Mini Project Report
Mini Project Report
Mini Project Report
ON
NIYATI PATHAK
Rollno: 2301240700049
MBA SEMESTER 2nd
MBA (Batch 2023-2025)
DATE/दिनांक ………………
CERTIFICATE
This is to certify that NIYATI PATHAK (Batch 2023-2025), a student of the
Master of Business Administration (MBA) Programme(Batch 2023-2025) At this
institute has conducted a Mini Project titled “"INDUSTRIAL ANALYSIS ON
(E-Commerce Industry)"” under my guidance during 1st semester. The Mini
Project has been prepared towards partial fulfilment for the award of an MBA
degree from Dr. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY. The
Mini Project report is the original contribution of the student.
The Mini Project report is hereby recommended and forwarded for evolution.
All have been collected by me and I also declare that this mini-project report has been prepared
by me and the same has never been submitted by the undersigned either in part or in full to any
other university or institute or published earlier.
Date: ......................
NIYATI PATHAK
MBA SEMESTER 2nd
Batch (2023-25)
ACKNOWLEDGEMENT
I NIYATI PATHAK, owe a great many thanks to a great many people who helped and
supported me during the writing of this project. Thanks and appreciation to the
employees of the organisation for their help and unbiased responses regarding my
queries. My deepest thanks to the director of our institute Mr. Alok Dixit for his
continued support. I express my thanks to the Principal of ICCMRT Lucknow, Dr.
K.Anbumani (Associate Professor, Principal) for extending his support and valuable
guidance. My deepest thanks to Neeraj Kumar Srivastava (Assistant Professor) the
Faculty Mentor of the project for guiding and correcting various documents of mine with
attention and care, he has taken pain to go through the project and make necessary
corrections as and when needed.
Date: ……………….
NIYATI PATHAK
MBA Semester 2nd
BATCH ( 2023-25)
TABLE OF CONTENT
S. No.
Chapter/Particulars PageNo.
1. EXECUTIVE SUMMARY 6
2. INTRODUCTION 7
3. OBJECTIVES OF E-COMMERCE 8
5. E-Commerce Technologies 17
11.
REPORT 46
12.
CONCLUSION 49
13.
Interesting Facts 51
14.
REFERENCES 52
EXECUTIVE SUMMARY
The Internet is the fastest growing media during the past decade. Online shopping is a rapidly
growing e-commerce area. Online stores are usually available 24 hours a day, and many
consumers have Internet access both at work and at home. A successful web store is not just a
good looking website with dynamic technical features, listed in many search engines. This study
aims to establish a preliminary assessment, evaluation and understanding of the characteristics of
online shopping. Although the benefits of online shopping are considerable, when the process
goes poorly it can create a thorny situation. A few problems that shoppers potentially face
include identity theft, faulty products, and the accumulation of spyware, as well as the
precautions to be taken are studied in this paper.
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INTRODUCTION
The term e-commerce was coined back in the 1960s, with the rise of electronic commerce – the
buying and selling of goods through the transmission of data – which was made possible by the
introduction of the electronic data interchange. Fast forward fifty years and e-commerce has
changed the way in which society sells goods and services.
E-commerce has become one of the most popular methods of making money online and an
attractive opportunity for investors. For those interested in buying an e-commerce business, this
article serves to provide an introduction to e-commerce, covering the reasons for its popularity,
the main distribution models and a comparison of the major e-commerce
platforms available.
E-commerce has transformed the way business is done in India. The Indian E-commerce market
is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Much of the
growth for the industry has been triggered by an increase in internet and smartphone penetration.
As of September 2020, the number of internet connections in India significantly increased to
776.45 million, driven by the ‘Digital India’ programme. Out of the total internet connections,
~61% connections were in urban areas, of which 97% connections were wireless.
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OBJECTIVES OF E-COMMERCE
Businesses aim at reducing the costs incurred for the betterment of their revenue. Automating the
E-Commerce business can help in reducing the management cost significantly. Moreover, the
right use of digital marketing can help in reducing the cost spent on driving customers to such an
extent that businesses can bring customers for free of cost.
With E-Commerce as the primary use, business development can be easily achieved. The direct
communication between a company and the customer, the business relationship can be boosted.
Eventually, the E-Commerce market shall be expanded.
Uncountable E-Commerce businesses are functioning out there in the market. When a customer
searches for a certain product (for instance, shampoo), they will probably click on the first three
links that are shown on the Google Search Engine Results Page. All the rest links are either
avoided, never seen, or are visited by a few. This itself shows the competition in the
E-Commerce market. One of the best ways to stand out from the crowd is by providing a unique
customer experience. This includes giving a personalized experience to each customer or visitor
of your online store, website, or mobile app. Some other pointers to consider are round the clock
customer service, immediate responses to the queries raised, engaging with the customers, and so
on.
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4. Increasing the number of loyal customers
Customers are the core of all business strategies. Therefore, ensuring the great customer
experience is of prime importance for the growth of the business. You need to meet your
customers where they spend their time. More than 60% of consumers look for purchasing goods
and services online. If you meet your customers where they are already active, the chances of
them interacting with your business increases two folds. You can increase the number of loyal
customers by giving the best experience to your already existing customers as well as bring in
newer customers.
With the continually evolving technology, you need to enhance the efficiency of your services.
By choosing an online E-Commerce platform to create an online store, you can efficiently reduce
the cost of managing and selling online. You have various opportunities to boost the efficiency of
your service that eventually enhances the revenue earned. By reducing the delivery time, you can
witness happy customers getting back to your business two times faster. Another way is to
provide your customers with automated services such as status update, invoice creating, chat
support, etc. When you update your efficiency of delivering products or services to your
customers, you are creating a strong online presence that helps you sell more.
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history, browser history, and so on. By saving these data, you can aim in targeting the relevant
market.
With the increasing use of smart phones for shopping online, it has become more than mandatory
for E-Commerce businesses to go mobile. Apart from creating a native mobile app, like the one
offered from Builder fly, you need to create a responsive E-Commerce website. It is one of the
major objectives of all leading E-Commerce businesses. By responsive, it means to create a
website that can be viewed from any devices of varying screen size, equally. Studies say that
Google may next rank a website based on its mobile website. It means that any website that has a
responsive design would be ranked on top of the website that does not have one. Making your
E-Commerce website responsive can help you optimize it. A mobile-friendly website earns more
traffic than the rest
8. Increasing sales
The objective of increasing sales will always remain continuous and constant for an
E-Commerce business. In order to thrive in the E-Commerce industry, you need to boost your
sales, constantly. All other objectives are zeroed down to make this objective happen. However,
you also need to look into your past store analytics and figure out the marketing tactics that have
worked well for you to increase sales. Although these objectives could help you in gaining sales,
nothing can beat the tried and tested marketing tactics for your business. For instance, the
products that are sold the most, ideally the best seller, can be used for remarketing and grab more
attention. Any marketing strategy you used earlier including the email targeting and traffic
boosting tactics must be revisited and worked upon to increase sales. Based on the
above-mentioned objectives and the marketing tactics that actually worked for you, you need to
design your marketing plan. Only you can decide what is perfect for your business and what is
not. Every business is unique, and so is yours!
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SWOT Analysis of E-Commerce Industry
E-Commerce or online shopping is one of the most rapidly burgeoning industries to have come
up in recent times. This success is owed to a variety of social and technological factors that have
aided the online shopping mechanism. And as a result, most distributors and retailers are making
their products available online through e Commerce portals.
In this article we will be conducting SWOT analysis of the e Commerce Industry to analyze the
strengths, weaknesses, opportunities, and threats pertaining to the current e Commerce industry.
This analysis will help understand why this industry has faced such massive growth and what
lies for it in the near future.
Strengths
Global Access
There was a time when goods from one geographical area could not be accessed by another.
E-commerce has ensured that all products be available globally and for minimal shipping costs
as well.
Start-up Friendly
Businesses that are just starting out prefer to sell their products through E-Commerce portals
rather than through traditional shops. This is primarily because the latter incurs a larger amount
of establishment cost which most start-ups are unable to afford. The marketing process also
becomes much smoother and cheaper through online shopping platforms.
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Discounts
Since production cost is lessened through the use of E-Commerce portals, sellers are able to
provide attractive discounts on their products which helps garner more consumer attention.
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Weaknesses
Consumer Mindset
Consumers are not ready to buy all products via E-Commerce portals. While products such as
electronic goods can be bought easily through these portals, other products such as clothing are
often preferred to be bought via traditional methods since size and exact color can be verified
before the purchase. Another factor is that customers expect smaller E-Commerce portals to
serve as speedily as larger ones and when the same level of service is not achieved these former
portals are abandoned.
Absence of Communication
Seller and buyer communication have always been a strong method of marketing when it comes
to consumer products. Since E-Commerce portals do not allow for such communication to take
place it is entirely on the buyer to make the decision, which often leads to the product not being
bought.
Cost
While E-Commerce portals are able to provide discounts that attract customers, in many cases
the shipping cost becomes quite high and sometimes even higher than the product cost. This can
easily turn customers away from buying the product online and shifting to traditional means.
Generation Gap
Consumers belonging to the older generation still prefer going to the respective markets to
purchase their goods rather than through the internet. This is primarily due to inaccessibility to
technology and lack of trust on online purchases.
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Opportunities
Market Reach
The E-Commerce world allows even the smallest seller to tap into a global market and sell to
more customers. As the global online population continues to grow, e Commerce will become
the single most effective way to sell products and gain market momentum.
Technological Advancement
While consumers in developed countries have plentiful access to technology that allows them to
make online purchases, other countries are still coming to grip with such technology. As the
purchasing power increases and the price of smartphones and computers decreases, the number
of people actively using E-Commerce platforms is expected to increase.
Marketing Possibilities
Not only is marketing through online portals cheaper and easier, but they also provide more
feasible ways to market the products. For example, usage of online influencers is one of the
primary ways in which clothing and cosmetics items are marketed. Usage of such alternative
marketing will help the online shopping industry grow and attract more consumers to it.
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Threats
Since the cost of setting up an e-commerce portal or using an established one is quite cheap, the
level of competition on such portals is much higher than traditional markets. This makes it
difficult for new sellers to achieve sales that are equivalent to bigger brands of their respective
industries. So, many small-time sellers prefer not to enter such a highly competitive market and
tend to their traditional ways of selling products.
Digital Fraud
Online payment systems, although secure, can be easily used to run fraudulent transactions.
There have been multiple instances where the consumer has made the payment and not received
the product. Such cases lead to consumers turning away from e Commerce portals as lack of trust
on online payment increases. Certain countries still do not have strict regulations on online
payment making it difficult for both buyers and sellers to use e Commerce portals.
Data Privacy
Buyers are expected to provide a lot of sensitive personal data to E-Commerce websites to be
able to make a purchase. This includes address, banking information, etc. Many consumers stave
away from handing over such data freely to websites that they do not trust. As a result, smaller
E-Commerce portals are unable to garner as much momentum as larger and more established
ones.
Government Regulations
Government regulations regarding online sales are becoming more stringent and there are high
possibilities of increased taxation on online sales. This will inadvertently increase the cost of
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products on E-Commerce platforms thereby turning consumers away from it. Furthermore,
data-centric regulations such as the GDPR have made it harder for setting up online stores.
The above SWOT analysis of the E-Commerce Industry presents a clear picture regarding the
growth of the E-Commerce industry and also how it will be performing in the future. While there
is no doubt that more consumers are joining the league every day, there are acute factors that are
also driving them away from it. It is expected that such factors will be dealt with in the coming
times so that the online purchasing process becomes much easier for the consumers.
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E-Commerce Technologies
In addition to boosting sales and conversion rates for merchants, eWallet usage provides
customers with ease of use and increased security. They no longer need to enter credit card
information on websites or give their credit cards to cashiers; plus, many eWallets offer or
require dual authentication prior to use.
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4. Customization makes products highly personal.
Consumers increasingly expect customized products and, thanks to advances in digital and
manufacturing technology, brands can enable them to personalize or customize products they
want online. By empowering customers to become partners in the product creation process,
brands strengthen the user experience, which increases customer satisfaction and loyalty and
leads to higher profits.
Marketers recognize the importance of personalization to buyers, with 92% reporting that their
customers and prospects expect personalized experiences. And they’ve seen quantifiable
business results from personalization efforts. 97% of marketers report seeing a positive impact
on their brand after personalizing the buying experience for prospects.
In order to make personalized product recommendations, you must leverage the details of users’
previous purchases and on-site searches to recommend relevant products.
Augmented reality (AR) and virtual reality (VR) are helping E-Commerce retailers overcome
one of their biggest challenges — the fact that their customers cannot try on or experience
products before buying them. With AR and VR, customers can virtually try on products, place
furniture within rooms of their homes, and more.
This personalized and interactive online shopping experience has led to greater adoption of this
technology. The augmented reality market is projected to have 2.4 billion users by 2023.
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7. Customer experiences improve thanks to better CRM integration.
Online retailers connect with customers through a variety of channels, including online
marketplaces, E-Commerce websites, chatbots, email, and social media, all of which must be
carefully managed to ensure the best customer experience.
To keep up, online retailers are implementing integrated E-Commerce CRM (customer
relationship management) systems. In addition to resulting in a better customer experience, CRM
E-Commerce integration provides a central location for customer data that can be used to make
marketing more effective. Sales data can also be used for improved inventory planning and
forecasting. Automated, synchronized data increases overall business efficiency by improving
order fulfillment and timely communication.
Next to built-in integrations and integrated E-Commerce CRM systems, online retailers often
use native integrations to connect their E-Commerce tool not only to CRMs, but to all the
channels and systems that gather customer data. That way, they ensure a smooth customer
experience across platforms and channels.
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Typically the most effective content involves storytelling and creating memorable experiences.
It’s also crucial whenever possible to ensure that any offers, ads, and promotions are tailored and
unique to each customer’s interests. Justin Ablett, global lead of Adobe at IBM iX, asserts that
“[customers] have no tolerance for poor digital experiences anymore.” A general digital
experience is a poor digital experience, emphasizing the importance of personalization.
Progressive Web Apps (PWAs) are websites accessed directly in a browser that provide the
high-converting features of a native app. These apps are not downloaded from an app store
platform.
While websites are optimized for users to get informational content, PWAs are designed to help
shoppers accomplish tasks quickly. They have fast and reliable features and functionalities that
create a highly engaging shopping experience.
Platforms enabling E-Commerce stores to sell directly through their social pages are increasingly
driving sales. With a simple click on a product link within a social post, consumers are
immediately taken to a product page where they can make a purchase.
As a result of this shift, social commerce sales are expected to reach upwards of 80 billion USD
in revenue by 2024.
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13. Video continues capturing consumer attention.
Using product videos on E-Commerce sites can increase sales and product understanding. 94%
of video marketers agree that video helps buyers understand their brand’s offerings, with 78% of
marketers saying that video directly increases sales.
This is because customers have more confidence in products when they see a video about them.
When done right, product videos can educate and encourage consumers to make a purchase.
Another plus is that they’re highly shareable via social media.
Chatbots use artificial intelligence to infer customers’ preferences and create a personalized
online shopping experience. It’s no wonder that this medium has grown in popularity — and will
continue to grow. Business Insider reports that by 2024, consumer retail spend via chatbots will
increase to $142 billion USD.
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Successful voice search strategies for E-Commerce retailers include implementing a solid SEO
strategy, building brand affinity with informational skills and actions, including product-feature
and review videos, and staying focused on delivering a superior customer experience.
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COMPANY PROFILE OF THE STUDY CONDUCTED
1. FLIPKART
● 21 state-of-the-art warehouses
Flipkart was founded in October 2007 by Sachin Bansal and Binny Bansal. It is one of India’s
leading E-commerce marketplaces and is headquartered in Bengaluru. The company initially
started as an online bookstore. Later, it also started selling other items such as movies and mobile
phones. Now the company offers more than 80 million products spread across more than 80
categories. It has the capacity to delivery eight million shipments per month.
Flipkart Group raised an additional US$ 1.2 billion from Walmart-led investor group in July
2020. Its valuation has reached US$ 24.9 billion post equity round. Flipkart has pledged to
completely transition to electric vehicles (EVs) by 2030 across its E-commerce value chain by
partnering with Climate Group’s global electric mobility initiative, EV100.
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Flipkart Internet Pvt Ltd – India’s largest e-commerce firm
2021 Flipkart signed a MoU with Jharkhand government and Federation of Indian
Chambers of Commerce and Industry (FICCI) to build infrastructure and industrial
development, including social development.
2020 On October 23, Flipkart acquired a 7.8% stake in Aditya Birla Fashion and Retail, a
subsidiary of the Aditya Birla Group, for Rs. 1,500 crore (US$ 203.8 million).
Flipkart recorded 110 order placements per second during their annual Big Billion
Days Sale event in October. The company stated that >50% orders were from Tier III
cities and beyond.
Flipkart partnered with PayTM for its annual Big Billion Days Sale event, offering
customers the convenience of making payments directly through the application with
the bonus of receiving PayTM cashbacks over and above Flipkart discounts.
On September 08, 2020, Flipkart signed an MoU with the Government of Jharkhand to
onboard Jharkhand’s artisans, weavers and craftsmen onto ‘Flipkart Samarth’—an
initiative aimed at enabling and handholding craftsmen from across India to set up an
online business.
Flipkart started wholesale e-commerce service in India.
Flipkart aims 100% transition to electric vehicles in next 10 years.
On July 09, 2020, Flipkart Group bought a minority stake in Arvind Youth Brands, a
subsidiary of Arvind Fashions Ltd (AFL), for Rs. 260 crore (US$ 36.88 million)
Introduced voice assistant to help customers buy groceries
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Flipkart brought US brand Nautica onboard to tap Indian fashion market
2018 Walmart acquired 77% stake in Flipkart for Rs. 111,824 crores (US$ 16 billion)
Launched fund to invest in early stage start-ups to seed innovation in areas related to
E-commerce ecosystem
2014 Flipkart became the first Indian internet retailer to register US$ 1.9 billion gross
merchandise value (GMV).
Acquired fashion e-seller Myntra.
2013 Launched PayZippy, an online payments solution for merchants and customers.
Sold 100,000 books in a single day.
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2012 Launched lifestyle and fashion portfolio. Launched electronics private label DigiFlip.
2011 Launches digital wallet. Delivery to more than 600 cities in India.
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2. PAYTM
● Total revenue of Paytm Payments Bank Ltd (PPBL) stood at Rs 2,100 crore (US$ 297.71
million) in FY20
Paytm, One97's flagship brand, is India's largest digital goods and mobile commerce platform -
inspired and driven by a commitment to great consumer experience. Paytm is also a leading
payment solutions provider to E-commerce merchants through its RBI approved semi-closed
wallet. One97 delivers mobile content and commerce services to millions of mobile consumers
through India’s most widely deployed telecom applications cloud platform. Headquartered in
New Delhi, One97 is more than 4,500 people strong with regional offices in Mumbai, Bengaluru,
Pune, Chennai and Kolkata and global presence across Africa, Europe, Middle East, and
SouthEast Asia.
Company Website: www.one97.com
2020 PayTM Money, a wholly owned subsidiary of PayTM, launched IPO investment
services in November. The Paytm interface will allow investors to apply for IPOs
through their UPI IDs, which is linked to bank accounts, and can change, cancel and
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resubmit their bids. It will also be equipped to track upcoming IPOs, view company
details, download prospectus and check performance of the past primary market
offerings.
In November, PayTM and Marg ERP entered a joint venture to launch an integrated
payments solution, called MargPay, for MSMEs. The solution is aimed at solving the
problem of payment reconciliation across multiple service platforms such as Net
Banking, UPI payments, Mobile Wallets and cards.
In September 2020, Paytm launched ‘Paytm Subscriptions’, a subscription service,
for businesses across the country.
Paytm has partnered with Alibaba-owned online marketplace Daraz to launch a new
gaming app in Bangladesh - Daraz First Games
Paytm First Games entered into a strategic partnership with Esports Players League
Paytm received IRDAI licence to enter insurance business
2018 In November 2018, One97 Communication Ltd crossed Rs. 98168.25 crore (US$
14.25 billion) in valuation
Paytm entered Japan as PayPay through a joint venture (JV) with SoftBank
Corporation and Yahoo Japan Corporation
2017 Paytm wins Best Digital Wallet award at the 11th IAMAI India Digital Summit.
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2016 Paytm wins the Mobile Wallet Provider of the Year Award in the B2C category at
the Frost & Sullivan Awards Ceremony.
2014- IRCTC, that handles the catering, tourism and online ticketing operations of the
Indian railways, added Paytm as one of the payment options
15 50 million wallet s registered on Paytm and Paytm ties up with Uber.
2013- Launched Semi closed wallet and reached a mark of 22 million registered customers.
Launched Paytm marketplace
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3. Infi beam
• More than 15 million stock keeping units (SKUs) of product across 40 product categories
Infibeam Corporation Ltd was incorporated on June 30, 2010 at Ahmedabad, Gujarat as a public
limited company under the Companies Act 1956. It’s an E-commerce company focused on
developing an integrated and synergistic E-commerce business model. The company owns and
operates the Infibeam BuildaBazaar (BaB) E-commerce marketplace which provides
cloud-based modular and customizable digital solutions and other value-added services to enable
merchants to set up online storefronts. As part of the integrated E-commerce ecosystem, it
operates Infibeam.com, a multi-category E-retail website. The company’s integrated business
model enables it to provide comprehensive multi-channel and multiscreen value-added services
to merchants.
Company Website: www.infibeam.com
Infibeam Inc
2020
In November, IAL received an approval from the National Company Law Tribunal
(NCLT), Ahmedabad, for the demerger of its various entities, including SME
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e-commerce service and e-commerce business undertaking. The company’s shares
climbed 10% and hit a high of Rs. 87, after this announcement.
In November, the company signed a contract with Oman’s second-largest bank, the
Bank of Muscat, to process the bank’s online card transactions of various payment
networks through its digital payment solution—CCAvenue Payment Gateway Service.
Its shares rose 3.27% to Rs 88.35, after the company said that it will provide digital
payment solutions to Oman's Bank Dhofar.
Infibeam Avenues announced its decision to invest in So Hum Bharat Digital
Payments to bolster its application to the RBI for a new umbrella entity (NUE) license
for retail payment systems.
In October, IAL entered into an agreement with Reliance Jio for its enterprise
solutions.
2017
Infibeam acquired cloud ERP solutions provider DRC System
2016 Infibeam lists on both National and Bombay Stock Exchange as Infibeam Avenues
Limited.
Infibeam signs MoU with IL&FS for implementing digital projects.
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2015 Infibeam.com was awarded Varindia Top 100 Most Trusted Companies Of The Year
2014.
2014 The Company acquired 100% of OdigMa Consultancy Solutions Private Limited.
2013 The Company integrated travel technology solutions in Buildabazaar platform for
travel and theme park ticketing.
2011 The Company launched 10 million stock keeping units (SKUs) across multiple
categories.
Infibeam Corporation Ltd was incorporated on June 30, 2010 at Ahmedabad, Gujarat as a public
limited company under the Companies Act 1956. It’s an E-commerce company focused on
developing an integrated and synergistic E-commerce business model. The company owns and
operates the Infibeam BuildaBazaar (BaB) E-commerce marketplace which provides
cloud-based modular and customizable digital solutions and other value-added services to enable
merchants to set up online storefronts. As part of the integrated E-commerce ecosystem, it
operates Infibeam.com, a multi-category E-retail website. The company’s integrated business
model enables it to provide comprehensive multi-channel and multiscreen value-added services
to merchants.
Company Website: www.infibeam.com
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Infibeam Inc
2020
In November, IAL received an approval from the National Company Law Tribunal
(NCLT), Ahmedabad, for the demerger of its various entities, including SME
e-commerce service and e-commerce business undertaking. The company’s shares
climbed 10% and hit a high of Rs. 87, after this announcement.
In November, the company signed a contract with Oman’s second-largest bank, the
Bank of Muscat, to process the bank’s online card transactions of various payment
networks through its digital payment solution—CCAvenue Payment Gateway Service.
Its shares rose 3.27% to Rs 88.35, after the company said that it will provide digital
payment solutions to Oman's Bank Dhofar.
Infibeam Avenues announced its decision to invest in So Hum Bharat Digital
Payments to bolster its application to the RBI for a new umbrella entity (NUE) license
for retail payment systems.
In October, IAL entered into an agreement with Reliance Jio for its enterprise
solutions.
2017
Infibeam acquired cloud ERP solutions provider DRC System
33
2016 Infibeam lists on both National and Bombay Stock Exchange as Infibeam Avenues
Limited.
Infibeam signs MoU with IL&FS for implementing digital projects.
2015 Infibeam.com was awarded Varindia Top 100 Most Trusted Companies Of The Year
2014.
2014 The Company acquired 100% of OdigMa Consultancy Solutions Private Limited.
2013 The Company integrated travel technology solutions in Buildabazaar platform for
travel and theme park ticketing.
2011 The Company launched 10 million stock keeping units (SKUs) across multiple
categories.
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Current Trends & Analysis-Online Travel Agencies
• Makemytrip, Yatra & Cleartrip are the major Indian online travel agencies (OTAs)
• Growth in India’s travel and tourism industry is the second fastest worldwide
• Largest component of the Indian e‐Commerce sector with a market share of about 70%
• India is poised to feature among the top five civil aviation markets in the world over the next
decade.
• The entry of low cost carriers (LCC) in the country made air travel affordable for a large
number of people.
• India is witnessing the entry of international players and mushroom‐ing domestic OTAs.
• OTAs have taken a physical form, with the establishment of new Makemytrip retail outlet in
Mumbai, to leverage their brand
• There is a clear perceived change in the approach of the OTAs, from e‐Travel to m‐Travel
• Emergence of Meta search engines which enable consumers to view & compare tariffs across
different portals
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Snapshot of the online travel industry;
Makem Cleartri
Particulars ytr ip p Yatra
Makemytrip
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Yatra
Cleartrip
From the chart given above, one can clearly see the first mover advantage that Makemytrip
enjoyed for a year before other firms forayed into this segment. Despite being a market
leader, its position is constantly under threat due to innovative marketing techniques &
erratic client‐base. Both Yatra & Cleartrip can be seen as having eaten into the market share
of MMT.
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Current Trends & Analysis- E-retail
• There are many players in this segment, but the bigger players are notably Flipkart, Amazon
& Snapdeal
• Online retailers are moving to the marketplace (consignment) model from the
inventory‐holding model`
• Online retailers are developing in‐house logistical capabilities
• Complex tax structures are making decisions relating to warehouse locations difficult for
online retailers
• COD has emerged as a preferred payment choice for customers, accounting for at least 60%
of transactions
• Due to the cap of 51% FDI allowed in B2C sector, dilution or complete exit is prohibited,
which proves to be a hindrance to foreign investors or buyers
• It has attracted investments of over $3bn due to the promising high growth nature of the
business from PE Funds &VCs (domestic & international)
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Snapshot of the e‐retail industry;
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Search interest generated over the internet
Flipkart
Amazon.in
Snapdeal
The above graph defines a battleground, between the three largest e‐tail players in India.
Clearly, Flipkart had an upper hand going in, but the coffers of Amazon & Yes Bank backed
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Snapdeal have flattened the playing field. The constant spikes are explained by the large
scale sales that the portals have in place. One can say that Flipkart set in place a red carpet
welcome for the other two.
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Current trends- Miscellaneous
Entry of corporates;
• Mukesh Ambani’s Reliance Retail, India’s largest offline retail chain, is planning to
enter ecommerce space, according to a recent report in The Economic Times.
• The USD 40‐billion Aditya Birla Group will launch a project to identify opportunities in
the ecommerce space, the Economic Times said in a recent report.
• The Mahindra Group, which has a presence in the retail sector through a few offline
specialty retail units, is looking at small steps to build its presence in the online retail
market, Anand Mahindra told CNBC‐TV18 recently.
• The pioneer of organized offline retailing in India is not too far behind. Future
Group’s Kishore Biyani plans to launch Big Bazaar Direct, which will launch all of
Big Bazaar’s products on an online platform by 2014.
• Bangalore‐based BigBasket.com is yet another start‐up in the online food and grocery
space. The start‐up is also present in Mumbai and Hyderabad. BigBasket.com has shown
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huge growth potential and is aggressively planning to expand its presence in major metro
cities in the country.
• Launched three years ago, Bluestone.com is based on the concept of a virtual jewelry
mall for brands and vendors to market their products.
• TinyOwl, a food ordering app, launched in Mumbai leads the home delivery segment, in
direct competition with the Rocket Internet group’s Foodpanda.in
The growth rate experienced by a niche player is far more phenomenal than any other sector,
primarily because the models are extremely differentiated & they aim to appease its customers
by offering a unique experience.
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Financial Analysis
An analysis of the major e‐commerce players in the industry reveals poor profitability figures.
This is down to the extreme expansionist policies currently implemented as market penetration
& customer loyalty are top priorities. For any e‐Commerce firm, there are ‘levels’ of
profitability in the consumer internet space as follows;
The following is a snapshot of the expenditure vis‐à‐vis the sales for some varied players in the
e‐commerce industry;
The above clearly indicates that the newer industry players can barely cover the cost of the
merchandise they sell, though the older ones have now slowly stabilised and have a sound
revenue model in place.
Flipkart, Snapdeal & Myntra are evidently at a stage of risky expansion, clearly indicated by an
average expense ratio of 1.85. Jabong, owned by Rocket Internet, who’s typical strategy is to
clone their website in different markets, invest massively to aggressively acquire customers to
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raise their valuations, then sell and exit.
InfoEdge & JustDial are established industry players whose focus on sustainability is not
surprising at all.
Makemytrip, though quite old, is now engaged in a turf war with other new players, hence the
negative profitability.
As can be seen below, the expense to sales ratio is more than 1 in most peers;
Myntra Jabong
Makemytrip JustDial
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REPORT
● The Indian E-commerce industry has been on an upward growth trajectory and is
expected to surpass the US to become the second largest E-commerce market in the
world by 2034. India's e-commerce sector will reach US$99 billion by 2024 from US$ 30
billion in 2019, expanding at a 27% CAGR, with grocery and fashion/apparel likely to be
the key drivers of incremental growth. According to Forrester Research, Indian
e-commerce sales rose by ~7-8% in 2020. The Indian online grocery market is estimated
to reach US$ 18.2 billion in 2024 from US $1.9 billion in 2019, expanding at a CAGR of
57%.
● The Indian e-commerce sector is ranked 9th in cross-border growth in the world,
according to the Payoneer report. Indian e-commerce is projected to increase from 4% of
the total food and grocery, apparel and consumer electronics retail trade in 2020 to 8% by
2025. India's e-commerce orders volume increased by 36% in the last quarter of 2020,
with the personal care, beauty and wellness (PCB&W) segment being the largest
beneficiary. E-commerce sales in India were estimated to increase by only 7-8% in 2020,
compared with 20% in China and the US. The e-commerce market is expected to touch
the US$ 84-billion mark in 2021 on the back of healthy growth in the Indian organised
retail sector.
● As most Indians have started shopping online rather than stepping outside their houses,
the Indian e-commerce sector witnessed an increase. India's e-commerce festive sale
season from October 15 to November 15 in 2020 recorded Rs. 58,000 crore (US$ 8.3
billion) worth of gross sales for brands and sellers, up 65% from Rs. 35,000 crore (US$ 5
billion) last year.
● According to a Bain & Company report, India’s social commerce gross merchandise
value (GMV) stood at ~US$ 2 billion in 2020. By 2025, it is expected to reach US$ 20
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billion, with a potentially monumental jump to US$ 70 billion by 2030, owing to high
mobile usage.
● Much of the growth in the industry has been triggered by increasing internet and
smartphone penetration. As of September 2020, the number of internet connections in
India significantly increased to 776.45 million, driven by the ‘Digital India’ programme.
Out of the total internet connections, ~61% connections were in urban areas, of which
97% connections were wireless.
● Smartphone shipments in India increased by ~8% y-o-y to reach 50 million units in the
first quarter of 2020, driven by positive shipments of all smartphone vendors in the
market. Samsung led the Indian smartphone market with 24% shipping share, followed
by Xiaomi at 23%.
● The Government of India's policies and regulatory frameworks such as 100% Foreign
Direct Investment (FDI) in B2B E-commerce and 100% FDI under automatic route under
the marketplace model of B2C E-commerce are expected to further propel growth in the
sector. As per the new FDI policy, online entities through foreign investment cannot offer
the products which are sold by retailers in which they hold equity stake.
● As of February 15, 2020, the Government eMarketplace (GeM), listed 1,071,747 sellers
and service providers across over 13,899 product and 176 service categories. For the
financial year 2020-21, government procurement from micro and small enterprises was
worth Rs. 23,424 crore (US$ 3.2 billion).
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● Through its Digital India campaign, the Government of India is aiming to create a
trillion-dollar online economy by 2025. It has formed a new steering committee that will
look after the development of a government-based e-commerce platform. The new
committee, set up by the Commerce Ministry, will provide oversight on the policy for the
Open Network for Digital Commerce (ONDC), which is an e-commerce platform that the
government is backing for the development. The ONDC will serve as the infrastructure
for setting up the final storefront, which will be similar to Flipkart and Amazon.
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CONCLUSION
After having been in the nascent stage for the longest time, the e‐commerce industry is finally
starting to enter the mainstream. The major entrants in this sector have primarily been start‐ups,
which need an influx of money to follow their business model. Here, the demand for
non‐gearing funds comes in, the supply of which, a VC or PE firm can best assuage. Hence,
there is a need to establish the value of such enterprise, using one or more means which are
indicative of the actual value.
The e‐commerce space in India is still evolving and companies have limited history. Many of
them function at negative operating cash flows and are dependent on investments from venture
capital firms. Using traditional valuation methods like DCF Valuation and Relative Valuation
remain a challenge in this segment.
According to Grant Thornton, the nearly Rs 20,000 crore investment activity that e‐commerce
saw this year so far was driven in part by sky‐high valuations.
The commonly used valuation method is the annualized Gross merchandise value (GMV). As
most of the E‐commerce firms haven’t made any profits and do not have a positive cash flow,
this is used as an approximate estimate for valuation. The GMV is multiplied by about 2‐2.5
times to get the valuation of the firm.
But, as witnessed in the sector in India, even a GMV multiple of five‐ten is not unusual as seen
in the case of Flipkart, Myntra, etc. This is primarily because the Indian market is nowhere
close to being saturated & can be exploited by the existing & new players. This is very good for
the sector & even economy for a short term, but if successful exits cannot be made by the VCs
& PE funds, it may spell doom for the sector, as in the current momentum, any shortage of
funds would hurt the operations of these players.
Recent estimates suggest that leading Indian e‐tailers are valued at about four‐to‐six times their
revenue (on an annualised net run‐rate basis). This pre‐IPO multiple seems fairly low in
comparison with the 28‐times revenue multiple that Amazon generated at the time of its IPO
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(and has since justified). It needs to be noted that Amazon at the time was generating a mere
USD 16 million in revenue (while the top India e‐tailers are much larger), but then we are
comparing a 28‐times multiple to a 4–6‐times multiple. The Indian e‐tailers' revenue multiple
still looks reasonable in comparison with Amazon's current multiple of two, when their
respective revenue growth rates are taken into account. Amazon's revenue has grown by
30–40% over the past few years, whereas Indian e‐tailers have achieved more than 200%
growth in the past two years and still have most of their growth ahead of them.
Finally, any comparison would need to take India's status as a growth market into account. The
growth in India's Internet industry commands at least a two‐to‐three times higher multiple than
the multiples recorded in mature markets. By this measure, the four‐to‐six revenue multiples
(compared with the 2‐times multiple for Amazon) again seem reasonable.
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Interesting Facts
• Myntra has planned to shut its web portal by the year end, hence making its mobile
app as its sole point of contact with its users
• The North Eastern states of India contribute to almost 20% of e‐Commerce transactions
• The e‐Commerce industry is slated to hire over 1,00,000 professionals in the current
calendar year
• Contribution from tier 2 & tier 3 cities, exceed the contribution by tier 1 city, indicating the
outreach of e‐Commerce
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REFERENCES
https://www.ibef.org/industry/ecommerce.aspx
https://en.wikipedia.org/wiki/E-commerce
https://www.investindia.gov.in/sector/retail-e-commerce/e-commerce
https://www.moengage.com/blog/5-e-commerce-technology-trends-that-will-shape-the-futu
re/
https://blog.hubspot.com/sales/ecommerce-technology-trends
https://acquire.io/blog/ecommerce-technology-trends/
https://www.sana-commerce.com/blog/technologies-used-in-ecommerce/
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