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Case Study On:E-commerce New Warehouse location
Indian States with Internet Users
Source: http://updateox.com/india/state-wise-internet-users-in-india-census-2011/
India Mobile Internet Users
Source: IAMAI.IN
India e-Commerce Industry
India e-Commerce Industry
India e-Commerce Growth 2010 – 2015E
Source: http://www.euromonitor.com/india | http://www.juxtconsult.com
India Internet Usagee-Commerce Industry
Total India B2C E-commerce Market Size (In terms of net e-commerce revenues INR) 2013
E-Retail Product Category-wiseMarket Size in
Rs. BillionClothing/Accessories/Shoes 53,150,650,047
Consumer Electronics/Computer Hardware (Recreational)
2,403,403,044
Jewellery & Watches 8,018,554,108
CDs/MP3/Video/Cassettes/DVDs/ Computer Software (Communications)
11,308,019,529
Beauty Products/Cosmetics/Nutrition Supplies & Toilet Products Personal Non
Durables14,393,504,936
Event & Movie Tickets (Entertainment),Leisure (Books, Gifts, Music, Flowers &
Gifts), Sporting Goods6,268,901,325
Videos & Games Download 2,090,194,810Food, Home Provision, & Groceries 5,939,999,013
Others (Automobile & Parts, Toys/Dolls, Flowers & Gifts)
1,922,407,212
Total 105,495,634,024
Source: eStatsIndia.com Analysis and calculations based on Internet Users & E-commerce Market Model Version 1.0.xls
India e-Commerce Business Hub
Source: http://shopping.ebay.in/census/index.php
E-commerce friendly states• Top 3 e-commerce states
– Delhi-NCR– Karnataka– Maharashtra
• Large states with very little ecommerce presence:– Bihar– Uttrakhand– Chhatisgarh
• Top 10 cities:1. Delhi2. Bangalore3. Mumbai4. Pune5. Hyderabad6. Chennai7. Kolkata8. Ahmedabad9. Jaipur10. Panaji
New Warehouse location
Factors Influencing
• Online User base• Region Average income• Logistical location • Availability of goods
Online User base region Wise
South India (31.9%)
West India(23.5%)
East India (8%)
Central India (7.9%)
North India(28.6%)
South India have 31.9 % of Internet user base
Karnataka is one of the 3 top e-commerce states
Through Bangalore you can server entire south Central and east region.
Through Bangalore you can serve 4 metro cities
Region Average income
Per capita in south India (SDP)25027.75 (US$420) and in rest of India 23222 (US$390)
Percentage of urban population in south India 32.82 and rest of India 27.81
Literacy rate in south India 72.87 and rest of India 61
Source: http://pib.nic.in/newsite/AdvSearch.aspx
Textile Industry of India
Conclusion
• Bangalore is the most Suitable place to set up the warehouse– Demographic support this place– Online user base is large– Income group is on the higher end – Logistically location: Ideally located at the center
of south India, with well connection to all the other state through national highways and airports
Inventory Model
Key Decision Points
Consignment Model
consignment model based on the following principles:
• Online retailers tied up with networks of merchants to source products.• They then prepared web catalogs of products offered by their partner merchants.• Once a customer order was received for any of the catalog items, a notification was sent to the
merchant for its fulfillment.• The merchant then supplied the goods to the customer, and financial settlement was made
between the online retailer and the merchant for the products sold.
The consignment model provides several inherent advantages for an online retailer:
Requires Limited or no investment in inventory or warehousing. Delivery of goods generally managed by merchants or third party
providers Online payment system and settlement with later executed with
merchants
THE RIGHT BUSINESS MODEL FOR INDIA
Category Decomposition
• Fashion/lifestyle category depend upon the season and current fashion trends.
• What inventory to keep at which warehouse is accordance to the seasonal demand of that particular geographical area so as to ensure optimum level of fulfilment and meet customer's demand and need.
• Maintaining inventory level, while keeping in mind:– Current/next season– Upcoming festivals– Fashion forecasts.
Business Model (To follow Snapdeal model)
