A Study of Business Practices and Supply. Chain Issues in E-Retailing. 1.Kaustubh Khadke. 2. Dr B V Sangvikar. Abstract

Transcription

1 A Study of Business Practices and Supply Chain Issues in E-Retailing 1.Kaustubh Khadke (Research Scholar-Department of Management Sciences,PUMBA,Savitribai Phule Pune University,Pune) 2. Dr B V Sangvikar ( Professor and Former Head Department of Management Sciences,PUMBA,Savitribai Phule Pune University,Pune) Abstract Author attempting to study and to analyze supply chain issues faced by e-retailers which will help e retailers to find new way to cater the increasing needs of customer in terms of cost and money and on larger scale value proposition to online customers. E retailers are making very effort to smoothen, hassle free online buying or service provision. But in country like India it is definitely a herculean task to make it in cost effective manner as far as geographical spread and population spread considered. There are online customer rise in tier-2 and tier 3 cities, this is challenge accepted by Ertailers to expand their reach and provide services at par of cost and speed of delivery. To attempt this study in scientific way researcher framed a pilot study on sample population of 30 respondents. Results are being analyzed and then study will be taken to larger scale by correcting flaws in pilot study. Context and Design of study Literature review and GAP analysis Retailing always found by researchers as research area as it is directly connected to consumers or customers having no defining limit. Hence retailing having huge potential as far as economy and research considered as it goes hand in hand. Study of Prospectus of Ecommerce in India by Sharma and Mittal (2009) showing tremendous growth in Indian Ecommerce. There are number of online ecommerce sites operating in India providing good products and services. Page No:1947

2 Researchers have carried their research also to find out consumers online behavior, Bellman (2009) investigated various factors deciding if customer will purchase online or not. Author concluded that demographic factors such as income, education, age are several determinants of online shopping. PwC s total retail report 2016 clarifies understanding and comparison of consumer shopping behavior and use of different retail channels across globe. Ernst and Young while in their report published in 2000 mentioned main factors on which consumer prefer online shopping are good product selection, good prices and ease or convenience. PwC s report in year 2015 ecommerce in India-Accelerating growth focuses on various reasons for growth of ecommerce in India. BCG s report Decoding the digital consumer in February 2017 emphasizes on rising importance of digitalization of retailing process as whole towards business and consumer side. A white paper published by Mr. Shahjahan 2016 E-tailing In India Innovative supply chain logistics infrastructure focused on supply chain issues but more related to logistics and Indian infrastructure considered. E-tailing in India a whitepaper by Technopak critically suggest examines Indian e retailing on its own merits rather assessing it along with regular brick and mortar retailing as a subset of same. All above research work focusing on customer behavior and influencing factors for online shopping, issues related to online retailing in specific to food industry, Indian e-retailing potential, issues with logistics are discussed. This gives opportunity to researcher to unearth area of supply chain towards Indian e commerce giants at present like Amazon, Flipkart and Snapdeal entailing more than 90% of market share. SCOPE OF THE STUDY The scope of the present study is confined to the study of business practices in relation with their supply chains adopted by e-retailers such as on time delivery, payment, packaging, reliability, promotion/offers, and transit damage and its effect on their business. (Interpretation of word reliability customer orders and receives same thing). Page No:1948

3 Supply chain for grocery/vegetables/perishable food items e-retailing will not considered in the study as it is altogether different research area. Ecommerce websites for services at present not in scope of research work. As per Morgan Stanley Report published in Feb 2016 (Economic Times dt.26 th Feb 2016) Eretailing market share of more than 90% owned by Flipkart, Snapdeal, Amazon in India. Researcher intend to focus his study on this e-retailing giant. OBJECTIVES OF RESEARCH The present study attempts to analyze the following objectives: 1. To study the existing business practices adopted by e-retailers in reference to Supply chain such as on time delivery, payment, packaging, reliability, Promotion/offers, return policies, payment options and transit damage etc. 2. To identify and analyze different supply chain measures adopted by different e-retailers. Sellers,Sellers-training,Stocking/Inventory,Warehousing,Logistics,Order tracking,payments,returns,promotions,customer acquisitions and retention, Website viewership 3. To examine current problems faced by of E-retailors and to suggest measures for improvement based on research findings if possible. 4. To identify factors which influence customer preference for choosing any of the retailing website over another. 5. To study the extent to which IT and ITes provides the feature and fit to the requirement of supply chain integration process between e-retailer and supplier. Before attempting research experiment on large population research intend to do pilot study on sample population so that any fall back or any flaws in research design or way to data collection, critically analyze finding thru data collected, to frame or to modify correct survey tool accordingly. Data Collection Data required for study gathered from various online customers as researcher tried to get primary data thru online retailers company representative but most of time employees afraid to share Page No:1949

4 data. For pilot study data collected is mainly from direct sources so it is primary in nature. Primary data collected thru online survey. Researcher framed a structured questionnaire and sent to multiple respondents. Responses received are analyzed for further study. Sample technique Random sampling used for pilot study. LIMITATIONS OF THE STUDY Pilot study having following limitations The study was restricted to Pune city only. The study is mainly concentrated on Flipkart, Amazon and Snapdeal.com. The sample of the size will be limited to time and resources. The result is assuming that respondents have given accurate information. Data analysis, Results and discussions- Survey sent to 30 recipients out of which 26 responses received. Hence sample size of 26 decided for pilot study. Preference to offline or Online purchase - Interference 80% of sample population preferred online buying. Page No:1950

5 Commodities purchased thru online e-commerce portals Interference 70% of sample population preferred to buy smartphones online whereas furniture buying thru online is very less. Preference of E-Commerce portals Inference 60% of sample population preferring Amzon, while next to Amazon people preferred to buy from Flipkart.Snapdeal followed by Amazon and Flipkart. Researcher further explored why people preferred one e commerce portal over the other. And below is result. Page No:1951

6 Factors influencing customer preference of choosing e commerce portal over the other Inference faster delivery and low cost are fascinating factors people to purchase thru online portals. Secondly good product comparison, customer ratings, availability of review are stimuli for online buying. Comparison of E Commerce portals on various parameters Page No:1952

7 Delivery Inference - It is imperative from graphs that 70% of Amazon deliveries are within 3 days. While Flipkart serving 42% deliveries more than 3 days. 25% of buying population receiving Snapdeal deliveries more than 3 days. Amazon is far ahead for delivery than rivals. Page No:1953

8 Delivery charges Page No:1954

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10 Different issues faced by online customers with E- commerce portals Page No:1956

11 Out of all issues common issue with E-retailing it reveals that faulty product is predominant issue faced by online customers for all 3 E-commerce portals. HYPOTHESIS For the execution of research study following hypothesis will be formulated and studied. Appropriate statistical techniques will be employed to test and validate hypothesis: 1. Faster delivery will accelerate e-retailing growth. 2. Cash On Delivery (COD) will increase customer delight. Page No:1957

12 3. E-retailers having good return policy will be preferred by online customers than other ertailers who do not have return policy. 4. Speed of internet technology will boost e-retailing. 5. Government policies/supports are not sufficient to boost eretailing. Hypothesis Analysis : 1 H0(Null hypothesis) On time delivery does not accelerate e-retailing growth. H1(Alternate hypothesis) On time delivery accelerates e-retailing growth. Will you purchase again if delivery of product ordered online is on time Observed Expected O - E (O-E)2 (O-E)2/E Yes No Degrees of freedom = (rows-1)(coloumn-1) = (2-1) (2-1)=1 Level of significance= α = 0.05 Chi-Square formula = Sum [ (O-E)2 / E] = 6.07 i.e. Value of Chi Square Critical value from Chi Square table for degrees of freedom 1 and α=.05 is Test statistics Test value Table value > Comparison: If Test value < Table value, Accept null hypothesis. If Test value > hypothesis. Table value, Reject null Page No:1958

13 Hypothesis Analysis : 2 H0(Null hypothesis) Cash of delivery does not increase customer delight. H1(Alternate hypothesis) Cash on delivery increases customer delight. I will prefer online e-commerce portal offering cash of delivery payment option? Observed Expected O - E (O-E)2 (O-E)2/E Yes No Degrees of freedom = (rows-1) (coloumn-1) = (2-1) (2-1) =1 Level of significance= α = 0.05 Chi-Square formula = Sum [ (O-E)2 / E] = i.e. Value of Chi Square Critical value from Chi Square table for degrees of freedom 1 and α=.05 is Test statistics Test value Table value > Comparison: If Test value < Table value, Accept null hypothesis. If Test value > hypothesis. Table value, Reject null Page No:1959

14 Hypothesis Analysis: 3 H0(Null hypothesis) E-retailers having good return policy does not preferred by online customers than other ertailers who do not have return policy. H1(Alternate hypothesis) E-retailers having good return policy preferred by online customers than other E retailers who do not have return policy. I will prefer online e-commerce portal having good return policy in place? Observed Expected O - E (O-E)2 (O-E)2/E Yes No Degrees of freedom = (rows-1)(coloumn-1) = (2-1) (2-1)=1 Level of significance= α = 0.05 Chi-Square formula = Sum [ (O-E)2 / E] = i.e. Value of Chi Square Critical value from Chi Square table for degrees of freedom 1 and α=.05 is Test statistics Test value Table value > Comparison: If Test value < Table value, Accept null hypothesis. If Test value > hypothesis. Table value, Reject null Page No:1960

15 Hypothesis Analysis: 4 H0(Null hypothesis) Internet speed has no significant role to boost e retailing growth. H1(Alternate hypothesis) Internet speed has significant role to boost e retailing growth. If speed of internet is not good enough for navigation, online buying will take more time and hence possibility of buying will be less in that case? Observed Expected O - E (O-E)2 (O-E)2/E Yes No Degrees of freedom = (rows-1)(coloumn-1) = (2-1) (2-1)=1 Level of significance= α = 0.05 Chi-Square formula = Sum [ (O-E)2 / E] = 6.07 i.e. Value of Chi Square Critical value from Chi Square table for degrees of freedom 1 and α=.05 is Test statistics Test value Table value > Comparison: If Test value < Table value, Accept null hypothesis. If Test value > hypothesis. Table value, Reject null Page No:1961

16 Hypothesis Analysis: 5 H0(Null hypothesis) Government policies/supports are not sufficient to boost eretailing. H1(Alternate hypothesis) Government policies/supports are sufficient to boost eretailing. Do you feel Government is taking initiatives, measures to promote eretailing? Observed Expected O - E (O-E)2 (O-E)2/E Yes No Degrees of freedom = (rows-1)(coloumn-1) = (2-1) (2-1)=1 Level of significance= α = 0.05 Chi-Square formula = Sum [ (O-E)2 / E] = 6.07 i.e. Value of Chi Square Critical value from Chi Square table for degrees of freedom 1 and α=.05 is Test statistics Test value Table value < Comparison: If Test value < Table value, Accept null hypothesis. If Test value > hypothesis. Table value, Reject null Conclusion Study reveals 80% of sample population opting for online buying due to obvious reasons such as saving of time, money, convenience, product comparison available easily, virtual interface offering virtual trial option, different payment options like EMI or Cash on delivery. This trend is on increasing path. Page No:1962

17 Amazon is present leader Indian E-commerce competition giving good services like speedier delivery with competitive delivery charges for same day delivery, good implementation of cash on delivery payment option and replacement policy. Off late E-retailers to look into different issues like faulty product and out of stock issues which can be manageable by strengthening supply chain hence supply chain plays vital role as it is connecting bridge between suppliers, e-retailers and customers. Future prospect of study - This study having pivotal importance focusing supply chain issues of E-retailers. Eretailers can further explore positive outcome due to which customers preferring online buying and also issues faced by customers to retain existing customer as well to create new customers. Eretailers thus can work towards building their supply chain in such way to provide value proposition to existing and potential buyers in cost effective and timely manner. References- Total retail Global Report,2016, by PwC (Source pp 1-3. E Commerce in India Accelerating growth, 2015, paper by PwC (Source pp 1-5. Decoding the Digital Opportunity in Retail, Feb 2017, paper by BCG (Source BCG and RAI publication) pp 1-4. K. Shahjahan (2016), E-tailing In India Innovative supply chain logistics infrastructure (Source- Twelfth AIMS International Conference on Management ISBN no ) E-tailing in India Unlocking Potential, May 2013 paper by Technopak pp 1-3 Sharma S and Mittal (2009), Prospectus of Ecommerce in India, Proceedings of ISCET 2, ISBN: , pp Bellman, Steven and Lohse, Gerald Johnson, Eric J. (2009) Predictors of Online Buying Behavior. Communication of the ACM, Vol no 42,pp Morgan Stanley report 2016 (Source Economic times article dt 25 th Feb 2016) pp 1-5 Page No:1963