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Annexure-V- Cover Page for Academic Tasks
Course Code: ECO310 Course Title: Economics for Engineers Course Instructor: Honey Kanojia Academic Task No.: 3 Academic Task Title: CA Date of Allotment: 02-10-2019 Date of submission: 09-11- Student’s Roll no: B32 Student’s Reg. no: 11612995 Evaluation Parameters : (Parameters on which student is to be evaluated- To be mentioned by students as specified at the time of assigning the task by the instructor)
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THE ONLINE RETAIL BATTLE IN INDIA
Introduction:
The definition of E-Commerce is the electronic process by which individuals or organizations make a transaction, such as buy, sell, transfer, or exchange products, services and/or information. In a nutshell, e-commerce effectively erases the necessity of huge investments or outlays on physical infrastructure to develop a global presence, which has led to a revolution in the way business is conducted around the world. E-Commerce stands for electronic commerce. It means dealing in goods and services through the electric media and Internet, without using any paper documents. A type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, typically the internet. Electronic commerce operates in all four of the major market segments:
customer behavior is changing dramatically. People are not only using the Web to book air tickets and movie tickets but also do not hesitate in placing orders for mobiles, laptops and other consumer electronics and home appliances.
The Key drivers of growth of Indian ecommerce have been:
- Increasing standard of living and buying power of middle-class families.
- Availability of much wider product range.
- Busy lifestyles and lack of time for offline shopping and difficulty in traditional means of shopping.
- Increased usage of online categorized sites.
Factors that have contributed to its growth:
Following factors have played a major role in spreading online shopping within the country:
- (^) Faster internet: Better broadband services like 2G and 3G have provided faster and better internet access to the consumers; thereby enticing them to spend more time online.
- Time saver
- Cheaper rates and discounts: The exciting discounted rates and best deals on various products are profitable for the budget-conscious customers.
- Cash on Delivery (COD): This facility is available only in India and has come as a hassle- free option for customers who are afraid to use debit/credit cards.
- Wider options
- Home delivery and return policies
- Increased mobile applications
Challenges faced by Indian online retailers:
Indian audiences often question the authenticity of many online sites. Many cases of hacking and security issues have bubbled up in the past, which has led to distrust amongst the customers. Moreover, they are not willing to share their financial information on these sites. Product quality and transparency is another issue, especially while buying costlier products like electronics and apparels. These consumers are still not well versed with the technology and lag behind in proper usage of the internet; this has adversely affected the e-commerce phenomena in India. Due to this lack of knowledge regarding internet usage makes online shopping the least preferred option by them.
Discussion of the topic in detail:
According to a 2014 report by Morgan Stanley, three players have pulled ahead in the horizontal marketplace race. Flipkart leads with a 44 per cent share of the $6.3 billion Indian e-commerce market, by Gross Merchandise Value (GMV). Snapdeal is No.2 with 32 per cent share, while Amazon, a late starter in India - it launched in June 2013 - has 15 per cent. Amazon touched $1 billion in sales in 2014. For the company, India is the fastest-growing international market to reach that mark, in just one-and-a- half years. Amazon does not agree with the Morgan Stanley report on the difference in GMV share. And Snapdeal CEO Kunal Bahl insists the race between Flipkart and his company is much closer. The Morgan Stanley report was published in February 2014, before Snapdeal bought Free Charge, a mobile transactions company. Flipkart and Myntra had a five-year, $500-million, and 10,000-person head start. Snapdeal started in 2010. By the time Amazon launched in mid-2013, Flipkart was already nearing an annual GMV of a billion dollars. Flipkart, meanwhile, thinks its first-mover advantage will hold good. Founders Sachin and Binny Bansal did not speak to BT for this article, but four company executives spoke on Flipkart's behalf. Meanwhile, revenue figures from Registrar of Companies (RoC) do show Flipkart remains in lead. Flipkart didn't have much competition in 2007 when it started. Its founders initially thought of a price comparison website - an aggregator of e-commerce sites. But they soon
Future growth prospects of online shopping in India:
India's e-commerce and online market has been getting bigger and better day by day. With fastpacked lives, cut-throat competitions and money changing hands within seconds, the online market keeps evolving by the second. "It was driven by rapid technology adoption led by the increasing use of devices like smart phones and tablets and access to the Internet through broadband, 3G, etc., which led to increase in online consumer base. India's online market is, however, relatively very small compared to the more mature markets of the US and the UK, but the growth rate has been phenomenal. There are
countless retail sites, among which 80 are well known retailers, in India. Sales of these well-known websites, such as Flipkart.com, top $100 million annually.
Conclusion and real-world applica�ons:
Due to fast moving lifestyle, online shopping has been growing drastically in India. With developed internet penetration, increasing adoption of devices like smartphones, tablets, and laptops, and access to the Internet and the shift in buying behavior among the consumers has contributed to the rapid growth of the online consumer base. The increase of online shopping has become a trendy way for consumers to shop over internet. The research indicates that shift in buying behavior towards online is positive due to reasons like cash on delivery, discounts, schemes & quality of products offered. Increasing awareness towards use of internet, satisfactorily results in online shopping, rise in standard of living, occupation, influence of friends and attractive offers had affected purchase decision making. Youth contributes a considerable proportion of the online users with India’s youth comprising a significantly larger share than global internet users. ‘Y’ generation which are youths between the age group of 18-35 years were mostly attracted towards online shopping of electronic product through smart phones. Flipkart as India’s leading e-retailer has revolutionized online shopping like never before maintains top position on consumers mind followed by Snapdeal & Amazon. Flipkart to retain top position it needs to offer better schemes & offers with superior quality and service. With nearly one-third of internet users already making purchases online, the e-retail growth will rely more on increased spending from existing buyers than first-time online buyers. When it comes to liking most about online shopping, most of the e- consumers likes cheaper prices as their primary motivation for shopping electronic products online and Cash on delivery is the most preferred payment method. E-consumers decision making mostly influenced by marketing influences like the Price, Advertisements on TV, Newspapers & Magazines, Free samples, Quality of product & Brand Image impacts most on consumers’ willingness to buy online. Overall, most of consumers reported to have satisfied experience with the quality and services offered to them by e-retailers. Hence the study directs the e-retailers that they should focus on these important aspects in order to attract the more customers towards online shopping.
References:
- http://cbsmohali.org/img/Rising%20trends%20of%20Online%20Shopping%20In%20India.pdf
