FORE SCHOOL OF MANAGEMENT - NEW DELHI

CONSUMER BEHAVIOR
AND E-COMMERCE IN
INDIA
UNDERSTANDING THE CHANGES IN
CONSUMER BEHAVIOR IN INDIA IN
RESPONSE TO E-COMMERCE












SUBMITTED BY:
GROUP 1
SHAGUN GAURISARIA 211133
SRISHTI MAGAN 211143
AANCHAL MAHAJAN 211160
VISHESH KALIA 211166
PRANAV BHARADWAJ 211171

1

CERTIFICATE

This is to certify that Group 1 (ONE) Members Mr./Ms. Shagun Gourisaria, Srishti Magan,
Aanchal Mahajan, Vishesh Kalia and Pranav Bharadwaj Roll Nos.211133, 211143, 211160,
211166 and 211171 have completed their mini project report entitled Consumer Behavior in
e-Commerce: UNDERSTANDING THE CHANGES IN CONSUMER BEHAVIOR IN
INDIA IN RESPONSE TO E-COMMERCE towards part fulfillment of the requirements for
the award of the Post Graduate Diploma in Management (FMG-21) 2012-2014.

This Mini Report in Consumer Behavior is the result of their own work and to the best of my
knowledge no part of it has earlier comprised any other report, monograph, dissertation or
book. This project was carried out under my overall supervision.






Date:
Place:



Dr Anupam Narula
Internal Faculty Guide










2

CONTENTS

TABLE OF FIGURES ............................................................................................................................ 3
TABLE OF TABLES ............................................................................................................................. 3
ACKNOWLEDGEMENT ...................................................................................................................... 4
EXECUTIVE SUMMARY .................................................................................................................... 5
INTRODUCTION .................................................................................................................................. 6
LITERATURE REVIEW ....................................................................................................................... 8
METHODOLOGY TO CONDUCT THE STUDY .............................................................................. 11
DATA COLLECTION ......................................................................................................................... 13
ANALYSIS AND INTERPRETATION .............................................................................................. 15
Validation of Data w.r.t the objectives of the project: ...................................................................... 15
Validation of the results .................................................................................................................... 32
CONCLUSION ..................................................................................................................................... 38
RECOMMENDATIONS ...................................................................................................................... 39
REFERENCES ..................................................................................................................................... 40
APPENDICES ...................................................................................................................................... 41
APPENDIX 1 SAMPLE QUESTIONNAIRE .................................................................................. 41
APPENDIX 2 COMPANY PROFILES ........................................................................................... 43
FLIPKART ................................................................................................................................... 43
JABONG ....................................................................................................................................... 44




3

TABLE OF FIGURES

Figure 1 Number of respondents in each age bracket ........................................................................... 19
Figure 2 Increase in internet usage ....................................................................................................... 20
Figure 3 Use of internet for buying goods ............................................................................................ 20
Figure 4 Reasons for internet use .......................................................................................................... 21
Figure 5 Internet over actual buying ..................................................................................................... 22
Figure 6 Actual buying over internet .................................................................................................... 22
Figure 7 Maximum used site ................................................................................................................. 23
Figure 8 Main attraction of Flipkart ...................................................................................................... 24
Figure 9 Main attraction of Jabong ....................................................................................................... 25
Figure 10 Expectations from e-commerce ............................................................................................ 26
Figure 11 Consumer Decision Making model ...................................................................................... 33
Figure 12 Motivation Model ................................................................................................................. 34
Figure 13 Tri-component model of attitude .......................................................................................... 35
Figure 14 Four parts of Self-concept .................................................................................................... 36


TABLE OF TABLES
Table 1 Summarised Data ..................................................................................................................... 14

4

ACKNOWLEDGEMENT

We would like to thank all the people who have helped us directly or indirectly in completing
this project successfully.
First of all we would like to extend my utmost regard to FORE School of Management which
provided us such a great opportunity and gave us a chance to work on such a relevant topic.
We are highly indebted to our project guide, Mr. Anupam Narula, under whose guidance we
have been able to complete this project successfully.
We would also like to thank all the respondents who spared their precious time and enabled
us to gain a better insight about the project.

GROUP 1
CONSUMER BEHAVIOR SECTION C
FORE School of Management



5

EXECUTIVE SUMMARY

The world of business has continuously evolved over time in different ways. However there
are certain major shifts that leave a considerable mark over how the business community
works and operates. The transition from barter system to use of coins and paper money, the
concept of globalization and the latest the advent of e-commerce which has turned the
business world from bricks to clicks, to cite a few.
Making the concept of Global Village a reality, internet has today surpassed countless
borders to become an integral part of the age old buying and selling process. Thus, taking into
the account the power that internet holds today, it becomes very necessary to understand how
is it that the consumer of today has embraced the concept of e-commerce, especially in India
that has only recently warmed up to the concept.
Hence, for the purpose of this project two major e-commerce giants in India were selected,
Flipkart and Jabong. While the former is responsible for converting the majority of the Indian
population from hesitant one time users to regular internet buyers, the latter managed to make
a space for itself when the competition in the e-commerce market was huge. Flipkart, with its
concept of cash-on-delivery managed to eliminate the main fear that the Indian consumer had
i.e. risk of online money fraud. Similarly, Jabong also introduced a whole new concept of try
and buy and eliminated the fear that consumers had that the online product will not match the
actual product.
For this purpose the consumers of various age and income segments were interviewed and a
descriptive, qualitative analysis was carried out to find how the consumer behaviour is
influenced by e-commerce. The major findings of the analysis are as follow:
1. There has been considerable growth in the field of online retail.
2. There has been a positive change in consumer behaviour regarding online retail.
3. Flipkart and Jabong have understood consumer psychology to target consumer fears
through their marketing campaigns.
On the basis of the analysis carried out and our understanding of the whole process, certain
recommendation were put forth regarding the ways in which e-commerce sites can further
boost their business. The major recommendations have been cited below:
1. Online retail should launch using a unique strategy that caters to specific consumer
benefits
2. Online retail should look for user friendly approach through easy navigation and easy
payment
3. Online retail should look for offline advertisements after establishing themselves
online.
4. Online retail should work on enhancing post-purchase experience as well.
6

INTRODUCTION

Project Title: To understand how e-commerce brand create awareness, acquire customers
and change customer buying behaviour simultaneously.
As the project title describes, the group decided to enhance their understanding of consumer
behaviour by studying the e-commerce websites and how they acquire and manage their
customers. Today e-retailing is one of the fastest growing sectors in the business world. The
business world is no longer limited to being just a bricks industry. In fact it has evolved from
even a brick and click industry. Today a significant if not the major part of retail sector as
well as other areas has turned into a purely click industry. The prime examples being Amazon
and Flipkart.
Keeping in mind the rapid growth of e-commerce it seemed best to analyse the industry
giants of e-commerce in India so as to gain an in-depth understanding as to how it is that the
consumer behaviour has changed in response to e-commerce today. Moreover, the project is
also an attempt to understand the consumer attitude towards both the current state and future
expectations from the industry.
Two industry giant within e-commerce, Flipkart (the first major success story under e-
commerce in India) and Jabong (the first to launch try and buy concept) were the two
companies selected to understand the consumer behaviour.
Flipkart, as a choice of e-commerce website is almost self-explanatory. An organisation that
started in 2007 with online sale of books has today diversified into as many varied categories
as possible. Home appliances, entertainment cds, mobiles, and the latest song download is
just a brief example of the categories in which Flipkart has branched in a short span of just 6
years. In addition to the variety of offerings that it has Flipkart was also the pioneer in
overcoming the Indian consumers hesitation of online shopping by introducing and
popularizing the concept of cash-on-delivery. These and many other features make Flipkart
one of the best examples as well as research subject for understanding consumer behaviour in
e-commerce field.
The second organisation selected for comparison and further analysis is Jabong. A recently
started organisation (date), Jabong has managed to climb up the success ladder very quickly.
Jabong makes for an interesting research subject because despite being such a late entrant it
has managed to make a place for itself in the market. In addition to this, just like Flipkart,
Jabong also introduced a new concept to attract customers i.e. the try and buy concept,
wherein consumers can try on products before actually buying them. The adoption of this
concept in itself highlights the understanding that Jabong has of the Indian consumer mind-
set.
Considering the apparent similarities and dissimilarities between Flipkart as well as the time
difference in their launch and subsequent success, it is believed that these two organizations
will be able to provide a comprehensive comparison of the changes that have taken place in
7

the consumer behaviour today. Moreover by studying the underlying characteristics of both
of these organisations it will be easier to understand that what strategies does an e-commerce
organisation needs to adopt in order to attract and then hold the attention of its consumers.
Project Objectives:
The project objectives are as follow:

To understand the marketing strategy of e-commerce organisations by studying
Flipkart and Jabong.

To understand the thought process of consumers regarding e-commerce.


To compare and contrast the two organisations and analyse and understand the
different approaches and why they worked.

To understand how is it that the consumer behaviour can be changed through e-
commerce.


Relevance of the Study:
The topic is relevant with respect to the subject consumer behaviour because of the following
reasons:
It gives an idea as to how e-commerce sites study, use and change the behaviour
of its consumers.

It gives an idea as to how all areas (marketing in form of display, finance in form
of security etc.) of a business integrate to efficiently perform one single function
attract consumers


It relates the learning of the course to real life scenario, mainly the roles played by
the marketing strategy, marketing research etc. in an organisation.

It provides an understanding of the features that set apart one e-commerce site as
different from another, especially in light of the rise in internet traffic.


8

LITERATURE REVIEW

Internet has been changing the way consumers shop and purchase goods and services, and has quickly
transformed into a global phenomenon. Numerous companies are using the Internet with an aim of
reducing their marketing costs, thereby cutting down the price of their products and services in order
to stay ahead in an extremely competitive marketplace.
Companies also use the Internet to deliver, communicate and publicize information, to sell their
products, to take feedback and also to conduct various satisfaction surveys with their customers.
On the other hand, Customers use the Internet not only to buy various products online, but also to
compare prices, product features and after sale services they will receive if they purchase the product
from a particular store. Many experts are optimistic about the prospect of online business.
Case, Burns, and Dick (2001, p.873) suggest that among the undergraduate and MBA students, factors
such as Internet knowledge, income, and education level play a very important role in forecasting the
Internet purchases.
Bellman, Lohse and Johnson (1999) have studied the relationship among demographics, personal
characteristics and attitudes towards online shopping. These authors have found that in the U.S.,
people who have a more wired lifestyle and who are more time-constrained are likely to buy online
more frequently, i.e., those who use the Internet as a routine tool and those who are more time starved
prefer shopping on the Internet.
Na Li and Ping Zhang, in their study of Consumer Online Shopping attitudes and Behaviour
identified five factors that directly determine attitude towards online shopping. These are External
environment, demographics, personal characteristics, vendor/service/product characteristics and
Website quality.
Out of these, vendor/service/product characteristics and Website quality are said to have a direct
influence on consumers purchase online. According to the authors, Decision-making is the stage
before consumers make an online transaction or purchase, and is sometimes considered to be a
behavioural stage.
The depicted relationships among attitude, intention, decision-making, and online purchasing are
based on the theory of reasoned action (Fishbein and Ajzen 1975), which attempts to explain the
relationship between beliefs, attitudes, intentions, and actual behaviour. Consumer satisfaction is
considered to be a separate factor, which can exist at all possible stages depending on consumers
involvement during the online shopping process.
The relationships between satisfaction, attitude, intention, decision making and online purchasing are
proposed to be two-way relationships due to the reciprocal influences of each on the other. In
addition, two of the antecedents, vendor/service/product characteristics and Website quality, have
been found to have direct impact on consumer satisfaction.



9



Vanitha Swaminathan, Elzbieta Lepkowska-White and Bharat P. Rao in their Research analysis on
The internet and Consumer Buying Behaviour suggest that consumers who are primarily motivated
by convenience are more likely to make purchases online and those who value social interactions are
less interested in the Internet use for shopping and thus shop less frequently on the Internet and spend
less money on e-commerce.
This in itself is valuable because it implies that retailers have to alter their offerings, and deliver very
specific solutions to each segment of customers. These findings should be valuable for marketers for
the purpose of segmentation and targeting their prospective buyers and also for customization and
personalization of products.
In addition, it also provides a basis for marketers to differentiate themselves from competitors. The
role of social interaction as a constraint of Internet shopping is also an important result. While it may
not be possible to imitate all the features of a physical store and the ability of the physical world to
provide unique shopping experiences but marketers should take advantage of the online discussion
groups, chat forums etc. in order to enhance the level of social interaction at various sites. This is
being done by some Internet retailers who provide links to various discussion forums, thereby tying to
incorporate the aspect of social interaction with visits to their Web sites.
Mayer et al. [1995] developed a model that combines traditional marketing philosophy on consumer
motivation to buy and the trust model. In this model, trust propensity; which is a personality trait
possessed by buyers; is an important originator of trust.
In Internet shopping, there is not much information available to the buyer regarding the seller, prior to
purchase. A buyer with a high propensity to trust will more likely be a potential customer than a buyer
with a lower propensity. Mayer et al. also suggested that ability, benevolence and integrity constitute
the main elements of trustworthiness.
10

Ability refers to skills, competencies and characteristics that a seller has in a specific domain. In this
context, sellers need to convince buyers of the competence of their companies in the Internet shopping
business.
Benevolence is the extent to which the buyer as wanting to do good perceives the seller. Sellers have
to convince buyers that they genuinely want to do good things for buyers, rather than just maximize
profit. Integrity refers to the buyers perception that the seller adheres to a set of principles which the
buyer finds acceptable.
Guo Jun, in his study on Consumers Attitude towards Online Shopping in China suggested that the
perceived marketing mix and perceived reputation have a great impact on consumers attitude of
adopting online shopping.
According to him, by understanding these two key drivers that have impact on online consumers
attitude towards online shopping, online retailers would be able to formulate and implement their e-
business strategy efficiently and effectively and possess stronger competitive advantage.
For example, online vendors should pay more attention to applying the marketing mix of high product
quality, lower price, discount, free delivery fee, or free gift and do their best to build, enhance, and
maintain their good reputation.















11

METHODOLOGY TO CONDUCT THE STUDY

Herein, we would like to give an overview as to how the project was executed, keeping in
view the objectives of the study. The main objectives of the project are as follow:
To understand and analyse the growth of e-commerce in India through examples of
Flipkart and Jabong.
To understand and analyse the change in consumer behaviour regarding e-commerce
in India.
To understand, analyse and compare the differences and similarities in the marketing
strategies of Flipkart and Jabong to see what made them successful.

In order to study the aforementioned objectives, major mediums selected were research
through secondary sources, as well as primary data collection in the form of personal
interviews using a sample questionnaire. The answers to these questionnaires and interviews
responses were recorded and analysed using pie charts, line graphs and other such tools.
The target audience for e-commerce is essentially any normal consumer who has access to
the internet. However since exploring the whole wide population of internet buyers was
impossible, a target sample was selected using random judgmental sampling. This sample
consisted of participants from different age groups mentioned below:
16 to 20 years
20 to 25 years
25 to 30 years
30 to 35 years
35 to 40 years
Within these age brackets 4 to 5 people were asked to respond certain basic questions in the
form of a questionnaire and interviews were conducted on the spot to gather an understanding
of their behaviour and attitude towards e-commerce and if there has been any significant
change.
The relevant parameters that defined that basis for preparing a questionnaire and the flow of
interview are as follow:
Internet usage frequency
Purpose of internet usage
Considerations for choosing a site
Benefits (perceived/actual) of internet buying
Disadvantages (perceived/actual) of internet buying
Reliability on internet or lack of it and why?
12

On the basis of the aforementioned questionnaire as well as impromptu interviews conducted,
the data was collected of 35 respondents across the various aforementioned age brackets. The
data collected was recorded and further analysed using Microsoft Excel output and in the
analysis section this output has been analysed and validated with the help of various theories
of consumer behaviour that have been studied in the course of the subject.






















13

DATA COLLECTION

In the project both primary and secondary sources of data collection were used. The primary
source was a questionnaire, the data of which has been recorded and showed subsequently.
As far as the secondary sources are concerned, reports of pre-existing surveys regarding
internet users in India, general trends on internet usage and marketing strategies of Flipkart
and Jabong as displayed through their advertisements and displays etc. have been perused.
Another important aspect of data collection was that all sources were complementary to one
another. This implies that the questionnaire was designed keeping in view the major findings
through the secondary sources so as to enable us to validate the findings.
Using primary resources in the form of questionnaires and secondary resources in the form of
records of internet users, reviewing marketing campaigns of Jabong and Flipkart etc. the data
for 35 people were collected. This data was then recorded in an excel sheet and has been
presented below using pie-charts, graphs etc.
The broad data is as below:
Number of Respondents 30
Age brackets 5 (18-20, 21-25, 26-30, 31-35, 36-40 years)
Medium of questioning Primarily through questionnaires (both online and offline) and
through impromptu interviews.
The specific data is as below:
CRITERION NUMBER OF
RESPONDENTS
Number of Respondents in different age brackets
16 to 20 years
21 to 25 years
26 to 30 years
31 to 35 years
36 to 40 years


8
6
4
5
7
Increased Internet Usage
Yes
No

25
5
Used internet buying
Yes
No

20
10
14

Reasons for internet usage
Information access
Ticket Booking
Social Networking
Internet Buying


5
8
10
7
Why internet over actual buying?
Ease of purchase
One stop access to variety
Ease of comparison
Quicker process (No rush/waiting)


12
4
6
8
Why actual buying over internet?
Risk of money fraud
Risk of product not meeting expectations
Lack of a return policy
Delivery period (Product not received instantly)
Expectations from an e-commerce site
Proof of money security
Policies for return of goods
Greater discounts
Faster Delivery


13
7
6
4

7
11
8
4
Most common site among the following
Flipkart
Yebhi
Jabong
Any other


12
5
9
4
Main attraction of Flipkart
Variety of products
Cash on delivery option
Timely delivery
N/A (In case youve never used Flipkart)


7
14
6
3
Main attraction of Jabong
Variety of Products
Features of try and then buy
Timely Delivery
N/A(In case youve never used Jabong)


5
12
7
6
Table 1 Summarised Data
15

ANALYSIS AND INTERPRETATION
Validation of Data w.r.t the objectives of the project:

Our first objective of the project was to understand and analyse the growth of consumer
behaviour in I ndia. Now, for this purpose the secondary sources of data were used. As per
the reports published, and nationwide surveys, following were the major highlights:
1. There is an expectation that Indian internet users will become nearly tripe from 125
million in 2011 to 330 million by 2016. This rise in Internet penetration will lead an
increase in digital influence on people's purchase decisions.

2. According to 40 % of India's 90 million urban Internet users online activities like
price comparison and product research influence what they buy. In categories such as
appliances and consumer electronics, 40 to 60 % of buyers have access to the Internet,
and are relying on the Internet for product research or price comparison.

3. Although online retail is more representative of individuals from higher income levels
even 18 % of the lower-income strugglers (whose annual household income is
less than Rs 1.5 lakh) have I nternet access.

4. Another observation was that 30% of online buyers were drawn to Internet shopping
for discounts. Another benefit that was valued was the convenience of shopping
from home (nearly 37% respondents), and almost 29 % people appreciated the
expanded variety of products available online compared with what is available at
brick-and-mortar stores.

5. Overall, the I nternet has the highest penetration among people between ages 18 to
24 years (48 %) and the lowest among those older than 54 years (6 %).

Today the Indian digital market is growing fast even as the internet user base rose by 50 per
cent. The latest data by comScore revealed that the total internet user base in I ndia grew to
139 million (inclusive of all devices and touch points used to access the internet) in
December 2012. This was a burgeoning 50 per cent growth as compared to 90 million in
2011.
Out of this, around 44 million users are logging in for online shopping. I n terms of online
retail penetration, I ndia turned out to be the fifth largest, with Germany, China, and the US
16

and Japan occupying the top four slots. India had 62 per cent retail category penetration,
compared to a global average of 74 per cent. Retail is also the fastest growing category,
adding over 15 million users in the past 12 months.
Among sub-categories, apparel is the fastest growing with 208 per cent growth. Unique
visitors to this segment grew threefold from 4 million in December 2011 to 12 million in
December 2012. Home furnishing, healthcare and movies have also seen more than 100 per
cent growth, according to the report. Also, people are doing more comparisons before the
actual purchaseas visitors to comparison shopping sites grew from 6 million to 10 million in
December 2012.
I n terms of payments, cash on delivery remains the most popular although the numbers are
decreasing. A total of 58 per cent of transactions are still done the COD way while in e-
payments, Visa is the most popular with 18 per cent of transactions. Of the total online
transactions, retail contributed around 15.6 per cent in the third quarter of 2012, almost
double of 7.6 per cent clocked in the first quarter.
At a session of the seventh I ndian Digital Summit organized by the Internet & Mobile
Association of India aptly titled e-Commerce 2.0 Emerging Trend, Mukesh Bansal, the
founder of Myntra.com, reiterated that acceptance for e-commerce has evolved in 2012 and
will witness growth in tier 2-3 cities. However, Murlikrishnan B, Country Manager of eBay
had a word of caution. According to him, While the year 2012 was a year of engagement
and supply dynamics to evolve, 2013 will be a year of reality check. However, according to
Alok Mittal the new e-commerce companies have to evolve unique strategies in the
competitive world. With the market size still being nave, the need to integrate all mediums to
reach consumers across platforms is required. As Sachin Bansal, founder-Flipkart put it,
Better online experience is what e-commerce companies should aim at.
As per data collected by Livemint.com, the e-commerce landscape in India is shaping up to
be one of the global powerhouses in terms of traffic. In November last year, 27.2 million
users above the age of 15 years - or 59% of the 46.4 million Internet audience in the country -
engaged in retail activity compared with 23.02 million - or 56% of the 41.2 million users in
2010. Plus.com Score, the most trusted site for statistics related to all things digital, reported
in December 2011 that, with Online Shopping Taking Off in India: Retail Web Audience
Grows 18 Percent in the Past Year as Nearly 3 of Every 5 Internet Users Now Shop Online.
Coupon sites were among the most popular category of online retail outlets with 7.6 million
visitors in November, representing an increase of 629 percent from the same period last
year.
The data presented above is indicative of a deep paradigm shift in the Internet users in India.
Consumer retail is today moving from brick-and-mortar stores to click stores as people are
becoming more and more net savvy. Currently the online retails industry is India is growing
at such a rapid space and has occupied such a considerable position of importance for
consumers, which most of the traditional brick industries today have or are planning to have a
presence on the world of internet.
17

Despite this growth in popularity for online retail, it has been found that even today the
online retail in I ndia accounts for less than 1% of the total retail market, and thus, a huge
growth potential is presented for both the international and the domestic retailers. As far as
consumer behavior is concerned, it has been revealed that metros or tier-1 cities have more
awareness about online retailing as compared to tier-2 and tier-3 cities. It was also found that
electronic products are more popular among online buyers. In order to increase the online
retail penetration in India, it is important to understand what factors have driven the online
retail as of now. Thus, these factors are:
1. Consumer need and convenience to buy these products online
2. Several start-up ventures getting the required funding from Venture Capital funds
or Private Equity funds
3. Aggressive marketing by the players going online
Now, as per the India B2C E-Commerce report 2013, in India the Mass Merchants and
Online-Travel-Providers are especially popular among Internet Users in India. In 2012,
online mass merchants Flipkart and Snapdeal, as well as online clothing retailer Jabong, had
the highest number of unique visitors. Despite continuous growth, B2C E-Commerce
represents less than 1 percent of total retail sales in India. The product category clothing and
accessories has especially high potential, because it is only rarely ordered online, due to the
impossibility of trying the products in advance. This is exactly why Jabong managed to create
a space for itself in so short a time.
The online user growth has primarily been fuelled with improved network infrastructure and
growing need of online content consumption. However the growth of internet in India has
already been discussed above. The following points highlight the future growth points for the
internet retail industry
1. The large-scale rollout of 3G and 4G broadband services, the National Broadband
Plan and much expected opening of the Retail sector will certainly usher new business
opportunities for e-Commerce in the country.

2. The Internet also brought significant changes the way businesses and e-Commerce are
being conceptualized and run today.

3. The growth of Cloud based technologies is redefining the e-Commerce business
models. Today, companies can start their e-Commerce ventures with much less
CAPEX, and quicker go to market strategy. In the current Indian scenario, the online
model compliments the brick-and-mortar model rather than completely replacing it.

18

Today Indian e-Commerce market has been buzzing due to significant progress achieved in
all the four pillars of e-Commerce: technology, logistics, payment and marketing. This can
be seen through the following points:

Technology Platforms/ products have been developed in various robust and scalable
technologies such as Enterprise Java, Microsoft Technologies as well as open source
technologies (primarily Magento framework).

Logistics The level of connectivity between Supply chain management and last mile
logistics and end customers have greatly improved over the past few years. The
increasing presence of international logistics player in India such as FedEx (acquired
AFL) and DHL (acquired Bluedart) etc. has compelled the Indian players to upgrade
their logistics services offerings.

Payment Other than usage of Cards and Net Banking payment modes, the newer
models like Cash on Delivery (COD) and other consumer centric payment options
such as EMI for purchases has boosted the growth of online commerce. Usage of
Debit cards for shopping as well as credit card penetration in the country is also
increasing year-on-year.

Marketing On the digital marketing side, people have partnered with Google, who
provide analytics to retailers, and demonstrated that usage of Ad Words can drive
traffic.








19

The following data has been collected through the questionnaire and has been analysed in
order to understand the change in consumer behaviour regarding e-commerce in India (i.e.
the second objectives of the project).
The major respondents as per the different age groups have been depicted below:


Figure 1 Number of respondents in each age bracket

As can be seen from the graph above the majority of respondents belong to two age groups,
i.e. from 16 to 20 years of age and 36 to 40 years of age. This was an intentional decision on
the basis of the assumption that it is between these two groups that maximum contradiction
on internet usage exists.
This assumption has been proven true as per the responses of further question. However an
important observation from the current observation is that today internet is accepted by
people of all age groups. It has crossed the barriers of age, or working individuals, or web
designers and now every tom, dick or harry can and is an internet user. Thus, it can be said
that there is definitely an increase in the internet usage. This is further proved by the graph
presented below:
Number of respondents across different age
groups
16-20
21-25
25-30
31-35
36-40
20


Figure 2 Increase in internet usage
As can be seen from the above graph, majority of users have increased their use of internet
over the past 5 years. There could be many reasons for it, but as discovered through
literature review and impromptu interviews, internet has become such an intrinsic part of
everyones life that people cant handle any work without it. If we need information, we
instantly Google it, we want to plant a trip we plan it online; in short life has become so fast
paced that people have to live in sync with this speed and internet has become the way to.
Now, as far as using internet for buying products is concerned, following was the response
gathered:

Figure 3 Use of internet for buying goods
0
5
10
15
20
25
30
Yes No
Have you increased your internet usage
Have you increased your
internet usage
0
5
10
15
20
25
Yes No
Internet for buying
Internet for buying
21

The above graph clearly shows that people in I ndia have warmed up to the concept of
internet buying. What was once a foreign concept has now become a normal thing for more
than half of the respondent base! The majority of the people who have still not warmed up to
the concept of internet buying are an extension of the same population who are yet to increase
their internet usage. They are primarily belonged to the age group of 36 to 40 year old.
However in general the internet has been used for a variety of purpose as can be seen below:


Figure 4 Reasons for internet use

As is clearly evident from the graph above social networking is the main reason for using
internet. With the increased popularity of social media sites like Facebook and Twitter, it can
be easily observed how the world has used social media as the ultimate tool to connect and
build relations on. The presence of mobile apps have just added to the increased use of
internet for social networking, further supported by the introduction of the 3G network in
India. However, surprisingly people hardly ever access internet just for information access,
which as per the interviews conducted with the respondents, is a simultaneous activity
conducted rather than the sole purpose of accessing internet.
Internet buying is still low on the purpose of using internet, but as is obvious by the previous
response charts, it is fast gaining ground. Especially among the category of young 16 to 25
years old individuals, who are fashion savvy but want everything on the go.
However across our survey, we also tried to analyse the reasons why some people prefer
internet over actual buying and these were the responses:
Reason for using internet
Information Access
Ticket Booking
Social Nerworking
Internet Buying
22


Figure 5 Internet over actual buying
The above graph very clearly shows that internet offers an ease of purchase to the consumers
that makes it preferable over actually travelling to the market and buying different products.
Another insightful observation was that internet is not about buying variety at one place but
rather buying quickly at one place.
To further understand the consumer behaviour an attempt was also made to understand the
disadvantages that internet has over actual buying. The reasons for the same were analysed
and can be seen as depicted below:

Figure 6 Actual buying over internet
0 2 4 6 8 10 12 14
Ease pf purchase
One stop access to variety
Ease of comparison
Quicker Process
Reasons for preferring internet
Reasons for preferring internet
0 2 4 6 8 10 12 14
Risk of money fraud
Risk of product not meeting
expectations
Lack of return policy
Delivery Period (Product is not
received instantly)
Reasons for not preferring internet
Reasons for not preferring
internet
23

As can be interpreted from the above graph, In India people have a very high fear of
encountering money fraud on the internet. And since most of the internet buying requires
the divulgence of information about their credit or debit cards. This was in fact the very basic
reason why Flipkart was able to gain the consumer trust through its policy of cash-on-
delivery. Now while Flipkart marketed itself in an attempt to reduce customers fear of
money fraud, Jabong addressed the next source of insecurity as far as internet buying was
concerned. As the graph shows the average I ndian consumer was very scared of the actual
product not meeting the expectations it set through the internet. An Indian consumer is
known to be the staunchest believer of the ideology of value for money. Hence, it is very
essential for them to have products that meet the expectations that a certain amount elicits.
Keeping this thought in mind, J abong offered its consumers the chance to first try the
products it offers and then buy them. This unique and novel idea gained an instant hit with
the consumer who finally felt that he was making an informed decision, and not being
swayed by the internet advertisements or product description.
Thus, as can be observed, both Flipkart and Jabong managed to make a mark for themselves
by adopting strategies that focused on solving the sense of insecurity that the average
I ndian consumer had about buying over the internet. This is what made them so popular,
and this popularity is evident by the graph below:


Figure 7 Maximum used site

The reasons for Flipkarts and Jabongs success had been assumed and have been further
substantiated using the responses through different questions. The main attraction for Flipkart
can be observed through the following table:
Site used most
Flipkart
Yebhi
Jabong
Any Other
24


Figure 8 Main attraction of Flipkart

Now this graph is almost self-explanatory. The fact that Flipkart offers cash on delivery is its
unique selling point. Basically cash on delivery is an option that enables individuals to pay
for any product bought for at the time of delivery. This enables them to
a) Pay for the product when theyve actually received it and thus not fear losing money
from account
b) Not divulge any details of their debit/credit cards and remain in fear of online money
fraud
These benefits were cited by the consumers while recording their responses in the
questionnaire. In addition to this the strict adherence that Flipkart has towards sticking to
timely delivery has also contributed towards building up the reputation and goodwill that
Flipkart has. Though Flipkart has launched into a variety of products now (from the original
books, to music cds, clothes, electronic equipment, in short everything) it is still not the
reason it attracts a huge crowd. It is still the fact that it offers cash on delivery. Anyways, as
per other research conducted it has been found that the major reasons driving the online
buying are cash-on-delivery facility, and discounts & offers provided by the online
retailers.
In a similar manner, attempts have been made to understand the main attractive feature of
J abong, which is usually considered to be the feature of try and buy. The graph below
substantiates the statement:
0
2
4
6
8
10
12
14
Variety of
Products
Cash on
Delivery
Timely
Delivery
N/A (never
used
Flipkart)
Main attraction of Flipkart
Main attraction of Flipkart
25


Figure 9 Main attraction of Jabong
What try and buy refers to is that a product (especially apparels of shoes etc.) can first be
tried at home before actually being purchased. This serves the following purposes:
a) Offers the security that the product will be exactly as per the expectations
b) Gives the option for rejecting a product selected online.

Essentially what had made Jabong and Flipkart popular is that their strategies are very
uniquely concocted in a manner to cater to assuage the Indian consumers fears. This is
why; today the site generating maximum user interest is Jabong.com, followed by Flipkart
and Amazon, with Jabong scoring around 11.6 million unique visits and Flipkart and Amazon
getting 10.7 million unique visitors each in 2012. Myntra.com is the fourth most visited e-
commerce site, followed by India times Shopping. Another interesting point noted is that
online retails reach is almost 1.5 times online travel.
With such a staggering growth it is obvious that the expectations that people have from
online retail is also becoming more and more apparent. Thus after studying the trends of
online retail, a question to gauge the new found expectations of consumers from online retail
was incorporated in the questionnaire. It consisted of the following options
Proof of money security such as a symbol/logo/accreditation
Policies for return of goods which is present in very few sites
Greater discounts which can be haggled for in actual buying
Faster Delivery to enable the feeling of ownership
0
2
4
6
8
10
12
Variety of
Products
Try and Buy
feature
Timely
Delivery
N/A (never
used
Jabong)
Main atrraction of Jabong
Main atrraction of Jabong
26

Out of the aforementioned category, the policy for returning goods rates the highest in the
form of expectations as can be seen from the following graph:

Figure 10 Expectations from e-commerce

11 out of the 30 respondents wanted a policy incorporating the facility for returning goods.
The Indian consumer is a very cautious consumer, who will always look for value for money
and consequently never compromise. He always wants the option to be able to return a
defective piece, and ensure that he gets what he was promised.
Thus a summary of the above results of the survey assures that there has been a considerable
change in the consumer behavior regarding online retail among the Indian Consumers. The
Indian consumer today is ready to step out and explore the market, and consequently expects
much more as well.








Expecations from e-commerce site
Proof of money security
Policy of return of goods
Greater Discounts
Faster Delivery
27

FLIPKART vs. JABONG
As far as the third and final objective of the project is concerned, attempts have been made to
understand the marketing strategies of both these organizations and find out essentially, what
makes them tick.
FLIPKART
Flipkart CEO Sachin Bansal's mantras behind the success of his company are:
1) Be very focused on consumers.
2) Build amazing experiences for the customers.
3) Continuously innovate the product.
A Humble beginning from books, Flipkart now has a gamut of 12 products ranging from
clothing to electronics. Still it receives 50% of its revenue from selling books online. The
reason success is that it has a great customer retention rate, it has around 15 lac individual
customers and more than 70% customers are repeat customers i.e. they shop various times
each year. The company targets to have a customer base of 1 crore by 2015.
A mass Merchant, selling the products like Clothing, Footwear, Watches, Bags wallet belt,
Beauty personal care, Mobiles and tablets, Laptops and accessories, Cameras, Audio players
and speakers, Software (new), Home and kitchen (new), Books gaming, Music movies and
poster, Baby care and toys, Sports and fitness, has been continuously trying to innovate and
thus adding products to its basket to meet the increasing competition.
Everything what it does revolves around its obsession with providing its customers a
memorable online shopping experience be it its path-breaking services like Cash on Delivery,
a 30-day replacement policy, EMI options, free shipping or the great prices that it offers. It
has over the years improved by continuously drawing feedback from customers.
The site is easy to navigate, they help users to search for the products or content online. It
allows the user to use filters like by range, price, brands and colors available. They try and
make customers feel connected with the product by taking the customers details when the
product is unavailable, and later on informing their availability. Thus increasing the frequent
and repeat purchases.

Flipkart offers several modes of payments like Internet banking, E-gift voucher, COD and
wallet. Then Visa, master card, Maestro and American Express credit/debit cards in India and
21 other countries.
Unlike Jabong, Flipkart has an EMI payment option for Citibank, HDFC, ICICI, Kotak
Mahindra and Standard Chartered credit cards only. They can choose to pay in 3, 6, 9 or 12
month installments. Citibank credit card holders cannot avail the 12-month installment plan.
The minimum order value to avail the EMI payment option is 4,000. This gives Flipkart an
edge over Jabong, where it is continuously trying to innovate and trying to surpass Flipkart.
28

Flipkart also has a wallet feature which gives it an edge over Jabong. It gives flexibility to its
customers where they dont need to enter the card details every now and then. They can
simply buy virtual money and then use it as and when desired. The Wallet feature lets you
conveniently make purchases on Flipkart i.e. Helps make multiple payments without entering
card or bank details every single time you place an order, Simpler and faster checkout process
and Failed payments are no more a concern.
Earlier Flipkart lacked on the delivery front. The delivery time was of 2-3 days depending on
the seller and along with it orders below Rs 500 were charged Rs 50 as delivery charges. This
gave Jabong an edge over it which had excellent delivery network with free delivery.
Therefore, Flipkart is continuously trying to bring down the delivery time, as it is an excellent
marketing strategy to increase the sales revenue and to optimize the user shopping experience
and increasing loyalty of customers.
Initially Flipkart relied completely on word of mouth marketing but later due to coming of
new entrants it aggressively marketed itself using social networking sites like Facebook and
twitter. Over the years it has managed to build a strong community with millions of followers
by giving instant responses and interaction. Flipkart has also managed to sync all its
operations via the mobile apps on all the major platforms like android, apple, blackberry and
a mobile website facilitating the online purchase and selling functions. From such apps, it is
managing its marketing and sales offers, promotion and customer database in providing them
the customized outlook and offerings and at the same time keeping them updated about the
new product addition, promotions, pricings and latest offerings.
Unlike Jabong, Flipkart has gone aggressive on the offline media as well i.e. television and
print. Through this it is trying to make a good brand presence and a large market. It recently
launched a series of 3 ads with the tag line No Kidding No worries. Kids were used to
create the adverts to send out the message - if a kid can do it, you can also do it.
Along with this, Flipkart also very wisely used SEO (Search Engine Optimization) and
Google Ad-words as the marketing tools to have a far reach in the online world.
Flipkart, through its marketing strategy, tries to instill trust and faith in their customers who
never used to buy the product without touching it. It just tries to provide ample choice to its
customers. The website is great, easy to use, easy to browse through the products, add
products to wishlist or to a cart, get product reviews and opinions, pre-order products, make
payments using different methods, in short hassle- free and convenient. A very important
point is that they introduced the option of cash on delivery and card on delivery. This way
people demonstrated more confidence in buying the product. An interesting fact is today
Flipkart sells 20 products/min and have a massive customer base, still more than 60% of the
Flipkart's customers use Cash on Delivery and card on delivery methods. This is because of
two reasons, one is many people do not know how to make payments online. And secondly
people do not have immense trust in e-commerce in India.
29

It tries to re instill this faith by providing 30 days replacement policy for the product. Though
for Jabong the order can be cancelled even if it is delivered, for Flipkart the delivered order
cant be cancelled and the order cant be returned also in case of Flipkart.
Unlike Jabong, Flipkart lacks on the marketing front of delivering goods internationally.
Earlier when Flipkart was the only player the discounts offered were not so huge but as
competition entered, offering discounts, sacrificing their bottom-line temporarily, Flipkart
faced daily business operation pressures in terms of talent, tech costs and increased real estate
costs involved in stocking products. Bansal changed strategy and bought out electronics
retailer Letsbuy, launched Flyte, which helps in music, downloads amongst other tech
initiatives. This fund helps it manage its working capital and invest in supply chain and
technology offerings, said Mohit Bahl, Partner, Transaction Services, and KPMG India.
Along with it now, the portal offers a good pricing offers and deals to its users by the means
of Cash rewards, loyalty points, discounts and coupons. It even offers good relatively cheaper
pricing points than it is available in the physical markets which in total helps users save
money and at the same time get benefitted by the means of rewards points.

Therefore, message is very clear from the marketing strategies mentioned above. The main
motto is to make people more comfortable with Flipkart.com, to generate a great customer
relationship and loyalty on the basis of great product prices and excellent customer service.
All in all to create a great customer experience.

JABONG

Mahesh Murthy, an e-commerce investor and partner of early-stage venture capital
firm Seedfund, Says Jabong has done to Flipkart what Flipkart has done to other e-
commerce portals. Enter a market, spend outrageous amounts of money for customer
acquisition and build revenues.
Jabong, a clothing retailer, understands shopping better, and therefore, they strive to offer its
customers the best of fashion and elegance. They showcase products from all categories such
as clothing, footwear, jewelry, accessories, home & living, personal care, sports and exotic
cosmetics.
Similar to Flipkart the site is easy to navigate, they help users to search for the products or
content online. It allows the user to use filters like by range, price, brands and colors
available. They try and make customers feel connected with the product by taking the
customers details when the product is unavailable, and later on informing their availability.
Thus increasing the frequent and repeat purchases.
The best marketing strategy adopted by Jabong is sending newsletters to its customer base.
Through this newsletter it informs and reminds the customers continuously about the
exclusive Offers, new arrivals and latest trend. Along with it sends free vouchers worth Rs.
30

2000 to its target group. The vouchers are for e.g. Rs. 1000 off on a purchase of Rs 4000 and
Rs. 500 off on a purchase of Rs. 2000 and above.
The payment options available are Visa, master card and cash on delivery. Flipkart is at a
better position in comparison to Jabong as far as payment methods are concerned. The
methods provided by Flipkart are more customer-friendly and gives a better experience to
customers for e.g. card on delivery.
Flipkart.com was the first to become Indias e-commerce darling after delighting customers
with a clutter-free user interface, easy order placement and a 48-hour delivery schedule,
which was unheard of till then in the Indian e-commerce space. If Flipkart has raised the bar
for customer satisfaction for e-shoppers in India, Jabong has queered the pitch with
aggressive marketing, same-day delivery and a wide array of product portfolio.
Jabong has been extremely aggressive in winning over customers while the company officials
deny resorting to heavy discounts. We focus on variety, widest assortment, fastest delivery
time and excellent customer service rather than deals and discounts, Manu Kumar Jain, co-
founder and managing director of Jabong, said in an e-mail response to Techcircle.in
After analyzing the sites of Flipkart and Jabong it was observed that Jabong offered more
aggressive discounts as against Flipkart i.e. they offered the same products at a much better
price.
Jabong has been the pioneer in the industry for starting the try and buy policy along with 30
days return policy. The Indian consumers have a mindset of trying the products and then
buying it. Jabong thus, imbibed this culture into its marketing strategy thus increasing its
revenues tremendously. Unlike Flipkart, Jabongs marketing strategy also consisted of
providing personalized recommendations to its customers and free shipping for goods of any
value with excellent delivery. Along with it if there were technical glitches then the orders
can also be taken on the phone.
Similar to Flipkart they also have an order cancellation policy with a distinguishing feature
that if the order has been shipped then also it can be cancelled in Jabong by not paying or
even if online payment has been made order can be cancelled and customer will get virtual
money in the form of points.
Jabong expanded its customer base by entering the international market with the site called
JABONGWORLD.COM. This gave them a huge jump over Flipkart to expand their revenues
and sales.
Soon after its arrival, Jabong gave established websites such as Flipkart and Snapdeal a run
for their money. It established a huge collection with fast services in a very short period.
While all its competition websites have been very active on television and other offline
media, Jabong seems to be very confident of taking the risk of giving them (offline media)
very less share in its marketing pie. Digital and social hold 90 per cent of Jabongs marketing
pie and the remaining 10 per cent is allotted to television and outdoor
31

To initiate engagement, the website rolled out a number of social media campaigns on
various occasions such as the page achieving million likes, Valentines Day and a Chief
Shopping Officer campaign to increase traction on the website. In Jabongs digital strategy its
Facebook page has recently crossed 1 million likes, and has 17K+ followers on Twitter. They
publish 6-7 updates a day and almost all of them are self-promotional but still are able to
engage the audience. They are also focused towards attracting female shoppers more than
men.
Jabongs promotional campaigns are also held on Google+, through blog on fashion and
trend and also personalized emails. Thus it has been rightly said by the CEO of Jabong that,
We use digital to enhance our transactions and revenues and social media to increase
engagement. Offline media are used to generate awareness in small towns and cities
Through all its communication what Jabong conveys is that it is the ultimate fashion portal
with largest and widest assortment of fashion and lifestyle products, and of being the
Google destination for it. To deliver the message, the fashion and lifestyle portal usually
banks on the style factor exhibited in movies.
In addition to this, a well thought strategic move was made by Jabong that is the portal
recently associated itself with Ranbir Kapoor Deepika Padukone starrer Yeh Jawaani Hai
Deewani. The films merchandise was released on the website, not only increasing traction
on the website but also leading to Jabongs cross promotion with the film.
Jabongs immediate competition websites like Flipkart have been very active on television to
promote their summer collection and other products and services. While Jabong has managed
to sail through royally so far by banking only on digital media with pull strategy, how much
this strategy will work in the long run is a million dollar question.
Another great distinguishing feature for Jabong is its Corporate Gift card. They are the great
means by which employers can show there customers that they care. These cards can be
perfect rewards for the employees hard work, as a greeting for the new seasons and as a gift
on birthdays and anniversaries. The distinguishing feature is that these cards come in flexible
denominations, customized templates and can be tailored to ones taste.
Therefore the marketing strategy of Jabong works on the idea of add as many categories as
possible; acquire customers at any cost; build a logistics arm from ground up and delight the
customer.






32

Validation of the results
Considering the data presented to validate the objectives stated, the following is a
summarized version of the results received:
There has been a considerable growth in number of users in the field of online retail in
India
Online retail is changing the behaviour of consumers by focusing on bringing
strategies that focus on overcoming the fears of consumers
Flipkart is considered responsible for bringing the online retail revolution to the
Indian consumer, and is still one of the top grossing sites
Jabong, is a newcomer in the online retail industry, and has yet managed to instantly
set a place for itself in the consumers mind
Now, certain theories of consumer behaviour will be used to validate the results that we
arrived at through primary and secondary sources of information. The main theories that have
been studied to validate the results are as follow:
Online retail through model of consumer decision making
Promoting online retail through motivation model
Using tri-component attitude models to show the change in consumer behaviour
Use of j.n.d by Flipkart and Jabong in changing their displays
Use of self-concept w.r.t Flipkart and Jabongs marketing strategy

Online retail is also a buying process which follows the same process as that of any other.
Now the consumer decision making model consists of the following steps, which have been
explained with respect to the online retail:
Input This includes
a) Firms marketing efforts, like easy navigation of Flipkart and Jabong, entertaining
advertisements that have been used etc.
b) Socio-Cultural Environment, like using actors in advertisements, peer groups using
internet and vouching for sites, online gift brochures
Consumer Decision Making process- This includes three aspects, namely, need recognition
(the need for purchasing a product online), pre-purchase search (evaluating how internet
buying takes place and its success rate), and lastly evaluation of alternatives (what other
ways would offer the same convenience for buying products). This also includes the element
of psychological field and experience learning.
33

Output/Post-decision behaviour- which refers to the actual purchase and post-purchase
evaluation that also contribute to experience element.
Following is the pictorial representation of the consumer decision making process:


Figure 11 Consumer Decision Making model

34

As seen through the data collected, there has been a considerable growth in the internet usage
over the last few years, including in the field of online retail. In order to understand what
made consumers embrace the internet as a medium of shopping; the motivational model has
been used. The motivational model looks like below:


Figure 12 Motivation Model


Now the steps in the above model have been explained below, again with respect to online
retailing:
Unfulfilled Needs, Wants and Desires The medium of online retail solved the needs for
convenience in shopping, variety at one place and easy comparison of prices and ranges of
products.
Tension When the aforementioned needs were not being fulfilled there was frustration
because of increasing market traffic, inability to find the right product at the right price and
amount of time taken for a single purchase.
Drive The areas of tension mentioned drove a consumer to various behaviours that were
influenced by the personality, perception, learning and attitude of different individuals. This
is in fact how consumers were motivated to look towards internet as a solution.
Behaviour- The action taken by consumer defines his/her behaviour. Like in this case, the
use of internet not for a single time purchase, but as a regular medium of retail shopping.
35

Goal or Need fulfilment- The final step is the sense of satisfaction that reduces the initial
tension when the original goal (in this case easy and quick shopping) is fulfilled.
Another reason for the considerable increase in the number of internet users has been the
change in the attitude of consumers towards internet and online retail. The tri-component
attitude model has been used to understand the same.



Figure 13 Tri-component model of attitude


The tri-component model, as the name suggest consists of three components, namely
conation (intention towards a certain object), cognition (thoughts towards a certain object)
and affect (feelings towards a certain object). All three of these have been explained in terms
of online retail:
Cognition- This refers to the change that has taken place in the attitude of consumers towards
internet as a medium for shopping. From a source of money frauds and unreliable services,
internet is today the one stop access for all kinds of shopping. This change in attitude has
been developed by the personal experiences that the consumers experienced through sites like
Flipkart, Jabong etc.
36

Affect- A major reason for the increase in internet traffic is the change in attitude caused by
the change in feelings of consumers towards online retails. People today want everything on-
the-go without the usual hassles, but with equivalent level of trust. As survey results show
Flipkart and Jabong have achieved that position specifically, and online retail in general has
reached that level.
Conation- Today, as is evident by the results, there is a very high tendency to use internet for
a variety of purposes, including shopping. People are now net savvy which means they are
becoming more proficient and comfortable in all uses of internet be it social networking or
shopping.

As far as the marketing strategies for Flipkart and Jabong are concerned, the self-concept has
been very readily used, and this has been explained below.
First of all, self-concept refers to the totality of the individuals thoughts and feelings having
reference to him or herself as an object. Self-concept can be divided into four parts:


Figure 14 Four parts of Self-concept

Today online retailing is not just another way to shop but a depiction of the part of new
culture. Thus a major reason for the increase in the use of internet is the fact that becoming
net savvy is a part of the ideal self-concept (private self) that consumers try to arrive at.
Consequently Flipkart has aimed its marketing towards achieving the ideal self-concept
(social self) for the consumers. For example- all its advertising its aimed at showcasing
Flipkart as the latest stop for fashion etc. Moreover its advertising has a quirky, innovative
feel to it that is aimed at attracting consumers.
37

Similarly Jabong also has created its marketing campaign to help the consumers bridge the
gap between the actual and ideal self-concept. It highlights the features that are unique to it,
and ensures that the consumer realizes how Jabong is differentiated from the other
competitors
Thus an idea of self-concept enables the organisations to better aim its marketing strategies
towards attracting the consumer interest.
Lastly we look at how Flipkart has used the concept of just noticeable difference. The
concept of just noticeable difference basically refers to how marketers introduce changes in
their product in slow and gradual steps to show difference between two similar stimuli. In
case of any major change that shows something negative in the product, such as reduction in
size etc. then the j.n.d should be such that differences are not very evident. Similarly in cases
where the difference points towards a positive difference such as reduction in price etc. the
j.n.d. has to be relevant enough that the difference is easily visible.
In case of Flipkart, the moment it added apparels to its product categories, it started a full-
scale advertising campaign with the tagline fashion ka naya destination. However it retained
the original concept of using children to portray the adult emotions/actions.
Jabong, as such, has not shown any outwardly j.n.d in its advertisements or its
display/navigation of the webpage. However, taking into account its advertising campaigns
so far it can be safely assumed that Jabong will be able to capture in on the j.n.d expertly
when it has to.













38

CONCLUSION

On the basis of the research carried, following are the major conclusions that the group
arrived at:

There has been a considerable increase in the penetration of internet usage in
comparison to the levels internet usage recorded before. However there is still a scope
for greater improvement or increased penetration, especially in the field of online
retail.


Today there has been an evident change in consumer behaviour regarding online
retail. The consumer today is net savvy, easily transitioning from brick to click
industry, and the convenience of shopping coupled with features being offered by
sites like Flipkart and Jabong, has replaced the insecurity of online shopping.


Flipkart and Jabong are two of the most popular sites as far as online retail in India is
concerned and they have both succeeded because they offered a unique feature that
assuaged customer fears regarding online retail (Flipkart offered cash on delivery and
Jabong offered try and buy feature).





















39

RECOMMENDATIONS

On the basis of the project carried out, the group has the following recommendations to offer:

In order to launch into the online retail industry it is necessary to distinguish yourself
using a strategy that offers a unique benefit to the consumer.

Online retail should focus on enhancing customer experience to differentiate itself
from normal buying, like being faster, easier to access etc.

If you want to launch into online retail, user friendly experience should be propagated
through easy navigation (to reduce time) and simple payment methods.

Once youve established yourself online, offline advertisements should be undertaken
to reach people who not buy online, especially in tier-2 and tier-3 cities.

Online retail should look at developing post-purchase experience as well
(return/exchange policy etc.).















40

REFERENCES

Following is the list of references:
www.flipkart.com
www.jabong.com
http://forbesindia.com/printcontent/35209
http://www.mxmindia.com/2013/01/e-commerce-set-for-steady-growth-in-2013-iamai/#sthash.E2MUuVbl.dpuf
http://www.ystats.com/uploads/report_abstracts/1015.pdf?PHPSESSID=3307b9599ddf668c8b8a0a51
e60fa32f
http://articles.economictimes.indiatimes.com/2013-07-30/news/40895410_1_tier-ii-e-commerce-
small-towns
http://articles.timesofindia.indiatimes.com/2013-04-26/internet/38842529_1_indian-internet-internet-
shopping-internet-penetration
http://www.rncos.com/Report/IM421.htm
http://www.ft.com/intl/cms/s/0/6cb4c5d0-ea1f-11e2-913c-00144feabdc0.html#axzz2aylphWLt
http://retailangle.com/Newsdetail.asp?Newsid=4760












41

APPENDICES

APPENDIX 1 SAMPLE QUESTIONNAIRE

On the basis of these parameters, the sample questionnaire prepared was as below:
Personal Profile
Name:
Age:
Occupation:
Product/Service Profile:
1. How regularly do you use internet services?
Very often
Often
Medium
Rarely
Not at all

2. Have you increased your internet usage over the last 5 years? Yes/No

3. Have you ever used internet for buying a product? Yes/No

4. What is the major reason you use internet for?

Information access
Ticket Booking
Social Networking
Internet Buying

5. What prompts you to use internet for your purchases?

Ease of purchase
One stop access to variety
Ease of comparison
Quicker transactions (No rush/waiting)


6. What prompts you to not use internet for your purchases?

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Risk of money fraud
Risk of product not meeting expectations
Lack of a return policy
Delivery period (Product not received instantly)

7. What more do you look for in an e-commerce site?
Proof of money security
Policies for return of goods
Greater discounts
Faster Delivery

8. Which is the most common site you use for internet buying?

Flipkart
Yebhi
Jabong
Any other

9. If youve used/visited Flipkart, what was the major attractive feature?

Variety of products
Cash on delivery option
Timely delivery
N/A (In case youve never used Flipkart)

10. If youve ever used Jabong, what was the major attractive feature?

Variety of Products
Features of try and then buy
Timely Delivery
N/A

11. Any other remarks as far as internet buying, Flipkart or Jabong are concerned?


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APPENDIX 2 COMPANY PROFILES

FLIPKART

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was
founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart focused on
online sales of books, but later it expanded to electronic goods and a variety of other
products. As of today, Flipkart is amongst the popular sites for online marketing business.
Flipkart offers multiple payment methods like credit card, debit card, net banking, e-gift
voucher, Cash on Delivery and Card Swipe on Delivery.

Flipkart was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian
Institute of Technology Delhi. They worked forAmazon.com before quitting and founding
their own company. The first book the company sold was John Woods' Leaving Microsoft to
Change the World. Today, as per Alexa traffic rankings, Flipkart is amongst the top 20 Indian
Web sites and has been credited with being India's largest online bookseller with over 11
million titles on offer. Further in 2012, Flipkart added A.C, air coolers, stationery supplies &
life style products to its product portfolio.

As of today, Flipkart employs more than 4,500
people.
Funding
Initially funded by the Bansals themselves with 400,000, Flipkart has raised funding from
venture capital funds Accel India (US$1 million in 2009) and Tiger Global (US$10 million in
2010 and US$20 million in June 2011).
Flipkart.com, on 24 August 2012, announced the completion of its 4th round of $150 million
funding from MIH (part of Naspers Group) and ICONIQ Capital.
[
The company announced,
on 10 July 2013, that it has raised an additional $200 million from existing investors
including Tiger Global, Naspers, Accel Partners and Iconiq Capital.
Acquisitions
2010: WeRead, a social book discovery tool.
2011: Mime360, a digital content platform company.
2011: Chakpak.com is a Bollywood news site that offers updates, news, photos and
videos. Flipkart acquired the rights to Chakpaks digital catalogue which includes 40,000
filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said
that it will not be involved with the original site and will not use the brand name.
2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart has bought
the company for an estimated US$25 million. Letsbuy.com had been closed down and all
the traffic of Letsbuy is diverted to Flipkart.

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JABONG

Jabong.com is one of India's leading fashion and lifestyle ecommerce portals.It retails
apparel, footwear, accessories, beauty products, fragrances, home accessories and other
fashion and lifestyle products. The site started operations in January 2012. It was co-founded
by Arun Chandra Mohan, Praveen Sinha and Lakshmi Potluri. Currently it is spearheaded by
Arun Chandra Mohan, Praveen Sinha, Manu Jain & Mukul Bafana.
The company headquarters is in Gurgaon, Haryana. The company has launched its mobile
site recently and is said to have estimated revenues to the tune of 100-150 mn USD.

Business Model
Jabong.com follows both inventory model and a controlled marketplace model. In inventory
model, products are sourced from brands and stored in the Jabong warehouse. In controlled
marketplace model, Jabong doesnt store the inventory but takes care of the Fulfillment,
Customer Service, and Returns if any.
Jabong has used the internet widely to promote its brand. However, Jabong launched its first
TV campaign in March 2012. A similar campaign was launched in September 2012. In Feb
2013 Jabong launched a new TVC with tagline Fashion Nikla Mann Fisla.
Online Traffic
According to a ComScore report of September 2012, Jabong.com had the second highest
amount of traffic on its website within a few months of its launch. In March 2013,
Jabong.com held an Alexa Traffic ranking of 44 in India. Jabong also ranked 10th in Google
Zeitgeist India trends making it 10th most searched term in 2012 in India.
Products and Brands
Jabong has positioned itself as a Fashion and Lifestyle e-portal by selling shoes, apparels,
accessories, home dcor and furniture through its website. The e-store at present carries over
700+ brands and over 50,000 products. Top brands include sports and lifestyle brands such
as Nike, Puma, Adidas, Reebok, Asics, Fila, Skechers, Converse, Provogue, United Colors of
Benetton, Woodland, Levis. Women apparel brands include Biba, Harpa, Global Desi, W,
etc. Top accessories brands such as Ray Ban, Hidesign, Elle, etc. are also available. Kids
section sell brands such as Gini & Jony, 612 Ivy League, Unikid etc.
Premium Brands
Jabong has separate section for premium brands that include top international brands and few
Indian designer brands too. DKNY, Elle, Vogue, Espirit, Gas, FCUK, Satya Paul, Desigual,
etc. find place in premium section.
Jabong Delivery
Jabong.com offers same-day delivery in Delhi/NCR, and within 48 hours in top 10 cities and
within 23 days in other cities and towns.