A PROJECT REPORT ON

“A study of working capital on Amazon”

A project submitted to

University of Mumbai for partial completion of the degree

Bachelor of Management Studies

Under the faculty of management

By

Shaikh Reeba Abdul Razzaque

Roll no: 67

Under the guidance of

Santosh Sir

THANE

Year 2022-23
 CHAPTER NO. 1
INTRODUCTION TO WORKING CAPITAL
Working capital (WC) is a financial metric which represents operating liquidity available to
a business, organization, or other entity, including governmental entities. Along with fixed
assets such as plant and equipment, working capital is considered a part of operating capital.
Gross working capital is equal to current assets. Working capital is calculated as current assets
minus current liabilities. If current assets are less than current liabilities, an entity has
a working capital deficiency, also called a working capital deficit and negative working
capital.
A company can be endowed with assets and profitability but may fall short of liquidity if its
assets cannot be readily converted into cash. Positive working capital is required to ensure that
a firm is able to continue its operations and that it has sufficient funds to satisfy both
maturing short-term debt and upcoming operational expenses. The management of working
capital involves managing inventories, accounts receivable and payable, and cash.
MEANING:
A positive working capital cycle balances incoming and outgoing payments to minimize net
working capital and maximize free cash flow. For example, a company that pays its suppliers
in 30 days but takes 60 days to collect its receivables has a working capital cycle of 30 days.
This 30-days cycle usually needs to be funded through a bank operating line, and the interest
on this financing is a carrying cost that reduces the company's profitability. Growing businesses
require cash, and being able to free up cash by shortening the working capital cycle is the most
inexpensive way to grow. Sophisticated buyers review closely a target's working capital cycle
because it provides them with an idea of the management's effectiveness at managing their
balance sheet and generating free cash flows.
As an absolute rule of funders, each of them wants to see a positive working capital because
positive working capital implies there are sufficient current assets to meet current obligations.
In contrast, companies risk being unable to meet current obligations with current assets when
working capital is negative. While it's theoretically possible for a company to indefinitely show
negative working capital on regularly reported balance sheets (since working capital may
actually be positive between reporting periods), working capital will generally need to be non-
negative for the business to be sustainable
Reasons why a business may show negative or low working capital over the long term while
not indicating financial distress include:
 Assets above or liabilities below their true economic value
 Accrual basis accounting creating deferred revenue while the cost of goods sold is lower
than the revenue to be generated
o E.g. a software as a service business or newspaper receives cash from customers early
on, but has to include the cash as a deferred revenue liability until the service is
delivered. The cost of delivering the service or newspaper is usually lower than revenue
thus, when the revenue is recognized, the business will generate gross income.
 INTRODUCTION TO AMAZON
[Link], Inc. is an American multinational technology company which focuses on e-
commerce, cloud computing, digital streaming, and artificial intelligence. It has been referred
to as "one of the most influential economic and cultural forces in the world", and is one of
the world's most valuable brands. It is one of the Big Five American information
technology companies, alongside Alphabet, Apple, Meta, and Microsoft.
Amazon was founded by Jeff Bezos from his garage in Bellevue, Washington, on July 5, 1994.
Initially an online marketplace for books, it has expanded into a multitude of product
categories: a strategy that has earned it the moniker The Everything Store. It has
multiple subsidiaries including Amazon Web Services (cloud computing), Zoox (autonomous
vehicles), Kuiper Systems (satellite Internet), Amazon Lab126 (computer hardware R&D). Its
other subsidiaries include Ring, Twitch, IMDb, and Whole Foods Market. Its acquisition of
Whole Foods in August 2017 for US$13.4 billion substantially increased its footprint as
a physical retailer.
Amazon has earned a reputation as a disruptor of well-established industries through
technological innovation and mass scale. As of 2021, it is the world's largest Internet
company, online marketplace, AI assistant provider, cloud computing platform, and live-
streaming service as measured by revenue and market share. In 2021, it surpassed Walmart as
the world's largest retailer outside of China, driven in large part by its paid subscription
plan, Amazon Prime, which has over 200 million subscribers worldwide. It is the second-
largest private employer in the United States.
Amazon also distributes a variety of downloadable and streaming content through its Amazon
Prime Video, Amazon Music, Twitch, and Audible units. It publishes books through its
publishing arm, Amazon Publishing, film and television content through Amazon Studios, and
is the owner of film and television studio Metro-Goldwyn-Mayer since 2022. It also
produces consumer electronics—most notably, Kindle e-readers, Echo devices, Fire tablets,
and Fire TV.
Amazon has been criticized for practices including technological surveillance overreach, a
hyper-competitive and demanding work culture,[23] tax avoidance, and anti-
competitive behavior.
 INDUSTRY PROFILE
In 2000, U.S. toy retailer Toys "R" Us entered into a 10-year agreement with Amazon, valued
at $50 million per year plus a cut of sales, under which Toys "R" Us would be the exclusive
supplier of toys and baby products on the service, and the chain's website would redirect to
Amazon's Toys & Games category. In 2004, Toys "R" Us sued Amazon, claiming that because
of a perceived lack of variety in Toys "R" Us stock, Amazon had knowingly allowed third-
party sellers to offer items on the service in categories that Toys "R" Us had been granted
exclusivity. In 2006, a court ruled in favor of Toys "R" Us, giving it the right to unwind its
agreement with Amazon and establish its independent e-commerce website. The company was
later awarded $51 million in damages.
In 2001, Amazon entered into a similar agreement with Borders Group, under which Amazon
would comanage [Link] as a co-branded service. Borders pulled out of the arrangement
in 2007, with plans to also launch its own online store.
On October 18, 2011, [Link] announced a partnership with DC Comics for the exclusive
digital rights to many popular comics, including Superman, Batman, Green Lantern, The
Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes &
Noble to remove these titles from their shelves.
In November 2013, Amazon announced a partnership with the United States Postal Service to
begin delivering orders on Sundays. The service, included in Amazon's standard shipping rates,
initiated in metropolitan areas of Los Angeles and New York because of the high-volume and
inability to deliver in a timely way, with plans to expand into Dallas, Houston, New
Orleans and Phoenix by 2014.
In June 2017, Nike agreed to sell products through Amazon in exchange for better policing of
counterfeit goods. This proved unsuccessful and Nike withdrew from the partnership in
November 2019. Companies including Ikea and Birkenstock also stopped selling through
Amazon around the same time, citing similar frustrations over business practices and
counterfeit goods.
In September 2017, Amazon ventured with one of its sellers JV Appario Retail owned by Patni
Group which has recorded a total income of US$ 104.44 million (₹ 759 crore) in financial year
2017–2018.
As of October 11, 2017, AmazonFresh sold a range of Booths branded products for home
delivery in selected areas.
In November 2018, Amazon reached an agreement with Apple Inc. to sell selected products
through the service, via the company and selected Apple Authorized Resellers.
 HISTORY OF AMAZON
Amazon was founded by Jeff Bezos in July 1994, who chose Seattle for its abundance of
technical talent, as Microsoft was in the area. Mackenzie Scott was also instrumental in its
founding, and drove across the country with Bezos to start it. When Scott graduated, she
applied to work for D. E. Shaw & Co., a quantitative hedge fund in New York City, as a
research associate to "pay the bills while working on her novels". Bezos, then a vice-president
at the firm, met her when he interviewed her.
Amazon went public in May 1997. It began selling music and videos in 1998, and began
international operations by acquiring online sellers of books in the United Kingdom and
Germany. The following year, it began selling video games, consumer electronics, home
improvement items, software, games, and toys.
In 2002, it launched Amazon Web Services (AWS), which provided data on website
popularity, Internet traffic patterns, and other statistics for marketers and developers. In 2006,
it grew its AWS portfolio when Elastic Compute Cloud (EC2), which rented computer
processing power, provided Simple Storage Service (S3), and rented data storage via the
Internet, also became available. That year, Amazon also started Fulfillment by Amazon which
allowed individuals and small companies to sell items through the company's Internet site. In
2012, Amazon bought Kiva Systems to automate its inventory management business. It
purchased the Whole Foods Market supermarket chain in 2017.
On February 2, 2021, Amazon announced that Jeff Bezos would step down as CEO to become
executive chair of Amazon's board in Q3 of 2021. Andy Jassy, previously CEO of AWS,
became Amazon's CEO.
 AMAZON ORGANIZATIONAL STRUCTURE
Amazon organizational structure can be classified as hierarchical. Senior management team
include three CEOs and three senior vice presidents responsible for various vital aspects of the
business reporting directly to Amazon CEO Jeff Bezos.
Amazon organizational structure has the following three key features:
1. Hierarchical corporate structure. Hierarchical structure at Amazon has developed due to
the immense size of the business. The largest internet retailer in the world by revenue employs
more than 647,00 people worldwide.
2. Flexibility of the business. It is important to note that despite its large size, unlike many
other companies with hierarchical organizational structure, Amazon remains highly flexible to
adapt to frequent changes in the external marketplace. Moreover, the online retail giant leads
changes in external business environment, it has caused disruptive innovation in e-commerce
and currently it is about to cause a disruptive innovation in global logistics industry. This is
mainly due to visionary and efficient leadership by Amazon founder and CEO Jeff Bezos.
Amazon organizational structure integrates many small teams that deal with various aspects of
the business. Amazon founder and CEO Jeff Bezos is credited with the introduction of ‘two
pizza rule”. According to this rule, meetings should be held in teams small enough that could
be all fed with only two pizzas.
3. Stability in the top management. Stability is one of the key features of Amazon.
Specifically, the largest internet company by revenue in the experiences “very little turnover
among its most important power players, with many of them having been at the company for
years, if not decades.”
The figure below illustrates Amazon organizational structure:
It can be argued that due to the company’s adherence to business diversification strategy in an
aggressive manner, its organizational structure will remain dynamic, being subjected to certain
changes in a regular manner.
[Link] Inc. Report contains a full analysis of Amazon organizational structure. The
report illustrates the application of the major analytical strategic frameworks in business
studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix
and McKinsey 7S Model on Amazon. Moreover, the report contains analyses of Amazon
leadership, business strategy and organizational culture. The report also comprises
discussions of Amazon marketing strategy, ecosystem and addresses issues of corporate social
responsibility.
 MAJOR COMPETITORS
WALMART
Walmart is another global giant. This big-box department store generates $514.41 billion in net
sales per year. That’s more than double Amazon, although a large percentage of Walmart’s
sales obviously come from brick-and-mortar purchases.
There are more than 11,000 Walmart physical store locations across 27 countries.
While Walmart is best-known for its physical department stores, this retail giant also has a
significant presence online. Behind Amazon, Walmart is the second most popular online store
in the United States in terms of ecommerce revenue.

With Walmart’s international presence and customer base, they will be a continuous threat to
Amazon in the ecommerce space.
Walmart’s online sales are growing at 40% year-over-year. At this pace, you can expect this
giant to take away even more Amazon business in the coming years.
Alibaba is a China-based online retailer. This international giant specializes in wholesale
selling online, which is a differentiation factor compared to Amazon.
Another unique difference between Alibaba and Amazon is its overall business model. While
Amazon is run entirely under one roof, Alibaba is split into separate businesses:
 Alibaba.
 Taobao.
 Tmall.
Alibaba is the B2B focus of the company, while the other branches focus on B2C and
multinational brands, respectively.
As of June 2019, there are 755 million Alibaba users worldwide. The company is responsible
for 58% of all online retail sales in China.
Alibaba sold $30.8 billion of products on November 13, 2018, the Chinese version of Black
Friday known as “Singles Day.”
With an international presence, a dominant market share in China, and B2B sales in addition
to B2C focus, Alibaba is a force to be reckoned with. Plus, any website that can do $30 billion
in one day can definitely win against Amazon.
Otto.

Otto is a European online retailer. The company is best known for innovation throughout the
years to keep pace with the times. At its core, Otto is a trading company, meaning that it sells
products from other brands on its ecommerce platform.
It’s essentially a one-stop-shop for buying online in Europe. Some of Otto’s top categories
include fashion, electronics (like Apple and Microsoft products), home goods, and sports.
One of the reasons why Otto is so popular is due to its user-friendly interface. The platform
makes it easy for consumers to shop online.
In 2019, Otto generated roughly $3.8 billion in revenue from online sales. While this may seem
marginal compared to Amazon, it’s still extremely impressive.
Otto has a 13.7% annual growth rate. 72% of their sales come from furniture, appliances, and
fashion purchases. This makes them unique compared to Amazon.
JD.

Formally 360buy, JD (Jingdong) is another Chinese ecommerce business. This Fortune Global
500 company is a direct competitor of Tmall, which is run by Alibaba.
At [Link], consumers can buy a wide selection of products at an affordable rate. The website
also has a “buy in bulk” category, which is another reason why it goes head-to-head with
Alibaba.
[Link] is also an affiliate of JD. This site is in English and ships to more than 200
countries worldwide. It also offers 24/7 customer service and 30-day returns.
Jingdong has more than 305 million active customers. Its quarterly active customer accounts
are increasing at a 22% year-over-year growth rate.
eBay.
Everyone is familiar with eBay. This website was a pioneer in consumer-to-consumer selling
through an online marketplace. Over time, eBay has evolved and become more than just a
way for consumers to buy and sell their own new or used merchandise.
Today, eBay is used for B2C sales in addition to its traditional C2C model.
In terms of marketplace website visits, eBay is second to Amazon, with just under 20% of the
market share.
The site traffic to eBay is impressive. It’s nearly double Walmart, and we’ve already
established how successful Walmart is in the online space.
With the ability to bid on products and the unique way for buyers and sellers to connect online,
eBay is a top competitor to Amazon.
Flipkart.

Flipkart is a newer ecommerce company compared to some of the other competitors on our
list. This Indian-based ecommerce platform was founded in 2007 and quickly became the
largest online retailer in India.
In 2018, Walmart acquired 77% of Flipkart’s shares, valuing the company at $22 billion.
With Walmart controlling the majority stake of Flipkart, there’s no telling where the
company can go from here.
More than 100 million users are registered on Flipkart. The platform’s user-friendly design,
mobile app, and customer service make it one of the up-and-coming Amazon competitors. With
such a wide range of products offered through Flipkart, the company is poised for continued
success in the coming years.
Rakuten.

Rakuten is a Japanese ecommerce company.

The business generates more than $2.3 trillion per year in retail ecommerce sales. In 2019,
Rakuten controlled 14.1% of the total global ecommerce market in terms of retail sales.
Furthermore, they are responsible for nearly 10% of the total ecommerce retail share in Japan.
Rakuten generated more than $134 billion in Japanese ecommerce sales alone in 2019.
In 2010 they purchased [Link] to expand its global presence in the United States. Aside from
[Link], Rakuten has acquired other ecommerce companies like PriceMinster (France) and
[Link] (UK). They also ventured into acquisitions like Ebates (cash-back rewards) and Viber
(VoIP software).
As Rakuten continues to expand and buy companies across varying industries and regions, they
will attempt to keep pace with Amazon.
Newegg is a global leader in selling electronics like laptops, TVs, cameras, phones, and
computer products online. The company generates $2.7 billion in revenue by offering
electronics at an affordable rate.
The fact that Newegg is successful in the electronics space is threatening for Amazon. That’s
because electronics is Amazon’s most popular category.
44% of Amazon shoppers in the U.S. have purchased an electronics product through the
platform. Clearly, Amazon relies on those sales.
Newegg’s market share takes billions away from Amazon in this category.
How Online Stores Can Compete With Amazon
Now that you’ve had a chance to see some of Amazon’s top competitors, it’s time for me to
show you how online stores can compete with Amazon.
You don’t need to be the next Walmart, Alibaba, or eBay to have success selling online. Your
online store doesn’t need $1 billion in revenue to go up against this global giant.
All you need to do is follow the lead of successful brands in the space. You can even steal the
playbook from Amazon directly and apply it to your business.
These are the top 12 tips for competing with Amazon online.
1. Build a brand. Be the brand!
Branding is powerful. Branding is the reason why Starbucks is able to charge $5 for coffee and
why Gucci can sell t-shirts for $500.
You need to establish a brand that your customers recognize and trust. When customers are
loyal to a brand, they won’t shop elsewhere, even if the alternative option is cheaper or more
convenient.
Amazon sells products manufactured by many different types of brands. But the nature of
Amazon’s platform makes every product feel brandless.
It’s tough for customers to tell the difference between one brand or another when they’re
shopping on Amazon.
As a result, this creates a significant opportunity for other B2B ecommerce stores to stand out
with their unique brands.
2. Focus on customer retention.
Everyone thinks they need to go out and find new customers to be successful. While first-time
customers are obviously great, you can’t afford to ignore your existing customers.
Repeat shoppers spend more money and convert at a higher rate compared to new customers.
Source: Softclouds
A customer who has purchased something from your site once is already familiar with your
brand and products. It’s much easier to sell to them again, as opposed to trying to educate
someone else about who you are and what you do.
Research shows that you have up to a 70% chance of selling to a repeat customer, but that
number drops as low as 5% for new customers.
Returning customers are 50% more likely to try new products and spend 31% more money than
new customers.
Amazon uses its Prime memberships as a way to retain customers. You should come up with
a customer loyalty program to encourage customer retention with your online store.

3. Focus on ecommerce SEO

ecommerce SEO is something that needs to be a priority for all B2B ecommerce stores in 2020.
 Site architecture.
 User experience.
 Blogs.
 Category descriptions.
 Product descriptions.
 Keyword research.
 Link building.
These are all components of the on-page and technical SEO of your website. If you can master
your SEO strategy, you’ll rank high in SERPs for relevant keywords in your category.
The first page of a Google search result captures 71% of clicks. If you don’t appear on this
page, the chances of a customer navigating directly to your site are slim.
Without an emphasis on organic search traffic, you’re relying on customers navigating directly
to your website and bypassing the search engine. But what about shoppers who aren’t familiar
with your brand? You’re alienating those people.
The numbers speak for themselves. 93% of all online experiences begin with a search engine.
Consumers are searching for what you’re selling. You just need to make sure that your
ecommerce site is visible in organic search results.
4. Build an email list.
Contrary to popular belief, email marketing is far from dead. It’s one of the best ways for
brands to communicate with customers.
When you capture an email address, you’re able to remind that customer about sales or
promotions that will entice them to buy. You think about your brand 24/7, but in reality, your
customers do not.
Don’t just sit back and wait for them to visit your website. Send them an email to jumpstart the
process.
Here are two of my favorite strategies for building an ecommerce email list. First, collect email
addresses during the checkout process.

This example was taken from Lululemon. The customer has to provide their email address
anyway for the receipt, order confirmation, and shipping updates.
By adding this simple checkbox to the process, it makes it easy for the customer to subscribe.
They won’t have to go out of their way to opt-in.
Another great way to add subscribers to your list is by giving them an incentive to join. When
someone lands on your website, you can offer something along the lines of a 20% discount
for new subscribers.
Not only will this get your customers to sign up, but it also gives them an incentive to buy
immediately.
5. Offer enticing discounts.
Everyone wants to feel like they’ve gotten a good deal when they buy something. The last thing
you want is for your customers to have buyer’s remorse after shopping on your website. This
will give them a bad association with your brand.
One of the reasons why Amazon is so successful is because of their prices. Here’s a look at the
most important factors driving purchase decisions on Amazon.

Source: Statista
As you can see, the top two responses on the list were related to cost.
To compete with Amazon’s low prices, you need to offer enticing discounts on your
ecommerce website. When a customer feels like they’re getting a good deal, it increases the
likelihood that they will convert.
6. Prioritize website user experience.
Amazon is masterful at getting users to convert. The website, mobile app, and single-
click checkout process contribute to the company’s success.
To beat with that, your website must accommodate your customers. The pages need to load
quickly, and navigation simplicity has to be a priority as well. If your customers can’t find what
they’re looking for in just a click or two, then they’ll go elsewhere for their needs.
People don’t have any reason to put up with a frustrating shopping process. Countless websites,
including Amazon, make it so easy to shop online.
First impressions matter. It takes just 0.05 seconds for a person to form an opinion about a
website. 38% of consumers stop engaging with sites that have an unattractive design.
Furthermore, 88% of people won’t return to a website after having a bad experience.
If your website isn’t user-friendly, people will leave — it’s that simple.
7. Don’t sell the exact same products as Amazon.
We’ve already established how vast the Amazon product listing is. They seemingly sell
everything and anything under the sun.
But with that said, you should try to avoid selling the exact same products offered on Amazon,
especially if you’re an online reseller.
If you have the resources, try to come up with your own product. Otherwise, find ways to carve
out a niche in your industry.
You wouldn’t open up a fast-food burger restaurant and put it next to McDonald’s, would you?
So don’t try to beat Amazon online at their own game by selling everything that they do. Be
unique.
8. Don’t sacrifice margins on Amazon.
When you’re trying to compete with Amazon, it can be tempting to slash your prices. But that’s
not a winning strategy if you’re sacrificing your profit margins.
Amazon can keep its prices low based on the sheer volume of sales. But an independent online
retailer can’t afford to keep prices that low. Minimal profit margins will put your company at
risk of going out of business.
Sure, if you’re priced lower than Amazon for competing products, consumers might choose
you over them. But that’s not profitable long-term if you’re not making enough money to keep
the lights on.
Come up with a realistic profit margin. Then create a pricing strategy that meets those margins,
even after sales, promotions, or discounts.
9. Focus on conversions and funnels.
Conversions are the lifeblood of an online store. Traffic is great, but it’s useless if those visitors
aren’t converting.
Here’s an overview of the average ecommerce benchmarks at each stage in the conversion
funnel.
Source: CrazyEgg
How does Amazon compare to this average? Amazon Prime members convert at a whopping
74% rate.
Amazon blows the competition out of the water in terms of conversions. But fortunately, you
can model your conversion funnel after Amazon’s to boost your sales.
While 74% might seem unattainable, just think about how much more money you can make
by increasing your conversion rate by just 5% or 10%. How much would you make if you
doubled your conversions? You can increase ecommerce conversion rates by focusing on
funnels and guiding your customers through the checkout process.
The idea here is to figure out where you’re losing customers in the funnel. Simplify the process
so the conversion can be finalized in just a couple of clicks. Each added step gives the customer
a chance to change their mind and abandon their cart.
10. Have an easy returns process.
Returns are an inevitable part of selling online. Rather than trying to avoid them, you need to
make returns as easy as possible for the customer.
Customer-friendly return policies can be the difference between a conversion and a missed
opportunity.
66% of consumers check a company’s return policy before they make a purchase. 80% of
shoppers are deterred by brands with an inconvenient return process.
Put yourself into the shoes of a consumer for a moment. They purchased something that they
wanted, and for one reason or another, they want to send it back. In some cases, the product
could be faulty or short of the customer’s standards.
Regardless of the reason, the customer is already unhappy. Don’t make this worse by forcing
them to pay for returns. More than 41% of consumers will only shop from online retailers that
offer free returns.
Let them print a free return shipping label. Eliminate restocking fees or other return fees.
Don’t lose a customer over a return. If the process is simple, people will continue to buy from
your online store, even if their original purpose was unsatisfactory.
11. Offer 2-day shipping.
Amazon’s delivery service has raised the bar for online shipping practices. Prime members get
two-day delivery for their orders. This has become the new standard in the minds of consumers.
To compete with Amazon, you need to offer two-day shipping as well. Here’s the catch — you
need to do it for free.

Extra costs, including shipping, are the number one reason for shopping cart abandonment.
According to this graph, an additional 18% of consumers abandon checkout because the
delivery time was too slow.
A recent study suggests that nine out of ten customers say that free shipping is the number one
incentive to shop online more frequently.
Don’t worry about losing money on shipping. Just build shipping costs into the base price of
your products. Plus, 93% of customers feel encouraged to buy more products when free
shipping is offered. Orders shipped for free average a 30% higher value.
There’s no way around it; to compete with Amazon, you need to ship free and fast.
12. Work with marketplaces.
Instead of just selling directly from your website, you can work with other online
marketplaces besides Amazon. This is an ideal strategy for smaller brands in niche categories.
Some of the top marketplaces to consider listing on include:
 Etsy.
  Touch of Modern.
 Fancy.
 Wayfair.
So, find an online marketplace that specializes in your niche category. Shoppers are already
familiar with these platforms and use them to shop online.
Conclusion
Amazon has changed the way we buy online. They’ve raised the expectations for consumers
and set the bar for other online retailers.
Although Amazon is a powerful, global ecommerce leader, it doesn’t mean that they are
immune to competition. There are plenty of other huge companies out there taking a chunk out
of Amazon’s market share.
Every single online store in existence is competing with Amazon. To survive and thrive
moving forward, you need to adapt and make changes to your process.
Follow the tips that I’ve outlined in this guide, and you’ll be able to compete with Amazon for
years to come.
 OBJECTIVES OF THE STUDY
CUSTOMER SATISFACTION
The online shopping trend around the world spread very fast. ―The Neilson Company
conducted survey in 2010 and polled over 27000 internet user in 55 market from as a in pacific,
Europe, middle east, north America a to look at how consumers shop online‖(Neilson, 2010).
Globally online shopping is made on books and cloths as per survey data. Most people are
interested to purchase and bought usually books and cloths. Alternative names are: e-web-store,
e-shop, e-store, internet shop, web-store, online store, online storefront and virtual store.
Mobile commerce (or m-commerce) describes purchasing from an online retailer‘s mobile
optimized online site or app. Internet makes life simple and innovative. People are doing
business online and trade has become more easy and fast. Internet provides new ways to
promote business. Website becomes the essence of online business as to show their services
and products. Internet gathers all competitors and consumers in one place. It brings new lane
to promote, advertise products and services in market. Online consumers are always seeking
new products, new attractiveness and the most important thing being price compatibility with
their budget. The internet is best way to save time and money through purchasing online within
their range of budget at home or in anywhere. Online consumers don‘t have limits to online
shopping. They also use internet for comparison of prices of goods and services, news, visit
social networks and search information and so on. Online shopping behaviors depends upon
factors such as shopping motives, personality variables, internet knowledge and experience and
last factor of shopping incentives ,etc,. The main purpose of this research is to analyse online
consumer behaviour in a systematic way. What factors affect online shopper while making the
decision to buy goods and services from internet, to buy more items and give information about
the product from website. Online shopping is the process of buying goods and services through
internet. Since the development of World Wide Web, retailers sought to sell their goods and
services through internet.. It offers you to Access to products and services which are not handy
in local market. Online shopping is described as a computer activity performed by a consumer
via a computer based interface, where consumer's computer is connected to retailer's digital
storefront through a network (Haubl & Trifts, 2000).
According to ForeSee’s annual Holiday E-Retailer Satisfaction Index, this year was Amazon’s
biggest holiday season ever with more than 26.5 million items ordered worldwide on its peak
day. Amazon has been making mobile a focal point of its strategy and is continuing to
incorporating the medium into its day-to-day initiatives.
“These are not just fuzzy, feel-good metrics,” said Larry Freed, president/CEO of ForeSee.
“Satisfaction is a metric that can predict the future success of a company.
“We were able to quantify the impact of a good customer experience on a retailer’s future
financial results, and the impact is huge,” he said. “While most retail CEO’s will be evaluating
the success of the holiday season based mainly on figures like sales and conversion, we found
that a highly satisfied visitor to a retail site is 71 percent more likely to purchase online, 56
percent more likely to purchase offline, 65 percent more committed to the brand, and 61 percent
more likely to return to the Web site.
“For companies who want to improve any of those figures, this data would certainly indicate
that investments in the customer experience are a good bet.”
Holiday satisfaction
ForeSee surveyed more than 24,000 customers between Thanksgiving and Christmas, asking
them to rate their satisfaction with the top 100 retailers.
For the second year in a row, Amazon’s score of 88 was the highest attained by any retailer in
the study, per ForeSee.
According to ForeSee, Kindle Fire HD was the No. 1 best-selling, most gifted, and most wished
for product across the millions of items available on Amazon.
Christmas Day was the biggest day ever for downloads from Amazon’s digital ecosystem,
which includes movies, television shows, music, magazines, books, audiobooks, applications
and games.
To date, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle hold the top four spots on
the Amazon worldwide best seller charts since launch.
Furthermore, Cyber Monday 2012 was the biggest day ever for Kindle sales worldwide.
ForeSee also found that the Amazon Appstore for Android selection nearly tripled in 2012 over
2011 and sales of apps and games during the holiday period alone were up more than 250
percent over the same period last year.
“There were two surprises in the report,” Mr. Freed said. “First, that Amazon continues to
dominate.
“We used to consider 80 the threshold for excellence, but Amazon is setting a new bar with
their consistently high scores,” he said. “This methodology has been used to evaluate online
and offline companies for twenty years, and there are very, very few companies that do so well
so consistently.
“Amazon is setting a new standard. The second surprise was that satisfaction with Apple has
dipped. Apple is one of our perennial high performers. They have a very loyal customer base
and a strong history of a customer-centric culture. Their stumble shows even the biggest
companies have to stay vigilant.”
Consumer shopping

According to ForeSee, Amazon customers purchased more than one toy per second on mobile
devices.
Top purchases included copies of the “Fifty Shades” trilogy by E.L. James, “Bond 50” Blu-ray
sets purchased and Just Dance 4 games.
The report further proves that Amazon is not just a key player in the mobile space, but one to
watch out for.
“Amazon has had a customer-centric culture since day one, often foregoing short-term profits
in favor of long-term investments that improved the customer experience and paid long-term
dividends,” Mr. Freed said.
“They are also the only company I know of with a CEO who is so involved and in tune with
the customer experience,” he said. “I don’t know of any other company whose CEO writes
customers a letter every year thanking them for these kinds of awards.”
CHARACTERISTICS OF AMAZON
In his first letter to Amazon shareholders in 1998, Jeff Bezos declared that it was “Day 1 for
the internet, and if we execute well, for [Link].” He meant that the company, which
was already four years old, should always think of itself as being at the beginning of its
journey.
Twenty-one years later, “It’s still Day 1” (or the variant “It remains Day 1”) remains a
rallying cry for the company. Bezos signs off each new shareholder letter with the sentiment,
and Amazon executives from across the company often slip it into conversation when I
interview them.
I always knew that the company liked its nuggets of wisdom. But it wasn’t until I spent time
at Amazon for our new profile of its HR chief, Beth Galetti, that I realized quite how many
of them the company had formalized. Here are four of its lists of philosophies and goals.
Many of them, the company has never publicized to us outsiders–but each of them helped
me understand Amazon better.
 CHAPTER 3. REVIEW OF THE LITERATURE
1) According to Mohanapriya.s “Online shopping has grown in popularity over the years
mainly because people find it convenient from the comfort of their home or office. One
of the most enticing factor about online shopping is popularity during a holiday season,
it alleviates the need to wait in long lines or search from store to store for a particular
item. The main scope of the study is to know about customer satisfaction towards online
shopping. The present study reveals about reasons for preferring an online website and
satisfaction towards online websites”.

2) Sharma and mittal (2022) in their study “prospects of e-commerce in India”, mentions
that India is showing tremendous growth in the e-commerce. Undoubtedly, with the
middle class of 288 million people, online shopping shows unlimited potential in India.
The real estate costs are touching the sky. Today ecommerce has become an integral
part of our daily life. There are websites providing any number of goods and services.
The e-commerce portals provide goods and services in a variety of categories. To name
a few: apparel and accessories for men and women, health and beauty products, books
and magazines, computers and peripherals, vehicles, software, consumer electronics,
household appliances, jewellery, audio, video, entertainment, goods, gift articles, real
estate and services. Ashish gupta, senior managing director of helion venture partners
and one of the first backers of Amazon as an angel investor: “Amazon has been
absorbing companies that have some potential (letsbuy, myntra). In that process, some
of the bets will go wrong, for sure. But that is par for the course. The company
(Amazon) is consciously taking bets that allow it to either grow or eliminate
competition that reduces marketing spend and improves economics.”

3) Miyazaki and fernandez (2020) substantiated that the prior experience was found to
affect the intention and behavior significantly and in a variety of ways. The results of
this study imply that the technology acceptance model should be applied to electronic
commerce research with caution. In order to develop a successful and profitable web
shop, understanding customers' needs is essential. It has to be ensured that products are
as cheap in a web shop as purchased from traditional channels. According to sharma
and mittal (2020) in their study “prospects of e-commerce in India”, mentions that India
is showing tremendous growth in the e-commerce. Undoubtedly, with the middle class
of 288 million people, online shopping shows unlimited potential in India. The real
 estate costs are touching the sky. Today e-commerce has become an integral part of our
daily life. There are websites providing any number of goods and services. The e-
commerce portals provide goods and services in a variety of categories. To name a few:
apparel and accessories for men and women, health and beauty products, books and
magazines, computers and peripherals, vehicles, software, consumer electronics,
household appliances, jewelry, audio, video, entertainment, goods, gift articles, real
estate and services. Samadi and ali (2010) compared the perceived risk level between
internet and store shopping, and revisit the relationships among past positive
experience, perceived risk level, and future purchase intention within the internet
shopping environment.

4) Abhijit mitra. (2018), “e-commerce in India-a review”, international journal of

marketing, financial services & management research. Concluded that the e-commerce
has broken the geographical limitations and it is a revolution-commerce will improve
tremendously in next five years in India.

5) [Link]. (2017),” e-commerce or internet marketing: a business review from

Indian context”, international journal of u- and e- service, science and technology.
Concluded that the e-commerce has a very bright future in India although security,
privacy and dependency on technology are some of the drawbacks of e-commerce but
still there is a bright future to e-commerce.

6) Martin dodge. (2015),”finding the source of [Link]: examining the hype of the
earth’s biggest book store”, center for advanced spatial analysis. Concluded that
[Link] has been one of the most promising e-commerce companies and has
grown rapidly by providing quality service.

7) Vijay govindarajan is one of the world’s leading experts on strategy and innovation.
Govindarajan, coxe distinguished professor at dartmouth college’s tuck school of
business and marvin bower fellow at harvard business school, is also a best-selling
author. The biggest opportunity in India is e-commerce. Why? Three important factors
will drive this: 1) mobile phone penetration; 2) a young demographic that is used to
ordering things using the mobile platform; 3) growth of consumerism with more Indians
with higher disposable income. We will see many new innovative business models in
 the e-commerce space in the next five years. No doubt we will see new innovative high-
growth companies—Indian equivalents of Alibaba.

8) Simranjit Singh, Sonia Bajwa (2017) had carried out a research study on “buying
behaviour of consumer towards counterfeit products: a case study of moga city”. The
main objective of the research was to put emphasis on the reasons for counterfeit
purchase and the norms they follow while forming this behaviour. The other objectives
were to find out the dominant factors affecting on the consumer while purchasing
counterfeit goods, to know the relationship of these factors with the purchase behaviour
and application of TPB model for knowing the factors creating inclination towards
counterfeit. The sample size was for research was 100 respondents. A structures
questionnaire was used by following the convenience sampling method. The data were
described with the help of pivot table and pie charts with percentages. After the analysis
the researcher had found that behaviour of the respondents that leads them to go for
committing a crime of purchasing such knock offs and pirated items. Cost and status
seeking have known to be the two reasons for committing an illegal practice. If the
money income of the consumer is increased then this could work as a measure of
curbing this practice.
9) Priyanka Sharma (2017) performed a research study on “Consumer Behaviour towards
Online Shopping-An Empirical Study With Reference To Bhiwani City, Haryana”. The
main objective of the research was to identify the relationship of demographic factors
that influence online shopping, to study the preferences of the consumers toward online
shopping and the satisfaction level of the consumers while they shop online. To achieve
the objective, null hypothesis „Online shopping is not reliable and trustworthy to the
consumers‟ was tested. The sample size of the research was 100 respondents from
Bhiwani City in Haryana state. The author had used Excel and Statistical Package for
the Social Sciences (SPSS) software for data analysis purpose. After the data analysis
and interpretation, the author concludes that the internet has given rise to great potential
for businesses through connecting globally. The people having an annual income below
Rs 2, 50,000 prefer cash on delivery and above Rs 2, 50,000 prefers Internet banking
payments. Cash on delivery is found the most popular payment method for online
shopping among consumers. The most of the people having annual income below Rs
4, 50,000 spends between 1500- 3000 per month for online shopping. People having
annual income above Rs 4, 50,000 spends above 3000 per month for online shopping.
 The price of the products has the most influencing factor on online purchase and online
shopping is getting popular in the younger generation. The Majority of the respondents
buys from [Link] which is thus one of the leading online shopping websites in
India. The main barrier is the safety of payment and privacy issue in the process of
online shopping. This increases low levels of trust on online stores therefore; sellers
have to make proper strategies to increase the consumer‟s level of trust with them.

10) M. Dhanalakshmi, M. Sakthivel, M. Nandhini (2019) performed a research study on

“A Study on Customer Perception towards Online Shopping, Salem”. The main
objective of the research was to study the customer perception towards online shopping
at Salem district. The sample size of the research was 150 respondents. The researchers
had adopted random convenience sampling technique to gather the data. The data were
analyzed using the simple percentage analysis and ANOVA (analysis of variances)
methods. As a result of data analysis and interpretation, the researchers conclude that
the consumer‟s perception of online shopping varies from person to another and the
perception is limited to a certain extent by the availability of the proper connectivity
and the exposure to the online shopping has to be improved to make the customer
satisfied. The perception of the consumer also has similarities and difference based on
their personal characteristic usage based on their needs and demand. The study reveals
that most the students are attached to the online shopping and hence the elder people
don‟t use online shopping much as compared to the younger ones, so awareness has
been fashioned in the coming era. Finally, the researchers suggested that the online
transaction should be flexible for the customers who perceived in shopping.

11) Saban Kumar K.C, Arun Kumar Timalsina (2019) carried out a research work on
“Online Grocery Shopping Attitudes among the Consumer in Kathmandu Valley”. The
major focus of the research was to assess attitudes of customers towards online
shopping within Kathmandu. The sample size of the research was 100 respondents from
Kathmandu, Lalitpur and Bhaktapur. The researchers had used the Statistical Package
for Social Sciences (SPSS) for data analysis purpose. As a result of data analysis, the
researchers conclude that majority respondents i.e. 86% were found to be aware about
online shopping. Similarly, 89% of the respondents were positive about the online
shopping of grocery items whereas the rest were negative. The Result also depicts that
52% respondents were aware about existing online portals. The freshness and delivery
timing were given more importance than payment system and pricing while shopping
vegetables and fruit items online.