12IB-003

 

Learnings from the course

The reason why E-business is important in India today:

1.      Growing no. of internet users in India. In 1999 there were 3 million internet users and today there are 200million users. It is growing by 1.5million every month.

2.      The industry size in India is $10billion where travel ticket sales account for $8.4 billion. The e-commerce industry is booming now.

Hence the companies are interacting with the customers online through social networking sites or through mobile apps. There is an explosive growth in Big Data. Even the product offering has changed, we now have e-books, encyclopaedia has transformed from printed to Cds or websites.

Ecommerce eras

1996-2000

a.      We had Venture capitalists.

b.      No money was charged for transactions but revenue came from advt.

c.       Focus was on innovation (B2C)

 

2001-2008

The industry was hit hard by the slowdown and so money disappeared in the market.

In India ~80% websites were shut down.

a.      Companies borrowed from banks.

b.      There were charges per transaction.

c.       Focus was on Cost saving and also B2B 

 

2008 onwards

a.      VCs have reappeared (e.g. Flipkart)

b.      Again money comes from advt (Facebook)

c.       Decline in B2B and Innovation back to B2C

 

Assessing E-commerce

We moved from B2I2C to B2C to B2E2C. Intermediateries have resurfaced as they played a very important role of bringing buyer and seller, though the commissions have reduced.

Today the buying power of the channel exceeds the buying power of the buyer.

 

Problems faced in the industry:

1.      High working capital(inventory model) since inventory period is as high as 60-90 days

2.      Banks are reluctant to lend the companies with untested business model

3.      Problems of low prices, payment by cash on delivery and free shipping

4.      No loyalty

5.      Many customers are afraid to buy online coz of the following concerns

a)      Will the product be delivered, the company might run away with my money

b)      Will the product be in good condition and also new- first hand

c)      Whom to contact if I face a problem

 

 

I also learnt about the Business models

1.      Value proposition + TG

2.      Revenue + Cost

3.      Why do we exist

4.      Business partner & Stakeholders

5.      Operation model

6.      Sustainability

 

A.  MarketSPACE

 

Value Cluster

 

 

MarketSpace Offering

 

 

Resource System

 

 

Financial Model

 

B. Egg Model

 

 

 

8 key elements of a business model

1.      Value proposition

2.      Revenue model

3.      Mkt opportunity

4.      Competitive environment

5.      Competitive advantage

6.      Mkt Strategy

7.      Organization Development

8.      Management team

 

 

Design/layout of the home page

1^st Fold: Should contain Bouncer offers(Hefty discounts) and strategic banners. This way we can attract the customers and will be more appealing to them

2^nd Fold: Popular products to retain the customer

3^rd Fold: Profit making products. Probably small ticket size but high margins

4^th Fold: Jamboree (also called stocks). What the retailer is best at. Few e-tailers also show the recommended products in this fold. E.g. Amazon

 

 

4 Models that are prevalent  in India

1.      Standard

E-tailers that sell everything. e.g. Flipkart

2.      Deal Based

E-tailers that provide lucrative deals e.g. groupon and snapdeal

3.      Club based

A customer has to become a member first and only then he/she can buy. Specific products which appeal to the community are sold. e.g fashionandyou.com

4.      Market

E-tailers who do not sell but just facilitate and provide a platform i.e bring the buyers and sellers together e.g  ebay

 

 

Working capital Management

1.      SOR Model

Procure, keep in warehouse and ship against an order

2.      Back-to-back model

Only when you get an order, you procure and then ship. In this model, there is no problem of unsold inventories but the lead/shipping time is larger.

 

 Also from the case study we learnt that how Amazon, Apple, Facebook and Google are entering into each others domain. Facebook is best for building brands and offers a platform to interact with the customers. It is good for exponential growth since we can not only see what friends are doing but also what friend's friends are doing, whereas google is best for one to one interaction and for transactions.

 

Types of Payment systems

We understood how payment happens online.

 

Also other payment options like itzcash and paypal were explored and understood.

 

Akhil Mahindroo

12IB-003

E-Bussiness (section B)