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Discovery Engineering, Volume 2, Number 6, September 2013

discovery

Discovery Engineering • PERSPECTIVES • E-COMMERCE

Engineering

ISSN 2320 – 6675

EISSN 2320 – 6853

PERSPECTIVES • E-COMMERCE

Online retailing – the Indian viewpoint Charul Thareja1☼, Ritika Ghai2, Vaibhav Jain3 1. Dronacharya College of Engineering, Farrukhnagar, Gurgaon, India 2. Dronacharya College of Engineering, Farrukhnagar, Gurgaon, India 3. Dronacharya College of Engineering, Farrukhnagar, Gurgaon, India ☼

Corresponding author: Dronacharya College of Engineering, Farrukhnagar, Gurgaon, India, E-Mail: [email protected]

Received 13 June; accepted 24 August; published online 01 September; printed 16 September 2013

ABSTRACT The intention of this paper is to provide an overview on the subject of Online Retailing with a special reference to the Indian market. The whole scenario of e-shopping in India is summed up under various headlines to give a detailed description of all the current proceedings as well as the future approximations in the online retail sector. Through this paper we are introducing the concept of online retailing with a brief mention of its origin and history along with the various advantages and disadvantages it possess. The leading online shopping stores in India have been provided in between. The paper also offers the various online retailing statistics and a comprehensive analysis and study of the customer taste. Keywords: e-tailing, e-commerce, e-shopping, web-shop. Abbreviation: B2B - Business to Business, B2C – Business to Consumer.

1.3. History

1.1. Definition

The history of e-commerce would rightly be back-tracked by the time people felt the need to send “interactive content” to be displayed on television and Videotex came into being. Research was going on from the early 1960 but the main credit goes to Rediffusion Computers employee Michael Aldrich of Great Britain. In 1979 Michael Aldrich connected a domestic television by telephone line to a real-time transaction processing computer and invented what he called teleshopping. Consequently more corporations got interested in sending information and thus it matured. Online service of videotext, Minitel was launched in France in 1982 and was accessed using telephone lines, similar model failed in UK. It was a real success till World Wide Web. The researchers who were working on Videotex in US with services like “The Source” and “CompuServe” in 1979 (contemporary of UK based research: BBC with Prestel, British Telecom with Viewdata, ITV with ORACLE) got interested in creating a solution for customer-targeted payment processing whose target audience would be the software developers and shareware authors. They created Swreg in 1987 in US, thus enabling the first online market for the developer’s community. In the 1990s online shopping moved to the internet. In 1990 Tim Berners-Lee a British scientist working at CERN laboratory wrote the first web browser WWW which then changed most research processes and ways of businesses seeing a whole new market to evolve (rather a whole new world “The web

Online Real time transaction processing: The term is used to describe a number of different computer features. For example, real-time operating systems are systems that respond to input immediately. They are used for such tasks as navigation, in which the computer must react to a steady flow of new information without interruption.

Brick-and-mortar: Brick-and-mortar businesses are companies that have a physical presence and offer face-toface customer experiences.

retailing (also known as B2C or business-toconsumer e-commerce) is basically a Web-enabled interface between your company and your target consumer for selling products and services on the Web with the facility of online payment.

1.2. Introduction Online shopping or online retailing is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, estore, Internet shop, web-shop, web-store, online store, and virtual store. An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping centre; the process is called business-toconsumer (B2C) online shopping. In the case where a business buys from another business, the process is called business-to-business (B2B) online shopping. The largest of these online retailing corporations are eBay and Amazon.com, both based in the United States. With the growth of online shopping, comes a wealth of new market footprint coverage opportunities for stores that can appropriately cater to offshore market demands and service requirements.

Charul Thareja et al. Online retailing – the Indian viewpoint, Discovery Engineering, 2013, 2(6), 16-19, www.discovery.org.in/de.htm

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1. ONLINE RETAILING

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To Cite this Article: Charul Thareja, Ritika Ghai, Vaibhav Jain. Online retailing – the Indian viewpoint. Discovery Engineering, 2013, 2(6), 16-19

Discovery Engineering • PERSPECTIVES • E-COMMERCE about the product online and read real user reviews before making their purchase. Discounts and deals only available to online shoppers is another prime reason why many choose to now shop online. Rather than spending hours of your day in the busy commute on Indian roadways, save time, fuel and energy by shopping from home at your convenience. Not only this, but online shopping also gives a relief from the hectic last minute shopping for a friend or a family in case you forget to buy a gift for them on a specific occasion. Transformation in the trends of shopping is occurring because of the changing lifestyle of the consumers in India and expansion in online activity. Many of those who own computers have taken the steps to start shopping online with ease. While this may not have been the first country to introduce e-shopping, India is catching up quick with growth and advances being made each and every day. Many different retailers from across the world are stepping up their game and offering their services to Indian residents. The possibilities are endless when opting to do your shopping online.

2. THE INDIAN OUTLOOK

2.3. Statistics

2.1. Outline

There are some of the facts that exactly give us the holistic picture of online retail Industry. As per our research, online retail account for less than 1% of the total retail market in India in the current scenario while the global Industry average is 4%. Our neighbour country China is very close to the Industry average. But the situation is changing. Online shopping in India, saw 128% growth in interest from the consumers in the year 2011 to 2012 in comparison to only 40% growth in 2010 to 2011, making 2012 the tipping point for online shopping in India. In terms of product categories, apparels & accessories (30%) emerged as the second biggest product category after consumer electronics (34%). As per the research, 90% of online shoppers are planning to buy more products online which reflect on the positive experience of the users. The frequency of purchase was also higher for categories like apparels & accessories (34%), beauty & personal care (33%) products in comparison to electronics (28%). For regular internet users – cash on

Online shopping in India has continued to evolve over the last few years, providing residents with the means to shop from the comfort of their own home for goods, apparel, electronics and so much more. In last two years many ecommerce websites have mushroomed online and giving tough competition to one another with striking deals like free shipping, coupons, free gifts, easy return policy, and many more. Though, like any other country, people had started doing online shopping quite tentatively but with time confidence in shopping stores is building up. Nowadays virtual stores in India are not limited to one or other kind of a specific product but sell all kinds of material ranging from home decor, designer clothes to grocery etc. With the everyday consumer choosing to do a great deal of research before purchasing items in this day and age, shopping online is a major benefit. Through online shopping, Indian consumers are able to do the research that they need to

Charul Thareja et al. Online retailing – the Indian viewpoint, Discovery Engineering, 2013, 2(6), 16-19, www.discovery.org.in/de.htm

www.discovery.org.in © 2013 Discovery Publication. All Rights Reserved

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Holistic: Emphasising the importance of the whole and the interdependence of its parts

world”). The first World Wide Web server and browser, created by Tim Berners-Lee, opened for commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut, Netscape's SSL v2 encryption standard for secure data transfer, and Intershop’s first online shopping system. Immediately after,Amazon.com launched its online shopping site in 1995 selling almost each and everything online, eBay was also introduced in 1995.When money was involved in doing business over the internet , “PayPal” was launched which offered an alternative (through internet) to cash or check payment. It was acquired by eBay for $1.5 billion in 2002 and practically has share of 70% till date. Aggressiveness in the market especially in the online shopping market is giving way to new tricks like giving out Coupons for customer loyalty and in an attempt to keeps clients reverting back. Major benefits are being offered with decent discounts to promote online shopping.

Current trends in online shopping in India show that the majority of buyers choose to shop at websites that allow them to purchase a wide variety of items from a range of different stores rather than one, select retailer. When purchasing electronics and other goods, many Indian shoppers rely on opinions and online reviews from other users from around the world. With the help of social networking websites and online media outlets, nearly 50% of all Indian consumers rely on these social outlets to make their online shopping decisions. It is also revealed that metros or tier-I cities have more awareness about online retailing as compared to tier-II & III cities. It was also found that electronic products are most popular among online buyers. In terms of motivators to shop online, the consumers highlighted cash back guarantee as the number one benefit. Ability to give cash on delivery, fast delivery, great deals and access to branded products were highlighted amongst the other benefits of shopping online. The consumers also highlighted some barriers that deter them from shopping online – the number one factor was inability to touch and try the goods before purchase, fear of faulty products, fear of posting their personal and financial details online and the inability to bargain were cited among the other reasons. Thanks to online shopping stores and discount coupon code system, a new trend has emerged in India.

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2.2. Current Trends

Discovery Engineering • PERSPECTIVES • E-COMMERCE 3. MAJOR ONLINE PLAYERS IN INDIA 3.1. Flipkart Flipkart was started by two IIT, Delhi alumni. Initially Flipkart focused on online sales of books but it later expanded to electronic goods and a variety of other products. It reported sales of US$100 million in FY 2011-2012 and is known for its fast delivery & cheap Electronics products. Website: www.flipkart.com

3.2. EBay eBay.in is the Indian version of the popular online shopping portal eBay.com – world’s online marketplace. Ebay has a diverse and passionate community of individuals and small businesses. Ebay offers used and fresh items with a wide network of international shipping. Website: www.ebay.in

3.3. Shopclues Shopclues is famous for their heavily discounted Jaw Dropping deals. Shopclues is one of the best online stores that offers a wide variety of cameras, Computer accessories, Mobile, Gift, Jewellery, Cosmetics, toys, clothes, books andbag. Their Jaw Dropping deal became most liked deal of 2012. Website: www.shopclues.com Discovery Engineering

3.4. Homeshop18 HomeShop18 is a venture of the Network18 Group, India’s fastest growing media and entertainment Group. The company has its headquarters in Noida, UP. The website has received the “Best shopping site” award from PC World Magazine in 2008. HomeShop18 also has India’s first 24 hour Home Shopping TV channel. Website: www.homeshop18.com

3.5. Myntra Myntra.com is one of the leading online retailers of lifestyle and fashion products. Myntra offers T-shirts, Shoes, watches and more at discounted price. Their deals become more lucrative with discount coupons. Website: www.myntra.com

3.6. Amazon World’s largest online trader “Amazon” started its services recently in India. It provides large range of Mobile phones, Cameras, Books, E-Books, Portable media players, Kindle Reader, Kinle Fire HD and many more things. Surely Amazon India will boost Indian Online Shopping market. Website: www.amazon.in

3.7. Snapdeal

Burgeoning: Begin to grow or increase rapidly; flourish.

It is almost certain that the next blue ocean in India is going to be the sector of online retailing. With the soared and record breaking online sale in the recent months, it is evidently proved that online retailing will outpace total retail sales in few years. In India, e-tailing has the potential to grow more than hundred-fold in the next nine years to reach a value of $76 billion by 2021. The country's growing internet-habituated consumer base, which will comprise 180 million broadband users by 2020, along with a burgeoning class of mobile internet users, will drive the e-tailing story. Growth of online retailing was low in starting years due to initial inhibitions, but, it is growing now with extraordinary pace as the confidence of Indian buyers is increasing slowly. Seeing the current behaviour of Indian buyers, online experts estimated that the trend of e-shopping will become basic phenomena among buyers in arriving years. The present and future e-marketers are keeping their eyes on the Indian market trends and studying the consumer behaviour for creating best and attractive deals potential clients.

Charul Thareja et al. Online retailing – the Indian viewpoint, Discovery Engineering, 2013, 2(6), 16-19, www.discovery.org.in/de.htm

Jabong is one of the biggest fashion & life-style E-commerce site in India. It was launched in January 2012 & in a given year got highest traffic from India. It gives lots of varieties of branded products. Website: www.jabong.com

4. PROS & CONS 4.1. Pros As the online shopping is gaining popularity day by day, more people are turning to it for all their needs. It offers a lot of advantages. Some of them are listed below: 1. Low Prices: Online shopping store can reduce overhead costs in a variety of ways, which means a lower price for us. The online prices are found to be 11 to 16 per cent less than offline market prices. Many times shoppers can save even further with an online coupon. According to the study 75 per cent of online shopper said they were able to find better discount offers and sales online. 2. Saves Time: If we already know what we are looking for, shopping online can save a significant amount of

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2.4. Future Scope

3.8. Jabong

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delivery was the most preferred mode of payment (74%), followed by debit card (18%) & credit card (5%).

Snapdeal offers everything from local daily deals on restaurants, spas, travel to online products deals. They offer you best price with free shipping. Website: www. snapdeal.com

Discovery Engineering • PERSPECTIVES • E-COMMERCE time. With just a few clicks of the mouse, we can place our order and move on to other things. 3. Price Comparisons: When we visit a store, we most likely have to settle for whatever price the vendor has placed on a particular item. Not so with online shopping as we have the ability to compare prices from hundreds of different vendors. 4. Shop 24/7: Online stores are available twenty-four hours a day, seven days a week, all year long. The same claim cannot be made by most (if any) retail stores. Online shopping allows you to shop whenever you want, at your convenience. 5. Environmental Benefits: Recent studies showing that shopping online leads to reduced fuel consumption and air pollution, because so much of our car travel is dedicated to shopping. Again shopping online reduces the need for print catalogue and excess packaging.

3. Shipping Costs: Unless we purchase digital products, there will sometimes be an additional expense to ship our purchases. The shipping cost will often depend on the size and the weight of the item. Many online retailers offer "free" shipping, but only if the cost of our order reaches a certain minimum amount. 4. See It, Touch It, Feel It: Some shoppers like being able to see and feel an item, and to test it or try it on prior to purchasing. By actually seeing the item, and being able to physically feel and inspect the item, the purchaser can often make a far more reasonable assessment of the quality. This is difficult to do if we are just looking at an online photo of the item. 5. No Relationship: When we purchase online, we rarely have the opportunity to build a relationship with the seller. On the other hand, local retail stores are far more likely to form relationships with their customers, simply because of the personal interaction between buyer and seller.

4.2. Cons Online Shopping has been praised again and again for the ease it provides to people but at the same time it has also been widely criticized for being very insecure and has many more disadvantages as listed below: 1. Personal Data: Some people are concerned about the potential security risks of storing and sharing of their personal data and credit card numbers with online retailers. Many people feel that purchasing online is an added security risk that they are just not willing to take. 2. Defective Items: When trying to deal with defective items purchased online, quite often the only option is to pack the item up and ship it back to the online retailer for a credit or replacement. And the customer is often responsible for any return shipping costs. After waiting a few days for our item to arrive in the first place, this adds even more time to the overall process.

5. CONCLUSION Everything comes with its own advantages and disadvantages and same is the case with online retailing. Mind-set of Indians is more inclined towards real shopping where they can actually touch, feel and compare the products before buying but slowly the trends are changing owing to the changing lifestyle today. The online retailers are receiving a positive response from the customers which is only going to increase with the passage of time. Also, by seeing promising profit in e-commerce industry, there will be many fake online shopping stores in the upcoming future. It is the duty of the buyers to remain cautious and to check the reliability and credibility of the websites before buying any product so that it becomes an enriching experience for them.

DISCLOSURE STATEMENT There is no financial support for this research work from the financing agency.

ACKNOWLEDGMENT Much thanks to our guide for his constructive criticism, and assistance towards the successful completion of this research work.

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Charul Thareja et al. Online retailing – the Indian viewpoint, Discovery Engineering, 2013, 2(6), 16-19, www.discovery.org.in/de.htm

www.discovery.org.in © 2013 Discovery Publication. All Rights Reserved