E-COMMERCE

CHANGING PHASE OF RETAIL

INDIA

Abstract
Electronic commerce is a process of doing business through computer networks. A person sitting
on his chair in front of a computer can access all the facilities of the internet to buy or sell the
product. Unlike traditional commerce that is carried out physically with effort of a person to go
and get products, e-commerce has made it easier for human to reduce physical work and to save
time. E-commerce which was started in early 1990’s has taken a great leap in the world of
computers , but the fact that has hindered the growth of e-commerce is security. Security is the
challenge facing e-commerce today and there is still a lot of advancement made in retail sector .

Purpose
Purpose of this report is to explain current scenario of Indian retail sector and identify the role of
E-commerce in retail management. Purpose of this report is to convey a path to policy
formulator and researchers towards importance and role of e-commerce as changing phase of
retail industry in today’s business world.

Methodology
This is prepared by reviewing related literature produced in the area of retail in many decades
yet. I have also incorporated views of policy formulators and customers related to this industry.
This report is based on secondary data and provides only descriptive information and no
statistics are used.

Introduction

Retail Industry in India has come forth as one of the most dynamic and fast paced industries with
several players entering the market. But all of them have not yet tasted success because of the
heavy initial investments that are required to break even with other companies and compete
with them. The India Retail Industry is gradually inching its way towards becoming the next
boom industry.The total concept and idea of shopping has undergone an attention drawing
change in terms of format and consumer buying behavior, ushering in a revolution in shopping in
India Retailing is expected to change with the rapid development of new online sales and
distribution channels that literally can be used from anywhere, anytime-from work, school, a
hotel, car, or airplane. These developments should impact retailing as much as the advent of
strip malls, catalogue retailing, and TV-based home shopping. Almost every retailer is re-
evaluating every aspect of its operation from customer service to advertising, merchandising to
store design, and logistics to order fulfilment. Furthermore, reacting to the pressure of retailers,
suppliers are assessing technology based solutions to drive down costs (labour, delivery, and
production) and become more efficient producers of goods.

Meaning of Retail
Retail is the sale of goods and services from individuals or businesses to the end-user. Retailers are part
of an integrated system cal led the supply chain. A retailer purchases goods or products in large
quantities from manufacturers directly or through a wholesale, and then sells smaller quantities
to the consumer for a profit Thus, retailing can be said to be the interface between the producer
and the individual consumer buying for personal consumption.

Classification of Retail Sector:

The retail sector is mainly divided into: -
a)Organized Retailing.
b)Unorganized Retailing.

Organized retailing refers to trading activities undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax, etc Hypermarkets and retail chains, and also the
privately owned large retail businesses.

Unorganized retailing on the other hand, refers to the traditional formats of low-cost retailing,
for example, the local kirana shops, owner manned general stores, paan/beedi
Shops, convenience stores, hand cart and pavement vendors, etc

E-COMMERCE

Retailing is expected to change with the rapid development of new online sales and distribution
channels that literally can be used from anywhere, anytime-from work, school, a hotel, car, or
airplane. These developments should impact retailing as much as the advent of strip malls,
catalogue retailing, and TV-based home shopping. Almost every retailer is re-evaluating every
aspect of its operation from customer service to advertising, merchandising to store design, and
logistics to order fulfilment. Furthermore, reacting to the pressure of retailers, suppliers are
assessing technology based solutions to drive down costs (labour, delivery, and production) and
become more efficient producers of goods.

Kinds of E-commerce:

1.The Business to Consumer(B2C): In this kind of e-commerce, the business sells their
products to the customers or consumers through online web portals, where you search for your
desired product, scroll them, add them to the cart and then buy it through online fund
transaction method like with the use of credit/debit card or net banking. The best example of
this is Amazon, Flipkart.

2.The Consumer to Business(C2B): The process of selling and purchase of items or products
through consumers to the business via the internet, for example, the paid survey regarding any
product of any company.

3.The Business to Business(B2B): The buying and selling of goods or products over the
internet between the two businesses or company. The best example for this is the company
which provides hosting services to the websites of other companies, like, GO Daddy, which sells
the domain and other hosting services to the other companies.

4.The Consumer to Consumer(C2C): When over the internet you sell a product which you
need no longer to the needy one it is Consumer to Consumer e-Commerce. The perfect example
of this is OLX, a wide platform where you click your good which you need no longer and give an
ad of it where the buyer can contact you directly through the contact details provided by you on
the website.
Recent Trend Of E-Commerce In Retail
Sector

1. Online Sales Growth is Unstoppable:

Ecommerce sales have been growing constantly and for good reason. Online shopping is one of
the most popular online activities. The sales are projected to increase from 1.3 trillion in 2014
to 4.5 trillion in 2021 . It would mean a threefold growth over a 7-year span Even though online
shopping is one of the most popular online activities, the usage varies by region. With the
increasing popularity of ecommerce stores, a rising number of people are turning to online
shopping.

2. Mobile Shopping is growing:

The growth of mobile commerce has been noteworthy. Since 2016, sales made via mobile
devices increased by 15%. By the end of 2021, 73% of ecommerce sales will take place on a
mobile device. These figures can’t be ignored. Improving the ecommerce experience for mobile
customers can be a huge opportunity for businesses to tap into.

3. Rise of Voice Commerce:

Voice shopping is growing among Internet users. 13% of U.S. smart speaker owners say that they
were making purchases by voice at the end of 2017. That number is predicted to grow to 55% by
2022. The total spend on voice shopping has also gone up in the UK. This ecommerce trend has
grown in popularity mainly since 2014 when Amazon launched their smart speaker – Echo. While
voice shopping is still in its early stages, this statistic shows us that it will become increasingly
popular in the coming years
4. Evolving Role of Social Media in Ecommerce:
The number of social shoppers is also rapidly increasing. With the introduction of the “Buy”
button on Facebook, and Instagram Checkout, social media is playing a significant role in the
world of ecommerce. Social media has changed the way we live our daily lives, including the way
we buy things. And who can forget TikTok – the latest and rising rave within the world of social
media that has not only made its way into the hearts of teens but also around Hollywood?

5. QR Code Payments Make a Comeback:

One thing that’s risen together with ecommerce is mobile payments, which have become the
norm. Research shows that more than one-third of the online population used mobile payments
in 2018.

Growth of E-commerce in India currently

and in upcoming 5 years

India has seen the wondering growth in the e-commerce field in recent years with an internet
user of about 300 million. India has seen the marvelous rise in e-retail, electronic goods, fashion,
home appliances and so much, it has given many opportunities to the young generation and
made them number one entrepreneur providing so many jobs.

In future or in upcoming 5 years it is possible that the purchasing and selling of stuff would be on
the social media platform. Maybe the delivery system will become more intelligent with the use
of quad-copter or drones. With the use of artificial intelligence, your all the queries would listen
and answer by the robots more accurately and efficiently.
How to start eCommerce business

If you want to start eCommerce business of yours, then in here we will tell the step by step
procedures with their requirements in order to achieve the desired ecommerce store of yours.

Step 1:

Choosing or selecting the product: In the first stage, you have to take the biggest decision of
yours i.e. which product you want to sell, this is touted to be the most challenging decision
which one has to take. After you have selected your product you want to sell over the internet
you have to register your business and have to set them all up.

Step 2:

Registering the Domain name: Then the second step comes choosing a fabulous domain
name of your online store, which will describe your business that would have the catchy name
with which the customer will relate to them, far easier..

Step 3:

Taking Hosting Services: The next step after buying the domain for your ecommerce is
purchasing the hosting services to setup your ecommerce store, find the compatible ecommerce
choices in order to work.

In this Magento ecommerce will help you in listing your items, set the suitable price for them
and also adding the shopping cart to the website.

Step 4:

Logo Design: After you have selected and registered the name of your business and have also
purchased the hosting services the next step towards the making of your online store comes the
making of a fanatic, the eye-catching amazing logo which would act as a symbol of your e-
commerce business.

Step 5:
Web Design: The next step after following the four comes, the most important one that is
designing a website for your e-commerce business. A great website which engages the user
attracts more visitors and increases the traffic to the website, in clear words; a great and
beautiful website has a big role in Ecommerce SEO.

Step 6:

Website Development: After making the prototype of the website by designing it with
outlines the next phase comes in is the second biggest phase that is the website development. In
this step, the site is developed with the help of website developers those give your ideas a new
life and make your imagination real. The functionalities are added to your ideas and hence the
end result gives you a perfect running ecommerce store of yours.

Step 7:

Digital Marketing: The seventh step after the completion of development phase comes to the
digital marketing phase. At this point, you have to decide how you want to introduce your
product or your business in front of the customers.The marketing of your business digitally is
done with theEcommerce (SMO) is social media optimization which is done by the Facebook ads
campaign which also includes Instagram, giving the ad on the YouTube, making use of Google
ads.

Step 8:

Building Marketplace Management: The last and the ultimate step which comes is building
the online store with the better understanding of Ecommerce SEO. in which you have to write a
valuable and compelling product description of your business. Where your e-commerce business
is launched on the social platform over social media as everyone has become so much
connected to the world of social media like Facebook, Twitter, Instagram and other websites
where they give new business a chance to get introduced to the audiences, as without marketing
the customers would be remain limited to a particular area, so for the global reach building
marketplace for the new business is must.
Challenges Faced by E-Commerce Business

1. Finding the right products to sell

Anyone can launch an online store within days and start selling all sorts of products. Amazon is
taking over the ecommerce world with their massive online product catalog. Their marketplace
and fulfillment services have enabled sellers from all over the world to easily reach paying
customers. All of this has made it very difficult for retailers to source unique products unless you
they decide to manufacture your own.

2. Attracting the perfect customer

Online shoppers don’t shop the same way as they used to back in the day. They use Amazon to
search for products (not just Google). They use their smart phones to read product reviews while
in-store and pay for purchases using all sorts of payment methods. Lots have changed including
the way they consume content and communicate online. They get easily distracted with
technology and social media.

3. Capturing quality leads

Online retailers are spending a significant amount of money driving traffic to their online store.
With conversion rates ranging between 1% to 3%, they must put a lot of effort in generating
leads in order to get the most out of their marketing efforts. The money is in the list. Building an
email subscribers list is key for long term success. Not only will help you communicate your
message, but it will also allow you to prospect better using tools such as Facebook Custom
Audiences.

4. Converting shoppers into paying customers

Driving quality traffic and nurturing leads is key if you want to close the sale. At a certain point,
you need to convert those leads in order to pay for your marketing campaigns. Retailers must
constantly optimize their efforts in converting both email leads as well as website visitors into
customers. Conversion optimization is a continuous process.

5. Retaining customers
Attracting new customers is more expensive than retaining the current ones you already have.
Retailers must implement tactics to help them get the most out of their customer base in
increase customer lifetime value.

Benefits Of E-Commerce Business

With increasing the need of ecommerce industry, every businessman is looking to have an online
store where they can sell their range of products and services.Today, e-Commerce has
revolutionized the way companies are doing business. Now, consumers can purchase almost
anything online 24*7 a day and get an ultimate shopping experience.

1.Convenience & Easiness:

For many people in the world, e-Commerce becomes one of the preferred ways of shopping as
they enjoy their online because of its easiness and convenience. They are allowed to
buyproducts or services from their home at any time of day or night.

2.Comprise Warranty Information:

No matter whether you are looking to choose including warranty information with product
descriptions and datasheets or providing it from within an ecommerce shopping cart, you need
to make sure that customers must be aware of important terms and conditions that are
associated with their purchase.

3.Decreasing cost of inventory Management:

With e-commerce business, the suppliers can decrease the cost of managing their inventory of
goods that they can automate the inventory management using web-based management
system. Indirectly, they can save their operational costs.

4.Keep Eye on Consumers’ Buying Habit:

The best thing is e-commerce retailers can easily keep a constant eye on consumers’ buying
habits and interests to tailors their offer suit to consumers’ requirements. By satisfying their
needs constantly, you can improve your ongoing relationship with them and build long-lasting
relationships.

5.Competence:

For effective business transactions, e-commerce is an efficient and competence method. Setting-
up cost is extremely low as compare to expanding your business with more brick and mortar
locations. Very few licenses and permits are required to start-up an online business than physical
store. You can save your lots of money by using fewer employees to perform operations like
billing customers, managing inventory and more.

6.Allow Happy Customers to Sell Your Products:

With lots of customers’ reviews and product ratings, you can easily increase your sells as new
customers find that your products are good and effective. Make sure that you mention your
clients’ testimonials, reviews and product ratings as such things can help your new customers to
purchase your products.

7.Ability of Multi-site:

With ecommerce platform, it becomes easy for businesses to launch channel specific and
particular brand ecommerce website.

8.Attract New Customers with Search Engine Visibility:

As we all know that physical retail is run by branding and relationships. But, online retail is also
driving by traffic that comes from search engines. For customers, it is not very so common to
follow a link in the search engine results and land up on an ecommerce website that they never
heard of.

CASE STUDY
Lenskart.com: Setting Its Sight on the
Indian Eyewear Market

ABSTRACT
The case “Lenskart.com: Setting Its Sight on the Indian Eyewear Market” talks about the various
business aspects that led to the rise of Lenskart as a disruptive eyewear solutions company in
India. The case starts out by mentioning Lenskart’s early days as a start-up vertical ecommerce
company and the business practices it adopted to make buying eyewear online popular in
India’s highly fragmented eyewear market. It then describes the different marketing and
promotional strategies implemented by Lenskart to entice customers. The case provides the
factors that pushed Lenskart to becoming an omni-channel retailer with both an online and
offline presence. Lenskart’s tie-ups and investments in start-ups working on either products or
technologies in the eyewear space are also described. The case ends with a look into the
challenges being faced by the company. How can Lenskart sustain its position in the Indian
eyewear market and achieve its aim of coming out with an Initial Public Offering (IPO)? Can
Lenskart’s Founder and CEO, Peyush Bansal (Bansal), overcome the big challenge of leading the
company to success in the highly competitive but vastly untapped Indian eyewear market?
ISSUES

The case is structured to achieve the following teaching objectives:

1.Analyze the business aspects of an ecommerce company that provide it with unique
competitive advantages

2.Examine the nuances of the omni-channel retail strategy of an ecommerce company.

3.Study the marketing strategy of an e-commerce company.

4.Scrutinize the challenges of an e-commerce company in a competitive business market.

Contents
 INTRODUCTION

 THE RISE OF LENSKART

 BUSINESS MODEL OF LENSKART

 MARKETING STRATEGY OF LENSKART

 CHALLENGES GALORE

 THE ROAD AHEAD

 EXHIBITS

INTRODUCTION
In May, 2018, Lenskart Solutions Private Limited (Lenskart), an India-based omni-channel
optical retailer that sold eyewear frames, contact lenses, sunglasses, and spectacles,
announced an investment of US$ 0.5 million in ThinOptics, Inc. ThinOptics made state-
of-the-art reading glasses that could be moulded to the nose, as they were super-thin
and had no temples, which made them even more unnoticeable on the face. The glasses
could be attached to items such as phones, keychains, and laptops so that one would not
forget them.

Furthermore, Lenskart had plans to invest US$ 2-3 million in start-ups working on either
products or technologies that could help deliver inexpensive eye care solutions in
2018.Lenskart, founded in 2010, had grown more than 200% year on year to become
India’s fastest growing eyewear company and largest vertical ecommerce company in
eyewear. As of June 2018, it claimed to be shipping 300,000 pairs of eye-wear per
month, which was the largest eyewear selling company in India.

THE RISE OF LENSKART

Peyush Bansal (Bansal) had received his Engineering degree from McGill University in
Canada in 2006. Later, he joined Microsoft Corporation (Microsoft) in the US in January
2007 as a Program Manager. He left Microsoft in December 2007 and started his first
India-based company called Valyoo Technologies Private Limited (Valyoo), along with
Amit Chaudhary and Sumeet Kapahi in 2008.

In Valyoo, he launched his first business portal called ‘SearchMyCampus.com’. This portal
was similar to a classifieds site, where Indian students could search for jobs, housing,
books, coaching classes, etc.

EXCERPTS
BUSINESS MODEL OF LENSKART

Lenskart’s offerings included a range of eyewear options such as spectacles, contact

lenses, and sunglasses for both men and women. It offered glasses in three sizes – small,
medium, and large – and a one-year warranty on all of them. It had more than 3,000
different styles of eyewear to fit different price ranges. Apart from its in-house brands,
its collection included reputed eye wear brands such as Ray-ban, Bausch + Lomb , TAG
Heuer S.A. , etc.Though Lenskart sold other eyewear brands, around 90% of its revenues
were derived from its own brands. The price of Lenskart products ranged from Rs. 1,000
to Rs. 20,000.

MARKETING STRATEGY OF LENSKART

Lenskart chose different strategies to market its products to customers. What made the
company distinctive was that it did not target any market segment or age group in
particular, but designed its products in common for all the customers.

CHALLENGES GALORE

Despite its innovative business practices and the ability to attract investment, the
company’s financial position continued to remain weak. The losses at Lenskart widened
by 78% to Rs. 1.13 billion in 2015-16 from 2014-15, even as it posted a 63% jump in
revenues to Rs. 990 million, as per documents filed with the Registrar of Companies,
India (RoC).

THE ROAD AHEAD

As of June 2018, Lenskart was the largest optical retailer in India. Its app had five
million plus downloads, and it had an offline presence of 410 stores having 200
opticians. The company claimed that almost 50% of its total sales came from its
offline stores. Stimulated by the encouraging results from its offline foray,
Lenskart planned to open 15 new stores each month, mainly in the tier I and tier
II cities of India.

EXHIBITS
Exhibit I: Eyewear Market in India, as of 2018.

Exhibit II: Indian Eyewear Market growth 2015- 2018.

Exhibit III: Services Offered by MyOperator to Lenskart.

Exhibit IV: Lenskart Free Home Trial Process.

Exhibit V: Lenskart Franchise Requirements.

Exhibit VI: Lenskart Business Model.

CONCLUSION
This REPORT concludes that e-commerce is very good for us who provides us wide variety of
products and services with lots of information and attractive pictures at an affordable price at
our doorstep. It provides convenience to customers and allows the enterprise to expand their
business over internet. Ecommerce have good impact on markets like reduce the cost of
advertisements as many customers can attract through internet, new brand can be developed,
can maintain a good relationship with customers and can make customized products according
to customer’s needs. But e-commerce has bad impact on offline retailers because customers
buys on low price from online shops due to which they also have to lower their price and does
not get any profit, retailers cannot maintain a large stock like online shops have stores because it
will cost a huge loss to them. They have to spend more money in offline advertisements to
attract customers. Along with the impacts e-commerce also offers some limitation in terms of
markets and retailers that is website cost, to create and maintain a website a lot of money is
required; infrastructure cost, to fulfill the orders online retailers have to maintain a large stock in
a big warehouse which costs a lot; security and fraud, due to popularity of online shops criminal
elements are also attracted to them who can hack the personal information and can misuse
them; customer trust, it is difficult for customers to trust a new brand without looking, touching
and face-to face interaction.