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Using Business Analytics : A case of mharidukaan.com

Arvind Bodhankar, the Corporate Head of HSE at TATA Motors Ltd. breaks down a case study about mharidukaan.com; wherein he discusses why it failed to be a market success despite making huge promotions expenses.

Case Study

Using Business Analytics : A case of mharidukaan.com

Volume 2 Issue 1 June 2018 : By Arvind Bodhankar
ITM Group of Institutions

Introduction

Data Analytics is defined as deriving the actionable insights from the given data by churning the data through various Statistical, Graphical or Pictorial Techniques. The data so given if pertains to a business entity, the term Business analytics is used similarly the data if relates with Marketing, it would be termed as Marketing Analytics and so on. The term data analytics differs from data analysis in the fashion that the later relates with just the tabulation and representation of the raw collected data, while analytics deals with the clean data set to derive insights for business related problems. Here is the case discussing, how the use of consumer analytics helped mharidukaan.com to precisely figure out the reasons for mharidukaan.com not becoming the first-choice online business house in Vidarbha region over conventional stores despite making huge promotional expenses. In fact, this case study can stand as an eye opener for all the online e-commerce sites for not becoming the preferred sites for shopping and not getting an upper edge over traditional mom & pop shops

 

Company Profile

Mharidukaan.com, a venture started by two young female friends Ms. Sheetal Agrawal and Ms.Shital Surana (names changed), after having done their MBA from a reputed B-School in India. The venture was of online shopping complex, head quartered at Nagpur, which used to virtually market everything in fashion clothes, footwear, grocery items and personal care products, in the year June - 2014 with an initial investment of 30.60 Lacs. Their business model was to reach out to every individual in central India initially for their every requirement. They duo hired summer interns from various MBA institute from central India and gave them a task of bringing in the associations from the dealers/manufacturers for their shop. The dealers were offered a good mark up and guaranteed business. But the only condition was put in front of the dealers/manufacturers, the goods which were manufactured/sold to mharidukaan.com will not be sold through open market with the same price and same brand name so as to maintain the exclusivity for mharidukaan.com. The charges for inward & outward freight and packaging were to be borned by the mharidukaan.com. The shop was operating on three days inventory back up. For inward & outward freight services, they had tied up with a local courier service provider who can deliver the goods to any destination in central India maximum within 2 hours to 12 hours depending on the geographical destination of the buyer. Everything started off well. The concept was initially new in the year 2013-14.

 

Promotional budget/sales for last three years.

The duo expected a monthly lift of Rs. About 10 Lacs initially from the seventh month of inception of their business. They planned for a promotion budget of Rs. 3.00 Lacs per annum for next three years, with no expectation of any sizable return for first three years. From 2018 onwards, they expected a net return on investment of 30%. The actual sales figures of mharidukaan.com for first three years are given here.

Problem analysis

The duo observed that despite a good & quality product range, timely service delivery and sizeable promotional budget, the sales were not picking up. The average monthly sales were 1.46 Lacs, 1.53 Lacs and 1.56 Lacs for the years 2015, 2016 and 2017 respectively. The actual growth rate declined from 5.26 % in 2015-16 to 2.56 % in 2016-17. This was an alarming signal for the management.

 

Buyers were still attracted towards the conventional mom & pop stores for shopping. The online shopping has not yet taken shape. To understand the real reason behind why online shopping has not become popular rather first choice shopping destination for Indian consumers compared to conventional stores, they assigned this project to some of the interns. The project was titled as “Study of factors responsible for online shopping not being the preferred mode of shopping in non-metro cities in India.” The study was conducted in February-March 2018 in Nagpur. The respondents were from all around the central India.

 

Data Collection

The interns along with the promoters decided to conduct an exploratory survey and the data so obtained was to be analyzed to arrive at actionable insights, which can help the promoters to improve the performance of the firm. The level of accuracy was decided to be 95% i.e. level of error was 5%. At 95% accuracy level, the number of samples were selected, which were done on all age groups, all areas and of both the genders.

 

For collecting and tabulating the responses five-point Likert’s scale was designed. The Data was collected on eight attributes such as trustworthiness, easy exchange, latest & multiple varieties, ease in operations, rural consumers, leisure experience and payment safety were identified which can make or break the e-commerce business.

 

Analytics

The following table shows the summary of responses from all the responses and its interpretation.

Amongst all ‘t’ values of attributes_ Trust Worthiness (0.09291 ), Easy Exchange (0.23561) , Smart Phone Proficiency of Rural and age old consumers (-9.985845) and Safety of Payment Gateways (1.1416912) are < 1.645 which is the standard t value. And which was acting as negative attributes which probably prohibited the success of e-commerce sites, so is true for mharidukaan.com.

 

Conclusions

Hence, it can be concluded from the analytics that mharidukaan.com should develop the strategies to improve trust worthiness of the site. They should simplify the exchange/replacement procedure, they should educate the old age/rural buyers about using such sites through smart phones and should adopt the reliable payment gateways.

 

 

Arvind Bodhankar is Corporate Head- Health Safety Environment & Sustainability at Tata Motors Ltd. He is a certified Independent director with core skills on Sustainability & HSE. He is having 28 years of proven track record and wealth of diverse experience in the area of Petrochemicals, Fertilizers, Steel, Cement, Shipping, Glass, Food/FMCG/Pharma and Automobile industry. He is a lead Assessor for ISO 14001, OHSAS 18001 & internal auditor for ISO 9001 & TS16949 and a certified Green belt for Six sigma. Certified TQM trainer, TPM champion, Energy Auditor....  

Volume 2 Issue 1 June 2018 : By Arvind Bodhankar