INTRODUCTION

What is LOGISTICS?

Logistics is about moving materials, information and funds from one business to
another or from a business to the consumer. It is a vital part of the business economic
system and is a major global economic activity. In fact 10-15 per cent of product costs are
logistics related. Worldwide, logistics constitutes about $2 trillion a year. For any country,
the logistics cost is estimated between 9 and 20 per cent of its GDP.
Every company dreams of achieving the seven R's - delivering the right product in
the right quantity and the right condition, at the right place, at the right time, for the right
customer at the right cost. Effective logistics management alone can make this possible.
Logistics is one of the oldest and also the newest activities of business management. It
involves combining diverse functions and service providers who may be culturally and
objectively different.
In the past, quality of products and services was the key differentiating factor for
companies operating in the same market. In due course, quality and low cost became the
winning combination.
Today, responsiveness to the customers' needs is the determining factor. An enterprise
that caters instantly to the needs of the customer is the winner. Integrated logistics can
serve as a potent tool for success in today's competitive business environment.
Logistics is an organized process of managing the flow of merchandise from the source
of supply - the vendor, wholesaler or distributor - through internal processing functions
like warehousing and transportation, until the merchandise is sold and delivered to the
end customer.
Logistics management aims to reduce inventory-holding costs and improve profits, while
enhancing customer satisfaction.
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Anything can be ordered online, but receiving a tangible product is impossible. The
difference between e-business success and failure lies in a company's ability to manage
the logistics.

History of Logistics

The Greeks defined logistics as "the science of correct reasoning by means of

mathematics". The first modern use of the term was in the military to identify the process
of planning and coordinating the movement of army and weapon support systems. Good
logistics brings out the ability to move faster and accurately to the battlefront. If one
applies the same to the business organisation, it is one's ability to reach the product to the
consumer at the right time, right place, right quantity and at the lowest cost. On similar
lines, supply chain management will mean the network of organisations involved in the
process by which goods are moved from producer to consumer and the counter flow of
information, to manage the supply chain as a single entity.
A prominent application of logistics was in World War II where weapon movements were
coordinated to ensure success. A recent instance of massive logistics initiatives is in the
Gulf war. With increasing competition in the market place, managements started focusing
on customer services in the early 1950s in developed markets such as Europe and the
U.S. In late 1960s some of the logistics concepts were tested. Following the oil crisis of
the 1970s and the concept of just in time in manufacturing customer-servicing standards
were given more importance and new integrated logistics models and solutions were
born. The emergence of organized distribution system by department stores and super fast
courier service organisations gave a boost to logistics concepts and strategies. Today all
businesses are looking for seamless transaction systems to co-ordinate their information
and material requirements along the value chain.
At the micro level any manufacturing and marketing company spends 5 - 35 per cent of
sales on logistics. The major cost components are transportation, warehousing and
inventory carrying cost. Improvements in logistics get reflected in a reduction in
inventory levels, shorter delivery schedules, and improved servicing standards with
significant savings in total costs.
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Logistics Management Process

Michael Porter in his famous book "Competitive Advantage'' has spoken of the value
chain approach and emphasized logistics as one of the most important tools for
competitive advantage.
The various processes and elements that are part of logistics as a discipline are:
Inbound logistics: Purchasing, Inbound transportation, Inventory Management.
Manufacturing: Production planning systems, Machine scheduling system.
Outbound logistics: Order booking process, Distribution management, outbound
transportation, and Warehouse management systems.
As customers started demanding improved servicing standards, fast cycle time has
become the key factor for business success, whether it is custom made tailoring service in
Hong Kong or development of a new car in Detroit.
Before delving deep into logistics, a look at the current business scene will be great help.

Scenario of Logistics in India

At present, companies specialising in logistics operations in India use traditional
technologies and cater to stand alone services like transportation, warehousing, clearing
and forwarding. There is tremendous scope to upgrade the technology, integrate the entire
supply chain, improve productivity levels and bring down operating costs. Any
technology that can improve productivity in transportation operations will be a great
boom to the economy both directly and indirectly with opportunities for 10-12 per cent
reduction in costs. Besides the savings on downstream users of transport will be much
higher and the cost multiplier effect on the economy will be reduced to that extent.
Given the emerging business and technological trends there are possibilities for adoption
of innovative logistics solutions specifically designed for India. In addition, there is a
requirement for an integrated strategy towards developing logistics and its related IT
infrastructure and also enhancing its industry base.
In recognition of the growing need for technology-enabled solutions in logistics in India
and abroad, many companies such as eLogistics are taking shape. In fact, there are a
dozen multinational logistics companies such as Exel, Bax Global and Menlo which have
started operations in India during the last few years.
Today logistics management in India has become complex with about ten million related
outlets to cater to the needs of 1000 million people.
The logistics market in India is estimated to be Rs. 260,000 crores and constitutes 13 per
cent of the GDP. It is much higher than for the U.S. but lower when compared to
countries like China and Korea.
A reduction in logistics costs by one percentage point will mean a saving of $4.8 billion
or Rs. 21,600 crores annually.

Besides significant benefits can be reaped through the multiplier effect of better logistics
on all economic sectors.

Corporate
Profile ABOUT BLUE DART
BLUE DART is South Asia's leading integrated air express carrier and premium logisticsservices provider. It has the most extensive domestic network covering over 13,880
locations, and service more than 220 countries and territories worldwide through its Sales
alliance with DHL, the premier global brand name in express distribution services.
BLUEDARTS vision is to establish continuing excellence in delivery capabilities
focused on the individual customer. In pursuit of sustainable leadership in quality
services, they have evolved an infrastructure unique in the country today.
State-of-the-art Technology, indigenously developed, for Track and Trace, MIS, ERP,
Customer Service, Space Control and Reservations.
Blue Dart Aviation, dedicated capacity to support their time-definite morning deliveries
through night freighter flight operations.
Warehouses at 14 locations across the country as well as bonded warehouses at the 6
major metros of Bangalore, Chennai, Delhi, Mumbai, Kolkata and Hyderabad.
ISO 9001 - 2000 countrywide certification by Lloyd's Register Quality Assurance for
their entire operations, products and services.

Its Competitive Advantage lies in:

Blue darts vast and unparalleled Domestic Network
Linked by some of the most advanced communications systems and positioned to offer a
consistent, premium, standardized quality of service.
A spectrum of services to provide customized solutions.
Blue dart is the only express carrier in the country today which offers an entire range of
services that extend from a document to a charter-load of shipments. Its services are
relentlessly monitored to deliver a net service level of 99.96% (as on February, 2005).
Its Customs and Regulatory expertise
Company had a dedicated team of specialists who provide the expertise for customs as
well as regulatory clearances at all States within the country, to support seamless service
to the customer.
Its Technology
Designed to enhance the reliability of our operations and process efficiency, and add
value to the customer through time and cost savings.
Its Air Network
The only one of its kind in the country today, that is focused on carriage of packages as
its prime business, rather than as a by-product of a passenger airline. A dedicated aviation
system to support Blue Dart's services is self-sustaining, with its own bonded
warehouses, ground handling and maintenance capability.
Its financial credibility
Fitch Ratings India Pvt. Ltd. has assigned the highest "F1+ (Ind)"

[F one plus (Ind)]

rating for their short term debt programme of Rs. 30 crores. Further, ICRA Ltd. has also
assigned the highest "A1+" (pronounced A one plus) Rating for their Commercial Paper
Programme of Rs. 25 crores.
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Its People force

Committed, diverse and over 4,000 strong are companys most valued asset. All
companys achievements have been possible because they have a team who believes in
themselves and their company, a team with a winning attitude. Blue dart is a learning
organization, valuing self-development, and most of companys managers are
homegrown.

MILESTONES

1983:
Khushroo Dubash, Clyde Cooper, and Tushar Jani establish Blue Dart Courier Services
with a capital base of Rs: 30,000. They forge ties with Gelco Express International U.K.,
and introduce India's first international air package express service.
1984:
Blue Dart Courier Services becomes a Global Service Participant of FedEx with the
acquisition of Gelco Express International by FedEx. Blue Dart Courier Services is the
first carrier in India to provide domestic and international on-board couriers, a hub-andspoke system and a 10.30 a.m. delivery service.
1988:
Blue Dart Courier Services establishes real-time, on-line tracking for all international
shipments through COSMOS, the FedEx track and trace system.
1991:
Blue Dart Express is registered as a private limited company, and introduces its
economical logistics service option, Dart Surfaceline. It indigenously develops its
domestic tracking system, COSMAT-ITM.

1992:
Blue Dart Express Pvt. Ltd. connects its in-house domestic E-mail network, and sets up
its employee satisfaction programme - Survey Feedback Action (SFA).
1994:
Blue Dart Express Ltd. goes public with an equity offer of 2.55 million shares, at a
premium of 14 times, worth Rs: 382.5 million. Blue Dart Express Ltd. launches Dart
Apex (Domestic Air Package Express), a multi-modal, premium package delivery
service, and COSMAT-IITM, an advanced system which includes track and trace. Blue
Dart Aviation is registered as a public limited company and becomes the first private
company to receive government permission for operation of cargo aircraft in India.
1995:
Blue Dart Aviation acquires 2 Boeing 737-200 freighters and receives ATO permission.
Blue Dart Express Ltd. develops its SMART (Space Management Allocation
Reservations and Tracking) system for its aircraft, the first cargo management system in
the country. Blue Dart Express Ltd. is awarded the "Global Service Participant Sales
Award" by FedEx for outstanding sales performance.
Blue Dart, Calcutta is proud to have the office inaugurated by Mother Theresa of the
Missionaries of Charity, and Nobel Peace Prize Laureate.
1996:
Blue Dart Aviation launches India's first jet express airline. Blue Dart Express Ltd's
turnover crosses the Rs: 1 billion mark, as it expands its domestic network by entering
into strategic alliances in North, South and West India. Blue Dart Express Ltd. is the first
express company in India to receive an ISO 9001 certification, and post its website on the
internet. Blue Dart Express Ltd., FedEx and the Heart-to-Heart Foundation, U.S.A., cooperate in bringing the world's largest airlift of charity to Kolkata.

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1997:
Blue Dart Express Ltd. signs agreements with leading international airlines for
distribution of bonded cargo within its network. Blue Dart Aviation launches its domestic
charter operations.
1998:
Blue Dart Aviation develops India's first Load and Trim software for its B737F flights.
Blue Dart Express Ltd. launches SMARTBOX, its economical, packaged door-to-door
product, and extends its delivery to over 1000 locations.
1999:
Blue Dart Express Ltd. moves to its state-of-the-art Administrative, Technology and
Operations Super hub, the Blue Dart Centre, at Mumbai. At close proximity to both the
international and domestic airports, encircled by four five-star hotels, and equipped with
the latest technology, the Super hub has improved efficiency and increased load-handling
capacity multifold. Blue Dart Express Ltd. Launches Power Dart 2000+, a software that
provides customers free connectivity to its database, enabling customers to track and
retrieve all information related to their shipments.
2000:
Blue Dart Aviation acquires its 3rd aircraft on lease. The aircraft is scheduled for
operations on the Bangalore-Delhi-Bangalore sector. Blue Dart Express Ltd. also
revamps its website replacing it with an interactive website to support e-trade and
commerce and facilitate customer interface on the net.
2001:
Blue Dart launches its 3rd aircraft operations on the Bangalore-Delhi-Bangalore sector.
The Civil Aviation Ministry requisitions Blue Dart aircrafts for relief operations into
earthquake-battered Bhuj in Gujarat. Technology tools and customer software MobileDart, On-Line Pick Up and ShipDart - are developed in-house and launched. Blue

11

Dart declares 1:1 bonus shares. Blue Dart, Kolkata moves into heritage building, Kanak,
its new premises inaugurated by Sr. Nirmala of the Missionaries of Charity.
2002:
Blue Dart is re-certified as one of a handful of Indian companies to the new global ISO
9001 - 2000 standards for "Design, management and operations of countrywide express
transportation and distribution service within the Indian Subcontinent and to international
destinations serviced through multinational express companies". Blue Dart ends its
contract with Federal Express and signs a path-breaking Sales Alliance with the World's
No. 1 international air express company, DHL Worldwide Express. Blue Dart crosses
100,000 shipments per day.
2003:
2003 - Blue Dart acquires its fourth Boeing 737 freighter. With a thrust on strengthening
infrastructure, Blue Dart establishes twelve of its own offices in the South, delivering to
an additional 198 locations, expands its hub at Bhiwandi and sets up a bonded warehouse
in Mumbai. The company is selected a Super brand from over 700 brands across 98
categories by a jury of eminent marketing and advertising professionals. The company
celebrates its 20 years of service to the nation on 19th November 2003
2004:
Blue Dart inducts its 4th aircraft into operation on 17th May 2004, connecting Hyderabad
as its 6th Aviation Hub. Blue Dart also extends its brand into Sri Lanka through a
Regional Service Alliance with Foster Agencies Pvt. Ltd., Member of the Hayleys Group,
one of Sri Lanka's largest diversified multinationals. The Alliance will enable customers
to use Blue Dart services between 400 locations in Sri Lanka and over 13,700 locations in
India. Blue Dart acquires its fifth Boeing 737 freighter.
2005:
DHL Express (Singapore) Pte. Ltd. completes the acquisition of 81.03% of the equity
capital of Blue Dart Express Limited. Blue Dart continues to operate as an independent
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brand and provides a complete spectrum of domestic and international express services
through synergies with DHL.

Companys future plans:

Focus on our core domestic products to expand our market share and consolidate our
unique and premium position in the Indian market, and expansion into the near Mid-East
and Far East markets and the SAARC (South Asian Association of Regional Cooperation) countries. Blue Dart would also leverage its vast customer base for global
distribution through its alliance with DHL. We plan to leverage our established
infrastructure to continue adding value and customised solutions to the changing and
evolving demands of the customer. We would also provide global logistics customers
with access to our quality domestic and regional distribution. Our domestic network will
continue to differentiate itself in all areas of our core competencies - supply chain
management, logistics and Ecommerce.
Position ourselves as the preferred, seamless link to a country projected to be an
economic superpower of the 21st Century. Through our technology development,
premium services, quality network and strategic alliances, we plan to carve for ourselves
a leadership position in the industry as India's and the region's link to the world.
Continue to deliver value to our stakeholders through our People Philosophy and
Corporate Governance based on distinctive Customer Service, Business Ethics and
Accountability, and Profitability.

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LOGISTICS IN BLUE DART

The Information Technology industry is, perhaps, typical of the changing and escalating
logistic demands of various industries today, irrespective of their category as 'old' or 'new'
economy. In the IT industry, the difference between success and failure is closely linked
to the supply/value chain integration, of which there are two distinct processes:
1. The delivery of goods to the customer in the most reliable transit period (and
preferably the shortest) possible. 'Reliable' alludes to a certain guaranteed transit time for
packages to reach customers or the response that organisations need in the event of any
exceptions.
2. The reverse flow of acknowledged signed delivery records without which, in many
cases, recovery of bills are virtually impossible. Especially so in the case of companies
placing multi-location orders that could cover hundreds of cities. The task for the supplier
is staggering - plan logistics for deliveries to all these locations, and hope for 100% of the
delivery records to be returned before bills can be submitted to the customer. In most IT
companies, the role of 'logistics' or 'fulfillment' is key.
With organisations moving towards close to perfect standards like Six Sigma, interaction
with logistics suppliers has taken on a critical role moving up sometimes to the level of
the CEO of the organization.
Blue Dart Express Limited applied and found solutions to these critical demands much
before other players could even recognize their need. Through its exceptional people
processes, superior technology, and stress on quality systems over the last, almost two
decades now, Blue Dart was quick to fulfill these needs:

14

The country's most reliable air and surface network offer a pre-determined delivery
schedule with close to 100% accuracy. The IT industry could plan its production with
precision and avoid expensive inventory build-up.
Blue Dart offers the country's most comprehensive communications technology. Much
before the internet was prevalent; Blue Dart customers could dial into the network
through Power Dart 2000 and track their packages. As an added option, Fax dart could
fax a copy of the delivery record the minute the Blue Dart system was updated.
The country's only express airline with a fleet of three Boeing 737s ensured that packages
were flown to their destinations overnight. Another tremendous advantage was that the
individual size of packages that could be carried multiplied manifold.
Retrieval of signed delivery records posed the industry's most intriguing problem. Blue
Dart was quick to understand this requirement and put in place a 100% retrieval system.
Blue Dart not only handles large volumes and oversize packages overnight - it also
provides the industry with status of their shipments and retrieves such records as are
necessary for billing. The entire cycle has been considerably shortened, enabling the
industry to achieve healthy bottom-line.

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SERVICES OF BLUE DART

REGIONAL SERVICES IN SAARC AREA

Between India, Bangladesh, Bhutan and Nepal.
Blue Dart offers the fastest, most reliable, door-to-door express
deliveries for your documents and packages to countries in the SAARC
region through Regional Priority. The service offers access to over
13,700 locations in India, and over 800 locations in Bangladesh,
Bhutan and Nepal, providing the widest coverage in the region through a quality network,
an integrated air and ground infrastructure dedicated to express transportation and
innovative technology support.
Regional Priority: Documents (RPDX)
The most dependable and secure delivery for non-dutiable, critical and important
shipments such as legal documents and tenders. The Blue Dart Envelope provides secure
and attractive packaging for your documents, brochures and reports up to 500gms.
Regional Priority: Non-Documents (RPDT)
Fast reliable and safe door deliveries for samples and non-commerical shipments.
Currently available between India and Nepal only.

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Let see different type of regional services: -

DOMESTIC PRIORITY

The fastest, most reliable, door-to-door delivery

service within India and to Bangladesh, Nepal
and Bhutan for documents and small shipments
under 32kgs per package. The special benefits of this service are:

Delivery to over 13,700 locations in India

Free pick-up from your location

Real-time Tracking

Regulatory Clearances

Free Computerized Proof of Delivery

DART APEX
Dart Apex is a door-to-door delivery service within India for
shipments weighing 10kgs. And above. It is the fastest, most
efficient delivery solution for commercial shipments that are
time-bound and are required to undergo regulatory clearances,
or require special handling.
Dart Apex offers you an economical option of an Airport-to-Door service from the major
airports of Chennai, Bangalore, Mumbai, Delhi, Kolkata and Hyderabad to all the Dart
17

Apex locations serviced. A customer may book space for their shipments through
companys Customer Service and deliver customer shipments to Blue Dart Aviation
Office at the related airport.
Dart Apex also offers a further economical option of a Door-to-Airport service. A
customer may book their shipments at any of companys locations serviced for this
product to any of the major airports. Consignee would be required to collect the shipment
from the Blue Dart Aviation office at the concerned airport.
Dart Apex offers the following benefits:

Wide Market Reach

Single-window Clearance

Real-time Information

Time-Definite Delivery

Free Proof of Delivery on Demand

Speed

Flexibility

Economical

DART SURFACELINE

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Dart Surfaceline is an economical, door-to-door, ground distribution service within India

for shipments weighing 10 kgs and above. It offers a cost-effective logistics option for
your less time-sensitive shipments, with the following value-added benefits:

Time-bound Delivery

Track your Shipment

Regulatory Clearances

Pick-up Convenience

Secure Shipments

Economical Tariff

SMART BOX
Smart Box is a convenient, economic, packaging unit
priced to include a door-to-door delivery service within
India. The units come in 2 sizes, 10kgs and 25 kgs, and are
designed to accommodate a variety of products. The special
benefits of using Smart Box are:

A wide market reach

Speedy Delivery

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Free pick-up

Real-time Tracking

Regulatory Clearances

Proof of Delivery

Trouble Free Service

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INTERNATIONAL SERVICE

International

services

of

Blue dart are taken over DHL EXPRESS in 2002.

Blue Dart Express Limited, through its International Sales alliance with DHL, the
premier global brand name in express distribution services, offers DHL Document
Express (DOX), DHL Worldwide Package Express (WPX) and the Jumbo Box (Jumbo
Box - 25 kgs. and Jumbo Junior - 10 kgs.), a one-stop shipping process for reliable, timedefinite, door to door delivery of international documents and packages. The service
offers access to 220 countries and territories worldwide and the extensive, quality
network of Blue Dart and DHL.
The special benefits of the International Services are:
1)

A Convenient Solution for Urgent, International Documents & Shipments.

2)

Documents and packages will be picked-up from location, cleared through

customs and delivered to consignee.

3)

Customs Clearance Expertise Specialists conversant with customs formalities in

India as well as in 228 countries worldwide, and pre-clearance for shipments in transit
available for most destinations, ensure efficient delivery.
4)

Real-time Tracking

5)

A Cost-effective Option.
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6)

Packaging.

Different types of international services: -

AIRPORT TO AIRPORT
The airport-to-airport service is an air freight
service available on the flights operated by Blue
Dart Aviation between the airports of Kolkata,
Delhi,

Mumbai,

Bangalore,

Chennai

and

Hyderabad. The advantages of an airport-to-airport service are:

Cooling-Period

All the Blue Dart Aviation warehouses are equipped with X-ray machines, which
eliminate the necessity of the mandatory 24 hour cooling-period required for security
reasons for all air freight transported within India.

Late Night Cut-off & Early Morning Deliveries

With Blue Dart Aviation's night operations, shipments manufactured during the day can
connect the night flights and be delivered at destination the next morning.

Capacity

Blue Dart Aviation is the only cargo operator with scheduled B737-200 freighter services
within India and can offer a larger capacity than other domestic airline.

CHARTERS

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Blue Dart Aviation operates the only Boeing 737 freighters in India. The freighters have
an 8-pallet configuration, and operations are supported by an in-house ground-handling
and maintenance capability, as well as bonded warehouses at all the on-line stations, and
company-owned cargo handling assets. With qualified, professionally-trained personnel,
Blue Dart Aviation is positioned to offer the most superior quality of service in the
country today.
Charters are operated on an ad-hoc basis. Normally, charters have been used where
timely delivery of sensitive equipment or large loads is required. In the past, Blue Dart
Aviation has operated charters for carriage of TV Equipment for the Miss World Contest,
high-value TV and Broadcasting equipment for Cricket Matches around the country,
perishable Aquaculture, Computer peripherals and Electronics, Emergency Equipment
and large inventory for JIT plants.
INTERLINE
Blue Dart Aviation operates the only Boeing 737
freighters in India. The freighters have an 8-pallet
configuration, and operations are supported by an in-house
ground-handling and maintenance capability, as well as
bonded warehouses at all the on-line stations, and company-owned cargo handling assets.
With qualified, professionally-trained personnel, Blue Dart Aviation is positioned to offer
the most superior quality of service in the country today.
The bonded warehouses with customs personnel facilitate efficient transhipment of cargo
within India. This facility has enabled distribution of imports within the country and has
provided exports access to and from the gateways of international airlines. This provides
international airlines with a cost-effective option to restrict their on-line stations within
India, and enhance their marketing possibilities at off-line locations by utilizing the
distribution capabilities of Blue Dart Aviation.

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Currently, Blue Dart has interline agreements signed with 23 international airlines - Air
Canada, Air France, Air India, Air Mauritius, Alitalia, Asiana, British Airways, Cargolux,
Cathay Pacific, China Airlines, Cross Air, Das Air, El Al Israel Airlines, Emirates Sky
Cargo, KLM Royal Dutch Airlines, Kuwait Airways, Polar Air, Saudi Arabian Airlines,
Singapore Airlines, Sri Lankan Airlines, Swiss Air, South African Airways, and Qatar
Airways.

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EXECUTIVE SUMMARY ON E-COMMERCE

The concept of e-commerce is downloading at a fairly rapid pace in the psyche of the
Indian consumer. In the metros, shortage of time is a big driver for online shopping. On
the other hand, accessibility to a variety of products makes audiences from smaller towns
and cities opt for the online route. Major retailers face challenges in stocking their stores
adequately. Often, customers are unable to purchase items of their choice, thus prompting
them to resort to e-retailers.
Flipkart has accorded a lot of importance in trust building exercise that is why it has a
strong Customer Support Team which helps the customers with the website guidance and
resolving issues.
Flipkart uses its in-house logistics (FKL) as well as third party logistics (3PL) services as
the logistics is one of the most important for a success of any ecommerce venture. Along
with the logistics, reverse logistics of Flipkart is also well developed with a 30 day return
policy and flipkart bearing courier charges for returned products.
Flipkart when it started employed the consignment model of procurement as it was the
most risk free way to operate but then they changed to Inventory model to ensure
superior delivery times. But with foreign direct investment (FDI) favoring the
marketplace model in April2013, Flipkart changed its business model to marketplace
model.
WS Retail a pet project of Flipkart now handles the inventory and warehouse
management. Flipkart has continued to fare very well in terms of the delivery time
because of their developed supply chain management and dedicated customer support
team to ensure customer delight. This causes them to build a lot of slack into their
existing systems causing higher costs at several points in the supply chain. How they
address this challenge is what will determine their future success.

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MARKET OVERVIEW
India has an internet user base of about
250.2 million as of June 2014. The
penetration

of

e-commerce

is

low

compared to markets like the United

States and the United Kingdom but is
growing at a much faster rate with a large
number of new entrants. The industry
consensus is that growth is at an
inflection point.
Unique to India (and potentially to other developing countries), cash on delivery is a
preferred payment method. India has a vibrant cash economy as a result of which 80% of
Indian e-commerce tends to be Cash on Delivery. However, COD may harm e-commerce
business in India in the long run and there is a need to make a shift towards online
payment mechanisms. Similarly, direct imports constitute a large component of online
sales. Demand for international consumer products (including long-tail items) is growing
much faster than in-country supply from authorized distributors and e-commerce
offerings.
India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3
billion in 2011 and to $14 billion in 2012. About 75% of this is travel related (airline
tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing
comprises about 12.5% ($300 Million as of 2009) India has close to 10 million online
shoppers and is growing at an estimated 30%CAGR vis--vis a global growth rate of 8
10%. Electronics and Apparel are the biggest categories in terms of sales.
Key drivers in Indian e-commerce are:

Increasing broadband Internet (growing at 20% MoM) and 3G penetration.

26

Rising standards of living and a burgeoning, upwardly mobile middle class with
high disposable incomes

Availability of much wider product range (including long tail and Direct Imports)
compared to what is available at brick and mortar retailers

Busy lifestyles, urban traffic congestion and lack of time for offline shopping

Lower prices compared to brick and mortar retail driven by disintermediation and
reduced inventory and real estate costs

Increased usage of online classified sites, with more consumer buying and selling
second-hand goods

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675
billion by 2016 and $850 billion by 2020, estimated CAGR of 7%. According to
Forrester, the e-commerce market in India is set to grow the fastest within the AsiaPacific Region at a CAGR of over 57% between 201216.
As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment
Bank specializing in digital media and technology sector, the Indian e-commerce market
is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes
a sizable portion (87%) of this market today. Online travel market in India is expected to
grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in
size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in
2011 and estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.
Overall e-commerce market is expected to reach Rs 1, 07,800 crores (US$24 billion) by
the year 2015 with both online travel and e-tailing contributing equally. Another big
segment in e-commerce is mobile/DTH recharge with nearly 1 million transactions daily
by operator websites.

27

SWOT ANALYSIS OF FLIPKART

Strength:

Top Indian ecommerce portal

Diversified into electronic goods
Two VC investment to build its own delivery system thereby reduce delivery time
Cash on delivery which is making 60% of its income

Weakness:
Coordination with suppliers and courier was tough
Price biasing to maintain the margins ( e.g. Low price for the best seller book and
more price for the least wanted)
24/7 customer care, thus even mid night is to delivered within 24 hours
Opportunities:
Already working towards customer delight will obtain customer loyalty gradually
Supplier database interface with flipkart website for JIT procurement
Mobile internet usage is increasing there by chances of increase in sales through
mobile shopping.
Threats:
Small players and emerging competitor
Major players like Amazon
In capabilities to manage certain costs like delivery cost, bank charges

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MAJOR COMPETITIORS

Amazon.com

is

an

American

international electronic commerce company with headquarters in Seattle, Washington,

United States. It is the world's

largest

company, based on revenue

and

internet
number

of

employees.

Snapdeal.com is an online marketplace, headquartered in New Delhi, India. The

company was started by KunalBahl and RohitBansal, in February 2010.

eBay Inc.,is an American

multinational

corporation and e-commerce company, providing consumer-to-consumer sales services

via Internet. It is headquartered in San Jose, California, United States.

HomeShop18 is an online

and on-air retail and

distribution venture of Network 18 Group, India. HomeShop18 was launched on 9 April

2008 as India's first 24-hour Home Shopping TV channel.

Yebhi.com is an Indian

Online shopping E-

commerce portal for Home, Lifestyle & Fashion e-retailer, launched in the year 2009.

29

MARKET SEGMENTATION
The process of defining and subdividing a large homogenous market into clearly
identifiable segments having similar needs, wants, or demand characteristics. Its
objective is to design a marketing mix that precisely matches the expectations of
customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must
breakdown the total demand into segments and choose those that the company is best
equipped

to

handle.

The four basic market segmentation-strategies are based on

GEOGRAPHIC SEGMENTATION

CATERS TO TIER 1, TIER 2 AND TIER 3 CITIES

DEMOGRAPHIC SEGMENTATION

75% of online users between the age group of 15-34 years.

Flipkart targets mainly the youth of the country,

BEHAVIOURAL SEGMENTATION

Web friendly people.

PSYCHOGRAPHIC SEGMENTATION

Flipkart concentrates on more Psychographic, which helps in deciding where to

display ads online

They target online shoppers and people who dont online shop (thus TVC to
encourage them)

30

MARKET POSITIONING
An effort to influence consumer perception of a brand or product relative to the
perception of competing brands or products. Its objective is to occupy a clear, unique, and
advantageous position in the consumer's mind.
Points of parity:

Easy locating of products

Competitive prices.

No hassles of going to shops personally and shop for products

Availability of various products on one platform

Discount on purchases.

Home delivery

Gifting services

Cash on delivery

Availability of liquor

Flipifts

Academic related books

Points of Difference:

Flipkart membership cards for premium customers

Vernacular language

Better user interface-one drag approach

31

MARKETING STRATEGIES

Word of mouth (initial marketing even now they want to satisfy customer so they
come back for more)
Good use of SEO
We DONOT sell old books or used books. All the books listed at Flipkart.com
are new books. The books listed at Flipkart.com are NOT available for free
download in ebook or PDF format
Thus when you search free ebooks or pdf books old or used books flipkart will be

displayed.
Good use of SEM
Ads at proper places and use pay per click to pay for ads
Very easy web interface
Payment convenience
Cash/card on delivery there by encouraging students and people with no
credit/debit card to purchase in flipkart, with mobile internet penetration there is

chances of capturing rural market (60% revenue by COD)

EMI by targeting price sensitive customers
Wallet customer can recharge money online and purchase then and when needed
those entering details always is rectified, target heavy purchase and luxury
customer
Customer conversion rate is so high more than 70%
Personalization of the user page
Product recommendation with your previous purchases

Price of the product taking account of various expenses such as Supplier

expenses, Transportation expenses, Packaging expenses, Shipping expenses,
Courier expenses, inventory maintenance expense, office and stationery expenses,
32

sales and advertisement expenses, taxes, depreciation, discount allowances and

many more expenses.

Roughly about 5-7% profit per book orders which indicates that generation of
revenue is on volume basis.

Differentiated themselves by giving best selections, best services at lowest best

possible prices. (Videofor the same)

Discounts up to 35% across all categories.

Upper edge in competitive pricing.

Place

Channel type: Words of mouth (if we can say that) which hasbeen key driver for
their growth.

When an order is placed they either serve the order from theirinventory or procure
the book on demand from various suppliersand then deliver the customer.

As on date more than 80% orders of Flipkart are handled viawarehouses which
help in quick and efficient service.

We deliver orders in 1 day in Tier-I cities and 2-3 days in Tier IIcities and 3-5
days Tier III cities

Shipping and Courier would act as intermediaries in this process.

Delivery services through e-kart and postal services

Tie ups with local vendors and courier firms (thereby avoiding octroi charges)

Company owned warehouse in major cities near airport

Trying to achieve minimum returns

33

If the courier cant delivery to the location the product is shipped through
government post

34

Warehouses are located in the following cities, often near airports

Bangalore
Chennai
Delhi
Hyderabad
Mumbai
Noida
Pune
Kolkata

35

Promotions -

Employees of divisions like Website, Business Planning andAnalytics, ERP,

Business Development, Product Managementand Marketing, Supply-Chain
Management and CustomerSupport are generating revenue for it.

Selection Criteria at Flipkart:-While years of experience arealways beneficial for a

candidate, Flipkart's focus is to hire thosewho are able to consistently raise the
bar and introduce a varietyof innovation to move this organization forward. As
Flipkart grows, we feel it is absolutely necessary that our employees arealso able
to grow professionally with the organization.

Adequate Training as per their roles and responsibilities is given to them

accordingly and incentives.

Telephone Sales force is only 2% of the total employees focusing to reduce the
unsold/goods not much in demand.

Majority of Flipkart are employed in Customer support division.

It is the only customer support division in India having 24x7customer support
functioning for issues such as regarding choice of the product to purchase,
shipping, courier, how to order on website, mode of payment, gift voucher, order
status &cancellation and returns.
36

Having even tie up with Skype for the same on the website for user delight.

Unique tool of Sales Promotion is Affiliate on their website.

Publicity is by words of mouth publicity generating trust and accountability to

users.

As internet/web strategy used Google Ad-words, blogs, social networking sites

such as
twitter, facebook, used Google ad-words, e-mail campaigns.
Advertising focused on firstWords of mouth from 2007-10 as the advertisement
cost was not affordable

Focused on Print and TVC from 2011 onwards.

Launched their first campaign in tvc on 05/05/2011 with the concept of Granny,
Mouse, Magic Presenting the Concept of Getting Books Delivered at Doorsteps at
just one click of The Mouse through a Fairy-Tale.

Launched their second campaignNo kidding. No worries that we are serious

about our promises we make and experience shopping safely, delightfully and
with ease.

Packaging:

Different packaging for different product to ensure safe delivery

Flipkart the name goes with the online cart

Design and packaging is common so customers can relate it to the company

Positioning:

Customers feel Flipkart is cheap, on time delivery, replacement; the online myth
is gradually eradicated

37

Competitors see Flipkart as the market leader, with the acquisition of letsbuy.com

General public want to try it once for its creative TVC is making people curious to
experience flipkart.

People:

Service people, Sales Clerks, Delivery drivers, Managers, Complaints department,

Accounting, Warranty people, Technical people, all work for the customer ease,
customer satisfaction and customer delight.

38

CONCLUSION
BLUEDART
Value added services on the rise. Blue Dart has started providing value-added services
like logistics management, supply chain management and warehousing facilities to its
clients. Going forward demand for such services from corporates is likely to grow at a
fast clip. This is because by outsourcing such services to third party service providers
they would be able to cut down on costs and improve their efficiency levels. For the
courier companies such services would be part of the overall value proposition they
would be offering their clients apart from the normal pick up and delivery. Such services
have the potential for enhancing the margins of courier companies like Blue Dart. We
believe that Blue Dart is best equipped to capitalize on the growing opportunities in the
emerging areas of warehousing and supply chain management.
E-COMMERCE
A credible rival can do wonders to an enterprise and Flipkart is no different. The entry of
Amazon in India has enabled Flipkart develop a lot of in-house innovation and
organically developed best-practices - that have now become the industry standard.
Flipkart began operations on the consignment model; goods were procured from
suppliers on demand, based on the orders received through the website. Later, the booksto-electronics e-shop adopted the warehouse model. The company had its own
warehouses, and maintained its own inventory. However in July 2013, Flipkart launched
its model of marketplace just one month after Amazon launched its marketplace in India.
It introduced payments brand PayZippy for online merchants and customers seeking fast,
hassle-free and safe payment options. Some 70 per cent of its shipments are done by its
own logistics company and about half of deliveries are on a cash-on-delivery basis.
Flipkart has recently introduced the next day guarantee delivery service and shopping
from its own mobile application. Given the critical mass of transactions Flipkart controls
- about 100,000 a day - the company is betting that it has the volumes to lay the
foundation of what will be a profitable business.
Last but not the least; Flipkart has very clearly prioritized customer delight as its chief
avenue for customer acquisition and retention.
39

BIBLIOGRAPHY

Book: International Marketing By Manan Prakashan

www.bluedart.com
www.flipkart.com

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