Online Retailing- trends in India and

International

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Introduction

The digital revolution has transformed industries like music, books and travel almost entirely because e-commerce solutions delivered shopper needs in ways that traditional channels couldn’t match.

The digital shopperconnected, savvy and actively seeking choice,

convenience and value for their money.

Are clicks,

destined to replace

bricks?

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Introduction Online retailing is catching up really fast

with Indians— says the Census Guide 2011 by eBay.

Consumers are buying not only low-involvement products but also: cosmetics, jewellery, watches, fashion clothing, electronic gadgets and fitness equipment online.

With growing broadband

internet access, this

industry may see an

explosive growth.

Retail: The future is ONLINE

Scalability

Growing at 30-40 per cent year-

on-year

Always available–anywhere, anytime

Online store acts as the retailer’s face in front of millions of people all across the

globe.

Physical to online store is inevitable.

Global outreachEasy to manageFastest growing medium

The online retail industry in India is

likely to be worth Rs 70 billion by 2015..

Seamless interaction with consumers

Drive footfalls to your traditional store

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Online Retail: The Vision

Reduced search and transaction costs,Customers able to find lowest prices,Lowered market entry costs, Lower operating costs, Higher efficiencyTraditional physical store merchants

forced out of business,Some industries would be

disintermediated.

Shopper Needs and Retail Advantages

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An examination of the path to purchase for diapers versus baby food provides an interesting perspective

into the different role of digital technology for two seemingly related categories. At first glance, more

shoppers use digital media when shopping for diapers (62%) compared to baby food (54%). This

suggests that diapers are more successful in digital shopper marketing.

DIAPERS V/S BABY FOOD

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The fundamentals of running an online or offline retail business are the same, but the mechanics are different:1. Products

2. Presentation

3. Technology

4. Efficiency

5. Pricing

6. Delivery mechanism

7. Promotion

Investing in technology, back-

end logistics, infrastructure scale

and customer experience systems

is a continuous process in Online

business.

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Products: It is important to be positioned as a store selling a range or a product category. This avoids the customers confusion where to go for what.

Presentation: The content and presentations are critical, let the customer get a good idea about the quality and feel of the product simply by photography and descriptions. In an online store, the website talks to customers vs a real person.

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Technology: Spend more time to understand the complex technology, its constraints, also the pros and cons better. Also, security is one of the major concerns for a customer when he is shopping online. For example, recently Microsoft India’s e-commerce store was

hacked.

Efficiency: An online store runs 24x7, so need to round the clock service. Given a customer has access to multiple stores, an e-commerce business needs to operate super efficiently to be able to survive and grow.

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Pricing: Online shopping clearly hinges on price. The shopper makes a purchase commitment only if he perceives the product to be well priced.

Delivery Mechanism: Customers equate the delivery in online shopping almost as instantaneously as they would in a brick-and-mortar store. Therefore, deliver more efficiently than the customer’s expectation for a better customer experience and the chances of repeat purchase.

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Promotion: Unlike offline retailers, Online retailers should focus more, at least initially, on: Website layout, Visually appealing, user friendly and

secured website Product display, content and clarity Online marketing Customer acquisition activities and Customer experience, etc,

In the long run, this will become the critical success factor for online stores.

If 60 per cent of the

business after a year of

existence is not repeat,

one is in deep trouble,” adds

Triedev Kapoor, CEO, ezeegift.com.

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Online Target Shopper

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How They Want

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Value Proposition

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The Top 6 reasons why shopper buying through on online

Rank 1

Saves time and efforts

2 Convenience of shopping at home

3 Wide variety / range of products are available

4 Good discounts / lower prices

5 Get detailed information of the product

6 You can compare across various brands / models

IMRB Survey

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6 Concerns while buying online

Rank 1

Not sure of product quality

2 Cannot bargain/Negotiate

3 Not sure of security of transactions /Credit card misuse

4 Need to touch and feel the product

5 Significant discounts are not there

6 Have to wait for deliveryIMRB Survey

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The Next WaveWorld's largest online retailer, Amazon.com

is set to enter India, as they are in discussions with leading Indian ecommerce players like Flipkart.com, LetsBuy.com and Exclusively.in, among others.

Acquiring Indian players has been the dominant theme for foreign majors looking to enter Indian market with eBay acquiring Baazee.com and Groupon picking up SoSasta.com to enter the market.

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Online Trend Flipkart, which started out as an online

retailer of books in 2007, has slowly diversified into mobiles, cameras and movies and music.

Bata, being a traditional brick-and-mortar retailer decided to develop a new ecommerce platform for the Indian market as they were confident of the online model clicking with the consumers.

There are more bigwigs like Reliance Retail, Aditya Birla Retail and Tata’s Croma are looking at entering the Rs.2,050 crore e-retailing market, growing at over 30% annually.

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Contd. ... FutureBazaar.com, the e-commerce

arm of the Future Group, that links to its stores including eZone, Pantaloons and Big Bazaar online delivers across 1,500 cities and towns in India covering 16,000 PIN codes.

Experts say as the retail market evolves in India, more e-commerce sites will be launched by pure-play retailers and e-tailers, not just the metros but in Tier II & III cities.

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Online retailing portals such as eBay.in , Snapdeal.com, and Naaptol.com are registering anywhere between 40 and 60% of their sales from rural areas apart from the tier II and III cities like Vadodara, Faridabad, Jaipur, Visakhapatnam, Kanpur and Lucknow.

According to eBay India Census 2010, about 3,296 Indian cities shopped on eBay last year, of which 2,234 were tier II and tier III cities, and 1,045 were rural towns.

Contd. ...

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Popular Indian Online Retailers

E Bay, Amazon-india, Wal-mart, Wirefoot, fabindia, indiaplaza, flipcart, snapdeal, myntra, futurebazaar, Giftcardsindia.in, naaptol, homeshop18, bechna.com, ultop.com, Rediffproductsearch, CompareIndia.com, wize.com, PriceGrabber.com, yahooShopping, DealTime.com, StreetPrices.com, Google Products.

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Online Retailing International

Gone are the days where we had to buy an entire album because of a particular track. With iTunes, it is so much easier and economical to customize a personal music library and deliver it digitally.

It is much more convenient to visit travel sites like Expedia or Travelocity to research, compare and make purchases, rather than visiting a travel agency.

In publishing, Amazon’s endless book selections, authentic reader reviews, personalized book recommendations and e-book options are hard for brick-and-mortar bookstores to match.

Amazon’s edge in giving shoppers tailored and relevant choices as well as highly competitive prices has forced traditional booksellers like Borders to close, and has set Amazon on pace to own more than half of the books business in the United States across all formats by the end of 2012.

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Contd. ... Digital technology is widely pervasive today and

will only continue to grow at a rapid pace into the future.

Over 274 million Americans have access to the Internet.

As of March 2012, 117 million people had smartphones, and approximately 80 percent of them were using smartphones for shopping activities like finding stores, making lists, checking prices, researching products, sharing content and purchasing

Thank you