E-commerce Industry Analysis

This assignment requires an in-depth analysis of the e-commerce industry in India. It involves researching and evaluating the performance of leading e-commerce companies such as Flipkart and analyzing their strengths, weaknesses, opportunities, and threats. Additionally, it requires an examination of the market size and growth prospects of the e-commerce industry in India.

Marketing
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing management refers to the process of accessing and improvising the current
marketing strategies that a company uses in order to achieve higher success through their efforts.
This report is about an electronic commerce company named as 'Flipkart', headquarters in
Bangluru, India. It sales number of products online which includes consumer electronic, books,
lifestyle, baby care and many more. This assignment talks about the background of e-commerce
and market positioning as well as USP used by Flipkart (Baker,2016). Further it includes
description of market audit conducted using SWOT & PESTLE analytical tool. Apart from this it
explains about marketing mix of company and methods to improve it also covered in this report.
MAIN BODY
Marketing refers to the set of activities that are used for communicating the information
as well as importance of a commodity in order to influence customers to purchase product or
services. Marketing management is defined as the process of analysing, planning, applying and
controlling the program designed for approaching the target market and for achieving the desired
outcome. Flipkart is an online retailer of India, which sell its product or services using its own
website throughout the world.
Background:-
E-commerce refers to the buying and selling of good or services online with the help of
World Wide Web. E-commerce market is consider to be one of the most powerful and fastest
growing sector of the world. With the emergence of information technology, E-commerce
market has also gained popularity in India and this revolution has changed the whole scenario of
doing business in country. Now, Indian E-commerce market is now expected to grow up-to US$
200 billion by 2026. Introduction of smartphones, 4G networks and increasing customer wealth
are consider to be main reason behind the popularity of e-commerce market in India. With the e-
commerce revolution, number of retail companies also started selling their product or services
online to achieving higher revenue and sale (Fernandez, Le Roy and Gnyawali, 2014). Retail
companies like Flipkart, Snapdeal, Amazon etc. are the greatest promoter of e-commerce
business in India. According to present scenario, online retail sale in India is expected to increase
by 31% in upcoming year.
Apart from this government of India also promoted the use of e-commerce by providing
various opportunities to businessmen by initiating several schemes Digital India, Make in India,
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Start-up India and innovation fund. In these schemes government provides loans to small
business so that they can expand their business over an e-commerce platform. The timely
implementation of these programs support the growth and existence of E-commerce in India.
Flipkart Pvt. Ltd is one of the largest Indian E-commerce company, headquartered in
Bengaluru. It was founded by Sachin Bansal and Binny Bansal in year 2007 when they use to
sell books online. It was the most riskier decision taken by them to sell product online as that
time e-commerce was not much exists. After gaining popularity company expanded its business
in other product categories such as mobile phones, music, movies, etc. With the momentum
gained by e-commerce in India, Flipkart started offering different range of products and now it
offers more than 80 million products categories which includes computer and accessories,
laptops, books, lifestyle products, home appliances, electronic goods, baby care, toys, jewellery
and many more (E-commerce Industry in India, 2018).
Flipkart positioned itself as a customer friendly and trust worthy e-commerce brand by
launching its 'cash on delivery' services. This option help in developing confidence as well as
trust among online buyer. As they hesitate to pay online or disclose their financial information on
web page. Cash on delivery option influence target market up to a large extent for purchasing
products online. Further company also put more effort toward improving the supply chain system
for delivering product or services on timely manner. These positioning helped Flipkart in
maximizing their customer share in market and now company has more than 100 million
registerd customers.
Apart from this company's unique selling preposition also support company to achieve
such heights in e-commerce industry. Flipkart targeted customer support services as their USP,
where more than 2500 staff work 24/7 for offering better services to their customers (Flipkart –
Company Profile, 2016). It also manage its own supply chain which includes warehouses and
distribution centres across 13 cities of India. Other USP of Flipkart are quality and original
product, genuine Feedback & rating etc. These all unique selling preposition assists Flipkart in
achieving popularity and building trust among target customers.
Market audit of Flipkart
Market audit refers to the process of thoroughly reviewing the firm's marketing approach,
activities and aims to determine the potentiality and viability of current market strategies. It
includes evaluation of business environment both internally as well as externally which further
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help company in identifying the area of improvement. These finding help in formulating the plan
which support in enhancing the performance of the company. This analyses can be better
performing using two analytical tools such as SWOT or PESTEL which help in accessing the
current market condition and strategies to be formulate for further growth of the company.
SWOT analysis of Flipkart:-
Swot is a analytical and strategical tool which help in accessing the business environment
to formulate growth strategies and eliminates various threats that may affect the functioning of
business. It is abbreviated as Strength, Weakness, Threat and Opportunities. This analysis will
help Flipkart in identifying the actions to be taken for improving their weaknesses and
eliminating threats that may affect its operations (SWOT analysis of Flipkart, 2018). Further it
also support in grabbing the opportunities that are present in market which take it new heights.
Following table describes about the SWOT of Flipkart:
Strength Weakness
 Greatest strength of Flipkart is that it
offer more than 80 million product
categories which ranging from lifestyle
product to electronics and kitchen
appliances.
 It invest more over improving the
supply chain system to ensure timely
delivery of product or services through
its own e-kart platform. Flipkart has
more than 4100 couriers in the world.
 Company has tie ups with various big
brands like Apple, Xiaomi and
Motorola which help them in getting
regular supply of product (Guesalaga,
2016).
 Company has logistic support from
ekart which ensures delivery of
product on time.
 Due to huge competition present in
market, lead company to invest more
promotional activities for acquiring the
attention of customers toward its
products.
 Distribution channels of Flipkart is
limited as compare to other competitors
such as Amazon, eBay.
 It offers discount over their products
during billion sales day which is too
high for the company that they hardly
make revenue as expected.
 Less knowledge about internet as well
as negative perception about online
selling in small cities leads to decrease
in sale of product or services.
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Opportunities Threats
 Flipkart can expand its product ranges
by adding other categories for example
furniture.
 Improving the online payment system
by adding more authentication process
help in building up more trust in the
mind of customers. This help in
increasing the number of customers as
well as volume of sale (Hakansson,
2015).
 Expand its global accessibilities also
help company in growing faster in
terms of number of customers as well
as revenue generation.
 Promotion using social media sites
leads company to approach youth that
help in maximizing the market share of
Flipkart.
 Increasing competition from
international players such as Amazon,
eBay etc. is consider to be the main
threat for Flipkart. As these players are
trying to grab each others market share.
 Switching cost is very low due to
number of options available in front of
customer. As same product is available
and displayed by several other online
retailers which may be at cheaper rate.
 Government regulation is also affecting
the operations of Flipkart. As according
to new GST bill the cost of selling
goods online is increased in India. This
may decrease the number of transaction
which further can affects the revenue of
company.
PESTLE analysis:-
It is an analytical tool which is used by companies to identify various factors present in
external environment which have an direct impact over the operations of firm. By using this
analysis company can formulate strategies which help them in dealing with threats that are
present in external environment and may hinder the functions of company. This tool consists of
six macro environmental factors such as political, legal, social, technological, legal and
environmental (Iacobucci, 2014). By using this analysis tool Flipkart can identify various threats
that are present in external environment and need to be consider while performing business
activities. Further it also help in identifying various opportunities present in external
environment which support Flipkart in expanding their business and in achieving higher growth.
Following points shows the Pestle analysis of Flipkart:
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 Political:- It includes factors related to governmental regulation and political stability
which may affect over the operations of Company. It includes government policies, tax
policy, trade restrictions etc. Government of India is currently planning for boosting up
the economy of rural area by promoting digitalization to each area of country. For
promoting this growth government of India provide various schemes such as Digital
India, Make in India, innovation fund (Karjaluoto, Mustonen and Ulkuniemi, 2015). This
has open up number of opportunities for Flipkart as they can sell their products to other
untapped part of country. Apart from it also brings some threats for company as new
regulation may be formulated for E-commerce industry to promote economical growth
which leads to modification in business operations of company. Further, this step of
Indian government also open up the entry option other international retailers such as
Amazon, eBay etc. which increases the competition in market.
 Economical:- It includes factors such as economical growth, exchange rate, inflation,
disposable income, interest rate etc. which affects the profitability and way a business
operates. E-commerce industry in India is one of the fastest growing sector and is
expected to reach up-to 31% by this year to staggering of $32.7. Therefore it brings
number of opportunities for Flipkart to grow and expand its business (India’s e-
commerce market. 2018). With the increase in income level of people lives in India leads
to increase in demand of commerce platform for purchasing and selling the good or
services. Further there are other positive factors that help in promoting the growth of
Flipkart such as increasing in the living standard of population, literacy related to
information technology, less tax over online purchase and busy schedule. These all
factors leads to maximizing the use of online platform to make purchases.
 Social:- It is also known as socio-cultural factors and it includes shared believes, values
and attitudes poses by customers. These factors affects the demand for company's product
or services. Plans of Indian government toward spreading the knowledge and literacy
regarding the use of computer and internet proves to be a better opportunity for Flipkart
to exert their services to rural areas (Kowalkowski and et. al., 2015). Further company
also focuses over improving and delivering the better customer support services for
maximizing the level of customer satisfaction. Company has more than 2500 staff
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members that work toward providing services and solving the queries of customers 24/7.
this help them in building trust among customers.
Apart from this Flipkart is also take a step toward improving the work life of their
employees by contributing toward day care expenses for their parents, maternity leaves
also revisited. In addition to this, average age of employees working in Flipkart is 29
years which provide better solution as well as trending practices that help in delivering
better services.
 Technological:- It includes factors like change in technology used, new methods of
producing or distributing products, technological up gradation and new innovation.
These factors have direct impact over the way in which company market its product or
services. With the increasing demand of using smart phone, company started offering
their product or services over their own mobile application. It is assumed that Flipkart
will go all mobile in upcoming future (Lovelock and Patterson, 2015) In addition to this
mobile apps also allows its users to use more customized and easier payment methods
which results in increase number of visitors. Apart from this company also provide new
innovated product or services to their customers in order to maintain their number of
visitors over their website. It includes newly launched mobile phones and other electronic
items.
 Environmental:- These factors includes changes in the weather condition as well as
various laws related to safety and protection of environment which are required to be
followed by a company in order to market its product in that geographical area. Flipkart
is not involve in any sort of activities which harm environment as it perform its business
operations using e-commerce platform. Rather it encourage consumption of more
product or services by adopting various sales promotion activities to attract customers for
buying more.
 Legal:- This factor includes various laws and regulations such as health & safety law,
advertising standards, consumer rights & law, employment law, product labelling &
product safety. It is very essential for a company to identify various laws that are required
to compel with in order to operates their business effectively and legally (Lusch and
Vargo, 2014). There are number of legal issue faced by Flipkart which affected the
reputation of company. This includes fake products delivered to customers from the
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suppliers lead the buyer file the case of fraud against the company. Secondly Zomato's
breach resulted in the theft of client's data which increase the concern of company toward
developing the ability of protecting the consumer data. This led Flipkart to be more aware
about the property rights and trademark practices.
Further with the growth of e-commerce industry it also increase various types of
government law and regulations implemented over companies like Flipkart which
affected the operations of company. It includes new changes in GST tax of India leads to
increase in the rate of selling online products. This leads to decrease in the revenue of the
company.
From this above market analysis it can be determine that there are various threats present
in environment which may affect the operation as well as profitability of the company. This
includes, changing government regulation & taxation policies, increasing number of competitors,
lower switching rate of customers etc. But apart from this there are number of opportunities
which are present in environment that help company to achieve higher growth (McColl-Kennedy
and et. al., 2015). It includes increasing living standard & income level of population,
governmental support toward digitalization and increasing use of smartphones. These all factors
provide numerous growth opportunities to Flipkart in Indian e-commerce market.
Marketing mix actions
Marketing mix refers to the set of strategic activities or actions taken by company that
help in promoting the product or brand in the marketplace. These strategies help company in
achieving the higher market share which in turn will increase the volume of sale.
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Source: The Marketing Mix, 2018
Above images shows the seven element of marketing mix which are used to formulate
strategies as per the current market trends. Marketing mix consists of seven elements which are
as follows:
 Product:- Flipkart is an online retailer company based in India which offers number of
product or services ranging from lifestyle products to electronic items. It deals in more
than 80 million consumer product categories which is the main reason behind its largest
market share in Indian e-commerce industry. But with the increasing popularity and
usage of internet leads people to search each product or services online. Therefore, it
increase the use of online websites for purchasing commodities (Morschett, Schramm-
Klein and Zentes, 2015). So in order to keep up with the demand of external environment
company is required to maintain its stock to fulfil the demand of customers. As due to
higher brand recognition and number of visitors, products get easily outdated. Increase in
the stock volume leads to decrease in customer switching which provides maximum
revenue. But apart from this it also leads to increase in inventory cost of Flipkart.
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Illustration 1: The Marketing Mix

 Price:- Flipkart has developed its strongest marketing model which help them in
competing with other e-commerce players. In this model company generally minimizes
the price of their product by forcing the to compete among themselves for achieving
higher revenue. This leads sellers to decrease the price of product which results in
increasing the number of customers (Papadopoulos and Heslop, 2014). Apart from this
company also offer 1 day delivery services to their prime customers but charges extra
service and installation amount. Increase in competition leads to minimizing or
eliminating the cost of delivery for attracting customer to purchase products. But on the
other hand Flipkart charges minimum 500 Rs., as a delivery charge this leads to buyer
switching. So, company is required to minimize its delivery charges which are higher
than that of competitors. This will help in reducing the customer switching but on the
other hand it increase the cost of company.
 Place:- Flipkart is one of the greatest electronic commerce company, headquarters in
Bangaluru, India. It offer wide variety of product or services across various areas of
country with more than 80 million product categories. It has number of distributors
centres in more than 13 cities of India. But with the emergence of globalisation and use
of internet leads to increase in the use of e-commerce platform for purchasing or selling
the product Yang and Su, 2014). This leads to increase in competition in this industry
and in order to cope with this situation Flipkart is required to expand its business in other
countries. This help in restricting the competitors to destroy the demand of Flipkart's
product. But on the other hand it leads to increase in the cost of exchange, inventory,
operation cost etc.
 Promotion:- For promoting its product Flipkart currently uses Google, SEO and Ad-
words services which leads customers to search their product as well as download mobile
application. This app help customers in getting alert about new product, order status,
current offers and various gift coupons (Sandberg and Aarikka-Stenroos, 2014). It also
uses TV commercials for displaying their creative and interesting advertisement. But on
the other hand competitors are using various other sources to promote their brand such as
social media site. Therefore, in order to keep up with current demand Flipkart is required
to modify its promotion activities by adopting different channels of communication to
promote their brand such as social media (Smith, 2016). This step will help in
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approaching the youth which are consider to be the largest segment for e-commerce
market.
 Process:- Flipkart uses several business processes for ensuring the smooth execution of
services to customers. When a person open up the webpage of Flipkart, the offers and
products are categorised over home page. By using this options customers can select the
product of their choice. After selecting the product they can either add it to cart or buy by
clicking over purchase option. When order is placed the product is packed, processed and
shipped from the centre and send it to customers place through distributors. This process
includes number of mediators through which product pass on which increase the time of
delivery. Further it also leads to replacement of original product that affects the goodwill
of the company. Hence, Flipkart is required to improve it current process in order to
reduce the time of operations.
 People:- Flipkart focuses more over delivery better services by hiring large number
employees which work toward solving the issues of customers and providing better
shopping experience. These employees work 24/7 to solve all the problems faced by
customers while purchasing or using of product or services. But as their is increase in
use of advanced technology leads company to fail in various areas of operation which
includes customer security, failure of network over internet, hacking of data (Swani,
Brown, and Milne, 2014). This requires the company to recruit employees that are IT
background which leads them to solve network security and other related issues quickly.
But along with this it also somewhere increase the cost of recruitment as well as training
& development cost.
 Physical evidence:- Flipkart uses its own web page to sell its product or services online
through out the country. It designs its website in such a way that customers can easily get
the product they are searching for. Number of options or categories are placed over their
which lead them to filter the product, brand and quantity they want (Wu, 2014). But on
the other hand this websites is managed properly. As during its sales promotion, ads of
offers get popped up every where which leads customers frustrated and they exit the app.
So company must manage their website properly so that customers didn't get confused
and frustrated.
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CONCLUSION
From the above report it can be summarized that it is very essential for a company to
manage it marketing activities which help them in achieving higher success. It also help in
determining various factors that are required to be improve ion order to improve their current
marketing strategy. In order to analyse the internal and external environment, SWOT as well as
PESTLE consider to be the best analytical tool. These tools assess the various opportunities that
help in further growth of a company.
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REFERENCES
Books & Journals
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and the role of customer engagement in social media. Industrial Marketing
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Hakansson, H., 2015. Industrial Technological Development (Routledge Revivals): A Network
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Iacobucci, D., 2014. Marketing management. Cengage Learning.
Karjaluoto, H., Mustonen, N. and Ulkuniemi, P., 2015. The role of digital channels in industrial
marketing communications. Journal of Business & Industrial Marketing. 30(6). pp.703-
710.
Kowalkowski, C. and et. al., 2015. What service transition? Rethinking established assumptions
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Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
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McColl-Kennedy, J.R. And et. al., 2015. Fresh perspectives on customer experience. Journal of
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Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management
(pp. 978-3658078836). Springer.
Papadopoulos, N. and Heslop, L. A., 2014. Product-country images: Impact and role in
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Sandberg, B. and Aarikka-Stenroos, L., 2014. What makes it so difficult? A systematic review
on barriers to radical innovation. Industrial Marketing Management. 43(8). pp.1293-
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Smith, B., 2016. Nature and Geography: Tragic Voids within Marketing Textbooks and the
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Swani, K., Brown, B. P. and Milne, G. R., 2014. Should tweets differ for B2B and B2C? An
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Online
E-commerce Industry in India. 2018.[Online] available
through<https://www.ibef.org/industry/ecommerce.aspx>./
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Flipkart – Company Profile. 2016. [Online] Available
through<http://www.newspatrolling.com/flipkart-company-profile/>./
SWOT analysis of Flipkart. 2018. [Online] Available
through<https://www.marketing91.com/swot-analysis-of-flipkart/>./
India’s e-commerce market. 2018. [Online] Available
through<https://www.financialexpress.com/industry/indias-e-commerce-market-to-hit-
32-7-billion-this-year-growth-trails-only-these-2-countries-in-a-pac/1198653/>./
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