Challenges/Opportunities for E-commerce

companies in India
by
Group 17

Aryan Bhat - R600218092

Pravesh Nautiyal – R600218085
Abhishek Chauhan – R600218084
Shristi Soni – R600218090
Mohd A Vahab – R600218088
Under the Guidance of
Dr. Neeraj Anand

MBA – LSCM
Semester II (Batch 2019-20)
UPES, DEHRADUN
Contents
 Background of the Problem  Merchandising
 Introduction  KPI
 Global Scenario  Reverse Logistics
 Indian Scenario  Green Supply Chain
 Significance  References
 Review Literature
 Methodology
 Facts & Findings
 Retail Formats
 Category Management
 Supply Chain
 Retail Analysis
Background of the Problem
 Lack of Privacy and Security: In case of start up and small business, Business owners fail to take the
initial steps to secure and protect their online business through installation of authentic protection
services like antivirus and firewall protection, which indeed a crucial step for successful online business
players.
 Payment and Tax Related Issues: Tax rate system of Indian market is another factor for lesser growth
rate of e-commerce in India in comparison to other developed countries like USA and UK.
 Lack of proper Cyber Laws: Other big challenge associated with e-commerce market is the near absence
of cyber laws to regulate transactions on the Net. WTO is expected to enact cyber laws soon. The India’s
Information Technology (IT) Bill passed by the Indian Parliament on May 17, 2000 intends to tackle
legislatively the growing areas in e-commerce
 Poor Infrastructural Problems: Internet is the backbone of e-commerce. Internet penetration in India is
still very low(34.8%) compared to other countries. The quality of connectivity is poor in several regions.
But both these are real threats for the growth e-commerce market in India
 Customer Service: E- Marketers focuses on the website performance ignoring customer relationship and
in-personal assistance.
 Logistics Challenges: Issues related to lack of supply chain integration, high delivery charges for
products, delay in delivery and lack of proper courier services in some areas also make customers
frustrated.
Introduction
 Nowadays peoples of India are most likely to buy and sell products and
services over the electronic system, or in other words, we can say that now
in Indian society, people are modernized using reliable and comfortable
that using of e-commerce
 For the buyer, it is a new and friendly channel to buy and sell products
through online.
 Uses of e-commerce directly link to the customer with manufacturer,
stakeholders, marketers, government, and service providers. That is called
Electronic commerce (e-commerce).
Global Scenario

 All countries are not likely to benefit equally from the virtuous circle of
Internet diffusion created by globalization and multiple revolutions in
Communication technologies (ICTs).
 Economic factors mainly influence perceived relative advantage of Internet
use whereas political and cultural factors influence the compatibility of the
Internet with a society.
 International institutions are influencing laws, regulations and policies in
developing countries making them more compatible with Internet use
Indian Scenario
 According to Mr. Rawat , ASSOCHAM( Associated Chambers of Commerce and
Industry of India) Secretary General as per the survey in India 75% youth, in the age
of 15-34 years, using online services or user in India, and India is an example of the
youngest demography globally
 The growth among categories focused on younger generations in last one year, it is
not very surprising to see.
 As per TRAI report, the total number of internet subscribers increased from 422.19
million at the end of Mar-17 to 431.21 million at the end of Jun 2017 with a
quarterly growth rate of 2.14%.
 The e-commerce sector in India started their operations late nineties among
business to business users (B2B). Business to Consumers (B2C) e-commerce started
in 1996 in the form of matrimonial portals.
 Major Indian portal sites have also shifted towards e-commerce instead of
depending on advertisement revenues.
Significance
 Significance of e-commerce To Consumers:
 Consumers have a much wider choice available on the cyber market
 They bear lower costs for products due to increased online competition among sellers.
 Because of wide-scale information dissemination, consumers can compare products, features, prices
and even look up reviews before they select what they want.
 They also have the convenience of having their orders delivered right to the door step.
 They enjoy saving in shopping time and money.
 Significance of e-commerce To Suppliers:
 It minimizes inventory cost
 It improves customer services.
 It reduces distribution costs as well.
 It helps business globalize
 It helps market products more quickly
Review Literature
Study Methodology
Objectives of study
 To analyse the present trends & opportunities of ecommerce in India.
 To examine the barriers of e-commerce in India.
 To find out the growth factors of e-commerce in India.

Scope of the study

 An e-marketplace provides a virtual space where sellers and buyers trade with
each other as in the traditional marketplace.
 Various kinds of economic transactions and buying and selling of goods and
services, as well as exchanges of information, take place in e-marketplaces.
 E-marketplaces have become an alternative place for trading. Finally, an e-
marketplace can serve as an information agent that provides buyers and sellers
with information on products and other participants in the market. These
features have been reshaping the economy by affecting the behaviour of buyers
and sellers.
Study Methodology Contd.
Type of Research Design: Descriptive

Sources of Data Books, Observation, Journals’, websites

etc.

Types of Data Secondary

Tools of Analysis Statistical and mathematical tools

Facts & Findings
 The E-Commerce sector in India is growing rapidly in India. The internet users’ base in India might
still be mere 400 millions which is much less as compared to developed nations of the world, but it
is expanding day by day.
 The accelerating growth of e-commerce in India is due to internet penetration and easily
available smart phones.
 Retail sector is one of the largest growing sectors in India at present, which is expected to grow in
future with an increasing rate.
Retail Formats of Amazon : Opens It Stores
Amazon has
Partnership
Amazon Go moved to brick
with KOHL’S
and mortar

To embrace Selling Amazon

innovations like
cashier less Bookstores devices and
checkout Accept returns

Amazon Ten stores feature

instant with ”Amazon
smart home
experience”
Flipkart Has Four Trends For E-Commerce In 2018
AI and machine learning
Machine Learning model
Using Artificial Intelligence for
that identifies incomplete
marketing .
addresses.

Chat bot's and browser less commerce

Browser less shopping can be
Chat bot's acting as a substitute
done to purchase FMCG products
for an in-store representative.
for home and personal retail.

Personalized ads and labels led by fashion

Personalized ads target theirretail able to create private
audience base based on labels itself based on the
products. shopping data

Mobile-phone and video-based ad formats

brands will be able to increase sales through e-commerce ads on
mobile devices
Category Management of Amazon and Walmart
Sales of vitamins, supplements on the rise, according to TABS Analytics report
By Jennifer Strailey on Aug. 20, 2018

Record sales increases at both online outlets and brick-and-mortar stores are
driving growth in the $14 billion VMS market, according to Shelton, Conn.-
based TABS, a technology-enabled analytics firm, which points to Amazon and
Walmart as two of the top sales outlets for the category.

“Walmart continues to dominate—both as a leader in VMS sales at its brick-

and-mortar stores, and it is showing online growth—while Amazon remains at
the top and continues to extend [its] lead in the e-commerce space,” said Kurt
Jetta, president and founder of TABS Analytics, when releasing results of his
firm’s most recent study.
 Supply chain Drivers
For Flipkart

 Facilities:  Inventory
 High inventory
 warehousing and order-fulfillment for third
party sellers  Multi-tire inventory network
 20 fulfillment centers across India
 Kolkata,Delhi,Gurgaon,Jhajjar,Pataudi,Ludhi
ana,Jaipur,Bangalore, Chennai, Hyderabad,
Ahmadabad, Mumbai, Nagpur, Pune etc.
 Transportation
 They rely primarily on national parcel
couriers UPS, FedX.
 Own logistics network
Retail Analysis
KPI
 A large percentage of population subscribed to broadband Internet,
burgeoning 3G internet users, and a recent introduction of 4G across the
country .
 The explosive growth of Smartphone users, soon to be world's second largest
Smartphone user base.
 Rising standards of living as result of a fast decline in the poverty rate.
 Availability of much wider product range (including long tail and Direct
Imports) compared to what is available at brick and mortar retailers.
 Evolution of Million-Dollar startups like Jabong.com, Saavn, Makemytrip,
Bookmyshow, Zomato Flipkart, Snapdeal Etc.
Reverse Logistics
 Some of the benefits of reverse logistics are:
 Reduced administrative, transportation and aftermarket support costs.
 Increased velocity.
 Increased service market share.
 Higher achievement of sustainability goals.
 Greater customer service and higher retention levels.
 Recovery of capital investments in assets
 Organized working capital
 There are several reasons that make reverse logistics inevitable like:
 Returns
 Mis-delivered or Undelivered Goods
 Damaged Goods
 Malfunctioning Goods
Green Supply Chain
 Each company in the green supply chain should be linked to others closely; the E-Commerce
application should eliminate the connection blocks between each company, which relates the
suppliers, manufacturers, vendors and customers in the green supply chain effectively.
 The green supply chain management mainly involves several aspects as followed:
a. Procurement Management:
In the E-Commerce system, the enterprises can know the condition of not only its business
operation but also its suppliers and customers wholly, so it can adjust its supply chain through
balancing economic earning, social effects and environmental benefits as well as it can control the
logistics, information flow, and capital flow according to the plan.
b. Order Processing:
Make orders and manage the orders through the E-Commerce system, and process the orders
with E-Commerce. As a result, the enterprise can shorten the cycle of orders, reduce the cost of
orders, and improve the efficiency of the business operation greatly.
c. Production Organization:
It can improve the contact among the suppliers, core enterprise and customers with E-Commerce,
and reduce the difficulty of controlling on the green cost in enterprise production procedure
effectively.
 Contd.

 Managing in Distribution and Transportation

In the E-Commerce system, it can do the monition on distribution center and track the
different products shipment to the warehouses or other sellers, and enhance the
management on product allocation, replenishment, picking and product processing,
and increase the green level of products, and reduce the environmental impacts
continuously.
 Customer Service
With the E-Commerce system, the customers of core enterprises can easily contact the
manufacturers on relative service issues with the Internet, whereas the core
enterprise let the customers know the information of its product green level with the
Internet quickly, and also accept the customers' complaints on product; understand the
customers' needs fully, and better improve the green level of product so as to win
customers continuously and highlight its brand, reputation and customers' loyalty.
 Conclusion
 E-Commerce has made the shopping easy. The E-Commerce Industry in India is
growing rapidly despites many challenge.
 E-commerce industry is one of the largest growing industries in India at present.
The sale of ecommerce industry is expected to grow by almost 4 times by 2021 than
the sales of 2015.
 This unprecedented growth in E-Commerce is due to increase in smart phones and
internet users, 3G/4G internet services, awareness in public, government initiative
of digitalisation, advanced shipping and payment options, entry of foreign e-
business players etc.
 Government should take steps to provide a proper legal framework so that hurdles
in the growth of e-commerce are reduced to minimum.
 At present there are several stumbling blocks in the development of e-commerce
such as computer initial investment, technological issues, computer illiteracy, legal
hassles, and adverse mindset of consumers, privacy and security issues.
References

 Mitra, Abhijit. "E-commerce in India-A Review." International Journal of

Marketing, Financial Services & Management Research 2.2 (2013): 126-132.
 The rise and rise of ecommerce in India. (2015, Nov 10) Retrieved from
http://www.ibef.org/download/TheRiseand- Rise-of-E-commerce-in-India.pdf
 Kaur P, Joshi MM. E-Commerce in India: A Review, IJCST, 2012; 3(1)-802-804.