1. INTRODUCTION:

“Electronic commerce denotes the seamless application of information and communication technology from its point of origin to its endpoint along the entire value chain of business processes conducted electronically designed to enable the accomplishment of a business goal. These processes may be partial or complete and may encompass business-to-business as well as business to consumer and consumer-to-business transactions” (Wigand, 1997).

It’s over a decade that ecommerce players like Flipkart, Amazon and others have experienced Indian consumers through digital action. The stage is all set and ecommerce companies today continue to explore the digital shopping experience. With advancements in internet users and rural penetration, e-commerce players have been developing new techniques to increase the customer traffic online. Promotional strategies like flash sales, daily deals, one day delivery, Search engine marketing, and many others are been tested by online players and found to be very effective leading to a transformation in the modern retail industry.

Today consumers are more linked that ever before. Information processing, product reviews, category selection, discounts, and offers are all available at the fingertips. Consumers purchase pattern, their preferences and choice for purchase, everything is being captured through analytics. These simulating factors enforce the ecommerce companies to implement strategies that enhance the consumer shopping experience.

A report from Internet and Mobile Association of India (IAMAI) reported that the number of internet users in India is clinching towards the mark of 500 million users by June 2018. India also stands second in the world just behind China in internet users. Urban India penetration stands at 65% (approx.) and Rural India penetration stands around 21% (approx.). The growth of such numbers are also important indicators to online players in devising strategies to tap the Indian consumers.

About Flipkart

“Flipkart is an Indian electronic commerce company based in Bengaluru and established in 2007 by Sachin Bansal and Binny Bansal . Its core business operations were anchored on books and soon shifted its gears to products like electronic goods, stationery supplies, air conditioners, life style merchandise, etc. It’s known for innovation that has revolutionized online shopping like never before. Today Flipkart has so much to give, some of the highlights are 5 million shipments every month, 8 million daily page visits by customers throughout the globe, 26 million registered users who constantly are into action to put something into their cart, Human resource of over 20,000 and 13 state-of-art warehouses”(Jamnani, 2016). Recently Walmart-Flipkart deal has been in news in which the former has offered to acquire 77% stake in Flipkart for $16 billion and has sealed the deal year ending 2018.

About Amazon.in

“Amazon.com was founded by Jeff Bezos in 1994 (earlier know as CadabraIncl). The company began as an online bookstore. It specializes in books and music, and it also sells products from a wide variety of categories including electronics, toys, apparel, auto, industrial, grocery, sports, and outdoors. In addition to its consumer goods, Amazon.com also provides access to technology infrastructure that developers can use to enable virtually any type of business (Yahoo). Amazon.com’s “Vision is to be Earth’s most customer-centric company to build a place where people can come to find and discover anything they might want to buy online” (Amazon.com Inc.). Amazon.com’s brand equity stems from the fast, reliable and trustworthy service its customers receive. It had very little success in beginning, however, the advent of 21st century reaped new ventures, investments, mergers, and acquisitions etc for Amazon and thus becoming a full-fledged e-commerce store offering millions of products through their platform” (Jamnani, 2018).

2. CONCEPTUAL BACKGROUND:

Andrew and Jimmy have reviewed over 400 articles published across 30 years in various reputed marketing Journals on research keyword Consumer Satisfaction, Dissatisfaction, and Complaining Behaviour. The review suggests complex interrelationships between multiple topics of concern. Categorical coverage over time recommends a continued shift in research that elucidates the consequences of dissatisfaction and complaining behaviors (Andrew Dahl and Jimmy W. Peltier, 2015).

The authors in their article on customer satisfaction on online shopping have expressed various factors that have an impact on consumers shopping online. Paper mentions various influential factors such as price sensitivity, brand preference, the uncertainty of product, convenience, online seller trustworthiness, safe and secure payments. It also cited problems faced by respondents while shopping online and ranking service preference from consumers (Jayasubramanian, Sivasakthi, and K, 2015).

Tulsi Jayakumar wrote on behavioural lessons from the flagship sale event of e-commercegiant Flipkart on Big Billion Day. Paper reflects on behavioral aspects of consumer and competitor response to such online sales, particularly with reference to e-satisfaction and e-loyalty. Researcher articulates that giving mouth-watering discounts in India may not work and etailers need to understand thoroughly the behavioural implications of humongous discounts and deals being offered (Jayakumar, 2016).

Here the researcher has cited a case on Dharavi Markets online portal www.dharavimarket.com that acts an instrumental link between local residents of Dharavi who are engaged in cottage industries as workers and daily wage earners and how this platform has been a savior to all the residents towards a better living. It highlights various challenges faced by the cottage industries and future prospects of Dharavi market. The case also recommends havingtie-ups with market leaders like Amazon, eBay, etc to enhance its reach and increase the demand for the products globally (Narasimha, 2017).

Writers in their paper have expressed the need to go beyond digital to deliver individualized experiences in connecting the consumers. Today’s digitally connected consumers are empowered and demanding instant access to personalized content on their own terms. To satisfy them as well as the ecosystem partners, Media and Entertainment (M& E) providers play a vital role in providing tailored and seamless experience to individual consumer (Berman and Kesterson‐Townes, 2012).

Carmen Balanhas written on the behavior of Romanian consumer in the digital era. Some of the common explored regions that define Romanian are the internet, social networking sites like Facebook, Hi5, Neogen, Netlog, opinion formers, bloggers, brands present in social media and online platforms. (Balan, 2014).

Authors in their article have done a review on consumer behavior and literature on social network theory in the context of e-commerce shopper. Findings revealed eight categories of consumer classification like cognitive issues, user-generated content, Internet demographics and segmentation, online usage, cross-cultural, online communities and networks, strategic use and outcomes and consumer Internet search (Cummins, W. Peltier, A. Schibrowsky, and Nill, 2014).

Hartemo has focussed on email marketing as an effective way of communication. In his articles, he conveys how e-mail marketing can be used to empower consumers and to give ideas for future scholarly research. Findings from his paper revealed that E-mail allows interactive and personalized communication. Thereby fulfilling the preferences of an empowered consumer. E-mails based on permission indulge consumers into active participation in the communication process. However, current e-mail marketing strategies need to be updated to get the maximum benefit out of the channel (Hartemo, 2016).

Jagdish and Michael in their article extending the extending self in a digital world highlight the central role of material artefacts in defining self-identity. Paper identified three crucial domains where traditional boundaries between self/not-self increasingly blur producer versus consumer, being offline versus being online; and body versus technology. It also presents eight commentaries from experts in a range of pertinent domains that include advertising, law, technology, communications, and public policy (Jagdish and Michael, 2014).

Khanna and Sampat have written on Factors Influencing Online Shopping During Diwali Festival of 2014 - Case Study of Flipkart and Amazon.in. Findings revealed positive and negative comments during the Diwali festive season sale. Factors like Convenience, Look and Feel, Ease of Payment, e-WOM, Attractive Deals favoured the customer in their purchase while Hidden Costs, Website crash, Website Timeout and logistical delay in order procurement dint favoured in positive customer purchase. (Khanna and Sampat, 2015).

Researchers in their articles have placed their emphasis on Impact of promotions and value consciousness in online shopping behavior in India. The paper examines the influence of deal proneness on Indian consumers’ online shopping behavior. Results indicate that Indian consumers are not influenced by deals, offers or other promotional tools being used by online retailers. Promotions may not be necessarily viewed by consumers as an important attribute while purchasing products or services online. The instrumental aspects of online shopping websites need to be strengthened to motivate consumers to shop online (Rakesh and Khare, 2012).

Dominic wrote on Marketing Strategies in the On-Line Business Era. The holistic marketing requires all interested parties to get involved in the value-creatingprocess, while in the digital economics, the companies, the clients, collaborators, and communities can be responsible partners in this process. He states organisations will require a rapid adjustment to the technological realities of the digital era in the on-line business era of the demands and behaviour (Perez-Danielescu, 2014).

3. METHODOLOGY:

Paper includes research articles in the area of ecommerce, etailing, online shopping and related literature from last 6 years (2012 to 2018) from Sprinjer, Ebsco, Proquest and Google Scholar. It also includes newspaper articles and web sources recently appeared pertaining to the topic of paper. It mainly focuses on only two major ecommerce players Amazon India and Flipkart. The objective of the research is to understand the strategies implemented by ecommerce players and to understand the factors influencing a online consumer

4. FACTORS INFLUENCING ONLINE CONSUMERS:

“Literature indicates that success of e-tailing depends on several factors like efficient website design, effective shopping, prompt delivery, and e-store services (delivery on real time, return and replacement, period of filling out online orders form, response time to e-consumers queries, etc” (Zeithaml et al., 2002; Shih, 2004; Lee and Lin, 2005; Hassanein and Head, 2007; Lin et.al., 2010; Di Nisio et al., 2010; PWC report, 2014).

During the Diwali festive season sale factors like Convenience, Look and Feel, Ease of Payment, e-WOM, Attractive Deals favoured the customer in their purchase while Hidden Costs, Website crash, Website Timeout and logistical delay in order procurement dint favoured in positive customer purchase (Khanna and Sampat, 2015) .

5. ECOMMERCE PROMOTIONAL STRATEGY:

Discounts and Deals have been the major motivators for consumers transacting online. However to keep the customers engaged in shopping experience, companies constantly innovate and bring out differential activities to leverage their sales ticking. One major hurdle is that ecommerce players aren’t been able to provide an overall customer interaction between the suppliers and related partners on a real time basis. ‘Ebay’ has been to some extent able to manage the above and provide customers contact directly with the suppliers. Thus paper examines holistic view of the customer attitude that influences them to make online purchase especially during major festive seasons in India.

Search Engine Marketing (SEM)

Search engine marketing is a kind of marketing strategy for a website to have better chances of visibility to customers performing search operations on Google search engine and others. Online platform players engage themselves in bidding process to have their products or website listed in a way to gain better visibility than the competitors. This process is coined as search engine optimisation (SEO). Other tools used by SEM are through paid advertising, Pay Per Click (PPC), Sponsored Ads, etc

Flash Sales Approach

This sales promotional tool has become viral in the online space, especially when it comes to sales of smartphone. Flipkart and Amazon both have been adopting this strategy since long. Flash Sale is a sales promotional technique offered by sellers at a greatly reduced price that last only for a short period of time. Sellers give exclusive rights to ecommerce players to beat the competition and channelize the customer traffic in one direction. It is also used as most effective strategy when the product is very new to the market and creates an impulsive buying behaviour. Flash sales are also advantageous to those who have aspired throughout the year and waiting to crack a better deal

To cite few Examples OnePlus, LeEco and Xiaomi are amongst the Chinese phone makers that have taken the maximum leverage from such promotional strategy. Lenovo, Nokia, Samsung etc and many more have also accepted such strategy leading to more customer acquisition and impulsive behaviour

Buyback Guarantee, No cost EMI, Exchange Offer

As part of another promotional strategy to keep the customers engaged in online shopping and giving a better customer satisfaction for their transaction, ecommerce companies are offering buyback guarantee. It’s a promotional tool that allows customers to know a future buyback price for their purchase and indulge into new purchases in future.

Similarly tie up with financial organisations have also enriched the customer buying experience by offering at 0% EMI or No cost EMI option. Under this method of promotion customers can avail the product at no cost but payable with monthly options in equal instalments at Zero percent interest

Another promotional tool to lure the customers is that of an exchange offer. Based on usage and under certain conditions of wear and tear the products worthiness is evaluated and then customers are given option of exchanging their old items to re-purchase the new one after. The above three strategies are usually are strongly seen only in the smartphone category.

Flagship Events during Festivals

Festive seasons are the times when online players are looking out to spurge their GMV (Gross Merchandise Value) and bring more sales numbers under their kitty. In India Diwali is undoubtedly the most awaited festive seasons for purchase, shopping, and family celebrations. For Amazon it’s the Amazons Great Indian Sale and Flipkart it’s the Flipkarts Big Billion day Sale. These flagship events are usually backed with huge promotions via print media, digital marketing, social media presence, SMS marketing and others.

Review system

Amazon is the largest Internet-based retailer by total sales in the world. One of its websites most appreciated feature is the review system which gives the users the possibility to rate the products and make comments. Reviewers rate the product on a rating scale from one to five stars indicating whether they found a review helpful to them. In 2010, Amazon was reported as being the largest single source of Internet consumer reviews. A concept especially in India that gained lots of prominence as buyer could be converted into an actual prospect based on customer review

Print Medium

In order to tap the offline customer’s ecommerce companies in addition to create awareness, they also heavily promote in print medium. During the flagship events of Flipkart and Amazon usually before Dussera and Diwali most of the newspapers are decorated with mouth-watering discounts, jaw-dropping offers, highlighters for the day and so on for altealt 2-4 pages full advertisements. It is one among the strategies that ecommerce players have been adopting since their foundation in Indian ecommerce industry. The target customer segmented via this approach are those who shop offline, those who do not use internet and tap the rural and semi-urban population.

New Age Advertising

The value and belief system of Indian consumers are changing abruptly. To address such change ecommerce giant Flipkart has adopted the new age advertising approach. In 2015 their advertisements were tagged “Har wish hogi Poori” (every wish will get fulfilled). In 2017-18 they have now changed it to “Naye India ke Saath” (With new India). Their next connection is with the change in digital campaign “Penguin Dads” where the videos show dads choosing to do it all for their children from braiding hair, changing diapers to singing lullabies while finding a work-life balance to spend more time with them. Flipkart advertising has been unique laced with its characteristic humour and fun quotient.

On the other hand Amazon.in too has not been far in connecting the India consumers with their value and belief systems. They launched the campaign “Aur Dhikao” (Promoting Indians Love for variety) and “Apni Dukaan”(Neighbourhood shop).

Barcode and Image Search

Amazon in a recent article is testing barcode scan and Image search bases shopping in India. It also benefits in capturing the offline customers which can scan the product or its barcode to place an online through Amazon. Such experiments have already fulfilled many in other countries like that of Chinese Ecommerce giant Alibaba’s TMall tested a similar search during its flagship event Singles Day sale with a few brands. Amazon too used his in US and has got good response. At present Amazon is in testing phase and then would launch slowly on a full scale basis.

Other Factors of Success

Warehouse and Logistics

Amazon sees its Fulfillment by Amazon (FBA) service as a major component to its success in foreign markets. The company has seen strong global growth in its fulfilment service especially for sellers - 40% year on year in 2016 - indicating that FBA may be a critical advantage to draw sellers to its marketplace. This may be especially true in countries with less-developed infrastructure, such as India and Mexico. In India it is competing against Flipkart’s Flipkart Assured who also embark on warehousing and logistical services. They already are planning to invest over Rs. 600 cr for setting in integrated logical and warehousing hub in West Bengal.

Convenience and ease of comparing different smartphone

In a deep dive consumer behaviour report on Indians buying smartphones, International Data Corporation (IDC) found that recommendations by in-shop retailers and word of mouth, mostly from peers or family, are the biggest influencers on which handset to purchase. Of the total market, only one-third of consumers prefer to buy smartphones online and since smartphones make up a big chunk of sales for ecommerce players like Amazon and Flipkart, they are making serious efforts to gain consumer trust, by improving user experience, reducing delivery time and entering exclusive alliances with smartphone vendors. In the online segment, one out of every two online consumer prefer e-commerce due to the convenience and ease of comparing different smartphone

Geographic Segmentation

Ecommerce platforms leaders like Amazon, Flipkart and others have proved their metal in serving the customers from big cities in past. However, they have been witnessing a surge in response from tier II and III cities which accounts for nearly two-third of the total sale. Thus focus is laid on tapping the Urban and Semi Urban consumers specially belonging to the non-metro cities to have better leverage on their sales. Flipkart and Amazon are the two largest ecommerce players in the country and are expected to infuse $103 Billion by 2019-20 to cater the Non-Metro cities in India. Their strategy would be to strengthen the network of delivery hubs to handle mammoth number of orders from smaller towns. Customer specific segmentation is very hard to predict due to its nascent stage nevertheless focus lies upon the geographic coverage.

6. CONCLUSION:

Ecommerce companies are almost nearing to a decade in experience and have been testing it very hard onto the Indian consumers. Top leaders with neck to neck performance are those of Flipkart and Amazon followed by others like Snapdeal, Patym, Shopclues, Infibeam, etc. The only wait for all these years was to have a volume of customer base who would shop regularly and get great customer experience from the offerings. In spite of huge promotional offers and discounts through various modes of communication the ecommerce players are yet to turn a profitable business venture. Customer expectations and the needs are non-repetitive. Attaining customer loyalty via any platform poses a huge challenge to most of the ecommerce players. Forward and Backward integration and consolidation is also what ecommerce companies have seen over a decade. It has been getting all the members of supply chain a good business momentum via volume sales and purchases. Thus companies should continue to keep promoting and evolve new strategies to keep their customers engaged in shopping experience.

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Received on 15.04.2019 Modified on 28.04.2019

Asian Journal of Management. 2019; 10(2): 153-158.

DOI: 10.5958/2321-5763.2019.00025.8