SECTORAL ANALYSIS GROUP NO.

70

PRESTIGE INSTITUTE OF MANAGEMENT

AND RESEARCH, INDORE

SECTORAL ANALYSIS
PRESENTATION WRITE-UP
Session: 2018-20

E-COMMERCE

SUBMITTED BY:

Sign. 1……… Sign. 2………… Sign. 3………. Sign. 4..........

Class: MBA Sem. II Section-F

Name & Scholar No. 1: ABHIJEET MUTHA - 1121210764

Name & Scholar No. 2: NIKHIL NAGAR - 1121211038

Name & Scholar No. 3: NITESH BHAGCHANDANI - 1121211316

Name & Scholar No. 4: ANEESH DUGAR - 1121211449

SECTORAL ANALYSISWRITE-UPS
 TABLE OF CONTENTS

Sr. No. Title Page No.

01. INTRODUCTION OF THE SECTOR 3-4

02. CONTRIBUTION AND IMPORTANCE IN THE 5-6

ECONOMY

03. COMPETITIVE SCENARIO 6-7

04. MAJOR PLAYERS AND THEIR RELATIVE SHARE 7-8

05. RELATION TO OTHER SECTORS 9

06. PRESENT GOVERNMENT POLICY RELATED TO 10

THE SECTOR

07. SWOT ANALYSIS OF MAJOR 3 PLAYERS IN THE 11-14

SECTOR

08. FUTURE PROSPECTS 14

09. CONCLUSION 14

10. REFERENCES 15
 1) INTRODUCTION

E-commerce is the buying and selling of goods and services, or the transmitting of
funds or data, over an electronic network, primarily the internet. These business
transactions occur either as business-to-business (B2B), business-to-consumer
(B2C), consumer-to-consumer (C2C) or consumer-to-business (C2B). The terms
e-commerce and e-business are often used interchangeably. The term E-tailing is
also sometimes used in reference to the transactional processes for online
shopping.

E-COMMERCE

The Indian e-commerce market is expected to grow to US$ 200 billion by 2026
from US$ 38.5 billion as of 2017.

 History of e-commerce

The beginnings of e-commerce can be traced to the 1960s, when businesses started
using Electronic Data Interchange (EDI) to share business documents with other
companies. In 1979, the American National Standards Institute developed ASC
X12 as a universal standard for businesses to share documents through electronic
networks.

After the number of individual users sharing electronic documents with each other
grew in the 1980s, the rise of eBay and Amazon in the 1990s revolutionized the e-
commerce industry. Consumers can now purchase endless amounts of items online,
from e-tailers, typical brick-and-mortar stores with e-commerce capabilities and
one another.
  Types of e-commerce

Business-to-business (B2B) e-commerce refers to the electronic exchange of

products, services or information between businesses rather than between
businesses and consumers.

Business-to-consumer (B2C) is the retail part of e-commerce on the internet. It

is when businesses sell products, services or information directly to consumers.

Today, there are innumerable virtual stores and malls on the internet selling all
types of consumer goods. The most recognized example of these sites are Amazon,
Flipkart which dominates the B2C market.

Consumer-to-consumer (C2C) is a type of e-commerce in which consumers

trade products, services and information with each other online. These transactions
are generally conducted through a third party that provides an online platform on
which the transactions are carried out.

Consumer-to-business (C2B) is a type of e-commerce in which consumers make

their products and services available online for companies to bid on and purchase.
This is the opposite of the traditional commerce model of B2C.
 2) CONTRIBUTION AND IMPORTANCE IN THE ECONOMY
E
 In this new economy, knowledge and information have become the main
production factor. In this context, innovation and technical progress have a
major contribution to the durable economic development. The electronic
commerce (e-commerce) is the key for enterprises’ competitively in this
informational era, insuring the access to new market segments, increasing
the speed of developing business, the increased flexibility of commercial
policies, decreasing the provisioning, sale and advertising costs, simplifying
the procedures etc.
 E-commerce is one such activity that has generated new dimensions in
economic growth and that has a potential to add a higher value to businesses
and consumers.
 Today’s digital revolution involving the Internet and worldwide use of
websites has set the stage for e-commerce.

 E-COMMERCE AND ECONOMIC DEVELOPMENT

E-commerce has a tremendous growth potential and also generates economic

growth. In order to realize its full potential to bring about the structural changes
needed for economic development, it is important to recognize that e-commerce
provides an environment in which new activities can fruitfully be developed.

Its interaction with various aspects of growth has to be self-reinforcing to yield the
required rate of growth.

E-commerce is one such activity that has generated new dimensions in

economic growth and has helped many countries to attain a higher level of
development in recent years, thereby creating an investment climate conducive for
further economic development. Economic development involves the creation of
novel economic activities.

3) COMPETITIVE SCENARIO
With the advancement of technology, there are many individuals who have

forgotten that there was a time when they use to buy things manually. But, now the
businesses are coming online with an e-commerce online platform. Nowadays, the
big players in the online shopping site such as Amazon and Flipkart, they are
leading the impact by presenting new innovations. To remain on the list of
competitive industry, the e-commerce companies require to be updated with
current trends. In the year 2016, the U.S. organizations at online retailers spent
$360 billion, with Amazon that accounts for a whopping $ 150 billion of all that. In
simple words, we can say that almost 50% of every e-commerce dollar goes to
Amazon and so the big players like Amazon and Flipkart are creating their own
image in the competitive market. These both are the online platform which is
visited daily by thousands of people.

 How Should E-commerce Startups React to Future?

As India’s top online retailers Flipkart, Snapdeal & Amazon are well prepared to
face off competition, the country’s vertical

E-commerce players are talking a slight path with less trodden. Companies like
online furniture or grocery (Jumbo Grocery) and lifestyle retailers Pepper fry,
Urban Ladder, online jewelry like Bluestone, are more focusing on hooking users
with the help of their newer catalog, ensuring top-notch deliver services and also
better customer experiences. The attracting offers by Flipkart, Amazon, and
Snapdeal have scouted the buyers for a product online during each season (either
sale, festive). In

2012, about 30% of the shoppers turned Amazon to research their most current
online purchase among which only 13% turned to Google.

To compete with ecommerce giants, you must have these following steps to be
included in your business. By including these steps, you will procure the benefits
of ecommerce into your organization

Such as:

 Create your own product

 Understand the shopper

 Fill a need

 Value for money

 Effective service

For starting an e-commerce business can be a difficult challenge for the

organization, but to lead it with the top e-commerce big players can be more
difficult.

4) MAJOR PLAYERS AND THEIR RELATIVE SHARE

These are all the top major players in the sector: -

 Flipkart Internet Pvt. Ltd

It is one of the best e-commerce companies in India. 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.

 Amazon Development Centre India Pvt. Ltd

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
capitalization. Amazon.com started as an online bookstore, later diversifying to sell
DVDs, Blu-rays CDs, video downloads/streaming, MP3 downloads/streaming etc.

 India-mart Intermesh Ltd.

IndiaMart InterMesh Ltd was founded in the year 1999. It is headquartered in

Noida, UP. It is serving Internet B2B marketplace. The company was founded by
Dinesh Agarwal and Brijesh Agarwal. Started as a small business directory, now it
has become one of the biggest B2B Company. Within last few years, it has raised
various funding and won awards.
 Jasper InfoTech Pvt. Ltd (Snapdeal.com)

Snapdeal is an online market place based in New Delhi, India. The company was
started by Kunal Bahl, a Wharton graduate as part of the dual degree M & T
Engineering and Business program at Penn, and Rohit Bansal, an alumnus of IIT
Delhi in February 2010.
 One97 Communications Ltd. ( 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, and Snapdeal.
 5) RELATION TO OTHER SECTORS
E-commerce related with: -
 Banking
 Stock trading
 Education
In some cases, this may bring a new dimension to the original service,
enhancing and altering it. E-education is an example of this. It may also bring
into the catchments new groups of consumers of the service to whom it might
not have been previously accessible.
Matchmaking services.
These take a need from an individual or business customer and provide
mechanisms (from providers) for matching that need.

 Information-selling on the web.

This group essentially sells information content of one sort or another and
includes ecommerce sites that provide on-line publishing such as web-based
newspapers
 consultancy advice
 specialized financial or other information

 Entertainment services
These provide internet-based access to videos, movies, electronic games, or
theme sites. This E-entertainment sector is expected to grow rapidly in the next few
years, with a convergence of TV and internet-based technologies.

 Specialized services such as auctions.

Many different auction sites have appeared and these are discussed further in
this lecture.
6) PRESENT GOVERNMENT POLICY RELATED TO
THE SECTOR

 India will ban e-commerce companies such as Amazon.com and Walmart-

owned Flipkart Group from selling products from companies in which they
have an equity interest.

In a statement, the government also said that the companies will be

prevented from entering into exclusive agreements with sellers. The new
rules will be applicable from February 1.

 E-commerce companies can make bulk purchases through their wholesale

units or other group companies that in turn sell the products to select sellers,
such as their affiliates or other companies with which they have agreements.

Those sellers can then sell the products to other companies or direct to
consumers, often at attractively low prices.

 The new regulations follow complaints from Indian retailers and traders,
which creates an unfair marketplace to allows them to sell some products at
very low prices.

 The All India Online Vendors Association (AIOVA) in October filed a

petition with the anti-trust body Competition Commission of India (CCI)
alleging that Amazon favours merchants that it partly owns, such as
Cloudtail and Appario. The cash back that customers get as an incentive
while online shopping should not be based on whether the product was
purchased from an affiliate of the platform or not.

 New rules will appease small traders and farmers who fear that U.S.
companies are making a back door entry into India’s retail market and could
squeeze out small corner shops that dominate Indian retailing.

 The Confederation of All India Traders in a statement said that if the order is
implemented in full then malpractices, predatory pricing policies and deep
discounting by e-commerce players will no longer occur.
 7) SWOT ANALYSIS OF MAJOR 3 PLAYERS IN THE
SECTOR

SWOT Analysis of Walmart

 Walmart’s Strengths – Internal Strategic Factors

1. Brand recognition – With millions of customers visiting Walmart every

day, it is the most recognized retail brand in the world.

2. Global expansion – Walmart has recently purchased ASDA, the UK based

retailer and Indian e-commerce giant Flipkart. Besides, it has created a joint
venture with India’s biggest retail store Bharti.

3. ‘Every Day Low Prices’ strategy – Walmart is based on economies of

scale agenda that’s why it can offer low prices. Thus, it’s one of the cheapest
shopping places in the world.

4. Global supply chain and logistics system – It uses Information Technology

(IT) to efficiently monitor the performances of every product in each store in each
country.

 Walmart’s Weaknesses – Internal Strategic Factors

1. Employee treatment and working conditions – Walmart has received

criticisms and lawsuits several times regarding its workforce.

2. Large span of control – Its highly extended size and massive span of
control could leave Walmart weak in some areas.

3. Thin profit margins – Walmart focuses on a cost leadership strategy. It

results in thin profit margins for the company.
4. Gender discrimination – Female employees are discriminated in regards to
promotions and pay scale as per this lawsuit.

 Walmart’s Opportunities – External Strategic Factors

1. Expansion to other markets – Walmart can gain the opportunity by

expanding its business to the markets which are not yet ventured.

2. Strategic alliances – Walmart has the opportunity to create strategic

partnerships with major firms or merge with other global retailers. Acquisitions of
small companies can also be a profitable opportunity for Walmart.

3. Improving quality standards – Low-cost products render low quality

sometimes.

 Walmart’s Threats – External Strategic Factors

1. Fake craft beer controversy – Walmart was sued for selling fake craft beer
in 2017.

2. Small-scale online e-commerce companies –It can be a threat to the

company’s future standing.

3. Technical issues on the website – Customers have complained many times

that there are some technical issues with Walmart’s website.

SWOT Analysis of Amazon

 Amazon’s Strengths – Internal Strategic Factors
1. Strong brand name – As a global e-commerce giant, Amazon has a strong
position and successful brand image in the market.

2. Customer oriented – Amazon caters to a large number of customers for

everyday needs at inexpensive prices. This has made it a customer-oriented brand.

3. Differentiation and Innovation – Amazon frequently brings creative ideas

and innovative additions to its product line and service offerings like Aura Smart
Sleep System.

4. Go Global and Act Local strategy – In India, for example, it has launched a
market campaign “Aur Dikhao” to encourage users to search more of its products.

 Amazon’s Weaknesses – Internal Strategic Factors

1. Easily imitable business model – Online retail businesses have become quite
common in this digital world.

2. Losing Margins in Few Areas – In few areas such as India, Amazon has faced
losses. It’s free shipping to customers can be one of the reasons that expose the
risks of losing margins in some markets.

 Amazon’s Opportunities – External Strategic Factors

1. Amazon can gain the opportunity to penetrate or expand its operations in
developing markets.

2. Can do backward Integration by bringing in-house brands in distinct product

categories to differentiate its offerings.

 Amazon’s Threats – External Strategic Factors

1. Few controversies have caused a dent in Amazon’s brand image. People
critically reacted and boycotted Amazon sites in 2010 when they found that it’s
selling the book “The Paedophile’s Guide to Love & Pleasure: a Child-lover’s
Code of Conduct.”

2. Government regulations can also threaten the business proceedings of Amazon

in some critical countries. Amazon does not ship to Cuba, Iran, North Korea,
Sudan, and Styria.

3. Increasing cybercrime can affect the network security system of the company.

SWOT analysis of Paytm

 Strengths in the SWOT analysis of Paytm

1. First mover advantage: Paytm was the first online payment company to set
up operations in India.

2. Tie-ups with merchants: Paytm can be used to transact with more than 3
million merchants across India and the number is said to be growing every
day.

3. Offers: Paytm has been able to grab and hold the attention of customers
primarily because of the never-ending offer stream it has been announcing.
 Weaknesses in the SWOT analysis of Paytm

1. Need for IT infrastructure: If Paytm functions have to be robust there has

to be good bandwidth and speed.

2. Fear of going cashless: Most Indians are used to transacting on cash and are
yet to get used to being used to cashless transactions.

3. Poor customer care: This makes the company go under sarcastic views.

 Opportunities in the SWOT analysis of Paytm

1. Growing demand for aggregators: Aggregators and middlemen are in

demand everywhere today. This has increased the role of payment
aggregators in India.

2. Demonetization: One of the services that benefitted heavily from the Indian
government’s demonetization drive was online payment services and Paytm
was one of the biggest beneficiaries.

 Threats in the SWOT analysis of Paytm

 Competition: With lowered barriers to entry, every new entrepreneur is

looking at aggregating services.

 Growing concerns about safety: Today there is negative imagery of

information security and tracking of shopping habits.

8)FUTURE PROSPECTS
 E-Commerce has unleashed yet another revolution, which is changing the
way businesses buy and sell products and services.

 E-commerce stands for electronic commerce and pertains to trading in goods

and services through the electronic medium.

 India is showing tremendous growth in the Ecommerce. The low cost of the
PC and the growing use of the Internet is one of reasons for that.

 There is a growing awareness among the business community in India about

the opportunities offered by e-commerce.
 The future does look very bright for e-commerce in India with even the
stock exchanges coming online providing an online stock portfolio and
status with a fifteen-minute delay in prices.

 In the next 3 to 5 years, India will have 30 to 70 million Internet users which
will equal, if not surpass, many of the developed countries.

Conclusion
 The concept of e-commerce is all about using the Internet to do business
better and faster. It is about giving customers controlled access to your
computer systems and letting people serve themselves.

 The role of government is to provide a legal framework for E-Commerce so

that while domestic and international trade are allowed to expand their
horizons, basic rights such as privacy, intellectual property, and prevention
of fraud, consumer protection etc. are all taken care of.

 We found various types of opportunities for retailers,

wholesalers/distributors, producers and also for people. Retailers meet
electronic orders and should be in touch with the consumers all the time.

 Wholesalers can take advantage through E-Commerce of those who are

capable of establishing contracts with reputed producers and link their
business with the on- line.

 People could found various opportunities of employment. On the behalf of

above mentioned reports and expert’s views showed that the future of e-
commerce in India would be bright in the upcoming years, if all essential
factors would be implemented.

 References: -
1. https://www.ibef.org/industry/ecommerce/showcase

2. https://www.fundoodata.com/learning-center/top-10-e-commerce-
companies-india-2/
3. https://www.youtube.com/watch?v=nxSDHBdsWqA

4. https://www.zepo.in/blog/2018/03/28/e-commerce-will-change-next-5-
years-india/

5. https://smallbusiness.chron.com/industry-analysis-ecommerce-79759.html

6. https://www.moneycontrol.com/news/business/cait-demands-regulator-for-e-
commerce-sector-3726661.html

7. http://panmore.com/amazon-com-inc-swot-analysis-recommendations

8. https://inc42.com/resources/ecommerce-policy-changes-and-its-impact-on-
indian-ecommerce/

9. https://www.marketing91.com/swot-walmart/

10. http://panmore.com/amazon-com-inc-swot-analysis-recommendations