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Cultural
influences indesigning e-Retailing portals
Submitted byGroup 9ASudhir Medithi(122049)Vinay Tejasvi (122105)
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Table of Contents
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Mr.Chris Lambert, the head of Marketing at CrySoft Technologies had reached office an hour
earlier than his usual time to prepare for his meeting with the companys CEO. In the past
few weeks, Chris had been working on the re-launch of his companys e-commerce website
in India and his team had come up with a new design and layout. The earlier website failed to
attract customers and had been criticized for neglecting key cultural aspects of the Indian
consumer. The team had spent considerable time in identifying the needs of the Indian
consumer and made substantial efforts to customize the website to gain a better cultural fit.
Chris was hoping for a go-ahead from his CEO to initiate the changes in the website.
Company Background
TheCrySoft technologies Ltd. Is an American e-commerce company, headquartered at New
York, United States. Mr. Jeffrey founded the company in the year 1995 as an online retail
bookstore but in a short span of time CrySoft diversified in to selling electronics gadgets,
apparel, furniture, and toys.
Vision, at CrySoft technologies, is to build an excellent e-commerce platform where people
can buy anything at a cheaper, affordable price with a trusted experience. Crysoft limited
ventured in to India and started its operations in the year 2009. Indian subsidiary reported a
revenue of 217.78 crores, net loss of 116.69 crores in the year 2012 and 49.4 crores revenue
and net loss of 24.01crores in the year 2011 (Exhibit -1). Others competitors like naaptol,
best buy, snap deal are able to make profits in this business but crysoft is failing to do so
since it began its operations.
Main product categories that CrySoft offer through their website are
Books: Covering all novels (fictional and non fictional), education related (textbooks,
entrance exams materials, academic & professional journals), religious etc.
Clothing: All seasons collections for both men and women are offered. More than 250 +
brands products are available.
Footwear: It offers both sports & causal shoes, chappals, sandals, floater collections for both
men and women in more than 40 brands.
Fitness, Home kitchen, Electronic products, accessories, and watches: Various brands
products are available in each category with different price ranges.
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Beauty &Skin care: It offers more than 70 brands cosmetics to the women covering wide
range of products.
Gaming: It offers various gaming consoles, games CDs, dvds and gaming related
accessories. It covers all latest release of games.Payment Modes: CrySoft provides customers with a confidence of safe and secure online
experience, simplified electronic payments flow, cash on delivery and customer friendly
return policy. CrySoft with 24x7-customer service support and with globally recognized
purchase protection, company leaves no apprehensions to customers regarding their security
concerns.
Evolution of E-Commerce in India
Evolution of e-commerce in India started with the launch of internet using dialup connection
in six cities. By the year 1998 online job portals, matrimonial portals ruled the e-commerce
space. With the effect dotcom bubble, during the period 2000-05, e-commerce faced tough
times but after the year 2005, this industry started growing at a rapid pace. Below image
shows the time line of e-commerce developments in India.
Source: (RE-BIRTH_OF_ECOMMERCE)||KPMG report
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Modes of Conducting E-commerce in India
E-Commerce transactions in India are broadly classified in to three modes
1. Customer to Customer (C2C)
2. Business to Customer (B2C)
3. Business to Business (B2B)
Below image shows the various transactions carried over e-commerce space
Source: (RE-BIRTH_OF_ECOMMERCE)
Customer-to-Customer (C2C): At present C2C, represents only small chunk in the e-
commerce market space but numbers of entrants in this mode has been increasing. Many of
these entrants are backed by venture capitalists and this segment expected to grow in future.
Ex: Online classifieds about selling of cars
Business- to- Customer (B2C): This market is predominant in India out of all available
modes of e-commerce. In this segment, major revenue generators are online travel portals
and e-retailing portals. This segment is rapidly growing and expected to continue the same
trend in future years.
Ex: IRCTC, Flipkart
Business to Business (B2B): MSMEs (micro, small and medium enterprises) are the
frequent users of this mode. This helps the businesses to find the market for their
products/services and helps to overcome high financial & communication barriers
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Key stakeholders in E-commerce Supply chain
In e-commerce, information flow, product flow and monetary flow constitutes key things to
carry out a transaction. Three stakeholders play a vital role in carrying out these flows in e-commerce space (i.e. supply chain). One is buyer, second is e-commerce player and third is
supplier. In product flow, movement of goods happens from supplier to customer via E-
commerce player and vice versa in monetary flow. Information flow happens across the value
chain (i.e. key stakeholders, Enablers, Customers) right from placing of order to delivery of
the product to the end customer. Below image shows the typical e-commerce supply chain.
E-commerce Market size in India
B2C and C2C together showed a phenomenal growth rate of 49% (CAGR) in reaching $ 9.9
billion in 2011 from $ 2 billion in 2007.
All figures in Billion
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Indian retail market size was estimated at $ 528 billion in 2012 with a growth rate of 11%
(RE-BIRTH_OF_ECOMMERCE). In 2012, 90.4% of the revenues are from the unorganized
sector but organized sector showed a growth of 24% year-on-year growth. In the year 2012,online retail market constituted to 1% of the total organized retail market in India. Below
image shows the market size stats of retail sector along with online retail contribution.
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Considering the growth potential of Indian retail market, online retailing market is expected
to grow at rapid pace in coming years
Emerging Models in E-commerce
With the changing times and needs the way of conducting the businesses are also changing
with the time. New models, which evolved recently in e-commerce space, are
1) E-mall/E-market place 2) Deals/Group buying
1) E-malls/E-market place: This business model is similar to real world shopping malls.
Here merchants can setup their virtual shops and carry out their normal merchandise
operations. Advantages of this model are, merchants will have access to huge customer base
when compared to setting up new website altogether and merchant can use existing channel
for payment related activities.
2) Deals/Group buying: This model is gaining popularity in recent times, premise behind
this model is to operate in large volume, by which merchant can achieve economy of scales
thus can reduce the price of the product.
Outcome of launching a standardised website
CrySoft technologies launched their e-commerce portal in India by making few
customization in terms of content (i.e. Address forms, phone numbers etc.). They believed in
the maintaining standard layout across the globe and same business methodology. They
continued to offer the same deals in India similar to that of USA. During initial days, website
attracted huge number of customers, in due course customers visits to the website, logins
and purchases eventually reduced. Below graph depicts the three years customers data.
Interest of the people visiting the page has decreased from 80% to 15% even though
company offering competitive prices compared to the others competitors in the market and
purchases were almost stagnant.
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Cultures influence on Website
Design
In the context of electronic commerce, the website layout and design must take into
consideration, the behaviour, emotional response, purchasing trends and needs of the online
shoppers. Hence, Mr Chris Lambert formed a team to design a website that reflects the taste
of Indian consumer.
The team adopted Hofstedes model of national culture to gain better understanding of the
Indian consumer and to configure the websites layout & design according to the cultural
dimensions, preferences and expectations of the Indian customer.
Indian Culture according to Hofstedes Model
The team then gathered information from the Hofstede Centre (The Hofstede Centre, 2013)
on how to view India from the lens of the cultural dimensions model (ReferExhibit 2 for the
Hofstede Centre ratings for India) and made the following observations:
Power Distance in India
The Hofstede centre had scored India with 77 points on the power distance index. This
number is fairly high on the power distance scale and indicates that people in the lower levels
of organizations accept the unequal distribution of power and are accustomed to hierarchical
social structures. Communication mostly happens from the top and critiquing opinions or
voices from below are neglected. Centralization of power is another key element of Indian
culture and the power holders expect and receive obedience from their subordinates. Due to
power distance in social life, Indian consumers are expected to be very loyal and do not shift
Interest (100% - peak interest)
Months
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their allegiances frequently. Hence, they will become loyal customers who will generate
repeat business if they are satisfied with the services offered by the company.
Individualism in India
India scored only 48 on the individualistic trait which means it clearly is a collective society.
The social groups that individuals are part of have a huge impact on the opinions and
decisions that individuals have or make. Acceptance in a social group is very important to
Indians and people are expected to behave in accordance with the guidelines laid down by the
group. In such a culture the buying patterns and behaviour are hugely influenced by the peer
group, family and friends circle of online shoppers and products and designs that gain the
acceptance of the society at large will also be adopted by individuals who are part of this
collectivistic culture. The utility and expectations from products must reflect the collectivistic
nature of the society.
Masculinity and Femininity
A score of 56 on the Masculinity index suggests that India is slightly more masculine than
feminine. In India, the show of wealth as an indicator of success and the utility of brands and
material resources is widely accepted. However, due to its spiritual inclination the country
also displays feminine qualities such as focus on quality of life and well-being of others. The
economy also is a mix of capitalism and socialism. In Masculine societies, the men hold
more positions in social life and the result of an activity is considered more important than
the process.
Uncertainty Avoidance
The Hofstede centre gave India a score of 40 on uncertainty avoidance which means that the
national culture has less affinity to avoid uncertainty. Hence the Indian customer is open to
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new and innovative products and is willing to adopt new ideas. When communicating to the
consumers, the visuals and messages can be generic and need not be very detailed. Indians
are also more tolerant to mistakes and failure of products and accept unconventional
marketing strategies.
Long Term Orientation
With a score of 61, India can be called a culture that is pragmatic and focused on the long
term. Being a secular nation, there is a tolerance for many religions, beliefs and sub cultures.
Indian society forgives the lack of punctuality, is flexible about change in plans, and does not
insist on adherence to a fixed path. The value placed on education and personal development
is high in India that aimed at giving long-term benefits.
Proposed Layout and Design
Based on the Hofstede model of cultural dimensions, the team developed a preliminary
layout and design idea for the website that are effective in adapting to the cultural differences
in India.
In accordance with the High power distance observable in the Indian Society, the layout
would be very formal and categorized according to product lines. Each product line can
then be classified clearly into multiple divisions based on a variety of attributes like age,
price, size, features etc. Promotional messages and schemes need not be elaborately
mentioned on the home page. Such promotions can lead to other pages of the website where
users can get more information about the scheme. Also, due to low uncertainty avoidance of
Indians the use of a site map indicator can be avoided. While navigating through the website,
users can be offered choice of products that are related to the ones they are currently
browsing and the catalogue of products can be huge as Indians do not mind browsing through
a lot of products before they make a purchase.
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The design of the website incorporates both flashy and sober renditions. Lifestyle items
would be displayed in a flashy manner whereas as general purpose products would be
displayed in a sober manner. Since Indian society is more masculine, the design of the
website can focus on promotions or visual renditions with male themes such as contests,
winner announcements. Also, the design can focus more on showcasing exclusive brands and
designer labels that the company sells.
Dilemma
By accommodating these cultural aspects in the design of the website, the team hopes to
reflect values of social life that are aligned with the cultural identity of Indian consumers and
create a successful platform for the companys operations in India. Chris also wanted to
incorporate colours, public figures and Sanskrit quotes that would increase user satisfaction
and enhancing the online shopping experience. He was also worried about finding a balance
between the masculine and feminine traits in the design of the website.
Has the team considered all possible differences in cultural dimensions while making the new
design? Will these changes suffice to turnaround the bad fortunes for his company in India?
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EXHIBITSExhibit -1
Income statement of Crysoft technologies India
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Balance sheet of Crysoft technologies India
Exhibit 2: Rating of India on Hofstedes 5 dimensions of culture
Source: The Hofstede Centre