e- commerce strategy challenge

7/31/2019 E- Commerce Strategy Challenge

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Submitted By:

Nishant Pandey

+91-9620622867

[email protected]


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Analyze the Indian online retail market potential and growth for next 5 years. Take

margins also into consideration.

Evaluate different business models and segments in online retail

Evaluate Legal Implications for India market entry

Define how to set up a competitive delivery network

Define how the marketing budget should be spent

What do you anticipate Buyonlineindia.com will do to thwart competition and how

Buyglobal.com can preempt these measures

Analyze and suggest if it is wise for Buyglobal.com to enter Indian market or not

Case Study Questions


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Analyze the Indian online retail market potential and growth for

next 5 years. Take margins also into consideration.

The current market size is of online retail is about INR 2000 Cr

The online retail industry is pegged to grow at 35% and is been expected

to reach INR 7000 Cr.(ASSOCHAM).

The easy availability of broadband and increasing penetration of internetis major driver of growth for the industry.

The large youngsters population who are eager to adopt new technologies

with rapid changing lifestyles.

To gain confidence of the customers various major adopted by the

companies are free home delivery, discounts, cash on delivery etc.

A survey conducted by ASSOCHAM in 2011 found that shoppers like online

shopping because of convenience, full info about product, price

comparison etc which is difficult in traditional stores.


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Continued.

Manufacturer (Direct):The manufacturer or direct model, it is predicatedon the power of the web to allow a manufacturer (i.e., a company that creates aproduct or service) to reach buyers directly and thereby compress thedistribution channel.

Affiliate: In contrast to the generalized portal, which seeks to drive a highvolume of traffic to one site, the affiliate model, provides purchaseopportunities wherever people may be surfing. It does this by offering financialincentives (in the form of a percentage of revenue) to affiliated partner sites.

Subscription: Users are charged a periodicdaily, monthly or annualfee to

subscribe to a service

Utility: The utility or "on-demand" model is based on metering usage, or a"pay as you go" approach. Unlike subscriber services, metered services arebased on actual usage rates. Traditionally, metering has been used for essentialservices


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Continued..

The evaluation of Online Retail Segments;

The various segment existing currently are Clothing, Footwear, Electronics,

Books, music & gifts, Entertainment, Watches etc

A survey reveals that Indian consumers are likely to buy Books(41%),Airline ticket/ Reservations (40%) Electronic equipments (35%) and

Clothing/Accessories/Shoes (25%) via online.

Online reviews and opinions are most important for Indians when buying

Consumer Electronics (57%), Software (50%), and a Car (47%).

The major spending is currently is on the books segment but theclothing/Accessories/Shoes segment is catching very fast and is expected

to increase its percentage with a greater margin.


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Evaluate Legal Implications for India

Market Entry

Core legal Issues:

Contracts: The Information Technology Act, 2000 (IT Act) deals with

contractual aspects of use of electronic records, such as attribution,

acknowledgement, time and place of dispatch and receipt.

Security: It Security over the Internet is of immense importance topromote e-commerce. Companies that keep sensitive information on

their websites must ensure that they have adequate security measures

to safeguard their websites from any unauthorized intrusion.

Privacy & Data Protection: An important consideration for every e-

commerce website is to maintain the privacy of its users. Presently thereexists no legislation in India that upholds the privacy rights of an individual

or organization against private parties. While the Constitution of India

upholds the right to privacy as a fundamental right of every citizen,9 the

right is exercisable only against a State action. Even the IT Act addresses

the issue of protecting privacy rights only from Government action.


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Continued.

Intellectual Property rights: One of the foremost considerations that anycompany intending to commence ecommerce activities should bear in mind isthe protection of its intellectual assets. The Internet is a boundless andunregulated medium and therefore the protection of intellectual propertyrights ("IPRs") is a challenge and a growing concern amongst most e-businesses. While there exist laws in India that protect IPRs in the physicalworld, the efficacy of these laws to safeguard these rights in e-commerce is

uncertain.

Jurisdiction: The jurisdiction is a little complicated because in e- commercethe transaction is not involved in only one country but multiple, a proper lawis not yet find by the authorities.

Taxation: The massive growth of e-commerce business has not gone unseenby the tax authorities. In India the High Powered Committee was constitutedby the Central Board of Direct Taxes, which submitted its report in September2001.


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Continued

Others core legal issues

Content regulation

Advertisement

Electronic payment issues

FDI

Corporate structure and funding


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Define how to set up a competitive

Delivery Network

To design a competitive delivery network the first thing is to make demand,

supply analysis and then design an efficiency template which help in

allocation of budget.

The process of delivery network is as follows:

Analyze customer needs

Establish Channel Objectives

Consider Channel Constraints

&List Channel Tasks Identify Channel Alternatives

Evaluate Channel Alternative

Select the channel member


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Define how the marketing budget should be

spent

Goal: 10% of 50 Mn= 5 Mn UsersEstablish a goal (e.g Market Share)

Likely to continue to use after trial

Likely to try if sufficiently exposed

% of market to be reached

Additional impressions needed to induce trial

GRP to be bought (= reach X frequency)

Budget based on average GRP cost

33% Triers loyal

=15 Mn Pot. users

40% Try = 37.5 Mn,

75% market share

25 impressions for trial

GRP= 75 X 25=1875

Avg. GRP = Rs 5000

Budget= 5000 X 1875= Rs 93.75

Lakh


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What do you anticipate Buyonlineindia.com will do to thwart

competition and how Buyglobal.com can preempt these measures

Buyonline.com is the no. 1 e-commerce portal in the country and has a

competitive advantage over other players. Since buyonline.com is available

on a large spectrum in the market.

Buyonline.com is not profitable in all segments and is getting profits onlyon some of the niche segments, what buyglobal.com can do is to serve on

to those areas where buyonline.com is making losses.

And if the market is analyzed properly and understand the needs of the

customer buyglobal.com can wiped off the competition and become the

leader into those segments and then target the other segments.


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Analyze and suggest if it is wise for Buyglobal.com to

enter Indian market or not

It is advisable for Buyglobal.com to enter into the India market is due to

following reasons:

The online retail is still at a very nascent stage and is expected to grow

in the coming years.

The large youth population who are ready to adopt to the newtechnology.

The success of online portal like Flipkart.com open a host of

opportunity for the industry.

The industry is expected to touch INR 7000 Cr by

2015.(ASSOCHAM). Also the new FDI policy which is friendly for foreign investors also

open a host of opportunity for the foreign players.


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e- commerce strategy challenge

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