Professional Documents
Culture Documents
“Impact of e-commerce”
Submitted by
A study conducted
At
(2014-15)
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ACKNOWLEDGEMENT
In this project we have made an honest and dedicated attempt to make the research
material as authentic as it could. And we earnestly hope that it provides useful and
workable information to any person reading it.
During this span of one month in which the project reached its completion,
There were a few people whom we would like to mention of and without whose help
The project would have never seen the light of the day.
We would like to thank our RO Team for providing us an opportunity to make this
project report, our Mentors to show the path on which we walked and finally to all our
team members for all their sincere efforts to make this project complete and present
today.
We dedicate this project to people who are working in retail and mainly in Brick and
Mortar format.
Thanking you
Pune Inorbit Team
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TABLE OF CONTENTS
1 4
EXECUTIVE SUMMARY
2 5-12
INTRODUCTION
5 20-29
THEROTRICAL PERSPECTIVE
6 30-33
RESEARCH METHODOLOGY
7 34-43
DATA ANALYSIS & INTERPRETATION
8 44-45
FINDINGS
9 46-47
RECOMMENDATION
10 48-50
CONCLUSION
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EXECUTIVE SUMMERY
This research project is about E-commerce. Started with a vision to provide a study on
impact of E-commerce on Brick and Mortar.
This information can further be given to sales force of the company. This information
can be converted into training needs assessment and methodologies. A proper training
manual can be prepared and a structured format can be developed. The major
objective of the project is to develop a strategies to maintain a sustainability in the
market with higher p[profitability.
In research design, type of research is exploratory. In the sample design the sample
universe is finite. The sample universe is Pune area.Sampling technique used is
probability sampling technique. It is also known as random sampling the sample size
is 100. The data collection tool used is Questionnaire method
The objective of the project was to the Study the “Impact of E-commerce on Brick
and Mortar. The major focus is on capturing the insights about the customers.. In this
research the researcher has tried to find out the market behavior This has helped to
find out what is the market potential is available for E-commerce and Brick and
mortar. Questionnaire technique the data was collected in Pune region. And the
researcher has also tried to recommend some of the important factors that are Brick
and mortarcan do to sustain.
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INTRODUCTION
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OVERVIEW OF THE INDUSTRY
Retailers in India have taken a long time to realize the impact of e-players on
their business. Traditional retailers under significant pressure with many are seeing as
much as a 50% drop in foot falls at their stores.
Indian e-commerce sales in 2014 is $2.3 billion which is 0.4% of total retail &
expected to reach $32 billion which cover up 3% of total retail.
One survey pegs that by 2015 India will have 30 million online buyers and
consumers adapting to e-commerce sites compared with the 2.5 million online buyers
at present.
India is the third largest internet market in the world with more than 243 million
users. As per BCG (Boston consultancy group) more than 580 million people in India
to use internet by 2018.70-80% of them are accessing the web on mobile phones.
Below shown is the image of globally contribution e-commerce industry.
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Impact of e-commerce has mainly affected on four perspectives:-
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Overview of contribution of e-commerce to Indian GDP -
% of gross domestic
Year
product
2009 0.13%
2010 0.12%
2011 0.14%
2012 0.15%
2013 0.16%
2014* 0.18%
2015* 0.18%
2016* 0.2%
2017* 0.21%
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2) Impact of e-commerce on market-
Market share of E-commerce companies in India :-
The size of India’s e-commerce market in 2013 was around $13 billion,
according to a joint report of KPMG and Internet and Mobile Association of
India (IAMAI). The online travel segment contributed over 70 percent of the
total consumer e-commerce transactions last year.
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E-commerce industry Category wise distribution (2014)
“Consumer mentality and shopping patterns are changing very fast. Online
shopping is going to become main stream in the coming five-six years.
Smart phones would be the biggest online shopping driver in the coming
years.
“Over half a billion Indians will switch to smart phones in the next five-six
years. That’s going to be a big driver of e-commerce in India,”
Sachin and Binny Bansal co-founded Flipkart in 2007,they claim the company
now controls nearly one-third of India’s online retail business and has over 1
crore (10 million) registered users.“By 2020, Flipkart target is to be a $20
billion company. E-commerce companies are investing a lot on technologies,
especially on mobiles and the supply chain,”
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3) Impact of e-commerce on customers
The age-wise analysis revealed that 35 per cent of online shoppers are aged between
18 years and 25 years, 55 per cent between 26 years and 35 years, 8 per cent in the
age group of 36-45 years, while only 2 per cent are in the age group of 45-60 years.
Besides, 65 per cent of online shoppers are male while 35 per cent are female. With
India poised to become youngster, with about 64% of the population by 2020 in the
age group of 15-35, the potential of e-commerce is all set to rise.
Traditional business has been impacted because of following reasons which brick and
mortar business model are not offering to customers-
Non-Cash Payment − E-Commerce enables use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website and other modes of electronics payment.
Improved Sales − Using E-Commerce, orders for the products can be generated
anytime, anywhere without any human intervention. By this way, dependencies to buy a
product reduce at large and sales increases.
Support − E-Commerce provides various ways to provide pre sales and post sales
assistance to provide better services to customers.
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Inventory Management − Using E-Commerce, inventory management of products
becomes automated. Reports get generated instantly when required. Product inventory
management becomes very efficient and easy to maintain.
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REVIEW OF LITERATURE
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REVIEW OF LITERATURE
Using the Internet for transactions and coordination can save time and money on
delivery of goods by using rich information flows to simplify and streamline the flows
of physical goods in the supply chain [Dedrick& Kraemer, 2002; Sturgeon, 2002].
Subsequently Indian e-commerce has grown at a swift pace in the last 5 years from
around 15 billion revenues in 2007-2008 to 139 billion in 2012-2013, translating into
a compound annual growth rate [CAGR] of over 56 percent [CRISIL, 2014].
Information is power
This is one of the most widely accepted statements and applies for every aspect of
human activity. Internet is an unlimited pull of information and benefits anyone who
use it properly.
According to Porter and Miller (1985) information gives competitive advantage to a
company in three different ways:
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A) By changing industry structure and changing the rules of competition
B) By providing companies with new ways to outperform their
competitors.
C) By creating new businesses, even from within a company’s existing
operations.
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OBJECTIVE AND SCOPE OF THE PROJECT
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OBJECTIVE
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SCOPE
The scope of study is as wide as an ocean and thereby the implementation hurdles.
When one thinks of impact of e-commerce business through final goal remains the
same as that of traditional business, but the way in which they function in order to
improve the performance is different. As information sharing is the major part of the
corporate industries, networking has given boos to e-commerce business. This change
in view-point has opened door for new opportunities.
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This research is very much useful to get the lifetime value of your customers
based upon their acquisition source and increase your expenditures on source
that generate the best customers over lifetime.
It helps to determine whether online competitors can significantly harm your
business by providing some of the value you currently offer customers in the
traditional way.
It helps the managers to improve the business by enhancing their
functionalities as compared with their competitiors.
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THEORITICAL PERSPECTIVE
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THEORITICAL PERSPECTIVE
SWOT ANALYSIS
STRENGTH:-
24/7 business.
Industry condition- Very high potential but is at its nascent stage lot of scope
for growth
High growth rate (Recently claimed to have doubled every quarter)
Has confidence of their investors
Not heavily dependent on courier services. Own their delivery network
Customer services & exception warehouse delivery system.
Variety of payment option, making it convenient for customers to order.
Concentration on customer satisfaction, logistics and distribution.
Wallet (Prepaid) feature is introduced to make online shopping easy and
increase the customer’s switching cost.
Low barriers and overhead cost.
Direct customer communication.
WEAKNESS:-
Still not operationally profitable. Allegro’s analysis states that in the year
ended March 2014, Snapdeal reported a loss of Rs. 264.6 Cr. On revenue of
Rs. 168 Cr. Flipakrt shows a loss of Rs. 281.7 Cr. On sales of Rs. 1180 Cr, for
the year ended March 2013.
CoD(Cash on delivery) option is not as successful as anticipated
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The size of business is still very small as compare to foreign counterparts. This
might create problems if entry of foreign competitors is allowed in the Indian
market.
OPPORTUNITY:-
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THREAT:-
Indian customers are not yet comfortable with the concept of online
payment.
There is too much competition in every product category by different sets of
players, in addition to fight for market share among competitors of comparable
sizes.
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PEST ANALYSIS FRAMEWORK
Political:-
Government support for increasing internet penetration in India.
Tax benefits to corporate.
2012 increasing stock holding % for foreign investors in companies.
Resistance against foreign retailers.
Economical:-
Booming Indian economy.
Increasing spending power.
Base of internet users multiplied by 10 to 11 times in last 6 years.
Social:-
Better comfort level and trust in online shopping.
High priority on time and convenience.
Improving uses of broadband and high computer literacy.
Technological:-
Advent of mobile shopping.
Increasing penetration rate of Broadband and wireless internet.
Better manage E-commerce sites for ease privacy and advancements in net
banking.
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7 P’s OF E-COMMERCE
Product:-
Appearance- the ease in the websites interface even for the first visitor.
Quality- checking of the product before packing( Visual test).
Packing- different packing( e.g. bubble pack for electronic items)
Brands- all brands integrated in one websites.
Warranty- one year warranty for the manufacturer’s side.
Service & support- guarantee delivery of undamaged product or else
replacement in 30 days.
Price:-
Special discount
As shipping is within India the shipping cost reduces.
Seasonal discount.
Free shipping.
For expensive products transit cost is born by company.
Place:-
Tie ups with local vendors and courier firms (thereby avoiding octroi charges).
Company owned warehouse in major cities near airport.
If the couriers can’t deliver to the location the product is shipped through
government post.
Promotion:-
SEO and SEM
Word of mouth marketing.
TVC lately to encourage non- online shoppers.
More online marketing like FB, Twitter, LinkedIn.
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Ad-spend are growing by e-commerce companies year on year at 50% rate.
49,000 Cr estimated Ad-spend across all media in 2015 & Rs.500 Cr likely
Ad-spend by e-commerce players in the present IPL 8.Below is the list of
information of Ad-spend through e-commerce companies.
Flipkart Rs.160-170 Cr
Snapdeal Rs.170-180 Cr
Amazon Rs.140-150 Cr
Physical Evidence:
Different packaging for different product to ensure safe delivery.
Company name goes with the online cart.
Design and packaging is common so customers can relate it to the company.
People:-
Service people, sales clerks, delivery drivers, managers, complaints
departments, accounting, warranty people, technical people, all work for the
customer ease, customer satisfaction and customer delight.
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7 C’s OF E-COMMERCE
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STP OF E-COMMERCE
SEGMENTATION:-
A)Customer persona:
Economical customers.
Bargain customers.
Big spenders.
Evangelists.
Highly engaged, infrequent purchasers.
B) Behavioral:
On site engagement.
Chanel preference
Device preference
Email engagement.
Abandoned baskets.
D)Purchase history
Share of wallet
In-store or online preference
Purchase frequency
Average basket size
Product or category interests.
Buying cycle.
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E) Demographic:
Gender
Age
Geographic location
Size of wallet
TARGET:-
E-commerce concentrates on more psychographic, which helps deciding
where to display ads online.
They target online shoppers and people who don’t online shop ( TVC to
encourage them)
Digital natives, families with children & busy professionals
POSITIONING:-
Customer delight ( low price, free shipping, replacement)
No kidding no worries
Online megastore
One stop solution
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RESEARCH METHODOLOGY
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INTRODUCTION-
This report is based on primary data& secondary data. However secondary data
collection was given more importance since it is overhearing factor in study of impact
of e-commerce. One of the most important users of research methodology is that it
helps in identifying the problem, collecting, analyzing the required information data
and providing an alternative solution to the problem .It also helps in collecting the
vital information that is required by the top management to assist them for the better
decision making both day to day decision and critical ones.
Data source
Primary Secondary
Questionnaires Internal
Survey
Observation
Experimental
Sale records
Marketing
External activities
Feedback
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DATA COLLECTION-
Data sources:
Primary data: Research is based on secondary data. Primary data can be used only
for the reference. Research has been done by primary data collection, and primary
data has been collected by interacting with various people, and it was constructed in a
manner of getting maximum information from the customers.
Data tools:
SAMPLING-
Sampling procedure:
The sample was selected of them who are the household consumers/working
people(M/F). It was also collected through personal visits to persons, by formal and
informal talks and through filling up the questionnaire prepared. The data has been
analyzed by using mathematical/Statistical tool.
Sample size:
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Sample plan:-
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DATA INTERPREATION & ANALYSIS
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Que1. What kind of shopping do you prefer?
Shopping Preference
Malls Online Both
60%
50%
40%
30%
20% 48%
33% 29%
10%
0%
Malls Online Both
Interpretation:
According to above figures, it shows that the people prefers for shopping from Malls
47%, from online 27%, and 24%from both.
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Que2. Preferences:-
ONLINEDEPT. STORE
a) Flip kart a) Lifestyle
b) Snap deal b) Central
c) Amazon c) Shoppers stop
d) Myntra d) Pantaloons
e) Yepme e) Westside
f) Jabong f) Others
30%
25%
Central
20%
Lifestyle
15% shoppers
26 Flipkart
10% %
18% Snapdeal
15% 14%
5% Amazon
10% 9%
8%
Both
0%
Interpretation:
According to above figures, it shows that the people shopping from departmental
stores are on 51 % it includes Central on 26%, Lifestyle is on 15%, AND SHOPPERS
IS ON 10%.
31 % shoppers shopping from online and it includes Flipkart 14%, Snapdeal on 8%
and Amazon on 9%.
The people shops from both is on 18%
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Que.3 How often do you purchase through online?
a) Once a week c) Once a month
b) Once in two weeks e) rarely
Once a week 0%
Once in two weeks 35%
Once a Month 22%
Rarely 43%
50%
45%
40%
35%
30% Once a week
25% Once in two weeks
20% 43%
Once a Month
35%
15% Rarely
10% 22%
5%
0%
0%
Once a week Once in two Once a Month Rarely
weeks
Interpretation:
According to above figures, it shows that the people prefers for shopping from online
35% people once in two weeks, 22% people are once in a month, 43 % people shops
rarely and no one shops on a weekly from online.
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Que 4. How often do you purchase through Retail stores or malls?
a) Once a week b) Once in two weeks c) Once a month d) rarely
Once a week 0%
Once in two weeks 55%
Once a Month 15%
Rarely 30%
60%
50%
40%
Once a week
30% Once in two weeks
55%
Once a Month
20%
Rarely
30%
10%
15%
0%
0%
Once a week Once in two Once a Month Rarely
weeks
Interpretation:
According to above figures, it shows that the people prefers for shops from retail
stores, 55% people shops once in two weeks , 15% shops once in a month, 30% rarely
shops and no people found who shops once in a week.
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Que 5. Which are the factors influence you to shop through online?
a) Delivery c) Low price or Discount offers e)
Availability of product
b) Busy lifestyle d) Various options or alternatives f) Ease of
shopping
Delivery 15%
Busy Lifestyle 20%
low price or discount price 55%
Various options or alternatives 10%
Availability of products 0%
Ease of shopping 0%
60%
50%
40%
30%
55%
20%
10% 20%
15%
10% 0% 0%
0%
Delivery Busy Lifestyle low price or Various Availability of Ease of
discount price options or products shopping
alternatives
Interpretation:
According to above figures, it shows that the factors influence for shopping through
online, major is price and discount it on 55%, and follows by busy lifestyle is on 20%.
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Que6. What are the factors influence you to shop through retail stores?
a) Salesman advise c) Payment facility e) Quality of
product
b) Look & feel d) Loyalty systems (cards, points) f) Shopping
experience
50%
45%
40%
35%
30%
25% Salesman Advise
20% 45%
Look & feel
15% 30% Payment facility
10% Loyalty system
5% 15%
0% 0% 10%
Quality of product
0%
Shopping Experience
Interpretation:
According to above figures, it shows that the factors influence for shopping through
retail, major is 45% on look and feel and 30 % on salesman advise.
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Que. 7 Do you trust on online shopping or retail store shopping?
a) Online shopping b) Retail store shopping
70%
60%
50%
40%
Online shopping
30% 65%
Retail store shopping
20%
35%
10%
0%
Online shopping Retail store shopping
Interpretation:
According to above figures it shows that, 65% people trust on retail shopping and
35% people trust on online shopping.
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Que8. If a product is priced equal both online & at the retail store through which
option you would like to shop?
a) Online b) Retail store or malls
Online 30%
80%
70%
60%
50%
40% Online
70% Retail store or Mall
30%
20%
30%
10%
0%
Online Retail store or Mall
Interpretation:
According to above figures it states that, if a product price is equal in online as well as
in retail stores 70% people prefer to buy from retail stores.
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Que9. According to you what would be the most effective way to attract customers for
a new brand launch?
a) Online b) Retail store or malls
Online 47%
Retail store or Mall 53%
54%
53%
52%
51%
50%
49% Online
53%
48% Retail store or Mall
47%
46%
47%
45%
44%
Online Retail store or Mall
Interpretation:
According to above figures it states that, the most effective way to attract customers
for a new brand is launch 53% people says from retail stores or mall and 47% people
says from online.
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FINDINGS
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FINDINGS
By research it shows that males are doing more shopping through online
compare to females.
Age groups between 26 to 35 do more shopping through online.
The maximum people prefer to do shopping from malls as compare to online.
People prefers to shop through online in which 35% people shops once in two
weeks, 22% people shops once in a month, 43 % people shops rarely and no
one shops once in a week through online.
People prefers to shop through retail stores in which 55% people shops once
in two weeks , 15% shops once in a month, 30% rarely shops and no people
found who shops once in a week.
The factors influence for shopping through online is mainly because of price
and discount offer which is on 55% and follows by busy lifestyle is on 20%.
The factors influence for shopping through Physical format, major is 45%
because of look and feel factor and 30 % due to salesman advice/assistance.
65% people trust on retail shopping while 35% trust on online shopping.
If a product is price equal in online as well as in retail stores 70% customers
prefer to shop through retail stores.
The most effective way to attract customers for a new brand launch in which
53% customers suggest on retail stores or mall while 47% people suggest on
online.
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CONCLUSION
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CONCLUSION
The penetration of the internet in firms is high; however the use of e-business is still
limited.
E-commerce business is attracting customers only because of price discount but still
brick and mortar model has wide scope to work on their service standards to reach
Brick and mortar business has to come up with a click and mortar model to sustain
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RECOMMENDATION OF THE STUDY
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RECOMMENDATION
Great retailers can boost of many advantage such as brand consistency, high customer
awareness and rewarding relationships.
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There is a trend of digitalize market and customers are looking for use of
digital medium in their shopping. For that we can provide i-pad to each
concept in which there would be enormous information of exclusive season
collection.
Turn every shopping assistant into a personal shopper who remains socially
connected with the customer even after the sale. For example Apple which
markets its associates as “geniuses” able to offer expert guidance, and Whole
Foods, which also boasts its reputation as having a knowledgeable employee
force.
Encourage shoppers to involve their peers and friends in the process of making
in-store purchasing decisions by leveraging mobile devices. Most people are
hesitant to make choices. Socializing decision-making opens a three-way
conversation between the customer, her friends, and the sales associate. To
clarify, this doesn’t mean a two-way communication such as a shopper making
a phone call to ask a friend whether to purchase something. The customer and
the sales associate need to converse and simultaneously engage remote friends
via new forms of interactions on mobile devices.
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ANNEXTURE
Area: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Age: _ _ _ _ _ _
Occupation: _ _ _ _ _ _ _ _ _ _ _ _ _ _ Sex: _ _ _ _ _ _
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BIBLIOGRAPHY
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84 Farhat Fatima
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