TERM PAPER

Amazon.com Vs Flipkart.com Or Allies

Submitted to Ajay Kumar Mishra Faculty Guide

Submitted by S.Samyukta A0650712006 BBS-BD EMAIL ID: adviser3sam@gmail.com

Acknowledgement

I wanted to thank our program leader Dr. Renita Dubey who helped me in making this project come possible. I also wanted to thank our mentor Mr. Ajay Kumar Mishra who not only supervised me but also encouraged me throughout the making of my project. They guided me through the difficulties I faced during makin g of my project and motivated me to do my best. Also, a special thanks to the websites mentioned in the bibliography page which made this project possible.

ABSTRACT

When we first hear the names of www.amazon.com or www.flipkart.com, the first thing that comes to our mind is on line purchase of goods. Till recently, we always bought things only after going to the market to see the item physically. With advent of internet, whatever we want we can see the items online and verify the features and then place a purchase order. This kind of transactions paved the way for the new business term called e-commerce. E-Commerce or Electronic Commerce is the most upcoming industry where buying and selling of products and services are conducted by electronic means such as internet or other computer networking. Electronic commerce is generally considered to be the sales aspect of ebusiness. It also consists of the exchange of data to facilitate transfer of goods from one place to the other and also financial transactions of business. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. Advantages of e-commerce 1) 2) 3) 4) Helps in comparing different products in one go Cost effective (lower cost) as infrastructure requirement is minimum. Can pay after or before the delivery of the product Convenience ( no need to wait in a long queue)

Amazon.com, Inc. is one of the first American multinational e-commerce a company with its headquartering in Seattle, Washington, United States. Its the world's largest online retailer. Amazon.com started as an online bookstore, but soon diversified into selling DVDs, CDs, video and MP3 downloads/ streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry etc. The company also produces consumer electronicspopularly known as the Amazon Kindle e-book reader and the Kindle Fire tablet. Jeff Bezos started the company in July 1994 and the site went online as Amazon.com in 1995. The company was renamed after the Amazon River.Amazon has separate retail websites for United States, Canada, United Kingdom, France, Germany, India, Italy, Spain, Brazil, Japan, and China, with international shipping to certain other countries for some of its products. It is also expected to launch its websites in Poland, Netherlands, and Sweden etc. Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart focused on online sales of books just like Amazon.com, but later it expanded to electronic goods and a variety of other products. Flipkart offers multiple payment methods like credit card, debit card, net banking, e-gift voucher, Cash on Delivery and Card Swipe on Delivery. It gives us

variety of options during the process of buying a product; it also deducts the unnecessary products which we dont want according to our needs, price range or the bran d of the product. It also helps in comparing the products when we have difficulty in choosing one, and selects the best product according to our need.

KEYWORDS
Amazon, Jeff Bezos, Flipkart, Sachin Bansal and Binny Bansal, E-Commerce, Modes Of Payment, E-Books, Online Products, Customer Services.

OBJECTIVES
1) To study how e-commerce has wiped out the normal day to day trading business 2) Through this we would get to know even though Amazon.com and Flipkart.com are different, they are similar in many ways. 3) We would get to know about the history of both the companies and their expansion.

RESEARCH METHODOLOGY
This research is conducted on the basis of secondary research methodology i.e. online news reviews, search engines, internet blogs etc. these information are gathered and modified into simpler form to know the similarities and the difference between Amazon.com and Flipkart.com.

REVIEW OF LITERATURE
Few reviews and interviews based on the companies are as follows: FLIPKART MAY LAUNCH ONLINE MARKETPLACE ON ITS WEBSITE Nivedita Mookerji, New Delhi, October 2, 2012 Last Updated at 19:26 IST E-commerce company Flipkart is likely to launch an online marketplace, to compete directly with the likes of eBay andSnapdeal in the country. Experts pointed out the company may be trying to be more like the largest ecommerce player in the world, Amazon, which too operates like a marketplace and not just a seller. The Flipkart founders, Sachin Bansal and Binny Bansal, were both at Amazon before this venture. And the buzz that Amazon and Flipkart may one day merge never died down, but the Bansals had earlier ruled out any buyout. With FDI barred in ecommerce, its a breather for a player like Flipkart in some ways, said Rachna Nath, executive director, PricewaterhouseCoopers. Nath was referring to competition from Amazon getting delayed in the India market. Last year, Amazon announced its India foray, but indirectly through a product and price comparison site, junglee.com. In the multi-brand retail Company policy announced by the government last month, FDI is prohibited in e-commerce. While no FDI is permitted in online B2C (business to consumer or frontend retail), theres no restriction in online B2B (business to business) or even backend. The government may be looking at strengthening the FDI clearance rules for backend in online companies as many players are opting for complex structuring to route FDI. For brick and mortar stores, up to 51 per cent FDI has been allowed in multi-brand. Flipkart did not respond to a questionnaire sent by Business Standard on the matter. But the company, Flipkart Online Services Private limited, has recently registered two new companies Flipkart Marketplace Private Limited and Flipkart Payment Gateway Services Private Limited. These companies may be for the purpose of starting an online marketplace, experts said. Online marketplace refers to an ecommerce site where product and inventory information is provided by multiple third parties. Its being increasingly seen as a channel for increased sales. In an online marketplace, consumer transactions are processed by the marketplace operator and then are delivered and fulfilled by the participating retailers. Marketplace is a great variation to e-commerce, that can exploit the power of the brand through an inventory-light model, according to Mohit Bahl, partner, transaction services, KPMG. Flipkart has built a strong brand which drives customer pull and marketplace will allow them to widen the products it can sell, Bahl added. Nath of PwC pointed out that through acquisition of companies, Flipkart has been moving towards a one-stop shop concept. This is more like giving more options to the consumers, quite like Amazon, she said. Arvind Singhal, chairman, Technopak Advisors, a leading retail consultancy, however, argued that ecommerce sites are trying to do too many things without thinking of any

differentiation. Its not just about Flipkart, but a whole lot of them, Singhal said. The players who offer little differentiation may harm each other through greater competition in the same space, and may also harm themselves in the process, he explained. Another industry insider however said that with the marketplace, Flipkart will be able to offer greater range of products on the site without having the headache of stocking them. Flipkart has been facing rough weather of late due to operational losses on books that accounted for 65 per cent of its sales volume and 40 per cent of revenue. The company has been constantly widening its product range in the recent months to bounce back. It stocks around 11.5 million book titles on average. The lead investors of Flipkart include Accel Partners and Tiger Global. Flipkart has been bullish on its revenue figures and also the target of $1 billion (about Rs 5,500 crore) in sales by 2015. From Rs 11.6 crore in 2009-10, its revenue jumped to about Rs 50 crore in 2010-11. The company closed 2011-12 with a revenue of over Rs 500 crore. It has a registered user base of over two million customers and ships out 30,000 items a day, clocking daily sales of an estimated Rs 2.5 crore. Source:http://www.business-standard.com/article/companies/flipkart-may-launch-onlinemarketplace-on-its-website-112100200140_1.html

FLIPKART: COUNTRYS LARGEST ONLINE BOOKSTORE Archana Rai, ET Bureau Jun 30, 2010, 09.41am IST BANGALORE: Popular belief has it that parents of young Indians with coveted degrees from the Indian Institutes of Management or Technology, quail at the thought of their children giving up a job in a multinational corporation to start a business. However, when Sachin Bansal, a Computer Science Graduate from IIT-Delhi, landed his first posting at global retail major, Amazon, his family was happy but wanted to know when he would launch his own business, so they could look for a bride for him. "In our community a person with a salaried job is less valued than someone who runs their own business," says Bansal who quit Amazon after a year to kick start his own e-commerce venture Flipkart.com with fellow IITian Binny Bansal. "As it happened I was married within a few months of starting out on my own," he says. That was more than two years ago. Today, Flipkart.com is the country's largest online bookstore, selling more than five lakh books since its inception in end 2007. "We sell a book a minute," says Bansal who started selling movies, music and games on the portal this fortnight. It was no cakewalk though. Flipkart could count only family and friends as customers in the initial months. "The first real order came nearly four months after the launch when we were able

to source a customer request for the book 'Leaving Microsoft to Change the World'," says Binny Bansal, who also worked at Amazon for eight months before launching Flipkart. For one, the two Bansals had to bet on word-of-mouth marketing amongst peers, college mates, friends, blogs and social media networks such as Facebook and Twitter to find new customers as they had to keep their budget tight. "We had spent just about Rs 4 lakh to set up the business in the initial days," says Sachin. The partners, who moved to Bangalore with their jobs, would park themselves at the entrance to some of the city's largest book fairs, distributing flyers to announce the launch of Flipkart. "The bookstore owners were very tolerant, they rarely objected to our presence," he says. Source: http://articles.economictimes.indiatimes.com/2010-06/30/news/27589478_1_bookstoreamazon-facebook-and-twitter

AMAZON ACQUIRES STANZA, AN E-BOOK APPLICATION FOR THE IPHONE By BRAD STONE APRIL 27, 2009, 4:03 PM

Lars Klove for The New York TimesThe Apple iPhone showing a book on Stanza, an electronic reader application. Seeking to strengthen its presence on the iPhone and iPod Touch, Amazon has acquired Lexcycle, the company behind Stanza, a popular free e-book application for the iPhone, according to Lexcycles blog. Stanza allows users to browse a library of around 100,000 books and periodicals for the iPhone, many of them in the ePub format a widely accepted standard for e-books that Amazon has yet to support with its proprietary Kindle platform.

In its blog post, Lexcycle said, We are not planning any changes in the Stanza application or user experience as a result of the acquisition. Customers will still be able to browse, buy, and read e-books from our many content partners. It is not clear how much Amazon is paying for the year-old company, which has offices in Austin, Tex., and Portland, Ore. But the move indicates Amazon wants to consolidate its position on mobile devices, particularly within Apples ecosystem, which may include a tablet computer later this year. The Lexcycle team should also help Amazon stake out ground on Googles Android phones, the Palm Pre and Windows Mobile devices and perhaps eventually turn to more open e-reading formats. Its very early days for e-books, and we believe there is a lot of innovation ahead of us, said Cinthia Portugal, a spokeswoman for Amazon.com. Lexcycle is a smart, innovative company, and we look forward to working with them to innovate on behalf of readers. Source:http://bits.blogs.nytimes.com/2009/04/27/amazon-acquires-stanza-an-e-book-applicationfor-the-iphone/

JEFF BEZOS: AMAZON'S ROCKET MAN KEEPS GETTING RICHER Clare O'Connor, Forbes Staff , 9/22/2011 , 2:46PM Amazon.com founder Jeff Bezos was one of the biggest dollar gainers on this years Forbes 400, adding $6.5 billion to his fortune over the past year and managing to stay just ahead of Mark Zuckerberg, who is hot on his heels. Bezos boost comes on the back of an impressive 55% rise in Amazon shares, pegging his net worth at $19.1 billion. Hes now the 13thrichest person in the U.S., just behind New Yorks Mayor Mike Bloomberg. Hes just one spot ahead of young pretender to the tech th rone Zuckerberg, whose net worth increased a staggering $10.6 billion since August 2010 to a current $17.5 billion as the private market valuation of Facebook nearly tripled to $66.5 billion. Dot com king Bezos neednt be too worried about Zuckerberg just yet, though. Once just an online bookseller, Amazon is now the worlds largest internet retailer of any kind. Its digital book business is booming: as of April, Amazon has sold 105 e-books for every 100 printed books that left its warehouse. Its Kindle device is hugely popular, with over 17 million sold to date. That number looks to grow with news that libraries may start to lend books out on the ereader. Bezos remains staunchly private, rarely speaking publicly and not giving in to speculation about Amazons plans, or his own. Hes stayed mum on persistentrumors that Amazon is set to launch a tablet to compete with the Apple iPad. His reticence, of course, only provides grist for tech bloggers and keeps Amazon acolytes coming back to check for word on the mystery device.

Hes also kept quiet about his other big investment: Blue Origin, a highly secretive commercial space company he funds. Bezos has been funneling money into the Texas firm for years in hopes of developing a vertical take-off, vertical landing rocket. He broke with protocol and spoke out in early September when one of Blue Origins spacecraft crashed during a test flight. He issued a rare statement on Blue Origins blog only after locals told Forbes of the explosion, writing: Three months ago, we successfully flew our second test vehicle in a short hop mission, and then last week we lost the vehicle during a developmental test at Mach 1.2 and an altitude of 45,000 feet, said Bezos in the post. A flight instability drove an angle of attack that triggered our range safety system to terminate thrust on the vehicle. Not the outcome any of us wanted, but were signed up for this to be hard, and the Blue Origin team is doing an outstanding job. Were already working on our next development vehicle. As Blue Origin works on its next development, so does Amazon we presume, anyway. Bezos is one billionaire who can keep a secret. Source: http://www.forbes.com/sites/clareoconnor/2011/09/22/jeff-bezos-amazons-rocket-mankeeps-getting-richer/

Introduction
E-COMMERCE Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service is conducted over electronic systems such as the Internet and other computer networks. E-commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices social media, and telephones as well. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting a business.

Amazon.com
Introduction Amazon.com Inc. is an American multinational e-commerce company with headquarters in Seattle, Washington, United States. It is the world's largest online retailer shop. Amazon.com started as an online bookstore, but soon then diversified into, selling DVDs, CDs, video and MP3 downloads / streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry. The company also produces consumer electronicsnotably the Amazon Kindle e-book reader and the Kindle Fire tablet computer and is the major provider of cloud computing services. Amazon has separate retail websites for United States, Canada, United Kingdom, France, Germany, India, Italy, Spain, Brazil, Japan, and China, with international shipping to certain other countries for some of its products. History

Amazon founder Jeff Bezos

The company was founded in 1995. In 1994, Bezos left his employment as vice-president of D.E. Shaw, a Wall Street firm, and moved to Seattle. After reading a report about the future of the internet which projected annual Web commerce growth at 2,300%, Bezos created a list of 20 products which could be marketed online. He narrowed the list to what he felt were the five most promising products which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, due to the large world-wide demand for literature, the low price points for books, along with the huge number of titles available in print. Amazon was originally founded in Bezos' garage in Bellevue, Washington. The company began as an online bookstore. In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to $20,000/week. While the largest brick and mortar bookstores and mail order catalogs might offer 200,000 titles, an online bookstore could "carry" several times more, since they had an almost unlimited virtual (not actual) warehouse: those of the actual product makers/suppliers. Bezos wanted a name for his company that began with "A" so that it would appear early in alphabetic order. He began looking through the dictionary and settled on "Amazon" because it was a place that was "exotic and different" and it was one of the biggest rivers in the world, as he hoped his company would be. In October 1995, the company announced itself to the public. In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at a price of US$18.00 per share ($1.50 after three stock splits in the late 1990s). Headquarters

Amazon.com's former headquarter in the Pacific Medical Center building in Beacon Hill, Seattle. The company's global headquarters are in Seattle's South Lake Union neighborhood. The European headquarters are in Luxembourg's capital, Luxembourg City. Business Growth in the Begining Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years. This "slow" growth caused stockholders to complain about the company not reaching profitability fast enough to justify investing in, or to even survive in the long-term. When the dot-com bubble burst at the start of the 21st Century, destroying many e-companies in the

process, Amazon survived, and grew on past the bubble burst to become a huge player in online sales. It finally turned its first profit in the fourth quarter of 2001: $5 million on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional business model could succeed. In 1999, Time magazine named Bezos the Person of the Year, recognizing the company's success in popularizing online shopping. Setbacks Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false. Barnes and Noble asserted, "It isn't a bookstore at all. It's a book broker." The suit was later settled out of court, and Amazon continued to make the same claim." Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen their trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the re-assignment of the former Walmart executives.

Fulfillment and warehousing Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers: Warehouses are large and each has hundreds of employees. Employees are responsible for four basic tasks: (a) (b) Unpacking and inspecting incoming goods. Placing goods in storage and recording their location

(c) Picking goods from their computer recorded locations to make up an individual shipment; (d) Shipping.

A central computer which records the location of goods and maps out routes for pickers plays a central role; employees carry hand-held computers which communicate with the central computer and monitor their rate of progress. A picker with their cart may walk 10 or more miles a day. Warehouse work for Amazon is relatively low-paying and somewhat regimented; in the United Kingdom initial staffing was provided by Randstad Holding and other temporary employment agencies. Some workers are accepted as Amazon employees and granted pension and shares of stock; others are dismissed. "When we have permanent positions available, we look to the top performing temporary associates to fill them." Development of a high level

of automation is anticipated in the future following Amazon's 2012 acquisition of Kiva Systems, a warehouse automation company. Products and services

Third-generation Amazon Kindle Retail goods Amazon product lines include books, music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, and groceries. The company launched amazon.com Auctions, a web auctions service, in March 1999. However, it failed to chip away at the large market share of the industry pioneer, eBay. Later, the company launched a fixed-price marketplace business, zShops, in September 1999, and the now defunct partnership with Sotheby's, called Sothebys.amazon.com, in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. Today, Amazon Marketplace's main rival is eBay's Half.com service. In August 2007, Amazon announced AmazonFresh, a grocery service offering perishable and nonperishable foods. Customers can have orders delivered to their homes at dawn or during a specified daytime window. Delivery was initially restricted to residents of Mercer Island, Washington, and was later expanded to several ZIP codes in Seattle proper. AmazonFresh also operated pick-up locations in the suburbs of Bellevue and Kirkland from summer 2007 through early 2008. In 2012, Amazon announced Vine.com for buying green products, including groceries, household items and apparel. It is part of Quidsi, the company that Amazon bought in 2010 that also runs the sites Diapers.com (baby), Wag.com (pets) and YoYo.com (toys). Amazon also owns other e-commerce sites like Zappos.com, Shopbop.com and Woot.

Amazon's Subscribe & Save program offers a discounted price on an item (usually sold in bulk), free shipping on every Subscribe & Save shipment, and automatic shipment of the item every one, two, three, or six months. Consumer electronics In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet", via the Sprint Nextel EV-DO wireless network. The screen uses E Inktechnology to reduce battery consumption and to provide a more legible display. As of March 2011, the stated library numbers over 850,000 titles. In September 2011, Amazon announced its entry into the tablet computer market by introducing the Kindle Fire, which runs a customized version of the operating system Android. The exceedingly low pricing of Fire ($199 USD) was widely perceived as a strategy backed by Amazon's revenue from its content sales, to be stimulated by sales of Fire. Digital content

Amazon Kindle Fire HD 8.9" Tablet In July 2010, Amazon announced that e-book sales for its Kindle reader outnumbered sales of hardcover books for the first time ever during the secondquarter of 2010. Amazon claims that, during that period, 143 e-books were sold for every 100 hardcover books, including hardcovers for which there is no digital edition; and during late June and early July, sales rose to 180 digital books for every 100 hardcovers. Amazon MP3, its own online music store, launched in the U.S. on September 25, 2007, selling downloads exclusively in MP3 format without digital rights management. (In addition to copyright law, Amazon's terms of use agreements restrict use of the MP3s, but Amazon does not use DRM to enforce those terms.) Amazon MP3 sells music from the Big 4 record labels EMI, Universal, Warner Bros. Records, and Sony Music, as well as independents. Prior to the launch of this service, Amazon made an investment in Amie Street, a music store with a variable pricing model based on demand. Amazon MP3 was the first online offering of DRMfree music from all four major record companies. In January 2008, Amazon began rolling out its MP3 service to subsidiary websites worldwide. In December 2008, Amazon MP3 was made available in the UK.

Amazon's Honor System was launched in 2001 to allow customers to make donations or buy digital content, with Amazon collecting a percentage of the payment plus a fee. The service was discontinued in 2008 and replaced by Amazon Payments. In 2011, Amazon announced that it was releasing a Mac download store to offer dozens of games and hundreds of pieces of software for Apple computers. On August 2012, Amazon announced it would be adding a gaming department to its company titled Amazon Game Studios. Amazon states that they will bring, "innovative, fun and well-crafted games." In January 2013, Amazon announced it is launching AutoRip, a digital music service. Amazon Prime Amazon Prime is a service of free two-day shipping on all eligible purchases, for a flat annual fee, as well as discounted one-day shipping rates. Amazon launched the program in the contiguous United States in 2005, in Japan, the United Kingdom and Germany in 2007, in France (as "Amazon Premium") in 2008, in Italy in 2011 and in Canada in 2013. Amazon Prime membership in the United States also provides Amazon Instant Video, the instant streaming of selected movies and TV shows at no additional cost, as of February 2011. In November 2011, it was announced that Prime members have access to the Kindle Owners Lending Library, which allows users to borrow certain popular titles for free reading on Kindle hardware, up to one book a month, with no due date. Private labels and exclusive marketing arrangements In August 2005, Amazon began selling products under its own private label, "Pinzon"; the trademark applications indicated that the label would be used for textiles, kitchen utensils, and other household goods. In March 2007, the company applied to expand the trademark to cover a more diverse list of goods and to register a new design consisting of the "word PINZON in stylized letters with a notched letter "O" which appears at the "one o'clock" position". Coverage by the trademark grew to include items such as paints, carpets, wallpaper, hair accessories, clothing, footwear, headgear, cleaning products, and jewelry. In September 2008, Amazon filed to have the name registered. USPTO has finished its review of the application, but Amazon has yet to receive an official registration for the name. Amazon Basics is a private-label consumer electronics product line. It sells AV cables, blank DVD media and other electronics products under the AmazonBasics product label. The line was launched in 2009. Amazon provides fast and inexpensive self publishing services through one of its companies, Create Space, a member of the Amazon group of companies, allowing authors to easily offer their content to millions of customers on Amazon.com and other methods.