Nishant Pandey +91-9620622867 nishantthethinker@gmail.

com

Submitted By:

Case Study Questions

Analyze the Indian online retail market potential and growth for next 5 years. Take margins also into consideration. Evaluate different business models and segments in online retail Evaluate Legal Implications for India market entry Define how to set up a competitive delivery network Define how the marketing budget should be spent What do you anticipate Buyonlineindia.com will do to thwart competition and how Buyglobal.com can preempt these measures Analyze and suggest if it is wise for Buyglobal.com to enter Indian market or not

Analyze the Indian online retail market potential and growth for next 5 years. Take margins also into consideration.

The current market size is of online retail is about INR 2000 Cr The online retail industry is pegged to grow at 35% and is been expected to reach INR 7000 Cr.(ASSOCHAM). The easy availability of broadband and increasing penetration of internet is major driver of growth for the industry. The large youngsters population who are eager to adopt new technologies with rapid changing lifestyles. To gain confidence of the customers various major adopted by the companies are free home delivery, discounts, cash on delivery etc. A survey conducted by ASSOCHAM in 2011 found that shoppers like online shopping because of convenience, full info about product, price comparison etc which is difficult in traditional stores.

Evaluate different business models and segments in online retail

The various online business models are as follows: Brokerage: Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Advertising: The web advertising model is an extension of the traditional media broadcast model. Infomediary: Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market Merchant: Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction

Continued.
Manufacturer (Direct): The manufacturer or direct model, it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. Affiliate: In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. Subscription: Users are charged a periodic daily, monthly or annual fee to subscribe to a service Utility: The utility or "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage rates. Traditionally, metering has been used for essential services

Continued..
The evaluation of Online Retail Segments; The various segment existing currently are Clothing, Footwear, Electronics, Books, music & gifts, Entertainment, Watches etc A survey reveals that Indian consumers are likely to buy Books(41%), Airline ticket/ Reservations (40%) Electronic equipments (35%) and Clothing/Accessories/Shoes (25%) via online. Online reviews and opinions are most important for Indians when buying Consumer Electronics (57%), Software (50%), and a Car (47%). The major spending is currently is on the books segment but the clothing/Accessories/Shoes segment is catching very fast and is expected to increase its percentage with a greater margin.

Evaluate Legal Implications for India Market Entry

Core legal Issues: Contracts: The Information Technology Act, 2000 (IT Act) deals with contractual aspects of use of electronic records, such as attribution, acknowledgement, time and place of dispatch and receipt. Security: It Security over the Internet is of immense importance to promote e-commerce. Companies that keep sensitive information on their websites must ensure that they have adequate security measures to safeguard their websites from any unauthorized intrusion. Privacy & Data Protection: An important consideration for every ecommerce website is to maintain the privacy of its users. Presently there exists no legislation in India that upholds the privacy rights of an individual or organization against private parties. While the Constitution of India upholds the right to privacy as a fundamental right of every citizen,9 the right is exercisable only against a State action. Even the IT Act addresses the issue of protecting privacy rights only from Government action.

Continued.
Intellectual Property rights: One of the foremost considerations that any company intending to commence ecommerce activities should bear in mind is the protection of its intellectual assets. The Internet is a boundless and unregulated medium and therefore the protection of intellectual property rights ("IPRs") is a challenge and a growing concern amongst most ebusinesses. While there exist laws in India that protect IPRs in the physical world, the efficacy of these laws to safeguard these rights in e-commerce is uncertain. Jurisdiction: The jurisdiction is a little complicated because in e- commerce the transaction is not involved in only one country but multiple, a proper law is not yet find by the authorities. Taxation: The massive growth of e-commerce business has not gone unseen by the tax authorities. In India the High Powered Committee was constituted by the Central Board of Direct Taxes, which submitted its report in September 2001.

Continued
Others core legal issues Content regulation Advertisement Electronic payment issues FDI Corporate structure and funding

Define how to set up a competitive Delivery Network

To design a competitive delivery network the first thing is to make demand, supply analysis and then design an efficiency template which help in allocation of budget. The process of delivery network is as follows:
Analyze customer needs Select the channel member

Establish Channel Objectives

Evaluate Channel Alternative

Consider Channel Constraints &List Channel Tasks

Identify Channel Alternatives

Define how the marketing budget should be spent

Establish a goal (e.g Market Share) Likely to continue to use after trial Likely to try if sufficiently exposed
Goal: 10% of 50 Mn= 5 Mn Users 33% Triers loyal =15 Mn Pot. users 40% Try = 37.5 Mn, 75% market share

% of market to be reached
Additional impressions needed to induce trial GRP to be bought (= reach X frequency)

25 impressions for trial

GRP= 75 X 25=1875

Budget based on average GRP cost

Avg. GRP = Rs 5000 Budget= 5000 X 1875= Rs 93.75 Lakh

What do you anticipate Buyonlineindia.com will do to thwart competition and how Buyglobal.com can preempt these measures

Buyonline.com is the no. 1 e-commerce portal in the country and has a competitive advantage over other players. Since buyonline.com is available on a large spectrum in the market. Buyonline.com is not profitable in all segments and is getting profits only on some of the niche segments, what buyglobal.com can do is to serve on to those areas where buyonline.com is making losses. And if the market is analyzed properly and understand the needs of the customer buyglobal.com can wiped off the competition and become the leader into those segments and then target the other segments.

Analyze and suggest if it is wise for Buyglobal.com to enter Indian market or not
It is advisable for Buyglobal.com to enter into the India market is due to following reasons: The online retail is still at a very nascent stage and is expected to grow in the coming years. The large youth population who are ready to adopt to the new technology. The success of online portal like Flipkart.com open a host of opportunity for the industry. The industry is expected to touch INR 7000 Cr by 2015.(ASSOCHAM). Also the new FDI policy which is friendly for foreign investors also open a host of opportunity for the foreign players.