E-Commerce Industry Analysis- Porter's

Firm Strategy, Structure and Rivalry | * India’s e retailers have primarily relied on PE funds and venture capitalists * Pricing is the point of differentiation from existing Brick and Mortar shops * Focus on segments like Books and apparels to slowly increase their offerings * innovations in delivery and technology in recent years like Cash on Delivery, CRM * Introduction of Guarantied replacement approach.Rivalry- * Business model is easy to copy * Beginning of extreme price war has led to difficult profit making. | Demand Conditions | * +Rise in disposable income * -Severe market competition * -Wide prevalence of cash economy * -Higher consumer loyalty | Factor Conditions | * Internet penetration * Acceptability of internet shopping * Developed supply chains and logistics * Less Entry barriers * Low cost of online advertising | Related Supporting Industries | Communication and Broadband Industry- * Launch of 3G and 4G services in India * Strong number of broadband users (13.81 million users as of 2012) Banking Industry- * Evolution of internet banking and mobile banking * 48% of transactions are taking place through electronic modeLogistics Industry * Improving Logistics and Supply chain industry * Presence of global players like DHL, DTDC, Blue Dart | Government Factors | * Low entry barriers * Restriction of entry to foreign players * Grey FDI policies | PORTER’S DIAMOND ANALYSIS |

Porter’s Five Forces Analysis 1. Threat of substitute products * -Low consumer loyalty as he is price sensitive * -Faster delivery time in brick and mortar model * +Deals and discounts generally not available * +Tech savvy and lazy customers * +Responsibility of seller is more for substitutes 2. Bargaining power of buyers * Since there are so many suppliers in this industry, the buyers have a lot of options. This makes