Supply Chain Management & International Marketing Report Analysis

This report delves into the complexities of supply chain management and international marketing, with a specific focus on the challenges encountered by online retailers operating within the Indian market. The study identifies key logistical hurdles, including increased costs, the slow adoption of new technologies, the impact of globalization, and the lack of sufficient research and development. The report analyzes these challenges in detail, providing insights into their implications for online retailers. Furthermore, the report explores potential solutions to mitigate these challenges, aiming to enhance the efficiency and effectiveness of supply chain operations. The Amazon model is also discussed. The report provides a comprehensive overview of the current state of the e-commerce landscape in India, and offers valuable insights for businesses seeking to optimize their supply chain strategies and navigate the evolving demands of the international market.

Running head: SUPPLY CHAIN MANAGEMENT & INTERNATIONAL MARKETING
SUPPLY CHAIN MANAGEMENT & INTERNATIONAL MARKETING
Name of the Student
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1SUPPLY CHAIN MANAGEMENT & INTERNATIONAL MARKETING
Table of Contents
Introduction................................................................................................................................3
Objective and framework...........................................................................................................3
Logistics Challenges faced by Online Retailers in India...........................................................4
Potential solutions......................................................................................................................9
References................................................................................................................................12
Introduction..............................................................................................................................15
Amazon Model.........................................................................................................................16
Amazon Development Process................................................................................................18
Reason for success...................................................................................................................21
References................................................................................................................................24

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Part A

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Introduction
Internet has emerged as one of the biggest technological development of the recent
era because of the ease that it had offered in almost every aspect of life (Dutton & Blank,
2015). From education to healthcare and homes all the sectors have been benefited by the
emergence of the internet. One of the sectors that have witnessed drastic change is the
business world. The association of the business and internet have given birth to different
terminologies such as e-marketing, e-filling, e-care and several others. One of the most
prominent terminologies is the e-retailing that stands for online retailing.
Online retailing refers to the B2C (business 2 consumer) format that is undertaken
through means of online (Verma, Sharma & Sheth, 2016). In simple words, online retailing is
the selling and purchasing of goods, services and actions through online means. According to
the data provided by Statista.com, the number of consumers of online retailing was around
1.66 billion in 2017. The above figure is greater than the most populous country that is China
which have a population of 1.411 billion. In terms of money, the total sales from online mode
exceeded the amount of 2.3 trillion US dollar and is projected to grow up to 4.48 trillion by
2021 ("Topic: E-commerce worldwide", 2018). Asia pacific contributed 12.1% of the total
figure discussed above. Hence, it becomes crucial to assess the market of Asia Pacific and the
paper is aimed at doing the same. Therefore, the paper has taken the second most populous
country of Asia and World as the geographical domain of study.
Objective and framework
The section above has established a base for the online retailing and selected India as
the geographical domain for the study. Hence, it is crucial to identify the factors that are
constraining the growth of online retailing in the Indian Market (Mathew & Mishra, 2014).
The barriers of online retailing in India is extensive that includes legal issues, working

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barriers, returns & cancellations along with several others. One of the most prominent
challenge that is being faced by the online retailers in India is the logistics challenge. India is
greatly dependent on the rural areas and when the logistics is unable to reach in those rural
areas, it is forcing the online sellers to limit themselves to limited zone in a very large market
of over 1.3 billion people (Thakur & Srivastava, 2015). Similarly, there are multiple other
challenges that needs to be identified and mitigated. The paper in discussion has detailed the
challenges faced by the online retailers in logistics.
The following section is dedicated towards identification of the challenges faced by
the online retailers in India. The discussed section will detail the challenges and have been
succeeded by the mitigation actions for the identified challenges before summarising the
discussion to conclude on the report.
Logistics Challenges faced by Online Retailers in India
The prominence of the online retailing has been established in the sections above
along with the challenges faced by the online retailing in India has also been established. One
of the most prominent challenge is logistics and the following paragraphs presents the
challenges faced by the online retailing industry in India because of logistics.
Increased cost is primarily the most concerning challenge for the logistics in India.
The Indian online retailing market is estimated to be of around $ 13 billion and every one of
the online sellers wants to get something out of it giving birth to high level of competition.
Hence, the firms with objectives of becoming competitive leaders in the Indian online
retailing market transports the products through airways which counts heavily on the firm’s
financial resources (Benerjee, 2019). Time is not the only issue with the choice of air
transportation but the snarled roads and lack of river transportation is also one of the
prominent reason for the choice of air transport. The Indian online retailing giant Flipkart as

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well as the international retailing giant Amazon and most of the other online sellers chose the
air transport. However, the challenge of logistic does not ends with increased cost of air
transport. The commercial airlines serving as the logistic partner for the online sellers also
remove the parcels of the online seller to make space for the customers. The statement made
by Rahul Chari, the supply chain head of Flipkart, India’s largest online retailing service can
be taken in account to understand the challenge that is faced by the online retailers of India.
He quoted “It is unfortunate, but offloading does happen and we have to make sure our
delivery promises take that into consideration” (Bose, 2014).
Hence, in summary it would be justified to state that the discussed challenge that is
the increased cost of logistics is one of the most prominent challenge that needs to be
mitigated so that the online retailers can enhance their productivity and revenue.
Adoption of new technology is also one of the primary challenge for the logistics of
the online retailers of India. The challenge is not because of lack of technology as most of the
online retailers such as Amazon, Walmart and other mega giants are using technology with
the objective of enhancing their productivity but the reason is perception and infrastructure of
India (Thiyagaranjan & Ali, 2016). The perception in discussion here refers to the perception
of the online retailers as well as the customers. The online retailers prefer the pen-paper
method which has become primitive and unorganised. Furthermore, if the firm decides to
adopt state-of-art technology for enhancing their performance and productivity, the lack of
proper change management strategy and awareness about it develops constraints for the firm.
Change management is the method that ensures that the change that is being introduced into
the firm are smooth and efficient (Kalia, Kaur & Singh, 2018). Implementation of the new
technology or processes will induct changes to the conventional approach of the business
model and day-to-say practices. Furthermore, it resistance from the end-users is also major
challenge.

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Another reason for the lack of adoption of new technology in the logistics of online
retailing services is the lack of proper infrastructure. The use of drones for logistics is one of
the approaches that had been adopted in the major countries and Amazon is one of the
frequent users is drone logistics (Ruby, 2016). However, the drone logistics in India by
Amazon is also extremely limited. The reason for the limitation can be based upon the
inadequate infrastructure for the technological adoption. India does not have a proper
regulation for the use of drones, IoT and other technologies that can offer assistance in the
logistics of online retailing. The lack of proper legal framework could be understood by the
fact that India have drafted its privacy policy in the third quarter of 2018 and it is yet to be
approved by the parliament of the country (Chakraborty & Roy Chowdhury, 2018).
Additionally, zones with low connectivity is also one of the challenges that impact the
logistics of online retailing.
Hence, it can be summarised to state that the perception and lack of proper
infrastructure is the most prominent challenges that restricts the online sellers from adopting
technology. The lack of adoption of technology is developing challenges for logistics that
could be mitigated by adoption of technology. The challenges and threats in discussion are
live-time update of the traffic, cost saving on use of drones for delivery, IoT will also prove
to be life savings as several accident cases of logistics services have been identified. So,
immediate and proper attention should be cited with objective of mitigating the challenges of
logistics.
Globalisation has also developed challenges for the logistics of online services. The
globalisations have gained attention of different mega online retailing giants into the vast
Indian Markets. The challenge that have been developed is the customer’s expectation. The
above made statement could be better understood by the example of Amazon (Banerjee,
2019). Amazon uses its services such as Amazon prime that delivers product within 2 days

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and Amazon prime Now that delivers within an hour, is raising bar of expectation for the
customers. The customers have now started to expect that other online retailers will also offer
them services within a very short frame of time. Amazon with its vast resources and
technological advantage can manage the delivery but the same cannot be stated for other
online retailers. Flipkart, the biggest retailer of India is also losing its consumer base due to
the delay in delivery. The same can be stated for other small and medium online retailers.
Hence, it becomes crucial for other online retailers to adopt techniques and tools that are fast
and efficient and are capable of delivering the goods as soon as possible to the customers.
It has also led to over pressuring of the logistics services of different online retailers.
Furthermore, the over pressure on the employees of the logistics is leading to employee
turnover which is undesirable for the firms and the supply chain associates as well. The
online retailers with their own chain of logistics such as Flipkart which owns E-kart is also
witnessing a large employee turnover (Kumar, 2015). The turnover is one of the most
prominent challenge for any firm as it forces them to compromise on the quality of human
resource. The Human resources of an organisation needs to be trained and developed over
period of time and losing them due to over pressure enforces the firms to invest more time,
effort and resources in developing new talents. Furthermore, it also consumes time for the
talents to cope up with the company’s model of work and technologies.
Hence, to summarise it would be adequate to state that the challenges posed by
globalisation is one of the major challenge that needs to be coped up with so that the logistics
of the online retailers in India could leverage the vast Indian online retail market.
Lack of Research and Development is also one of the major challenges for the
logistics services of online retailers in India. Logistics can be considered as one of the
primary pillar for the business. The reason for the above made statement can be justified by

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the fact that logistics impacts all the sectors of a business. In case of the online retailing, the
logistics is one of the primary component of the business success and hence, their
development should be priority (Srivastava, Verma & Tripathi, 2017). However, in case of
the Indian online retail industry, the perception prevails that there is no need for R&D in
logistics as they just collect the goods and delivers it. The discussed perception is restricting
the development of the logistics industry. If proper R&D will be done for the logistics
industry, then the firm can identify the factors that will enable on-time delivery metrics. The
identification can then be worked upon so that proper supply chain strategy can be developed.
Researching on the logistics approaches offered by the scholars and practitioners along with
the successful supply chain in existence will determine certain enablers (Sethi, Ahuja &
Singla, 2018). Those enablers can then be compared and contrasted with the business
environment, business requirement and other crucial aspects to develop a proper logistics
management strategy.
The lack of R&D is also letting the employee turnover ratio grow higher while letting
the fall of employee satisfaction ratio. The lack of R&D is also limiting the adequate studies
on the employees that is leading to development of great level of dissatisfaction among the
employees, which is undesirable. Without proper R&D, the logistics of online retailing have
also started to fall behind in adoption of state of art technology that will be catastrophic for
the long term sustainability of the firms and the industry as well. Hence, to summarise it
would be adequate to state that logistics of online retailing in India is facing challenges
because of lack of proper R&D.
Management can be considered as the most prominent challenge for the logistics of
the Indian e-Retail Industry. Poor corporate infrastructure, unorganised truck ownership, lack
of proper documentation and several others are example of how unorganised and inefficient
is the management of the logistics in the online retail industry of India. An article authored by

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Verma, Sharma & Sheth (2016), states that the value of management and its sub-operations
such as change management, inventory management, Human resource management and
similar others are given very little attention. The above discussed statement can be taken in
account to state the fact that the logistics of the Indian online retail industry also lacks proper
management. Furthermore, the contracting problems in the logistics industry of India is also
one of the major challenge. Improper logistics management leads to accidents, vehicle
breakdowns and other crucial challenge for the logistics industry (Papadopoulos et al., 2017).
Furthermore, the discussion from above can be taken in account to state that the human
resource management in the logistics is also a challenge.
The challenge of management in the logistics of the online retailing develops great
challenges for the online sellers. It leads to delay of delivery which leads to cancellation of
order and in certain cases the firm also had to incur financial penalties (Venkatesh, Rathi &
Patwa, 2015). Employee turnover due to lack of human resource management, failure of
technologies due to inadequate technology management and change management along with
several other challenges are posed to the logistics and eventually to the online retail industry
of India (Kapoor & Sharma, 2016). Hence, it is crucial that proper management strategies
should be developed so that the efficiency of the Indian online retail market can be leveraged
by making logistics as a catalyst for competitive leadership.
Potential solutions
The section above has detailed the most primary challenges of the logistics in India’s
online retail industry and the crucial importance of mitigating them have also been discussed
and hence, the discussed section is aimed at detailing the mitigation approaches that should
be adopted by the online retail industry to mitigate the challenges of logistics.

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1. Increased cost is one of the major challenge that is faced by the logistics of the online
retail industry and to mitigate the discussed challenge, one of the basic approach that
can be adopted is consolidating loads. The consolidating of the load with
collaborators and even with the competitors will be a win-win situation for all. It will
enable the firms to ship their product along with the products of other firm who are
transporting bulk products to a location. The small shareholder can pay some rent that
will be cost effective than hiring an entire logistic service while the large shareholder
will also gain the benefit of reduced cost. Another approach is the river transportation.
India is rich with rivers but until now, it had not been leveraged and in the most recent
case the river has been used for the transportation of goods. The firms can leverage
the river logistics opportunity as the trend is young in India so the price will be less
and it will also contribute to their corporate social responsibility (CSR) because river
logistics is considered to be sustainable logistics.
2. The online retailing industry of India should focus on the training and development of
the employees and as part of their CSR should also educate the residents of their
geographical domain in the advancements and needs of technological development.
The discussed approach will not only benefit the firm to enhance their credibility but
will also ease the path of technological adoption by changing the perception towards
technology. The infrastructural issue can be resolved by writing petitions to Indian
Government for developing proper framework. The likes of Google, Facebook and
others are also offering support to the Digital Initiative of India and young firms,
which can be leveraged to develop a better infrastructure.
3. With proper focus over the management and adding value to the operations, the firms
in online retailing business of India can cope up with the challenge of globalisation.
Tesla is one of the prime example of the firm that through its innovation have coped

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up with global brands with the limited resources it had. One of the approach that can
be accounted to attain the discussed recommendation is adoption of action centric
leadership which focuses on the task as well as the team and individual members of
the team. The discussed approach will mitigate the over pressuring of the employees
and will benefit the logistics by mitigating employee dissatisfaction and turnover
ratio.
4. The online retail industry should develop a dedicated team for research and
development while providing them with disruptive technologies and tools such as
Data analytics. The use of data analytics will enable them to understand the
challenges of logistics and propose recommendations for mitigation of the identified
challenges. Furthermore, they will also propose plans for the management of the
unorganised logistics vehicles and proper strategy for logistics management. The use
of disruptive technologies such as the IoT and cloud services for safe transportation,
identification of delivery metrics and other benefits will also be offered with
introduction of a dedicated research and development team. However, it should be
ensured that the R&D team should be skilled and in possession of state-of-art
technologies so that they can offer high level of work efficiency and feasible
solutions.
5. The online retail firms should also have a dedicated management team which
accounts for different strategies and based on the vision, mission and goals of the
organisation develop a proper management strategy for the firm. Project management
tools such as MS project, ERP, Accounting Systems and other should also be taken
into consideration so that the efficiency of the activities and strategies can be ensured.
In summary it can be stated that the logistics of the online retail industry in India is
facing certain challenges that needs to be mitigated and the proposed recommendations can