REPORT ON

BASED ON TASK 5: ONLINE BUSINESS MODEL IN INDIA

 CONTENT

Introduction
How E-Commerce entered in India
Why consumers prefer Online Shopping.coms
Amazon.coms tactics
Measurability in long-run aspects
Conclusion
Bibliography

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 Introduction

Type : Public
Founded : July 5, 1994:21 years ago Seattle, U.S
(headquarters)
Area served : Worldwide
Founder : Jeff Bezos
Industry : Internet
Service : Online shopping, web hosting
Website : amazon.com
Type of site : E-commerce
Entry in India : The Company took its first steps into the Indian
market in February 2012 when it launched
Junglee.com, a site which allowed customers to
compare prices online but not purchase items
directly; and in early June, 2013: amazon
launched its official site.
Vice president
Of India : Mr. Amit Agarwal

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 How E-commerce entered in India

The E-commerce sector has seen unprecedented growth in these years.

The growth was driven by rapid technology adoption led by the increasing
use of devices such as a smart-phones/tablets & access to the internet
through broadband, 3G, 2G etc: which led to an increased online
consumer base.
An analysis of the demographic profile of internet users
will further testifies, that E-commerce will rise rapidly in India in coming
years. Around 75% of Indian internet users are in the age group of 15 to
34 years.

Demographic Profile of Indian online users

15-24 year old

37%

25-34 year old

38%

35-44 year old

16%

Other
9%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Peer pressure is rising aspiration with career growth, fashion/trends

encourage this segment to shop more than any other category & India,
Therefor; clearly enjoys a demographic dividend that favors the growth
of E-commerce.

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 Geographical distribution of Internet users in India (millions)
250
216
200
165
150 130 138

99 92
100
60
50 38

0
Jan-12 Jan-13 Jan-14 Jan-15
Urban Rural Linear (Urban )

Mobile phones is to be most influential aspect

of e-commerce:

With mobile apps being developed by most of e-

commerce websites, smartphones are increasingly
replacing PCs for online shopping. In 2013, only 10
% of the mobile users used smartphone, and only 5 %
of the e- commerce transactions were made through a
mobile device.
Usage of electronice device in E-
commerce

3.4
8.2
2.5
3.8

Mobile Laptops Tablets PCs

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 Why consumers prefer online shopping.coms

The perception of conveniencemainfests in 2 key ways: being able to

click on the button on any time of day or night & having the product
delivered within 2 or 3 days. Buying online products is deemed a time-
saver; not only because it allows shoppers to avoid commuting to & from
the market & waiting. But also because selecting products online in much
quicker than navigating aisles/hunting down specific brands / items.

Convenience

Online Customization
Generation Y shopping

Broadband
internet/3G

Despite, the clear benefits, is still consider online shopping an indulgence.

Some who enjoy it seems a bit embarrassed, characterizing their decision
to shop online as a form of laziness .
And especially for those
consumers who never tasted a tangible purchasing from markets,
bargaining, crowds, traffic ,inclement weather etc ; besides from these
hurdles ,consumers prefer online shopping feels much comfortable.

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 Amazon.coms tactics

Some of strategic policies of amazons in their business game as follows:

Amazons Google app.store: Now, this is just brain, not too

much technology, not another invention. Besides, trying its
hands on all other kinds of business; amazon has its own-
collection of Google app.store products which customer can
purchase and download, even other players like Flipkart or other
online.coms doesnt have this kind of stuff in it.

Amazon has an extra advantage than other players is,

technology/innovation. We all know about the amazon kindle
which is an e-book reader and it is blessed with charged ink
technology and doesnt use the normal LED/LCD display.
Hence, reducing the strain on the eye.

Digital = Cash flow = Low prices [an average, a product stays: 70 days on
Best buys shelf & 33 days on Amazons one]
Product paid for
Customer buys & pays
suppliers
Best buy
70 days
Customer buys & Cash Debt
pays

Day 0 33 days
Cash Flows
Leveraging its high positive cash flow, Amazon is able to maximize margins/ beat all other retailers.

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 Measurability in long-run aspects

Indias growth potential: since the e-commerce industry in fast rising changes in
each year. The sector in India has grown by 34 %( CAGR). Since 2011 to touch 16.4
billion USD in 2015. The sector is expected to be in the range of 22 billion USD in
2015.

India's e-Commerce & e- Tail growth

40

35

30

25
29.2
20
21.3
15
16.4
10
12.6
5 9.5
7 7
3.8 5.3 6
1.5 2.3 3.5
0 0.4 0.6 1
2009 2010 2011 2012 2013 2014 2015 2016
e-Tail e-Commerce

The combined with a larger number of homegrown e-tail companies with their
innovative business models has led to a robust e-tail market in India rearing to
expand at high speed.
By 2020, e-tail in India is expected to account for 3% total
retail. Further, orders per millions are excepted to more than double from 5 million
in 2013 to 12 million by 2016, which will mean more opportunities for both
consumers and e-tail companies.
Only 16% of Indias total population was online in
2013 and of the online users only 14% or 28 million were online buyers. India,
therefore, was still in a nascent or immature stage of evolution of online- retail
spending.

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 Share of e-tail in Indian retail

2020 83% 14% 8%

2014 91.60% 8.00% 3%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00%

Independent retail Brick/mortar retail e-Tail

Order per month (in million) of e-tail

2016(estimated) 12

2013 5

2016 4

0 2 4 6 8 10 12 14

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 Amazons future fulfillment centers

It shows the fulfillment

centers of Amazons
(present); in which
citys total FCs also.
(Total -16)

It shows the future

fulfillment centers of
Amazon.com to be
build. (Total: 18)

Each fulfillment
centers square
feet will be,
150,000 or
52,500

Its called Kebo robots, which is used in fulfillment

centers of Amazon for to ship its goods in accurate time
and better efficiency.

Weight of 320 pounds can lift 750 pounds of items and

can travel 3 and 4 miles /motion sensors to detect any
objects.

This make the cut out much of the hard picking work
& bring items directly to the workers for further
process.
Kebo Robots

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 Future improvement in delivery system of Amazons

The drone known as Amazons Prime air

is an octrcopter, i: e made with 8 rotors,
travelling at over 80 kmph/: carrying
power (2.26kg).

Which covers 86% of Amazons

products.

Drone will takes maximum 90 minutes

to reach for selected customers.

Market
leadership
Amazons diversification

Mature
business
New entry

In each digital market, Amazon fights for monopoly

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 Conclusion

With the entry of e-Commerce, amazon knows the competition is expected to further
intensify. However, Amazon is an international players come with deep pockets and
the patience to drive the Indian e-Commerce market. Also, there strong domain
knowledge and best practices from their international experience give them an
additional edge.
Additionally, the Amazon Company
have been part of markets where they have seen the e-
Commerce market evolve and are aware of the
challenges and strategic policy to address issue
therefore.
And the company recently made a strategic
e-Commerce alliance with the Future Group, which is already known as the
father of retail; Future will use the Amazon platform to sell its private labels such as
Lee Cooper, Converse, Indigo Nation, Scullers and Jealous21, among others. The
company has a portfolio of about 40 brands.
Another plus point is from the Indian
government ambitious Digital India project and the modernization of India Post
will also affect the e-Commerce sector. This programme will give a strong boost to
the e-Commerce market as bringing the internet/broadband to remote corners of the
country will give rise to an increase in trade & efficient warehousing. Based on all
the above facts , Amazon have a great challenges and long term growth in India,
though the company may face tough competition, but still have the capability it
overcome with that.

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 Bibliography

www.business-standard.com

www.youtube.com

services.amazon.co.uk
http://economictimes.indiatimes.com/

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