthy growth, and
disposable income was on the rise.

“In India, pace has been faster with users getting comfortable buying clothes and footwear more
easily than they did in other countries. But that is because of the artificial push by Cod, no-
questions-asked return policies, and, most importantly, due to huge VC investment in e-
commerce here,” he says, adding that Amazon did not have that sort of funding when they
started off in the US in 1990s.

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World over, apparel is the largest category for online retail, followed by consumer electronics
and computer hardware. However, grocery, beauty and cosmetics, home appliances and furniture
are the fastest-growing categories, showing the increasing maturity of online shopping in Asia
Pacific.

But maturity is yet to happen in payment mechanisms. A majority of Indian online shoppers still
prefer Cod to online payment -- despite the recently announced currency ban that troubled most
businesses. Satish believes that the rise in digital payments caused by the demonetization will not
last for long. “For purchasing high-ticket items with discounts, online channel was the only
option for many. These are people who are mostly used to online banking, but the rest of online
shoppers are not willing to move in that direction. At least 100 million more users will on board
online shopping in the next four years. E-commerce firms will have to attract them through
Cod.”

The Indian customer base is not homogeneous either: some of them are comfortable paying
online as they have been buying online for 5-6 years. They want great customer experience –
including speedy delivery if not steep discounts. Then there are bargain hunters, looking or
purchasing cheaper products; they don’t care about fast delivery. They have no loyalty and go
where they get the best discounts. Indian e-commerce players, therefore, will have to cater to
multiple factors.

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“Currently, Amazon is the only one in good shape. Once Flipkart and Snapdeal raise decent
funding, they will promote themselves more without huge discounts. It is still too early to claim
profitability. Only a bigger market can bring profitability,” says Satish, adding that although
there are regulatory restrictions at the moment, the government will keep opening the retail
sector more. India currently does not allow FDI in inventory-led models of online retail. The
DIPP has also restricted e-commerce firms from gaining no more than 25 percent of their sales
from one seller.

25
FUTURE OF E-COMMERCE INDUSTRY IN INDIA

India, a country of more than 1.2 billion people, with innumerable challenges, is also an
emerging economy which offers billions of opportunities. The potential of growth in e-
commerce in India has caught the attention of several regional players like Flipkart, Snapdeal
and also of global giants like Amazon, Alibaba. From being worth just about $3.9 billion in
2009, online retail is worth $38 billion in 2016 and it is expected to generate about $100 billion
in revenue by 20201. So, what are the challenges to sell online in this complex market ?

An heterogeneous market

India has the second largest Internet user base in the world and the fastest growing one. Around
375 million Internet users and counting2. One of the challenges is the estimated 415 living
languages in India. On January 2016 Snapdeal, the eBay-backed Indian marketplace, was made
available in 11 local languages besides English. Thus, Snapdeal expanded its reach to an
additional 130 million smartphone users in India.

A mobile-first economy

80% of Internet sessions are coming from mobile in India1. Because the Internet penetration is
recent and booming, Indians bypassed the desktop age and are directly moving into mobile. And
since long loading times and frequent drops in connection make it harder for a user to keep
browsing on mobile, applications became the answer. Nonetheless it could be a mistake to be
app only. The app is, indeed, more user-friendly and allows better user-targeting. In 2015, a
marketplace called Myntra decided on an app-only approach and shut down its websites – its app
accounted for 90% of traffic and 70% of the sales at that time. But due to low-end smartphone
devices, users tend to uninstall an app after a purchase to make room for those they used more
frequently. Myntra relaunched its mobile website not long after, adopting an app-first but not
app-only strategy.

Offline versus online

As of 2016, online retail sales just represent 2% of the total retail spending in India6. Due to the
innumerable problems faced in reaching new customers, e-commerce players have found it hard
to grow in terms of customer acquisition. When it comes to shopping for clothes & jewellery,
Indian consumers like to touch and feel their products before making a purchase. Additionally,
according to demographic statistics released by Flipkart, consumers above the age group 45,
have staunchly resisted shopping online7. In view of these challenges, some of the e-commerce
players like Amazon, Flipkart or Pepperfry are planning to or have already launched a physical
store in India.
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Besides, Indian consumers are highly driven to shop online by discounts and offers. It has
become a huge challenge for e-commerce players to attract loyal consumers since most of the
consumers shop from the platform which gives them the best discount. Due to this discount war,
it has become very difficult for the market players to distinguish themselves in terms of services,
as most of them are busy fighting over discounts. This strategy to focus on customer experience
will not only help the players to acquire new users but also help in building a loyal customer
base.

Last but not least, it is estimated that 70% of the consumers prefer to make cash on delivery
(CoD) while shopping online, since majority of Indians are sceptical of doing e-payments3. When
the government decided to demonetize Rs. 500 and Rs. 1,000 notes, the CoD orders for the major
online retailers fell by 15-30%4. It is a huge challenge for the e-commerce players to attract
consumers to their platform since CoD is not only the preferred payment option but also
laborious, risky and expensive. To circumvent this problem, e-retailers are incentivising and
helping consumers shift to making electronic payments. For example, Amazon allows its
consumers to load their gift card balance and avail an incentive of 15% discount at the checkout5.

Consumer satisfaction & loyalty : logistics & services as key factor success

Customer loyalty seems to be harder to earn in India where consumers are spoiled for choice.
And since the cost of acquiring a new customer is 5 times the cost of retaining one, tending to the
customer relationship would be profitable. Unfortunately, the seamless customer journey is not
entirely up to the e-retailers to guarantee. Indeed, one of its main pain points is delivery, and
different carriers are used for different regions of India. All of them are not accustomed to
handling commercial value goods, thus delays, mix-ups and product damages are not
uncommon. To tackle this issue, many big players are integrating logistics divisions in their
business model, as Flipkart did with Ekart.

Online retail companies need to be innovative and keep on offering unique experiences in order
to win consumers’ loyalty. Some of them have already invested in this direction : Myntra
acquired a tech solution for virtual fitting room, Limeroad provides online advice from a stylist,
Flipkart announced a monthly instalment scheme without paying interests…

As a conclusion, we can say that data marketing will be key for tomorrow’s leaders. To better
know customers, better engage with them, anticipate their needs and eventually increase their
customer value. Which is a major challenge for a market that is expected to have 175 Million
online shoppers by 2020?

27
WHY E-COMMERCE?

From small businesses to that consummate eCommerce giant Amazon, many companies can
benefit from having their own eCommerce site. As well as selling a physical product,
eCommerce can be used to sell digital products, consultations or appointments, or intangibles,
making it a flexible solution for all kinds of businesses.

So how can eCommerce boost your business? Read on for five ways it can do so, and to see how
other businesses have had success with eCommerce.

E-Commerce Influences Purchase Decisions

When customers are deciding on a purchase, they start by looking online.

Your website is your showroom, where customers can research your product and see all the
reasons it is right for them.

Now imagine that same product was just a couple of clicks away from being theirs. A well-
designed eCommerce site can influence purchase decisions by showcasing your product at its
best, and making it as easy as pie to take action and make a purchase.

Staples' customer-friendly online shop has been such a success that they have scaled back their
bricks and mortar stores in favor of it. A searchable and convenient catalog that makes
purchasing easy, with plenty of product reviews to encourage that sale.

E-Commerce Taps into Social Media

It's a social world out there, with customers turning to social media such as Facebook and
Twitter to research potential purchases.

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For a smart business, an engaging social media presence can raise their company profile and
encourage traffic and sales. A well thought out social media strategy marries well with a good
eCommerce site, forging connections with buyers. Offers, competitions and other shareable
content can be used to grab attention and encourage visits to your eCommerce store.

Walmart takes its social media presence seriously, with a YouTube channel filled with useful
videos, and a Facebook page that's regularly updated with shareable feel-good pictures of their
food.

It's a seemingly simple strategy but it connects emotionally, garnering them a lot of likes - and
custom.

E-Commerce Is Convenient

Whether they're just getting through the door after a 10-hour work day, or getting the shopping
done at the crack of dawn before the kids get up, customers appreciate the convenience of online
shopping.

People's lives are hectic; getting to a bricks and mortar store means taking a sizeable chunk out
of their day for a detour. eCommerce means you can fit into your customer's busy lives, offering
the products they want, when they want them.

Amazon is a prime example of the convenience of online shopping, with a vast online store of
products available anytime, day or night. This convenience combined with a quick checkout
process, order tracking and quick shipping is a winning combination.

E-Commerce Can Broaden Your Brand

E-Commerce can be used in ways a traditional bricks and mortar store couldn't, whether that is
by offering intangible products, providing some kind of web search, or giving customers the
ability to order a product to their exact specifications. E-Commerce can be used to broaden your

29
range of products for sale, bringing you more custom and diversifying your sales.When Apple
first started ITunes, it was viewed as an IPod marketing tactic rather than a serious online store.

With billions of sales, ITunes is now a vital part of the global Apple brand, demonstrating how
E-Commerce can be used to broaden what a brand offers, diversifying and increasing sales.

E-Commerce Offers a Personalized Experience

There are many ways in which eCommerce can be used to forge a more personal connection with
customers.

For example, an eCommerce site could include personal recommendations, order tracking, quick
customer service, or personalized rewards, allowing your business to offer the same kind of
personal service online that you would offer face to face.

Shopittome has built an entire business, and reputation, around offering shoppers a personalized
experience. Busy browsers can enter their brand preferences and size, and receive regular
personalized newsletters full of bargains to suit them.

eCommerce offers businesses a vital opportunity to offer their customers round-the-clock

convenience.

A good eCommerce strategy that adds excellent customer service and a dynamic social media
presence into the mix can spell higher traffic and better sales for your business.

30
OPPORTUNITIES AND CHALLENGES IN E-COMMERCE

With a population of 1.25 billion that includes a large young, mobile-first generation—many
of whom share English as a common language—plus an emerging middle class, India
presents significant growth opportunities for retailers from across the globe. Following
the recent news that the Indian government’s Department of Industrial Policy and Promotion
would officially allow up to 100% foreign ownership of e-commerce marketplaces, both
web and brick-and-mortar retailers operating there have garnered some decisive new
advantages.

That “marketplace” aspect is important, however. Indian officials have also decided that e -
commerce companies capitalizing on the new rules must be in the business of providing
technology platforms that facilitate trade between buyers and sellers, as opposed to an old -
fashioned, “inventory-led model” where a retailer owns the goods it sells. (This, by the way,
will hold back Apple, which has worked hard to persuade the Indian government to relax
foreign investment rules that would make it easier to run its own stores, rather than rely on
Indian retailers, as it does now.)

“The policy provides a much overdue clarity on [foreign direct investment] in B2C e-
commerce,” Mihir Kittur, co-Founder and chief innovation officer at Ugam, a managed
analytics company, explained in an email to Retail Dive. “This should pave the way for
speedier and hassle-free foreign investments into the e-commerce sector, which should be
good for the e-commerce players. The policy also defines the marketplace format that B2C
e-commerce companies need to follow and permits manufacturers to undertake wholesale
and/or retail including e-commerce without approval. Another positive for the retail industry
at large.”

The potential

Even prior to the new guidelines, India posed an undeniably intriguing opportunity. The
nation's "modern trade" (including mall-based stores, chain stores and brands) is increasing
15% to 20% each year (though countrywide, it enjoys a lower organized retail penetration of
8%), according to PricewaterhouseCoopers. Meanwhile, a study from the Internet and
Mobile Association of India last year found there were 52 million new Internet users there
in the first six months of 2015, bringing the country’s total user base to 352 million as of
June. And of those, 213 million—more than 60%—accessed the web through their mobile
devices.

“If you look at the numbers, every three seconds an Indian experiences the internet for the
first time,” said Kittur.

Not surprisingly, as India's internet and mobile use has exploded, so has e-commerce. While
it's still a small fraction of the overall Indian retail market—just 4% to 6%—it’s growing
rapidly and expected to scale up exponentially in coming years: India’s top 25 retail

31
websites already account for some 62% of all web traffic nationwide, according to digital
market intelligence company SimilarWeb, and around 12% of all Internet users in India are
online shoppers, according to the Economic Times. Analysts believe that online shopper
penetration could grow to 20% by 2017.

Looking further into the future, overall retail sales in India are projected to double to $1
trillion by 2020 from $600 billion last year, according to the Boston Consulting Group,
which adds that e-commerce sales there are projected to quadruple in the next five years, to
$60 billion or $70 billion.

“Online serves a lot of the pent-up demand," Kittur said. "It can lead to a lot of solutions for
people in cities, where there’s a lot of money but not a lot of retail stores."

The players

Competition in India is fierce. Bengaluru-based Flipkart is India’s largest homegrown e-

retailer, with a gross merchandise value of $10 billion and a track record of raising $3.15
billion in venture financing. Nearly 10 years old, Flipkart has 46 million registered users,
33,000 employees, 14 warehouses and enjoys 10 million page visits each day, according to
Quartz India. Just last month, the company also acquired Bangalore-based mobile payments
company PhonePe, its third acquisition in payments/wallet solutions.

But Amazon India has given Flipkart a run for its money since arriving in 2013. India is
providing Amazon with its largest number of new customers after the U.S., and Amazon
India's Q4 2015 sales were equal to its total 2014 sales, according to Seeking Alpha.
(Amazon hasn't released numbers on its sales in India.)

Then there's six-year-old Snapdeal. The New Delhi-based firm recently said that it is well
on its way to the kind of volume and diversity of sellers that the government aims to
encourage, doubling the number of sellers on its marketplace last year to more than 300,000
sellers, on its way to a projected 500,000 sellers by the end of this year.

Flipkart and Snapdeal (among others), along with Amazon India, have already benefited
from outside investments—deals that critics long alleged weren’t quite legal under the
country’s confounding foreign direct investment rules. The new rules mean changes are
coming.

“Amazon India derives a significant portion of its revenues (over 25%) from its own seller
Cloudtail India Pvt. Ltd,. part owned by Amazon and its partner Catamaran Ventures,”
Venkat Viswanathan, founder and chairman of global analytics firm LatentView Analytics,
told Retail Dive in email. “With the clarity in policy guidelines, they would now need to
onboard more new sellers and reduce their dependence on their own seller. It's a very
similar story for Flipkart, where its largest seller, WS Retail, is a company part owned by
Flipkart.”

32
Chinese retail giant Alibaba is another emerging player in the Indian market, thanks to
previous investments in Snapdeal as well as mobile company Paytm (which has expanded to
become an e-commerce marketplace). But last month, the Economic Times reported that the
company is in talks with Indian conglomerate Tata Sons to jointly establish a new retail
venture—a development that, given Alibaba's size and scope, could shake up online
commerce across the Indian market if it comes to pass.

“We are planning to enter the e-commerce business in India in 2016,” Alibaba Group
President J. Michael Evans said during a visit to New Delhi, according to several news
reports. “We have been exploring very carefully the e-commerce opportunity in this
country."

A deal with Tata could give Alibaba a foothold in India to rival Flipkart as well as Amazon
India, experts say. An Alibaba/Tatas partnership in tandem with the government’s new rules
clarifications also could signal the beginning of increased competition from foreign
companies as Indian e-commerce continues to “stabilize and mature, either through joint
ventures or M&A activity, which could spur the next round of investment activity in this
space," said Henry Burrows, who runs Blueprint Risk Advisory, a U.K. risk-assessment
consultancy specializing in Southeast Asia.

“These routes are by far and away the most sensible for foreign companies in terms of
entering India, as you have ready access to local knowledge and expertise as well as
connections, bureaucratic and political, which help to mitigate any unforeseen commercial
risks,” Burrows told Retail Dive in an email.

The challenges

There’s no denying Indian e-commerce's massive potential, but that doesn’t mean it’s going
to be easy making headway in the market. For one thing, the enthusiastic venture capital
love shown to the likes of Flipkart and Snapdeal is cooling, just as it seem s to be in the
U.S., said Viswanathan.

“Gone are the days where you could get every e-commerce idea in India funded,”
Viswanathan told Retail Dive. “There is a shakeout and a drying-up of funds, and in some
sense it’s a reflection of what’s happening globally and in Silicon Valley—some weeding
out of the weaker players.”

Like Burrows, Viswanathan thinks there may be mergers and acquisitions as players like
Alibaba, Flipkart and Amazon do serious battle for market share.

“India is a long-term growth story,” Viswanathan said. “In the near term you can survive if
you have access to funding, and if you can survive during that period you can own that
market. Right now Amazon has the advantage in that story.”

Indeed, last month, Morgan Stanley took a chunk out of Flipkart’s valuation, reducing by
27% its assessment of the e-commerce venture (in which the financial services firm owns a

33
small stake), bringing it down to $11 billion from the $15 billion valuation it enjoyed at the
time of its June 2015 funding round.

There also are several practical considerations that challenge e-commerce retailers in India,
said Viswanathan. One is an under-developed logistics infrastructure that can make delivery
difficult. Another related problem: A dearth of less-skilled workers that can handle
customer service and fulfillment.

“They need people who speak English but aren’t highly skilled, and multiple companies are
going after the same group,” Viswanathan said. “There are lots of niche players fighting for
the same pool of workers as they try to scale their businesses.”

In addition, it can be difficult for marketplaces to find sellers who are ready for primetime,
said Ugam's Kittur. Many marketplaces in India provide financing because so few sellers
have access to traditional financing from banks, he said.

“How do I onboard these sellers and ensure their products are of good quality?” Kittur said.
“And if the seller does ship an improper product, how do I deal with customer
dissatisfaction? That’s really the number one problem.”

Last but not least, the new rules announced last month limit the price discounting that has
long been a hallmark of the intense competition among India's e-commerce players. The
discount cap could somewhat temper the consumer enthusiasm online retailers have enjoyed
so far, experts say.

“This should benefit brick-and-mortar retailers who have been struggling with lower
footfalls and sales conversions, and lobbied successfully for online retailers to be reined
back,” Viswanathan said. “The policy also restrains marketplace firms from funding
marketing costs or providing product guarantees, and mandates disclosure of seller contact
details. All these elements would lead to lower discounts from Amazon and Flipkart, and
relief for brick and mortar retailers.”

But even with the new limits to discounting and demands on sellers, make no mistake:
India's economic growth and its demographic profile still make the country attractive to
retail businesses at home and abroad, experts say.

“In a nutshell, [the rules] seem to be good for the India retail industry at large, providing
much overdue clarity on investments, probably providing a level playing fiel d for offline
retailers, and nudging e-commerce players to build profitable businesses,” Kittur said.

34
 ABOUT THE COMPANY

FLIPKART

Flipkart Success Story

Introduction

A quick look into any success story shows a path breaking idea at the heart of the tale.
Flipkart is no exception. It is not the idea itself but the conviction to convert ideas into
action and action into results is what defines a true success story. Measured by that
yardstick, Flipkart has been a hugely successful.

History

Back in 2007, when Flipkart was launched, Indian e-commerce industry was taking its
beginner steps. The company is registered in Singapore, but theyir headquarters are in the
city of Bangalore, India.

35
Founders

Sachin Bansal and Binny Bansal, who were working for Amazon.com had an idea to start
an e-commerce company in India. Both of them are alumni of IIT, Delhi and are native of
Chandigarh, India. They left their jobs in Amazon to start their own business.
One can easily call that a risky move. In a country where people have various t astes and
preferences, an ecommerce start-up will always have enormous challenges. In India, people
often prefer to shop in person and buy goods they see and like. Today, thanks to Flipkart,
e-commerce has become one of the fastest growing sectors in India.

36
How it Started

Flipkart began selling books to begin with. It soon expanded and began offering a wide
variety of goods. Innovating right from the start, Flipkart has been home to few of the
striking features of Indian e-commerce.

37
Fundings History

In the first few years of its existence, Flipkart raised funds through venture capital funding.
As the company grew in stature, more funding arrived. Flipkart repaid the investors’ faith
with terrific performances year after year. In the financial year 2008-09, Flipkart had made
sales to the tune of 40 million Indian rupees. This soon increased to 200 million Indian
rupees the following year.

Their last round of Fundraising had increased their value to $ 15 billion, however, as of
February 2016, according to Morgan Stanley, their estimated value stands at $11 billion.

38
Evolution

Back at the time when Flipkart was launched, any e-commerce company faced two major
difficulties. One was the problem of online payment gateways. Not many people preferred
online payment and the gateways were not easy to set up. Flipkart tackled this problem by
introducing cash on delivery and payment by card on delivery in addition to others.
Flipkart was the first to implement the popular ‘Cash On Delivery’ facility, which every
online shopping website in India offers as an option today.

39
The second problem was the entire supply chain system. Delivering goods on time is one of
the most important factor that determines the success of an ecommerce company. Flipkart
addressed this issue by launching their own supply chain management system to deliver
orders in a timely fashion.

Today as it stands, Sachin Bansal is the Chairman of the company and Binny Bansal is the
CEO of Flipkart.

40
Acquisitions

Flipkart also acquired few companies like Myntra.com, LetsBuy.com etc., to better their
presence in the market. With the entry of Amazon.com in India, the competition between
the companies has seen many takeovers. Flipkart’s journey from a small book e-retailer to
India’s largest e-commerce platform inspires a generation of start-ups. In a country where
stereotypes are common, Flipkart managed to break the norm and change the ecommerce
industry in India for ever. Flipkart’s story proves that if you have a great idea, and you are
a doer and not a thinker, success is not far off.

41
AMAZON

Considered a pioneer in online retailing, Amazon.com, Inc. expanded during the late 1990s to
offer the "Earth's Biggest Selection" of books, CDs, videos, DVDs, electronics, toys, tools, home
furnishings and housewares, apparel, and kitchen gadgets. Through third-party agreements,
Amazon.com also sells products from well-known retailers including Toysrus.com Inc., Target
Corporation, Circuit City Stores Inc., the Borders Group, Waterstones, Expedia Inc., Hotwire,
National Leisure Group Inc., and Virgin Wines. Sometimes criticized for its focus on market
share over profits, Amazon.com put investor fears to rest when it secured its first net profit
during the fourth quarter of 2001.

The Early 1990s: Beginnings

Throughout the 1990s, the popularity of the Internet and World Wide Web swept across the
world, and personal computers in most businesses and households got hooked up in some form
or another to Internet providers and Web browser software. As use of the Internet became more
prevalent in society, companies began looking to the Web as a new avenue for commerce.
Selling products over the Internet offered a variety of choices and opportunities. One of the
pioneers of e-commerce was Jeff Bezos, founder of Amazon.com.

In 1994, Bezos left his job as vice-president of the Wall Street firm D.E. Shaw, moved to Seattle,
and began to work out a business plan for what would become Amazon.com. After reading a
report that projected annual Web growth at 2,300 percent, Bezos drew up a list of 20 products
that could be sold on the Internet. He narrowed the list to what he felt were the five most
promising: compact discs, computer hardware, computer software, videos, and books. Bezos
eventually decided that his venture would sell books over the Web, due to the large worldwide
market for literature, the low price that could be offered for books, and the tremendous selection
of titles that were available in print. He chose Seattle as the company headquarters due to its
large high-tech work force and its proximity to a large book distribution center in Oregon. Bezos
then worked to raise funds for the company while also working with software developers to build
the company's web site. The web site debuted in July 1995 and quickly became the number one
book-related site on the Web.

In just four months of operation, Amazon.com became a very popular site on the Web, making
high marks on several Internet rankings. It generated recognition as the sixth best site on Point
Communications' "top ten" list, and was almost immediately placed on Yahoo's "what's cool list"
and Netscape's "what's new list." The site opened with a searchable database of over one million
titles. Customers could enter search information, prompting the system to sift through the
company database and find the desired titles. The program then displayed information about the
selection on a customer's computer screen, and gave the customer the option to order the books
with a credit card and have the books shipped in a just a few days.

Unlike its large competitors, such as Barnes & Noble and Borders, Amazon.com carried only
about 2,000 titles in stock in its Seattle warehouse. Most orders through Amazon.com were
placed directly through wholesalers and publishers, so no warehouse was needed. Amazon.com
would simply receive the books from the other sources, then ship them to the customer. At first,
42
the company operated out of Bezos' garage, until it was clear that it was going to be a success,
necessitating a move to a Seattle office, which served as the customer support, shipping, and
receiving area. It was interesting that, because of the Internet, such a small venture could realize
such a broad scope so quickly; within a month of launching the web site, Bezos and
Amazon.com had filled orders from all 50 states and 45 other countries.

As a pioneer in the world of Internet commerce, Amazon.com strived to set the standard for web
businesses. With that goal in mind, Bezos went to work on making the web site as customer
friendly as possible and relating the site to all types of customers. For those people who knew
what book they were looking for and just wanted quick performance and low cost, Amazon.com
offered powerful search capabilities of its expanded 1.5 million-title database. The company also
began offering 10 to 30 percent discounts on most titles, making the prices extremely affordable.
For other customers who were just looking for something to read in a general area of interest,
Amazon.com offered topic areas to browse, as well as lists of bestsellers, award winners, and
titles that were recently featured in the media. Finally, for people who could not decide,
Amazon.com offered a recommendation center. There a customer could find books based on his
or her mood, reading habits, or preferences. The recommendation center also offered titles based
on records of books the customer had purchased in the past, if they were return customers to the
site.

Other hits with customers were the little touches, such as optional gift wrapping of packages, and
the "eye" notification service, which sent customers e-mails alerting them when a new book in
their favorite subject or by their favorite author came into stock. The site also offered the ability
for customers not only to write their comments about different books and have them published
on the site, but to read other customers' comments about books they were interested in buying.

Going Public in 1997

After less than two years of operation, Amazon.com became a public company in May 1997 with
an initial public offering (IPO) of three million shares of common stock. With the proceeds from
the IPO, Bezos went to work on improving the already productive web site and on bettering the
company's distribution capabilities.

To help broaden the company's distribution capabilities, and to ease the strain on the existing
distribution center that came from such a high volume of orders, in September 1997 Bezos
announced that Amazon.com would be opening an East Coast distribution center in New Castle,
Delaware. There was also a 70 percent expansion of the company's Seattle center. The
improvements increased the company's stocking and shipping capabilities and reduced the time it
took to fill customers' orders. The Delaware site not only got Amazon.com closer to East Coast
customers, but also to East Coast publishers, which decreased Amazon.com's receiving time.
With the new centers in place, Bezos set a goal for the company of 95 percent same-day shipping
of in-stock orders, getting orders to the customers much faster than before.

Another growth area for Amazon.com was the success of its "Associate' program. Established in
July 1996, the program allowed individuals with their own web sites to choose books of interest
and place ads for them on their own sites, allowing visitors to purchase those books. The

43
customer was linked to Amazon.com, which took care of all the orders. Associates were sent
reports on their sales and made a 3 to 8 percent commission from books sold on their sites. The
Associates program really began to take off in mid-1997, when Amazon.com formed
partnerships with Yahoo, Inc. and America Online, Inc. Both companies agreed to give
Amazon.com broad promotional capabilities on their sites, two of the most visited sites on the
Web. As the success continued, Amazon also struck deals with many other popular sites,
including Netscape, GeoCities, Excite, and AltaVista.

As the company continued to grow in 1997, Bezos announced in October that Amazon.com
would be the first Internet retailer to reach the milestone of one million customers. With
customers in all 50 states and now 160 countries worldwide, what had started in a Seattle garage
was now a company with $147.8 million in yearly sales.

Further Expansion in 1998

As Amazon.com ventured into 1998, the company continued to grow. By February, the
Associates program had reached 30,000 members, who now earned up to 15 percent for
recommending and selling books from their web sites. Four months later, the number of
Associates had doubled to 60,000.

The company's customer database continued to grow as well, with cumulative customer accounts
reaching 2.26 million in March, an increase of 50 percent in just three months, and of 564
percent over the previous year. In other words, it took Amazon.com 27 months to serve its first
million customers and only six months to serve the second million. This feat made Amazon.com
the third largest bookseller in the United States.

Financed by a $75 million credit facility secured in late 1997, Amazon.com continued to reshape
its services in 1998. To its catalog of over 2.5 million titles, the company added Amazon.com
Advantage, a program to help the sales of independent authors and publishers, and Amazon.com
Kids, a service providing over 100,000 titles for younger children and teenagers.

Amazon.com also expanded its business through a trio of acquisitions in early 1998. Two of the
companies were acquired to further expand Amazon.com's business into Europe. Bookpages, one
of the largest online booksellers in the United Kingdom, gave Amazon.com access to the U.K.
market. Telebook, the largest online bookseller in Germany, added its German titles to the mix.
Both companies not only gave Amazon .com access to new customers in Europe, but it also gave
existing Amazon.com customers access to more books from around the world. The Internet
Movie Database (IMD), the third acquisition, was used to support plans for its move into online
video sales. The tremendous resources and information of the IMD served as a valuable asset in
the construction of a customer-friendly and informative web site for video sales.

Another big change in 1998 was the announcement of the company's decision to enter into the
online music business. Bezos again wanted to make the site as useful as possible for his
customers, so he appealed to them for help. Several months before officially opening its music
site, Amazon.com asked its bookstore customers and members of the music profession to help
design the new web site.

44
The music store opened in June 1998, with over 125,000 music titles available. The new site,
which began operations at the same time that Amazon.com debuted a redesigned book site,
offered many of the same helpful services available at the company's book site. The database was
searchable by artist, song title, or label, and customers were able to listen to more than 225,000
sound clips before making their selection.

Amazon.com ended the second quarter of 1998 as strong as ever. Cumulative customer accounts
broke the three million mark, and as sales figures for Amazon.com continued to rise, and more
products and titles were added, the future looked bright for this pioneer in the Internet commerce
marketplace. With music as a part of the company mix, and video sales on the horizon, Bezos
seemed to have accomplished his goal of gathering a strong market share in the online sales
arena. As Bezos told Fortune magazine in December 1996: "By the year 2000, there could be
two or three big online bookstores. We need to be one of them."

Growth Continues: 1999 and Beyond

As such, the company's focus on growth continued. In 1999, it launched an online auction
service entitled Amazon Auctions. It also began offering toys and electronics and then divided its
product offerings into individual stores on its site to make it easier for customers to shop for
certain items. During the holiday season that year, the firm ordered 181 acres of holiday
wrapping paper and 2,494 miles of red ribbon, a sign that Bezos expected holiday shoppers to
flock to his site as they had in the two past years. Sure enough, sales climbed to $1.6 billion
proving that the founder's efforts to create an online powerhouse had indeed paid off. In 1999,
Bezos reached the upper echelon of the corporate world when Time magazine honored him with
its prestigious "Person of the Year" award.

While Amazon.com's growth story was remarkable, Bezos' focus on market share over profits
had made Wall Street uneasy and left analysts speculating whether the company would ever be
able to turn a profit. Sales continued to grow as the company added new products to its site--
including lawn and patio furniture and kitchen wares. The company however, continued to post
net losses. To top it off, the "dot-com boom" of the late 1990s came to a crashing halt in the early
years of the new millenium as many startups declared bankruptcy amid intense competition and
weakening economies.

Bezos remained optimistic, even as Amazon.com's share price faltered. During 2001, the
company focused on cutting costs. It laid off 1,300 employees and closed a distribution facility.
The company also added price reduction to its business strategy, which had traditionally been
centered on vast selection and convenience. Amazon.com inked lucrative third-party deals with
such well-known retailers as Target Corporation and America Online, Inc. By now, products
from Toysrus.com Inc., Circuit City Stores Inc., the Borders Group, and a host of other retailers
were available on the Amazon.com site.

Amazon.com's strategy worked. In 2001, sales grew to $3.12 billion, an increase of 13 percent
over the previous year. During the fourth quarter, Amazon.com reached a milestone that many
had regarded as unlikely; it secured a net profit of $5 million. In 2002, the company launched its
apparel store, which included clothing from retailers The Gap and Lands' End. Overall, the

45
company reported a net loss of $149 million for the year, an improvement from the $567 million
loss reported in 2001. In the fourth quarter of 2002 however, the firm secured a quarterly net
profit of $3 million--the second net profit in its history.

While securing quarterly net profits was a major turning point for the young company, a July
2002 Business Week article warned, "after seven years and more than $1 billion in losses,
Amazon is still a work in process." Indeed, the company's foray into providing the "Earth's
Biggest Selection" had yet to prove it could provide profits on a long-term basis. Nevertheless,
Bezos and his Amazon team remained confident that the firm was on the right track. With $3.9
billion in annual sales, Amazon.com had without a doubt come a long way from its start as an
online book seller.

Principal Subsidiaries: Amazon Global Resources, Inc.; Amazon.com.dedc, LLC;

Fulfillco.ksdc, Inc.; Amazon.com.kydc, Inc.; Amazon.com Commerce Services, Inc.;
Amazon.com Holdings, Inc.; Amazon.com International Sales, Inc.; Amazon.com LLC;
Amazon.com Payments, Inc.; NV Services, Inc.; Amazon Fulfillment Services, Inc.;
Amazon.com@Target.com, Inc.

46
 RESEARCH METHODOLOGY

RESEARCH OBJECTIVES

1. To study the consumer buying behaviour towards Flipkart.

2. To study the consumer buying behaviour towards Amazon.

3. To study the comparison in consumer buying behaviour towards Flipkart and

Amazon.

RESEARCH DESIGN- Descriptive Research

SAMPLE SIZE-99

SAMPLING LOCATION-Ghaziabad

SAMPLING METHOD- Convenient Sampling Method

DATA COLLECTION METHOD- Questionnaire Method

47
 DATA ANALYSIS AND INTERPRETATION

INTERPRETATION-Out of 99 respondents, 80.8% are between the age group of 16-25, 16.4%
are between the age group of 25-35 and rest 2.8% belong from age group of 35-50.

INTERPRETATION-Out of 99 respondents, 56.2% are males and rest 43.8% are females.

48
INTERPRETATION-Out of 99 respondents, 66.4% are students, 24% are salaried professional
and rest 9.6% belong to business background.

INTERPRETATION-Out of 99 respondents, 50.4% belong from an income group of less than

Rs.2 lakhs per annum, 32.2% belong from an income group of Rs2. To Rs.5 lakhs per annum and
rest 12.2% belongs from an income group of Rs5. to Rs8.lakhs per annum.

49
INTERPRETATION-Out of 99 respondents, 53.4% are likely to shop through an e-commerce
website, 25.3% are mostly likely to shop through an e-commerce website, 18.5% doesn’t prefer
to shop from e-commerce website and rest 2.8% doesn’t shop online.

INTERPRETATION-Out of 99 respondents, 51.4% prefer Flipkart, 32.9% amazon and rest

8.2% prefer others.

50
INTERPRETATION-From the view point of price, 66.4% perceives that Flipkart is average
priced, 17.1% thinks that it is economical and rest 16.4% thinks that it is expensive.

INTERPRETATION-From the view point of price, 44.1% perceives that Amazon is average
priced, 26.6% thinks that it is economical and rest 29.4% thinks that it is expensive.

51
INTERPRETATION-From the view point of variety of product, 54.5% perceives that Flipkart
has good variety of product, 22.1% thinks that it has excellent variety of product, 20% thinks that
it has average variety and rest 3.4% thinks that it has poor variety.

INTERPRETATION-From the view point of variety of product, 56.6% perceives that Amazon
has good variety of product, 30.3% thinks that it has excellent variety of product, 10.3% thinks
that it has average variety and rest 2.8% thinks that it has poor variety.

52
INTERPRETATION-Out of 99 respondents for the product comparison the e-commerce
websites are average in user friendliness both Flipkart and Amazon.

Out of 99 respondents for the price comparison the e-commerce websites are average in user
friendliness both Flipkart and Amazon.

Out of 99 respondents for the payment options offered the e-commerce websites are average in
user friendliness both Flipkart and Amazon.

Out of 99 respondents for the product delivery the e-commerce websites are average in user
friendliness both Flipkart and Amazon.

Out of 99 respondents for the product variety the e-commerce websites are average in user
friendliness both Flipkart and Amazon.

53
INTERPRETATION-Out of 99 respondents, convenience is preferred in both Flipkart and
Amazon.
Out of 99 respondents, Minimum Delivery Time is preferred in both Flipkart and Amazon.
Out of 99 respondents, Product Trial Experience is preferred in both Flipkart and Amazon.
Out of 99 respondents, Discount/Deals is preferred in both Flipkart and Amazon.

INTERPRETATION-Out of 99 respondents, 36.4% prefer discounts, 28.7% prefer range

availability, 25.9% prefer convenience and rest 9.1% prefer quality in Flipkart.

54
INTERPRETATION- In Amazon, out of 99 respondents 36.4% prefer range availability,
26.6% prefer discounts, 21.7% prefer quality and rest 15.4% prefer convenience.

INTERPRETATION-Out of 99 respondents, 50.3% thinks the experience to be good, 22.1%

thinks very good experience and rest 17.9% thinks the experience to be average in Flipkart.

55
INTERPRETATION-Out of 99 respondents, 51% thinks the experience to be good, 21% thinks
very good experience, 17.5% thinks the experience to be average and rest 9.8% thinks
experience to be excellent in Amazon.

INTERPRETATION-Out of 99 respondents, 56.6% prefer Flipkart and rest 43.4% prefer

Amazon in terms of Consumer Satisfaction.

56
 Please rate the user friendliness of the e-commerce website which you
prefer the most (1-5, very poor to excellent)

Price comparison
T-Test
Determine preference of user friendliness of the e-commerce website in
case of price comparison ?

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Please_rate_the_user_friendline
ss_of_the_ecommerce_website 99 3.45 .884 .089
_which

Interpretation: Out of total 99 respondents all gave their responds towards the questions that
preference of user friendliness of the e-commerce website in case of price
comparison where mean preference level is 3.45 ≈ 3 which implies on an average customer
are neutral prefer towards the questions that preference of user friendliness of the e-
commerce website in case of price comparison with the Standard deviation of
0.884 giving the range of response varying from (3.45 ± 0.884). This is the conclusion we can
draw from sample.
In order to conclude for the population, we applied hypothesis test (1-sample t-test)
H0 : µ = 3
H1: µ ≠ 3

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

57
Please_rate_the_user_friendline
ss_of_the_ecommerce_website 5.117 98 .000 .455 .28 .63
_which

Interpretation:
Here, Tcal= 5.117(dof=98)
p-value = 0.000<α (α=0.05, as confidence interval=95%)
so reject H0.
Thus we can conclude that, preference of user friendliness of the e-commerce
website in case of price comparison is neutral.

T-Test
Please rate the user friendliness of the e-commerce website which
you prefer the most (1-5, very poor to excellent)
Product delivery

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Please_rate_the_user_friendline
ss_of_the_ecommerce_website 99 3.45 .884 .089
_which

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

Please_rate_the_user_friendline
ss_of_the_ecommerce_website 5.117 98 .000 .455 .28 .63
_which

58
 Interpretation: Out of total 99 respondents all gave their responds towards the questions that
preference of user friendliness of the e-commerce website in case of
product delivery where mean preference level is 3.45 ≈ 3 which implies on an average
customer are neutral prefer towards the questions that preference of user friendliness
of the e-commerce website in case of price comparison with the Standard
deviation of 0.884 giving the range of response varying from (3.45 ± 0.884). This is the
conclusion we can draw from sample.
In order to conclude for the population, we applied hypothesis test (1-sample t-test)
H0 : µ = 3
H1: µ ≠ 3

T-Test
Please rate your expectations in a shopping model (in a scale of 1-5,
least preferred to most preferred)
Convenience

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Please_rate_your_expectations
_in_a_shopping_model_Convei 99 3.39 1.086 .109
nence

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

59
One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

Please_rate_your_expectations
_in_a_shopping_model_Convei 3.608 98 .000 .394 .18 .61
nence

T-Test
Please rate your expectations in a shopping model (in a scale of 1-5,
least preferred to most preferred)

Discount/Deals
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Please_rate_your_expectations
_in_a_shopping_model_Discou 99 3.54 1.091 .110
nt_Deals

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

Please_rate_your_expectations
_in_a_shopping_model_Discou 4.883 98 .000 .535 .32 .75
nt_Deals

60
 Interpretation: Out of total 99 respondents all gave their responds towards the questions that
preference of user friendliness of the e-commerce website in case of
discoungt where mean preference level is 3.54 ≈ 3 which implies on an average customer are
neutral prefer towards the questions that preference of user friendliness of the e-
commerce website in case of price comparison with the Standard deviation of
0.884 giving the range of response varying from (3.45 ± 1.091). This is the conclusion we can
draw from sample.
In order to conclude for the population, we applied hypothesis test (1-sample t-test)
H0 : µ = 3

One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

How_do_you_find_your_overall
1.134 98 .260 .101 -.08 .28
_flipkart_experience

H1: µ ≠ 3

T-Test
How do you rate your overall flipkart experience?(1-worst, 5-Best)

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

How_do_you_find_your_overall
99 3.10 .886 .089
_flipkart_experience

T-Test
61
One-Sample Test

Test Value = 3

95% Confidence Interval of the

Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

How_do_you_find_your_overall
3.049 98 .003 .273 .10 .45
_amazon_experience

How do you rate your overall amazon experience? (1-worst, 5-Best)

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

How_do_you_find_your_overall
99 3.27 .890 .089
_amazon_experience

62
 FINDINGS
1. Out of 99 respondents, 56.6% prefer Flipkart and rest 43.4% prefer
Amazon in terms of Consumer Satisfaction.
2. Out of 99 respondents, 51% thinks the experience to be good, 21%
thinks very good experience, 17.5% thinks the experience to be
average and rest 9.8% thinks experience to be excellent in
Amazon.
3. Out of 99 respondents, 50.3% thinks the experience to be good,
22.1% thinks very good experience and rest 17.9% thinks the
experience to be average in Flipkart.
4. Flipkart is more preferred as compared to Amazon.
5. Product Delivery and Quality is much better as compared to
Flipkart.
6. Flipkart is more convenient as you get more variety as compared to
Amazon.
7. Cash on Delivery option is more preferred in Flipkart as compared
to Amazon.

63
 CONCLUSION
Twenty years ago the word 'shopping' meant going out of your house, maybe to a shopping
complex, a store or a mall, select the goods you like, pay for the same and then check out
instantly. Twenty years down the line everything seems changed, upside down. Today 'shopping'
comes with two adjectives serving the very word as options: 'online' and 'in-store'.

Today, to buy anything we think twice. Whether we should buy from a store nearby or check out
the whole bunch of options available online is a matter of great confusion for us. The good part
of the whole scene is that today the typical customer/user is has so many options available just a
few clicks away. If you want to buy a new laptop you don't need to go to that boring retailer's
shop anymore and tolerate him making you wait for another hour because you've never bought a
laptop from him, only blank DVDs and stuff. On the other hand, the retailers' fraternity are
running at a huge loss and it is likely to happen that sooner or later no one in the society would
consider opening a store again because the future is at great stake because of the big hats.
However, leaving all that aside in the name of 'business' ideas and 'right to profit', we are going
to discuss and compare two big giants in the online retail world of India – Flipkart and Amazon
India.

Flipkart vs. Amazon: Compare eCommerce sites

Before we proceed any further and lay out our conclusions, the question is why we are
comparing Flipkart and Amazon. Why not look at the broader picture and include more rivals
like Homeshop18, Infibeam etc. The reason is Amazon is a foreign company and practically
world's largest in the field of online retailership. Their entry into the Indian market is a recent
news and before their entry our undefeated champion from the locals was Flipart.
Is Amazon India going to enter our markets and defeat the most popular online retail company of
India because of its age long experience or will Flipkart be able to defend its goodwill in the
market, stand the competition in a dominative manner and will tell the world – no breaching our
gates?

History and Foundation - Whenever discussing about any business or industry, discussing the
history seems sensible. It is not an unknown fact that in the field of online retailership, Amazon
was the first one to come and tap the button. It took Amazon years because it actually made
some real profit out of the business. Surely, they have much more substance when it comes to
experience. On the other hand, the creators of the Indian banner, the Bansals are products of IIT
Delhi and before they actually started Flipkart, they had worked in Amazon for a few years. It
wouldn't be wrong to say that the creators of Flipkart drew experience from the very company
they are competing today. Now, the question is whether experience enough can beat the intellect
and intelligence of two engineering minds from the best technology institute of the nation?

Risks and Backup - Talk about who has more to lose in the battle of sales figures. Well, surely
Flipkart. The reason why we're putting forward this argument is the fact that Flipkart does only
one kind of business, which is that of online retailership.

64
Besides just more experience, on the other hand, Amazon is backed up by more business streams
which it's been successfully carrying out. Let's take the example of Amazon Web Services,
which is known to be generating a lot of revenue for the company. Even if it loses its hand in the
Indian market to its main rival Flipkart, it does not have too much to lose.

Amazon Drones and other Innovations - It is a recent buzz according to which Amazon is
busy building (or has probably built) drones to increase its business. Sooner or later drones will
be acting as your local delivery boy and will be delivering goods at your footsteps and giving
online retailership just another level. So, you don't have to worry too much anymore whether the
person delivering goods to your address is confused at how to find your address. Who knows?
Maybe Amazon someday makes it possible: a customer wishing to get delivered a set of books
merely has to locate his house on Google maps and a flying machine comes with the stuff you
ordered.

Books - Both the companies started their journeys and turned out popular but how did they start?
Both the brands are known to have started their travails with books. Books was what Amazon
began with and it was what Flipkart targeted to achieve first when they were nothing but a
warehouse. However, talking about books, it is a popular opinion that Amazon is cheaper dealing
with when it comes to books.

Model of working - Comparing Flipkart and Amazon, one can dig out the old pages and the new
and can infer that both the companies had started with their own warehouse but today, both
follow the common similar marketplace model. However, talking about the same, Flipkart and
Amazon India are known to be sharing a difference which is again about books. While Flipkart
enjoys putting its warehouses into good use when it comes to stocking books, Amazon likes to
continue working in the trend it enjoys – that is, with the marketplace model.

Presentation - Now, do we really need to put up our own opinion about the presentation and
looks of both the brands?
While the website of Flipkart is presented with the use of bright colors and beautiful buttons,
Amazon lags much behind in the name of presentation and colours, if not in anything else.

Amazon Kindle - Now, Amazon has an extra advantage, the advantage of technology, invention
and innovation. We all know about the Amazon Kindle. And in case you do not, Amazon Kindle
is an ebook reader specially designed by Amazon for enabling its customers buy ebooks from
Amazon and read on the Kindle. Kindle is blessed with charged ink technology and does not use
the normal LED/LCD displays, hence reducing the strain on the eye to an extent, it almost
pushes you to buy the ebook instantly for your Kindle.
And anyway, ebooks come at much lower price than the hard copies of books. Not only do they
save paper, it seems they are the future of reading. On the other hand, Flipkart doesn't seem to be
doing that awesomely when it comes to the sale of ebooks. Definitely, Flipkart has not been of
much use when it comes to invention. They do not have something like the Kindle of their own
and it doesn't seem likely to be in near future either.

Amazon's Google App Store - Now this is just brains, not too much technology, not another
'invention'.

65
Besides trying its hands on all other kinds of business, Amazon has its own collection of Google
App Store products which you can purchase and download. Flipkart does not have a business of
this kind.

Ease-of-Use and Convenience - When it comes to ease of use and convenience, we do not
hesitate to vote up the brand from the nation. Flipkart does have a very appreciable and
convenient way for the typical customer. Log on to the Amazon India website and all you find is
a confusing set of links. You do not understand where to click and where to not. Besides, if a
user wants to order something at Amazon India, let's say a book, he cannot do it just like that.
One needs to have a user account at Amazon, separately registered by the user. This kind of
rudeness is something which the Flipkart people haven't shown. If you have a Facebook or
Google account, all you need to do is use your credentials, feed in the details and place your
order. There is no need to create a special Flipkart account, registering separately for the same
(even though you could, if you really want to).

Amazon has a lot of stuff like Prime Membership and a lot of more confusing booty traps which
Flipkart choses to avoid. Even the search facility on Flipkart was something we greatly admired.

Same Day Delivery - Recently after its entry into the Indian retailosphere, Amazon India came
out with something called 'same day delivery'. According to this plan, if you are a customer and
are so desperate to get the products you ordered that you want them delivered on the same day,
you can enjoy this facility. All you have to do is pay an extra fee of Rs. 99. But recently, even
Flipkart launched the same feature; however the better bet here is because you have to shell out
Rs. 9 less. You need to place your order before 6 pm and the order will be delivered to you
within the same day. If however you place your order (on Flipkart) after 6 pm, your product(s)
will be delivered only the next day. So, when comparing Amazon and Flipkart on same day
delivery services, both offer pretty much good services.

Delivery Manners - There's a subtle change in the manner both the companies. Let's say you
order two things – a book and a movie DVD. It may be possible that you receive your book the
next day by Amazon and the DVD may arrive a few days later if the seller takes more time to
ship it. However, the same is not usually true with Flipkart. What Flipkart will do is – it will ship
the two products together, in the same package and will most likely make you wait. While some
favour Flipart's shipping habits, the others believe Amazon India does it better. Some may like
the responsibility Amazon takes by shipping the product as soon as it can reach the customers,
some believe Flipkart understands how a person expects his products to come all together,
keeping things simple.
While some say that Flipkart does this to save its expense on shipping the package, some opine
that Amazon too saves its expense by avoiding any midway intervention in the delivery process.

Selling your product - A mere look at Amazon India's top left area will let you to the 'sell' page.
It elaborates the user as to how he/she can actually sell his product on Amazon India without
going through an elaborate process to get his business listed in the website.

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Conclusion: Which E-Commerce service is better - Amazon or Flipkart

Any business starts and advances because of many virtues. One of them is public goodwill. Over
the years, Flipkart has earned a lot of that in India but then Amazon cannot be overlooked just
because it's new in India. It cannot be ignored that they know how this system works. They
understand this business as they are the trendsetters. While Flipkart seems to be giving Amazon a
tough go in India, Amazon is trying its bets. Flipkart offers you simplicity, beauty and ease of
convenience, Amazon offers you a promise which comes to it through the expertise. Amazon has
readymade advantages like Amazon Kindle, other revenue sources and easily approachable
system, it seems as though it is trying to play rude with people who want to buy products from its
market by compelling to open up their own accounts in Amazon even when almost everyone has
a Facebook account and can easily use the same to place the order. Flipkart seems to understand
that a user comes to it to buy products and not to buy its tantrums.

It would be too early to decide which of the two is going to dominate the Indian markets, but one
things is sure: Flipkart is going to have a tough time if it does not keep up.

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 RECOMMEDATIONS

1) Surprisingly, these top 3 E-Commerce players have been following

into each other's shoes and not doing any path breaking innovations and
lead by example.
2) Flipkart and Snapdeal are experimenting with Indian audience by
introducing
marketing gimmicks i.e. big billion day, singles day, big savings day
similar to US and China instead focusing on building strong technology
platform
3) These 3 players are well funded and supported by investors and have
full capacities to set benchmark for rest of the world
4) Digital Marketing strategy is limited to Facebook and twitter only and
all other platforms are currently ignored or not focused adequately
5) These 3 players are very optimistic about mCommerce business and
have been trying very hard to increase revenue proportion from mobile
6) Recently, these top 3 players have adopted or followed a new trend of
providing their online platform for exclusive launch of products
7) Print ad, Commercial ad and digital ad seem to be very important part
of their
brand building exercise
8) Targeting biggest events or shows by sponsoring it is the fasted way
of getting
attention from shoppers
9) These top 3 players will certainly shift the trend of shopping
drastically by
targeting rural and semi urban areas
10) Surprisingly, north east and southern shoppers are the one who prefer
to search and shop online more frequently
11) 85% of the shoppers are between 18-40 age
12) Handling customer queries and complaints is something a very major
area of concern for all these players
13) Brand Loyalty is missing due to lack of experiential marketing and
personalized engagement as 95% shoppers buy only because of coupons
and deals
14) Unlike amazon and flipkart, snapdeal does not have any inhouse
service and products to differentiate its brand.
15) Taking conversations off social media and then continuing to not
address them properly, all 3 eCommerce giants are failing constantly.
16) The customer grievance mechanism fails to curtail negative
sentiment
Common around customer services. Comments and posts do not resonate with
Observation customer satisfaction. Even positive posts from the brand’s end turn into

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venting grounds for frustrated customers.

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 1) Focus on other social media platforms to give one class above unique
experience to users across social media world.
2) It is important to have unique strategy in place specific to each digital
platform i.e. linkedin, youtube, google+, pinterest, instagram etc.
3) Path breaking innovation in services and products is much needed to
give reasons to shoppers to visit online store.
4) Usage of predictive analytics and sentiment analysis to give
personalized and customer centric experience to each shopper.
5) To increase eCommerce transaction volume, it is important to target
northern, central and western part of India
6) They should target shoppers of all generations i.e. age above 40 and
try to bridge the generation gap of online shopping.
6) Flipkart to have exclusive youtube channel in order to offer visual
content to viewers
7) Flipkart to be aggressive at PPC and have strong mobile Re-marketing
strategy in place to gain first time buyers
8) Flipkart to have transparent and seamless affiliate program to increase
sales.
9) Amazon to have customer complaint resolution service process in
place to improve brand opinion score.
10) Amazon and Snapdeal to ensure adequate social engagement activity
on across all digital platforms
11) Snapdeal to invest in R&D and innovation to come up with its own
inhouse services and products to ensure sustainable business and revenue
model.
12) Classifieds could be new revenue stream for these big players
13) The customer grievance mechanism should be made with strong
Common processes and online complaints should be addressed online only instead
Recommendations dragging it offline.

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 BIBLIOGRAPHY

REFERENCES

1. Asian Journal of Business Research Volume 1 Number 2 2011

Chayapa Katawetawaraks
SCG Trading Services Co. Ltd
Cheng Lu Wang
University of New Haven

http://www.magscholar.com/joomla/images/docs/ajbr/ajbrv1n2/Online%20Shopper%20B
ehavior%20Influences.pdf

2. http://ictactjournals.in/paper/IJMS_paper_4_pp_136_142.pdf
3. Hawkins L. Del, Mookerjee Amit (2012), “Consumer Behaviour”, McGraw Hill
Publications.

4. http://economictimes.indiatimes.com/small-biz/startups/ecommerce-sales-what-
does-flipkart-amazon-snapdeal-have-on-offer-today/articleshow/54640255.cms

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 ANNEXURE

ANNEXURE
A COMPARATIVE STUDY ON CONSUMER BUYING BEHAVIOUR TOWARDS
FLIPKART AND AMAZON
Q-1.) Please tick the age group you belong to
a) 16-25
b) 25-30
c) 35-50
d) 50 and Above
Q-2.) Gender
a) Male
b) Female
Q-3.) Please tick your occupation
a) Salaried Professional
b) Business
c) Student
d) Unskilled
e) Others
Q-4.) Please tick your income range
a) Less than Rs.2 lakhs per annum
b) Rs.2 to Rs.5 lakhs per annum
c) Rs.5 to Rs.8 lakhs per annum
d) Rs.8 to Rs.10 lakhs per annum
e) More than Rs.10 lakhs per annum
Q-5.) How frequently do you shop through e-commerce websites?
a) Most likely
b) Likely
c) Not likely
d) Never shop online
Q-6.) Which is your most preferred e-commerce website?
a) Flipkart
b) Jabong
c) Snapdeal
d) Amazon
e) Others

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Q-7.) Please rate flipkart from the viewpoint of price
a) Economical
b) Average priced
c) Expensive
Q-8.) Please rate amazon from the view point of price
a) Economical
b) Average priced
c) Expensive
Q-9.) How do you rate flipkart on the basis of variety of product?
a) Poor
b) Average
c) Good
d) Excellent
Q-10.) How do you rate amazon on the basis of variety of product?
a) Poor
b) Average
c) Good
d) Excellent
Q-11.) Please rate the user friendliness of the e-commerce website which you prefer the most (1-
5, very poor to excellent)
a) Product comparison
b) Price comparison
c) Payment option offered
d) Product delivery
Q-12.) Please rate your expectations in a shopping model (in a scale of 1-5, least preferred to
most preferred)
a) Convenience
b) Minimum delivery time
c) Product trial experience
d) Discount/Deals
e) Product variety
Q-13.) What makes you feel purchase the product from flipkart?
a) Convenience
b) Wide range available
c) Discounts
d) Quality of product

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Q-14.) What makes you feel purchase the product from amazon?
a) Convenience
b) Wide range available
c) Discounts
d) Quality of product
Q-15.) How do you rate your overall flipkart experience?
a) Poor
b) Average
c) Good
d) Very good
e) Excellent
Q-16.) How do you rate your overall amazon experience?
a) Poor
b) Average
c) Good
d) Very good
e) Excellent
Q-17.) Which one gives you better consumer satisfaction?
a) Flipkart
b) Amazon

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