Amazonvs Flipkart

Amazon vs Flipkart

Contents

Table of Contents

Scenario. 2

1.      Amazon vs Flip Kart. 2

Demographic Consumer target. 3

Geographic location. 3

Quality. 3

Presence. 3

Consumer service. 3

Growth status. 4

Violations of Indian Laws. 5

Market and Retail 5

Is Flip doing better than amazon?. 6

Who sells more?. 6

Who is the winner?. 7

Conclusion. 8

2.      The benefits that Tesco.com & Countdown.co.nz are likely to derive from their online channel. Comparism of Tesco case analysis with examples from Countdown (NZ). 8

The benefits Tesco.com & Countdown.co.nz derive from their online channel 8

Comparison between Tesco.com and Countdown.co.nz online sites. 8

3.      Discuss the role of logistics in online B2C e-commerce in general. Compare the AliBaba.com logistical challenges with Countdown.co.nz e-business logistics. 11

Logistics in online B2C E-Commerce. 11

Comparison between the logistical challenges between both Alibaba.com and Countdown.co.nz. 11

AliBaba.com logistical challenges. 11

Countdown logistical challenges. 11

4.     What lessons in e-business strategy would you draw from investigating Amazon.com?. 12

5.      Create recommendations for improving website features and usability for one of the nominated companies. 12

Recommendations. 12

6.     Using the Internet impacted value chain; outline any one of the Case companies showing value creation and value capturing examples. 13

What does the supply value chain system offer?. 13

References: 14

Scenario

This is a case study analysis of Amazon as an example of large companies operating in the ecommerce domain.  This case study and further research in the e-commerce field and global B2C will form the basis of this assignment.

1.        Amazon vs Flip Kart

Segmentation of Amazon vs Flip Kart

fig 2. Table defining differences between various segments of Amazon vs Flip Kart

Demographic Consumer target

Amazon uses online and offline marketing techniques to advertise the services, their TV ads feature higher end customers and blue collar families looking for jewelry and entertainment technologies. Their ads target quality service for an extensive range of merchandise.

It seems that Amazon is targeting consumers who regularly shop online looking for one stop shopping and immediate delivery.

In India most of the consumers targeted are the tier 1 market that has already been primed by Flipkart, they might aim to target the tier 2/3 consumer market more but do not focus or rely solely on them as readily.

Flip karts fashion focused ads target the higher end demographic customers as well as the teens to younger adult consumers (linkedin.com, 2015).

Geographic location

Flipkart services are limited in multiple locations around the world yet it does have a good reputation in India. I think it’s logical to assume that there may even be few places in India where Flip Kart services are not provided and it has also been found that there have been chances of fake products which consumers had believed they were buying from Flip Kart.

Quality

Amazons age, experience and proven logistic professionalism has shown that it is set apart from Flip Kart. Amazon provides services internationally to every corner of the world with merchandise that have become more trusted than Flip Kart (Quora.com, 2015).

Flipkart now is where Amazon was when it first began. The reason for the success of Flipkart is their quality of service that they offer with most of the Flip Karts investments invested into improving and maintaining logistics and service quality and spreading awareness about their brand.

Presence

·         Amazon Resellers like amazon because amazon is not yet one of the seller  Flipkart                 Unpopular with resellers because they themselves are resellers in the alias of WS retail (Quora.com, 2015).

Consumer service

Sellers vote no confidence when it comes to shipping merchandise to India, this is because of the poor shipping and clearance services there. Stock are held up with customs for long periods of time, and shipping to India internationally is undertaken by only a few agencies. India Post has a restriction on shipping electronics items whereas Amazon can move merchandise from their US warehouse to their Indian warehouse in combination (multiple orders combined) and deliver them to their customers via more cost effective alternatives.

Flip Kart customers have a hard time clearing their individual packages on customs. The rules are not readily available, and with their poor logistics there is a problem with following up orders and clearing them on time, clearance time has been noted to take anywhere from 2 weeks to 4 months.

Amazon can clear customs in one go, with their C-Forms and import licenses, which makes the process much easier. Also, Amazon's legal team can ensure that only those categories are offered, which are permitted in India.

·         Amazon's customer service is considered the highest quality service overtaking all other online shopping sites in India.

·         Amazon's customer service is considered second to none.

·         You don't have to call Amazon's customer service; they call you within 30 secs. if you choose the call back option from their contact webpage.

·         Amazon think from a customer's point of view whereas other sites think from a Sellers's point of view.

The end result is, the customer gets the priority in Amazon and the Seller gets the priority in other shopping sites, this is one of the main differences between Amazon compared to Flip Kart online shopping sites.  

Flip Kart in India has the reputation of treating its customers badly but for Amazon they have stated that first priority goes to the customers (quora.com, 2015)

Growth status

Amazon has just announced five new Centre’s in India making a total of seven. Flipkart has four such Centre’s but are looking at expanding.

Flip Karts exclusive launch or mega sale ads are geared towards positioning itself as India’s leading shopping choice in overall retail both on and offline.

The apparel ads are targeted to being recognized as the category leader in the second largest retailing segment in India with room for growth (linkedin.com, 2015).

·         Amazon is 100% owned by foreign investors

·         Flipkart is 80% owned by foreign investors and 20% by Indian investors

Amazon went public in under 2 years of operations, so everyone had access to all Amazons financial information, this allows you see the ins and outs of how they operated.

Flipkart though is a private and limited company and choose instead to head in the direction of private funding rather than that of an IPO route which stands for initial public offering, this is when a company goes public by selling shares to the public on a stock exchange like the NASDAQ (quora.com, 2015), for the consumers and other interested parties this meant they had no data to use to check against, such as its actual growth in terms of sales and cash flow which would help identify and define Flip Karts true scale meaning they can only speculate.

Amazons international operations in ecommerce has grown more rapidly and their income is higher than in India. So Flipkart (using funding rounds as a surrogate) is operationally scaling much quicker than Amazon have done (quora.com, 2015).

The sheer scale and size of Amazon makes it unreachable for competitors not just in India but the world. One can't even begin to compare Flipkart with Amazon. It’s like comparing a cup of water with an ocean. There is absolutely nothing which FlipKart has that Amazon doesn't, including India specific traffic as shown in the table (India, Nov 2011) below:

Fig 3. (Quora.com, 2015).

Violations of Indian Laws

·         Amazon = Has not violated any law till date

·         Flipkart = Has violated multibrand FDI laws of the country and has done an eye wash w.r.t

Market and Retail

On the 29th Sep Delhi edition of Times of India published a 2l page ad of the Flipkart mega billion-day sale and bang, and right next to it on the same page sat a small quarter page ad by Amazon saying – why wait for one day, get dhamaka (blockbuster) deals every day (linkedin.com, 2015).

Flipkart ads can be defined into two categories:

·         exclusive launches or mega sale full page print ads

·         fashion/apparel category TV ads.

Indian central government denied foreign direct investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process.

In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple.  The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus.

In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. (Wikipedia.org, 2015).

Amazon has passed this stage of being a single seller now being a market place with multiple suppliers, vendors and sellers expanding its offerings by directing its focus in the direction of App Stores, Kindle, Cloud and Music.

Flip Kart have their own WS retails and 95% of the product they sell from that seller only. Benefit for customers is that processing speed will be faster and their issues and concerns will be addressed immediately so whatever margin they are able to make is profit so they don't need to share it with anyone. Flip Karts loss is that they require resources, warehouses and manpower to manage all this.

 Amazon sell products but don't have any specific seller like Flipkart has WS Retails. All they have is Amazon fulfilled products but Amazon is still dependent on its third-party vendors to sell in India

This allows us to identify and compare their processes, benefits and drawbacks for both of their customers and organizations (Quora.com, 2015).

Table comparing Amazon and Flip Karts Indian Sales Products Categories

Company	Num Products Sold	Num of Categories	Registered Users
Amazon	15mil+	70	NA
FlipKart	15mil+	500	18mil

Fig 4

Is Flip doing better than amazon?

Flipkart is doing better in India compared to amazon. It can be seen from their Gross Merchandise Value of Goods sold.

Another reason might be the feeling of patriotism in Indians because FlipKart owners are Indians while Amazon is American.

FlipKart is 7 years old while Amazon India is just 2 years old. So it will take Flip Kart time to achieve as big a scale of trust and recognition that Amazon have (quora.com, 2015).

Who sells more?

Flipkart have claimed to have reached the milestone of $1 billion gross revenue GMV (gross merchandise value) this means that based on their monthly sales made from their site, they are set to cross $1 billion in GMV over the coming year.

Amazon doesn’t share India’s numbers but its founder Jeff Bezos said with Amazons current scale and growth rates, India may be the fastest country that Amazon has ever reached $1 billion dollars in gross sales in compared to the amount of time it took to cross the revenue benchmark in countries like China, where it had been present since 2004 (quora.com, 2015).

It would be fair to say that Flipkart today in India is currently outselling Amazon.

Who is the winner?

Flipkart has tried to consolidate its position through mergers and acquisitions, by becoming self-sustained and making its own payment process and logistics services but once Amazon customers can choose products from the global array of products displayed on the Amazon websites (not just http://amazon.in), and on ordering them, Amazon India procures them from Amazon US (or any other Amazon subsidiary), clears customs and then ships it to the customer, then, Amazon will be set to take India like an unstoppable tsunami.

Online buying utilizes credit cards, if bought directly on the website. Most of the Indian internet customers don’t have access to credit cards.

It’s not about how successful the business provides their products but more how successful the companies are at making their customers happy (quora.com, 2015).

The consumers and sellers are the winners.

Consumer because:

·         Customers get quality for money.

·         The more sales the more activity in ecommerce in tier 3-4 targets offering them higher quality products.

·         As for the tier 1 cities customers, they offer quicker, traffic free as both companies have claimed same day delivery system meaning more for less time and money

Sellers because:

·         Increased publicity of their sites meaning more selling power.

·         Some sellers sell only in sets implement ecommerce to clear their dead stock.

·         Apparel businesses are able to procuring new designs, businesses are able to test themselves against opposition.

“I think in the long run Flipkart would lose out to Amazon because Flipkart is only an indianized imitation of Amazon and its lifespan may only be until Amazon has expanded its business throughout India. (Naulakha, 2015)”

Although there can be no separate global or local winner between Amazon and Flip Kart, because the money from global businesses can be put into local business to beat the competition which eventually can lead to only 1 of 3 outcomes

·         Flipkart is acquired by Amazon

·         Flipkart will collapse - being a company that is built only on goodwill and confidence, it may collapse before long

·         Flipkart will accept its position as being the second biggest player in the industry, and may focus on certain niche areas (Quora.com, 2015).

Conclusion

There is an overlap between Flipkart and Amazon segments with Amazon as the older of the two yet Flip Karts quick expansion shows them to be labeled as one of Amazons most recognized competitors

Flip Kart has been trying to mimic amazon, they both started with books and expanded categories, Amazon created a music store whereas Flip Kart bought Flyte, Amazon has an IMDB and Flipkart made an acquisition of http://Chakpak.com which is a site that informs the latest news, trends views, gossip and events around India.

So although there are differences between the business operations as well as the strategic direction of both of these businesses, Flipkart future forecasts do seem to be driving in the direction of becoming the next Amazon, for now in India at least (Quora.com, 2015).

2.       The benefits that Tesco.com & Countdown.co.nz are likely to derive from their online channel. Comparism of Tesco case analysis with examples from Countdown (NZ).

The benefits Tesco.com & Countdown.co.nz derive from their online channel     

               

Benefits Tesco.com & Countdown.co.nz draw from their online sites are expansion of their marketing reach because they are able to reach more potential customers through the use of their sites, they are able to offer more of an insight into their businesses through pages like their about us and help, this information may cover everything from their products to their  supplier info, history, policies, careers, and they also have the opportunity to offer more services to their customers, such as specials, personal involvement through registrations like group offers, blogs, join up/sign up to receive notifications about particular subjects.

Comparison between Tesco.com and Countdown.co.nz online sites

                

Tesco.com & countdown home page

Tesco have had a poor last year losing %50 of their profit margins leaving them looking for the reason why, some say it may have been their poor marketing strategies, outdated logistics and generic never changing online presence leaving customers unsatisfied that was the cause of this.

Countdown though relatively new have also received a poor standing with its customers in NZ but this may be for an entirely different reason, in this section I will try to critique these 2 sites based on my research of these sites as well as my own personal view in the hopes of shedding light on these 2 similar yet very different online channels.

Comparison between Tesco.com and Countdown.co.nz online shopping channels

3.       Discuss the role of logistics in online B2C e-commerce in general. Compare the AliBaba.com logistical challenges with Countdown.co.nz e-business logistics.

Logistics in online B2C E-Commerce 

                                                                                    

Because of the increase of online users, ecommerce has been forced to reevaluate their position if they want to stay current with customer service demands, this means that any company who wishes to be successful in today’s ever expanding e- business must aim to be more efficient in both their marketing and logistic strategies for example a means to improve delivery times for their products to the customer must be identified defined and then implemented. Today online retail services are still only in their infant stages making in some cases only %4 of their total businesses profit margins, because B2C E-Commerce is still only young, it has enormous growth potential, it is this potential that will cause enormous changes in physical distribution networks and retail logistics especially the express and parcel delivery players.

Comparison between the logistical challenges between both Alibaba.com and Countdown.co.nz

AliBaba.com logistical challenges

·         Problem with the shipping services, Alibaba’s shipping industry are made up of multiple small companies who compete with each other on price the result being that services often suffer.

·         Rural Areas are harder to reach than online customers (Bloomberg.com, 2015)

·         Alibaba plan to improve its delivery services

·         Alibaba needs investment to financially support their network.

·         the company because instead of having its own warehouses,

·         Use network to coordinate between all the logistics providers dispersed throughout the country, to minimizing the time and distance it takes for a package to get from the delivery service to the customer (seekingalpha.com, 2015)

Countdown logistical challenges

·         Track deliveries using satellite technology

·         Ecommerce Logistics & Changing B2C Delivery Landscape

·         E Commerce Logistics Challenges

·         Improve your network per product/ market combination, there is a need for solutions to improve efulfilment.

·         Some of the key differences between a traditional supply chain or logistics requirement vis-à-vis an ecommerce focused business are as follows:

·         Emerging ecommerce Logistics Models

·         Evolving Distribution and Fulfilment Model of E-commerce Companies

·         Changing Delivery Models

·         Mobility Applications playing a key role in E-commerce deliveries (linkedin.com, 2015)

·         Focus on rural delivery systems

·         Improve efficiency

·         Increase in deliveries

·         Decrease in delivery errors and customer complaints

·         Improved delivery related communications with customers

·         Countdown Business Leadership New Zealand (nz.gradconnection.com, 2015)

4.      What lessons in e-business strategy would you draw from investigating Amazon.com?

As ecommerce grows, the logistics infrastructure needs to grow to keep up with the services.

Amazons proven strategy of acquiring customers and keeping them due to their good services. They have a proven track record, being active for a few years, they achieved this with good IT logistics and an improved delivery system.                                                      


                                                      

5.       Create recommendations for improving website features and usability for one of the nominated companies.

The Company website I will nominate to cover in this question is Tesco.com, Tesco could improve their website through updating its theme, it contains many symbolistic pictures well set out over the page, it utilizes its tab layout nice with everything spaced out and balanced and it uses white space well, it offers a multitude of high quality services and products at a low cost and invests in improving its delivery service yet it is still limited for many reasons such as it is only a national company, its online marketing is limited by the nations bandwidth constraints and its growth is limited by the growth of its consumers.

Recommendations

·         Maybe by investing more strategies into their application market and improving their mobile apps may increase public interest

·         Offer customers more involvement in their shopping experience

·         Change the B2C delivery landscape

·         Upgrade the overall theme of the site maybe create from scratch.                                                                                                      

            

6.      Using the Internet impacted value chain; outline any one of the Case companies showing value creation and value capturing examples.

       

                              

What does the supply value chain system offer?

Amazons Supply Chain Management is all about efficiency of the integration of the suppliers, factories, warehouses and stores so that the products are produced and distributed correctly, e.g.; right locations, quantities and times, all focused on consolidation for the purpose of minimized total costing to meet their service requirements thereby maintaining an efficient impact supply chain structure maximizes their services product procurement all the way through to the final product delivery.

Three attributes of the supply value chain.               
                                                                               

Inbound logistics

This is when you receive the order from the suppliers

Operations

This is the delivery system focused on an improved flexibility, higher service levels and quick efficient integration of all the services to the payee in a synchronized platform model.

Outbound logistics

This is the final stage of the delivery system where the payee would receive the product                                                        

References:

·         linkedin.com, 2015. Retrieved from: https://www.linkedin.com/pulse/20140930123145-19360894-amazon-vs-flipkart-vs-snapdeal-who-are-they-targeting

·         Simchi-Levi, D, edu.co, 2015. Retrieved from: http://www.icesi.edu.co/blogs/logisticawww122/files/2012/10/5-B2B-Davids-impacto-del-internet-en-la-supply-chain.pdf

·         icesi.edu.co, 2015. Retrieved from:

·         linkedin.com/pulse, 2015. Retrieved from: https://www.linkedin.com/pulse/20140930123145-19360894-amazon-vs-flipkart-vs-snapdeal-who-are-they-targeting

·         Wikipedia.org, 2015. Retrieved from:  https://en.wikipedia.org/wiki/Retailing_in_India

·         Quora.com, 2015. Retrieved from: http://www.quora.com/What-are-the-differences-between-Amazon-and-Flipkart

·         quora.com, 2015. Retrieved from: http://www.quora.com/SK-Ghosh

·         quora.com, 2015. Retrieved from: http://www.quora.com/What-is-the-difference-between-Amazon-and-Flipkart-in-terms-of-how-they-started-operations-and-began-scaling-up

·         quora.com, 2015. Retrieved from: http://www.quora.com/What-is-an-IPO-exit-route

·         Quora.com, 2015. Retrieved from:  http://www.quora.com/What-is-the-difference-between-Amazon-and-Flipkart-India-operations-Please-try-to-give-answer-in-area-of-operation-and-strategy

·         quora.com, 2015 Retrieved from: http://www.quora.com/Is-Flipkart-doing-better-compared-to-Amazon

·         Quora.com, 2015.  Retrieved from: http://www.quora.com/Who-is-the-winner-in-the-battle-between-Flipkart-and-Amazon-in-India

·         Quora.com, 2015. Retrieved from: http://www.quora.com/How-similar-are-Flipkart-and-Amazon

·         Fig 4. Image retrieved from: http://forbesindia.com/article/real-issue/indias-etail-battleground-amazon-flipkart-and-snapdeal-fight-for-top-slot/38058/0

·         Bloomberg.com, 2015. Retrieved from:  http://www.bloomberg.com/bw/articles/2014-05-29/alibaba-and-chinas-shipping-problem

·         linkedin.com, 2015. Retrieved from: https://www.linkedin.com/pulse/ecommerce-logistics-changing-b2c-delivery-landscape-santosh-kumar

·         nz.gradconnection.com, 2015. Retrieved from: http://nz.gradconnection.com/employers/countdown/#graduate-jobs_business-and-commerce

·         seekingalpha.com, 2015. Retrieved from: http://seekingalpha.com/article/2888846-chinas-shipping-challenge-creates-opportunities-for-alibaba-and-chinas-logistics-companies

·         fortune.com, 2015. Retrieved from: http://fortune.com/2014/09/19/alibaba-growth-challenges/