PERFORMANCE OF E-COMMERCE

COMPANIES:
A CASE STUDY ON AMAZON AND FLIPKART
PVT LTD.
Fundamentals Of Investment
Lakshita Makker
B.Com(Hons)-5227
P.G.D.A.V.(Eve) College
 WHAT IS E-COMMERCE?
 E-commerce (electronic commerce) is the buying and selling of
goods and services, or the transmitting of funds or data, over
an electronic network, primarily the internet.
 So when you log into your Amazon and purchase a book, this is a

classic example of an e-commerce transaction. Here you interact

with the seller (Amazon), exchange data in form of pictures, text,
address for delivery etc. and then you make the payment.
 These business transactions occur either as business-to-
business (B2B), business-to –consumer (B2C), consumer-to-
consumer or consumer-to-business.
 The terms e-commerce and e-business are often used
interchangeably. The term e-tail is also sometimes used in
reference to the transactional processes for online shopping.
 In the last decade, widespread use of e-commerce platforms
such as Amazon and eBay have contributed to substantial
growth in online retail. In 2007, e-commerce accounted for
5.1% of total retail sales; in 2019, e-commerce made up
16.0%.
 As of now, e-commerce is one of the fastest growing industries

in the global economy. As per one estimate, it grows nearly 23%

every year. And it is projected to be a $27 trillion industry by the
end of this decade.
 TYPES OF E-COMMERCE MODELS
 Business to Consumer (B2C):
When a business sells a good or service to an individual
consumer.
For e.g.-You buy a pair of shoes from an online retailer like
Amazon.
 Business to Business (B2B):
When a business sells a good or service to another business.
For e.g.-A business sells software-as-a-service for another
businesses to use.
 Consumer to Consumer (C2C):
When a consumer sells a good or service to another
consumer.
For e.g.-You sell your old furniture on eBay to another
consumer.
 Consumer to Business (C2B):
When a consumer sells their own products or services to a
business or organization.
For e.g.-An influencer offers exposure to their online
audience in exchange for a fee, or a photographer licenses
their photo for a business to use.
 FEATURES OF E-COMMERCE
 Technology-enabled
 Technology-mediated
 Universality
 Intercommunication
 Delivery of information
 Electronic completion of business processes
 Virtual communities
 Inter-disciplinary in nature
 Customization
 ONLINE SHOPPING
 Online shopping is the activity or action of buying
products or services over the Internet. It means
going online, landing on a seller’s website,
selecting something, and arranging for its
delivery. The buyer either pays for the good or
service online with a credit or debit card or upon
delivery.
 Online shopping has been around for about
twenty-five years. It has grown in popularity
significantly.
 Today, we can purchase nearly anything online. In
fact, retail experts say that online shopping will
soon overtake traditional shopping in monetary
terms.
 Online Shopping occurs when a customer buys
through a digital platform.

ADVANTAGES OF ONLINE SHOPPING

  Saves time
 Cost effective
 Other facilities
 Shop any store worldwide
 Ship your gifts directly
 Find items you might not see in stores
 No more waiting in line and pushing through
crowds
 The internet never closes
Products belonging to various product sectors are now
being sold on e-commerce websites and the range is
quite a large one right from expensive laptops to
mundane grocery items.
The frequency of B2C transactions has certainly
increased overtime in the Indian subcontinent. There
are many shopping websites, which are now witnessing
a decisive surge in traffic (this statement is being made
while keeping in view the performance of shopping
websites in the last five years). With an increase in the
number of persons visiting these websites, they have
also become ideal platforms for advertisements and
banners of different brands.
Apart from the businesses doing well, the customers
are also given many features like free gifts and offers.
 PROJECTED GROWTH OF E-COMMERCE
COMPANIES IN INDIA
 The Indian e-commerce industry has been on an upward
growth trajectory and is expected to surpass the US to
become the 2nd largest e-commerce market in the world
by 2034.
 India’s e-commerce market has the potential to grow
more than four folds to US$ 150 billion by 2022
supported by rising incomes and surge in internet users.
 With growing internet penetration, internet users in
India are expected to increase from 445.96 million in
2017 to 829 million by 2021.Its share is expected to
increase from 12% in 2017 to 22-25% by 2025.
 Propelled by rising smart phone penetration, the launch
of 4G networks and increasing consumer wealth, the
Indian e-commerce market is expected to grow to US$
200 billion by 2026 from US$ 38.5 billion in 2017.

PERFORMANCE OF ONLINE RETAIL MARKET

 The online retail market in India is estimated to be worth
US$ 17.8 billion in terms of gross merchandise value
(GMV) as of 2017.
 Electronics is currently the biggest contributor to online
retail sales in India with a share of 48%, followed closely
by apparel at 29%.By 2025, non-electronics categories
are expected to take 80% share in online retail in India.
 As of 2016-17, online retail made up 1.5% of overall
retail market in India. It is expected to grow to US$ 73
billion by 2022 at a CAGR of 29.2%.
 Government initiatives like Digital India are constantly
introducing people to online modes of commerce.
 Favourable FDI policy is attracting key players.
 As the awareness of using internet is increasing, more
and more people are being drawn to e-commerce.
 Whether it be sellers, buyers, users or investors, people
have started getting used to online mode or commerce.
 Increasing FDI inflows, domestic investment, support
from key industrial players is helping in the growth of E-
commerce.
 Amazon.com Inc. is an American-based multinational e-
commerce company which was founded by Jeff Bezos in
1994 in Washington and Amazon.com website became
first active in July 1995 to become the largest online
retailer in the world to offer Earth’s Biggest Selection in
less than two decades.
 The e-commerce and cloud computing company earned
an operating income of USD4.2 billion, USD4.1 billion,
and USD12.4 billion for 2016, 2017 and 2018
respectively(Annual Report,2018).
 Forbes lists Amazon as the world’s 4th most valuable
brand with the brand value as high as USD315.50
billion(Annual Report, 2018).
 In 2019, Amazon’s total annual revenue stood at $280.5
billion, and it is expected to grow again in 2020, some
estimates predict to $334.7 billion.
  It has declared its adherence to four principles:
Customer obsession rather than competitor focus,
passion for invention, commitment to operational excellence
and long- term thinking.
 Amazon’s mission statement is “We strive to offer our
customers the lowest possibloe prices, the best available
selection, and the utmost convenience.”This corporate
mission promises attractive e-commerce services to satisfy
target customer’s needs.The company focuses on the
variables of price, selection and convenience. In this regard,
the following characteristics are identifiable in Amazon’s
corporate mission statement:
1. Lowest Prices
2. Best Selection
3. Utmost Convenience
 Amazon’s corporate vision is “to be Earth’s most customer-
centric company, where customers can find and discover
anything they might want to buy online.”The vision
statement underscores the business organisation’s main aim
of becoming the best e-commerce company in the world.In
this regard, the following characteristics are identifiable in
Amazon’s corporate vision statement:
1. Global reach
2. Customer-centric approach
3. Widest selection of products
 Flipkart Pvt Ltd is an Indian e-commerce company based
in Bengaluru,India.It was founded by Sachin Bansal and
Binny Bansal in 2007. The company initially focussed on
book sales, before expanding into other product
categories such as consumer electronics, fashion, home
essentials and groceries and lifestyle products.
 The dervice competes primarily with Amazon’s Indian
subsidiary, and the domestic rival snapdeal.
 As of March 2017, it held a 39.5% market share of India’s
e-commerce industry.It is significantly dominant in the
sale of apparel and was described as being “neck and
neck” with amazon in the sale of electronics and mobile
phones.
 In August 2018, a US-based retail chain Walmart acquired
a 77% controlling stake in Flipkart for US$ 16 billion,
valuing it at $20 billion.
 Its revenue grew 42% to over $6 billion in the year ending
31st March 2019 compared with $4.2 billion in the PY.
  METHODOLOGY
The type of design being used for making this project is Meta-
Analysis Design. It is a statistical analysis that combines the
results of multiple scientific studies.
Various statistical tools like Pie charts, bar graphs and SD have
been employed to arrive at conclusions about the
performance of e-commerce companies via evaluation of
customer preferences and perceptions.

 SCOPE OF STUDY
To evaluate the performance and popularity of e-commerce
companies through consumer preferences and perceptions.
To compare the number of consumers of Flipkart and Amazon.
To find the no of future purchases through recommendations
by the consumer.

 DATA COLLECTION METHOD

Primary Data
It was collected through the survey method from the
respondents. The questionnaire was prepared to study the
customers’ preferences and feedback for e-commerce
companies viz, Amazon and Flipkart.
Secondary Data
It was collected through various websites and articles
available on the internet.
  SAMPLING SIZE
20 Respondents were taken and the method of selecting
samples is Convenience Sampling.
Findings of the study are based on the information that
respondents have disclosed in the questionnaire.