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0px; font: 12.0px Helvetica}span.Apple-tab-span {white-space:pre}              SVKM’S NMIMS School of Business Management, Hyderabad PGDM 2017 – 19INDUSTRY ANALYSISE-COMMERCE INDUSTRYApoorv Gupta- 80303170033      Dr. Kavita Kulkarni                                                              Faculty Guide – NMIMS Hyderabad Executive SummaryContents Chapter 1 INDUSTRY & COMPETITION………………………..……………………. 4         1.

1 Market size and Characteristics…………….…………………..………….

4  1.2 Market Trends……………………………………………………….……10 1.3 Market Structure…………………………………………………………..13 1.4 Competition Scenario…………………………………………………….

.16 1.5 Ways of competition/Behavioural                                                                     traits of each major competitor ……………………………………………… 23                                                 Industry & Competition 1.1 Market size and Characteristics OverviewIn the upcoming years, e-commerce is expected to boom in the Asian region. The number of digital buyers in Asia Pacific is projected to pass the one billion mark for the first time in 2018, which will account for 60 percent of all internet users in the region. In line with the regional growth, India, a fast-growing emerging Asian market, shows optimistic projections for the e-commerce industry. Current active e-commerce penetration in India stands only 28 percent, with lots of room for improvement – India’s retail e-commerce CAGR is projected to reach 23 percent from 2016 to 2021.Market Size of the industry.

 The e-commerce market is expected to reach US$ 64 billion by 2020 and US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Close to 329.1 million people are projected to buy goods and services online in India by 2020. This means that about 70.7 percent of internet users in India will have purchased products online by then.

The majority of digital shoppers in India are male. This growth in volume of digital buyers has a reflection on revenue as well.• The sector has experienced phenomenal growth, breaking down old shopping habits & inculcating new ones. Also, inspiring a new way that people transact.• Indians, in a matter of minutes, can literally shop from a wide range of services and goods, from travel, movies, clothes, groceries, pharmaceutical products, gadgets & even handymen services such as plumbers, electricians, etc.• E?Commerce in India is now characterised by low pricing, fast shipping and a multitude of options to choose from. • India is home to over 5000 e?Commerce hubs dedicated exclusively to exploiting the burgeoning growth rate of this sector.E-COMMERCE IN RETAIL INDUSTRY • The e-commerce retail market is estimated to be worth US$ 12 billion in Gross Merchandise Value (GMV) terms as of 2016.

• Electronics is currently the largest segment in e-commerce in India with a share of 34 per cent and is expected to grow at a CAGR of 39 per cent by 2020. • The apparel segment has the second highest share of 30 per cent in the e-commerce retail industry • Currently, there are 1-1.2 million transactions per day in e-commerce retailing.

GROWTH OF E-COMMERCE IN INDIA • Propelled by rising smartphone 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 as of 2017. • E-commerce is increasingly attracting customers from Tier 2 and 3 cities, where people have limited access to brands but have high aspirations.

• With the increase in awareness about the benefits of online trading, there has been a significant rise in investment in E-commerce business. Hand in hand with offline trading, many established businesses, e.g. Shoppers Stop or Lifestyle, have setup online transaction channels. • Earlier food and grocery were never thought of as items for online trading. However, with the change of working habits, and consumers opting for adaptability and convenience, there are now innumerable small and large E-commerce companies selling provisions and food items like Grofers, BigBasket, etc. • India’s e-commerce industry’s sales rose 40 per cent year-on-year to reach Rs 9,000 crore (US$ 1.5 billion) during the five-day sale period ending September 24, 2017, backed by huge deals and discounts offered by the major e-commerce companies.

1.2 MARKET TRENDS IN ECOMMERCEIndia is a massive E-Commerce marketplace now with every age group comfortably transacting online – more often preferring shopping online instead of visiting offline stores for a bigger gamut of choices and offers. The West shops online 10X more than India, but then India has the world’s 2nd largest number of smartphones and growing!E-Commerce industry is growing at an astounding rate in India and is expected to account for 1.61% of the global GDP by 2018.

URBAN AND RURAL MARKETPLACEWith increasing smartphone penetration in rural India, mobile apps work well for shopping, and the lack of PCs is hardly a hindrance.Online shopping is fuelling consumerism in rural areas, helping to urbanise them. It is happening because it produces a win-win situation.CASH ON DELIVERYEven though there has been a significant rise in online payments over the last few years since, Cash on Delivery (COD) continues to remain the most preferred mode of payment for consumers in India. According to Nielsen’s Global Connected Commerce Survey (Business Insider) about 83% consumers in India preferred using cash on delivery as a mode of payment for online purchases.R?tail?rs will s?? a high w?b influ?nc? on th?ir in-stor? sal?s Mark?ting will shift from d?vic? focus?d to p?opl? focus?d Fewer discountsCompanies will go after profitable growth rather than wooing customers with deep discounts (in other words, running on losses).

A bigger user base will just be the cue for companies to reduce discounts and focus on profitable growth.”Building scale won’t be a challenge for the large players,” says Sandeep Aggarwal, founder, Shopclues. Six of the large e-commerce players — Flipkart, Amazon India, Paytm, Snapdeal, eBay.in and Shopclues — together have about 85-90% of the e-commerce business in India.DISTRIBUTION OF ONLINE PURCHASESOnly a handful of companies are able to effectively l?v?rag? custom?r data across d?vic?s and platforms today.

?v?n with probabilistic and d?terministic matching now possible , most r?tail?rs still struggl? with tracking cross-d?vic? sal?s and custom?rs’ mov?m?nt across apps and brows?rs. In 2016, mark?t?rs will prioritiz? th?m sp?nd to ?nabl? th?m to und?rstand how consum?rs ar? moving across d?vic?s, platforms and publish?rs to consum? information. Cons?qu?ntly, w? will start to s?? mor? ?vid?nc? of tru? p?opl?-focus?d mark?ting. 1.3 Mark?t Structur?: Wh?n w? think of ?-comm?rc? , w? think of an onlin? comm?rcial transaction b?tw??n a suppli?r and a cli?nt. How?v?r, and although this id?a is right, w? can b? mor? sp?cific and actually divid? ?-comm?rc? into different categories on the basis of sides of a transaction, a transaction can be categorised in different types. There exist different transaction schemas that are forked from different types of e?commerce.

Some of the more popular ones have been given below- • Business?to?Consumer (B2C) ? Business?to?consumer describes activities of businesses serving end consumers with products and/or services. E.g., Makemytrip, Paytm (One97) • Consumer?to?Consumer (C2C) ? Consumer?to?consumer electronic commerce involves electronically facilitated transactions between consumers usually through some third party. E.g.

, eBay • Business?to?Business (B2B) ? Business?to?business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. E.g., Snapdeal • Consumer?to?Business (C2B) ? Consumer?to?business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. E.g., Roundone (Referral)                                       ECOMMERCE IN DIFFERENT SECTORSOnline Resource transferThis transaction majorly deals with transfer of resources (in most cases money)over the net.

Many businesses use this mode of e-commerce to eliminate physical documentation and reduce transaction time. (eg. Paypal, banks, western Union)Airline SectorOne of the most significant impacts can be seen in the airline sector. This industry has been predominantly dependant on physical documentation and the presence of branches (or travel agents) for reach. However with the advent of e-commerce in India industry players have drastically changed their modus operandi.

Physical tickets have almost entirely vanished from the airline sector in India. Travel agents no longer hold a major impact on the business. The whole process has been brought online thanks to e-commerce.Banking SectorFor banks e-commerce has provided a major area of cost cutting. The number of branches and personnel required per area has drastically decreased. The integration of the ATM networks allows users to access their funds through multiple sources. E-commerce promises to open up many more opportunities for businesses across sectors.

What we are witnessing now is only the tip of the ice-berg.Placement AgenciesThe area of Human resource management has been completely redefined. Sites like naukri.com and monster.com have given recruiters direct access to talent from across the country. Never before had such a wide talent pool been available to recruiters. Users could now break away from the grip of placement agencies which provided commission based services and actually select jobs they want to apply to online.

Matrimonial SitesThis is a business that could only work in India. With arranged marriages being predominant in India this business model was uniquely prepared for the Indian market. Migrating from family pundits to online profiles was readily accepted by the Indian family. Today a number of Matrimonial sites are prospering (eg. Shaadi.com) and with tools like e-kundali to support them, they seem to be here to stay.1.4 KEY PLAYERS IN E-COMMERCE SECTORE-commerce Industry is booming with rapid pace.

Many e-commerce companies have shown remarkable growth in short span of time. Sale with service is required to fit into the criteria of best e-commerce companies in India. There are many reasons which are contributing in the growth of e-commerce sector. In today’s time, everyone is preferring for online shopping due to lack of time and reasonable pricing. It is main reason behind the boom in e-commerce Industry.FINANCIAL SECTOR:Paytm, Mobikwik, Free charge, Jio money, Airtel payment bank, and other banks payment appRETAIL SECTOR: Amazon, Flipkart, Ebay , Paytm Mall and all standalone websitesONLINE TRAVEL: Makemytrip , Yatra, Paytm, Ixigo and other airlines AppENTERTAINMENT INDUSTRY- Bookmyshow , Paytm, NearbuyAMAZON-   Amazon.com, Inc.

often referred to as simply Amazon, is an American electronic commerce and cloud computing company with headquarters in Seattle Washington. It is the largest Internet-based retailer in the world by total sales and market capitalisation. Amazon.

com started as an online bookstore, later diversifying to sell DVDs, Blu-rays CDs, video downloads/streaming, MP3 downloads/streaming etc. FLIPKART-Flipkart is founded in 2007 by Sachin Bansal and Binny Bansal. The company is registered in Singapore, but has its headquarters in Bangalore. Flipkart has launched its own product range under the name “DigiFlip” with products including tablets, USBs, and laptop bags. The company is leading e-commerce Industry with several product categories. It has also launched several in house products.

PAYTM-Paytm is an Indian e-commerce website headquartered in Noida, India. It was launched in 2010 and is owned by One97 Communications. The firm started with offering mobile recharge, adding bill payment and e-commerce, with products similar to businesses such as Flipkart, Amazon.

com, Snapdeal. In 2015, it further added booking bus travel. Paytm also launched movie ticket booking by partnering with Cinépolis in the year 2016EBAY-Ebay is headquartered in San Jose, California.

The e-commerce giant Ebay is American MNC firm. It is an e-commerce company. It is involved into B2C and B2B business model. The foundation of company taken place in 1995 by Pierre Omidyar. It is among the top 10 e-commerce companies in India.MAKEMYTRIP-The Indian travel Company Make My Trip is known for its strong online presence. The company provides entire gamut of travel services including flight, holiday packages, tickets, hotel booking etc. It provides travel packages of all tourist locations.

It has launched its travel apps.The India’s top e-commerce company was founded in 2000 by Deep Kalra. The company has also presence internationally through offices in Sydney and New York City.

YATRA-Yatra.com is India’s leading online travel agency. It headquartered in Gurgaon. The company was founded in 2006 by Dhruv Shringi (CEO), Manish Amin (CIO) and Sabina Chopra (COO – Corporate Hotels).

It is also a travel search engine. Yatra.com is also running its holiday-cum-shopping card for facilitating travels.BOOKMYSHOW-BookMyShow is leading online portal into booking of entertainment related things like movie ticket, plays, sports events.

The online portal was launched in 2007. The company has office in all metro cities and head office is in Mumbai, Maharashtra.NEARBUY-Nearbuy is a pan-India online?marketplace platform that allows customers to connect with local merchants and engage with each other across 33 cities in India.

As a business, it allows customers to discover, buy and save on these local merchants. nearbuy operates in the $26Bn services retail market in India. Incorporated in May 2010 as Groupon India Private Limited, the company operated as a 100% subsidiary of Groupon Inc until August 2015, when it went through a management?buyout and in the process changed its name to nearbuy.MOBIKWIK-MobiKwik is an Indian company founded in 2009 that provides a mobile phone based payment system and digital wallet.12 Customers add money to an online wallet that can be used for payments. In 2013 the Reserve Bank of India authorised the company’s use of the MobiKwik wallet, and in May 2016 the company began providing small loans to consumers as part of its service. The company launched its MobiKwik Lite mobile app in November 2016, designed for users of older 2G mobile networks and for those in areas with poor internet connectivity.FREECHARGE-FreeCharge is an e-commerce website headquartered in Mumbai, Maharashtra.

It provides online facility to recharge any prepaid mobile phone, postpaid mobile, DTH & Data Cards in India. On 8 April 2015, Snapdeal acquired Freecharge in what is being referred to as the second biggest take over in the Indian e-commerce sector so far, after the buy out of Ibibo by rival MakeMyTrip, and the biggest Venture Capital exit in India to date. ANALYSIS OF E-COMMERCE INDUSTRYPROBLEMS-1. Low sales conversionTypically in the single digits2. Stiffening competitionLarger merchants are having more funds, they are giving discount in forms of offers and cash backs.3. Logistic ProblemThe company uses third party logistics which increases the cost and delivery time.

4. Web platform limitationsHeavy budget needed so-called “free” or low-cost sites quickly become expensive when companies begin to customise themOPPORTUNITIES-1. Changing trends:E-commerce is fast and effective even financial transactions can be made from any part of the world.

2. New technologies:Daily number of internet users are increasing, People feel more comfortable to shop online.3. Digitalisation and cash less economy initiatives.4. Advertising:Advertising is cost effective as compare to conventional offline system.

 PORTERS FIVE FORCES FRAMEWORK ANALYSIS OFE-COMMERCE INDUSTRYSWOT ANALYSIS OF DIFFERENT COMPETITORS IN THE E-COMMERCE INDUSTRYAMAZON-FLIPKART-                       Strengths                    Weakness  Innovative advertisements of Flipkart featuring kids who portray the role of adults.Huge investment leading to losses over the years hurts the brand image of Flipkart.Flipkart is backed by global investors like Tiger Global, DST Global, and Naspers Acquisition of loss making firms can add to its burdenImpressive list of acquisitions like Myntra, LetsBuy, Chakpak, AdiQuity etcBusiness expansion to other countries can be big boost for FlipkartGlobal competitors like Amazon making its foray in Indian online retail market can reduce Flipkart’s market shareForay into furniture and fresh product business to increase its breadth of product categoriesFlipkart’s business can be affected by fluctuating economy and unfavorable market conditions & govt policiesEver expanding internet penetration in India can be tapped by FlipkartInvestigations by authorities to check its FDI regulations compliance           Opportunities              ThreatsPAYTM-MAKEMYTRIP-BOOKMYSHOW-


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