E-commerce is the buying and selling of good or

services via the internet, and the transfer of money and

data to complete the sales. It’s also known as electronic
commerce or internet commerce. 
Here’s a few of the variations of how e-commerce is spelled: 

 e-commerce
 E-commerce
 ecommerce
 Ecommerce
 eCommerce
 e commerce

(In other words, “what is e-commerce” is far easier to answer than how to
spell it, so we may have to agree to disagree on the proper spelling).

INTRODUCTION:

It was in 1995 that the Internet was first launched in India, through dialup
connections. Ever since then, technology has just been on an evolutionary
ascent with online B2B online portals appearing from 1996 to 2007, when
the number of players in the e-tailing segment saw a significant rise. E-
commerce has made our lives simpler by making it possible to get what we
need with a few clicks from the comfort of our homes.

In the present Indian business environment, e-commerce occupies an

important position after passing through the various stages, which may be
understood from the different phases of evolution of e-commerce
First Phase (1995 to 2005):

The introduction of internet in India in 1995 marked the beginning of the

first wave of e-commerce in the country. Moreover, the economic
liberalization after the launch of reforms in 1991 attracted Multi-National
Corporations (MNCs) and caused for a significant growth in Information
Technology (IT) industry. The implementation of liberalization policies led
to the demise of the license regime, high taxes and import restrictions and
facilitated the growth of Small and Medium Enterprises (SMEs). The IT
industry and SMEs were the early adopters of internet that led to the
development of B2B, job searches and marital portals as stated hereunder

B2B Directory: India’s first online B2B directory was launched in 1996.
The liberalization of the country’s international trade policies was the main
factor that enhanced the growth of B2B virtual portals
Virtual Marital: In 1996, the first virtual matrimonial portal was
launched in India, which transformed the perceptions about the
matchmaking process from “marriages are made in heaven”
to “marriages are made in cyber space”.
Virtual Recruitment: India’s virtual recruitment industry took shape in
1997. The growth of the services sector, following the launch of economic
reforms in 1991, resulted in the creation of additional jobs and the internet
proved to be an efficient medium that allowed employers and job seekers to
connect each other.
The first wave of e-commerce in India was characterized by low internet
penetration, a small online shopping user base, slow internet speed, low
consumer acceptance of online shopping and inadequate logistics
infrastructure. The IT downturn in 2000 led to the collapse of more than
1,000 e-commerce businesses in India, as a result there was a muted
activity in India between 2000 and 2005.
Second Phase (2005 to Present):

After the muted activity during 2000 to 2005, there has been a significant
development in e-business, specifically in the areas of travelling, retailing,
group purchasing, societal interaction, etc., as presented below:

Air Travel: The entry of Low-Cost Carriers (LCCs) in the Indian flying

sector in 2005 marked the beginning of the second phase of e-commerce in
India. Travel developed as the biggest segment and individuals began
trusting on internet to search for travel-related information and to book
tickets. As a result of which, the success of the online travel segment made
consumers comfortable with shopping through online, this paved the way
for a massive improvement of online retail.

Virtual Travel: The decision of LCCs like IndiGo and SpiceJet to sell their
tickets online and through third parties enabled the development of Online
Travel Agents (OTAs). Prior to the entry of LCCs in 2005-2006, air travel
was considered a luxury and meant only for the rich and corporate travel.
LCCs changed the scenario by making air travel affordable for a large
number of people. They developed their own websites and partnered with
OTAs to distribute their tickets online and, thus, contain costs. The Indian
Railways had already implemented the e-ticket booking initiative by the
time LCCs commenced their online ticket booking schemes.

Virtual Selling: The growth of online retail was partly driven by changing

urban consumer lifestyle and the need for convenience of shopping at
home. This segment established in the second movement in 2007 with the
launch of multiple online retail websites. New businesses were driven by
entrepreneurs who looked to differentiate themselves by enhancing
customer experience and establishing a strong market presence.

Group Purchasing: In the Initial period of 2010, the group buying and
daily deals models became a global trend. Group-buying sites have seen a
significant rise in the number of unique visitors and membership which
enhanced the e-business.
E-Commerce Industry Segments’ Market Size:
According to the Digital Commerce Report published by the Internet and
Mobile Association of India (IAMAI) and Indian Market Research Bureau
(IMRB) that e-commerce segment in India (B2C model) Classifieds into
two parts as, online travelling industry and online non-travelling industry.

Online Travel:

Some of the prominent online travelling web sites in India are

MakeMyTrip, Yatra.com, Clear trip, Expedia.co.in, Travel guru,
Musfir.com, Booking.com, Redbus.com, Goibibo, Abhibus.com, Ticket
goose, Thomas cook, Ayo, etc., covering booking rail, air, bus tickets, hotel
accommodations, tour packages and travel insurance ,etc., whereas, non-
travelling industry are e-tailing market, financial service market, online
matrimony and classified market and other online services markets, a brief
description of which is as follows:

E-Tailing:

Includes, purchases of various consumer products/services such as books,

apparels, footwear, jewellery and other such as home and kitchen
appliances, consumer durables, electronics (mobile
phones/computers/laptops), home furnishings, etc. In India there are
many e-tailers as, Flipkart, Amazon, Snap deal, Shop clues, etc.

Financial Service Market:

Includes, transactions like mobile/data card recharges, post-paid
mobile/data card bill payments and utility bill payments transacted from
third party websites. The most popular examples of financial service
websites are Paytm, Mobikwik, Free charge, etc.

Online Matrimony and Classified Market:

Includes transactions like matrimony, car, real estate, etc. In India there
are many classified marketers as, Uber, Ola cabs.com, etc.

Other Online Services Market:

Includes transactions like online entertainment ticketing, online

commuting, online food and grocery delivery, online tickets for movies,
sports, show/concerts, etc. Some of the popular online service websites are
Swiggy, Foodpanda and Bookmyshow.com, etc.

TYPES OF E COMMERCE/Traditional models of commerce that have now transformed

into online platforms include:

As commerce continues to evolve, so do the ways that it’s conducted.

Following are the most traditional types of e-commerce models

1. Business to Consumer (B2C): B2C e-commerce is

the most popular e-commerce model. Business to
consumer means that the sale is taking place between a
business and a consumer, like when you buy a rug from
an online retailer.

2. Business to Business (B2B): B2B e-commerce refers

to a business selling a good or service to another
business, like a manufacturer and wholesaler, or a
wholesaler and a retailer. Business to business e-
commerce isn’t consumer-facing, and usually involves
products like raw materials, software, or products that
are combined. Manufacturers also sell directly to retailers
via B2B ecommerce.
 3. Direct to Consumer (D2C): Direct to consumer e-
commerce is the newest model of ecommerce. D2C
means that a brand is selling directly to their end
customer without going through a retailer, distributor, or
wholesaler. Subscriptions are a popular D2C item, and
social selling via platforms like Instagram, Pinterest,
Facebook, Snap Chat, etc. are popular platforms for
direct-to-consumer sales.

4. Consumer to Consumer (C2C): C2C e-commerce

refers to the sale of a good or service to another
consumer. Consumer to consumer sales take place on
platforms like eBay, Etsy, Fivver, etc.

5. Consumer to Business (C2B): Consumer to business

is when an individual sells their services or products to a
business organization. C2B encompasses influencers
offering exposure, photographers, consultants, freelance
writers, etc...

Here are some examples of types of e-commerce:

1. Retail: The sale of products directly to a consumer without an

intermediary.

2. Drop shipping: The sale of products that are manufactured and

shipped to consumers via a third party.

3. Digital products: Downloadable items like templates, courses,

e-books, software, or media that must be purchased for use.
Whether it’s the purchase of software, tools, cloud-based products
or digital assets, these represent a large percentage of ecommerce
transactions.

4. Wholesale: Products sold in bulk. Wholesale products are

usually sold to a retailer, who then sells the products to
consumers.
 5. Subscription: A popular D2C model, subscription services are
the recurring purchases of products or services on a regular basis.

6. Crowdfunding: Crowdfunding allows sellers to raise start-up

capital in order to bring their product to the market. Once enough
consumers have purchased the item, it’s then created and shipped.

ADVANTAGES OF E-COMMERCE:
1. A Larger Market:
eCommerce allows you to reach customers all over the country and around
the world. Your customers can make a purchase anywhere and anytime,
especially more people are getting used to shopping on their mobile
devices.
2. Customer Insights Through Tracking and Analytics:
Whether you're sending visitors to your eCommerce website through SEO,
PPC ads or a good old postcard, there is a way to track your traffic and
customers' entire user journey to get insights into keywords, user
experience, marketing message, pricing strategy, and more.
3. Fast Response to Consumer Trends and Market Demand:
The streamlined logistics, especially for merchants who do "drop ship,"
allow businesses to respond to market and eCommerce trends and consumer
demands in a nimble manner. Merchants can also create promotions and
deals on the fly to attract customers and generate more sales. X
4. Lower Cost:
With the advance in eCommerce platform technologies, it has become very easy
and affordable to set up and maintain an eCommerce store with a low
overhead. Merchants no longer have to spend a large budget on TV ads or
billboard, nor worry about the expense for personnel and real estate. X
5. More Opportunities To "Sell":
Merchants can only provide a limited amount of information on a product
in a physical store. On the other hand, eCommerce websites allow the space
to include more information such as demo videos, reviews, and customer
testimonials to help increase conversion.
6. Personalized Messaging:
eCommerce platforms give merchants the opportunity to serve
up personalized content and product recommendations to registered customers.
These targeted communications can help increase conversion by showing
the most relevant content to each visitor.X

7. Increased Sales with Instant Gratification:

For businesses that sell digital goods, eCommerce allows the delivery of
products within seconds of making a purchase. This satisfies consumers'
need for instant gratification and helps increase sales, especially for low-
cost items that are often "impulse buys."
8. Ability to Scale Up (Or down) Quickly and Unlimited "Shelf
Space":
The growth of an online business is not limited by the availability of
physical space. Even though logistics can become an issue as one grows, it's
less of a challenge compared to those for running a brick-and-mortar store.
eCommerce merchants can scale up or down their operation quickly, and
take advantage of the unlimited "shelf space," as a response to market trend
and consumer demands.
DISADVANTAGES OF E-COMMERCE:
1. Lack of Personal Touch:
Some consumers value the personal touch they get from visiting a physical
store and interacting with sales associates. Such personal touch is
particularly important for businesses selling high-end products as
customers not only want to buy the merchandise but also have a great
experience during the process.
2. Lack of Tactile Experience:
No matter how well a video is made, consumers still can't touch and feel a
product. Not to mention, it's not an easy feat to deliver a brand experience,
which could often include the sense of touch, smell, taste, and sound,
through the two-dimensionality of a screen.
3. Price and Product Comparison:
With online shopping, consumers can compare many products and find the
lowest price. This forces many merchants to compete on price and reduce
their profit margin.
4. Need for Internet Access:
This is pretty obvious, but don't forget that your customers do need
Internet access before they can purchase from you! Since many eCommerce
platforms have features and functionalities that require high-speed
Internet access for an optimal customer experience, there's a chance
you're excluding visitors who have slow connections.

5.  Credit Card Fraud:

Credit card fraud is a real and growing problem for online businesses. It
can lead to chargebacks that result in the loss of revenue, penalties, and
bad reputation. X

6. IT Security Issues:

More and more businesses and organizations have fallen prey to

malicious hackers who have stolen customer information from their
database. Not only could this have legal and financial implications but
also lessen the trust customers have in the company.

7. All the Eggs In One Basket:

eCommerce businesses rely heavily (or solely) on their websites. Even

just a few minutes of downtime or technology hiccups can cause a
substantial loss of revenue and customer dissatisfaction.

8. Complexity in Taxation, Regulations, and Compliance:

If an online business sells to customers in different territories, they'll

have to adhere to regulations not only in their own states/countries but
also in their customers' place of residence. This could create a lot of
complexities in accounting, compliance, and taxation.

ADVANTAGES OF E-COMMERCE TO NATION AND SOCIETY:

Advantages of E-Commerce to Society:

1. Provides job opportunities:

E-commerce bridges the gap between the job seekers and job givers in
the society. Human resources are able to get themselves placed in any
organization by posting resumes through internet, some organizations
also permit people to work from their home. E-commerce through
internet provides a global wide network to identify and train human
resource too.
2. Promotes cordial relationship:

E-commerce enables people to send gifts, greetings and gift vouchers

to friends and relatives anywhere in the world. This promotes cordial
relationship between and among individuals in the society.

3. Provides a wealth of information:

People through internet are able to access any information, say from
tourism to financial products. Access of global information at lower
cost, just by click of a button enhances the knowledge of the people
and helps them to transform into a part of a knowledge-based society.

4. Provides Entertainment:

E-commerce helps people to download music, videos and go through

latest updates and reviews. It permits people to book tickets to the
movies online.

5. Less pollution:

People can buy any product or service from any location through
internet without traveling from their respective home or workplace.
Business associates can contact each other from their locations. It
reduces traffic and reduces air pollution and contributes to lessen
global warming.

6. Online education:

E-commerce enables the students’ community to learn and acquire

knowledge through online. Students can complete assignments and
download information at any time. Discussions with the tutors and with
other students can take place with the help of internet.

Students can enrol themselves in any online educational institution and

acquire global exposure at a lower cost. Online education gives an
opportunity for every student to participate in virtual classroom
without considering their status, gender and role differences in the
society.

7. Health care:
Medical care and counselling are also provided through internet to the
needed people. Doctors and nurses can get professional information
and update themselves with the latest health care technologies through
internet. This equips the doctors to provide good health care to their
patients at a lower cost.

Advantages of E-Commerce to Nation:

The following are some of the advantages that e-commerce offers to

the Nation.

1. Reduces regional imbalances:

Developing countries provide several tax concessions for setting up call

centres in remote and rural areas. Call centres provide a lot of
employment opportunities. The revenues generated by the nation are
allocated towards the development of infrastructure in the rural areas.
It brings balanced regional development in the developing countries.

2. Reduces unemployment:

Business organizations require talented human resources to develop

and maintain the website of their business. Though business processes
are automated, business organization require people to attend to
customer queries. The establishment of call centres in developing
countries reduces the unemployment problem of those countries.

3. Economic development:

Business organizations are able to attract customers from anywhere in

the world. Increase in customer base results in increased production.
This generates greater revenues to the organizations and fosters
expansion in national income. Expansion of national income and
increase in the volume of production and services accelerate economic
growth.

4. Availability of goods:

Through internet people can buy goods from anywhere in the world.
The goods which are not available locally can be purchased from any
part of the world. The needs of the customers are met by accessing the
internet. So, business organizations cannot ride on customers by citing
shortage of goods in the local market as the reason.

GROWTH OF E-COMMERCE AFTER DEMONITISATION:

Though demonetisation brought with it a sudden decline in e-

commerce transactions, the first quarter of 2017 has brought some
positive changes. Demonetisation aims at pushing consumers towards
making digital payments, thereby contributing to a cashless economy.
NITI Aayog published a report on the growth of digital payments in
India post-demonetisation. According to this report, digital payments
have seen a whopping surge of 271 per cent in the very first month
following demonetisation. The number of mobile wallet transactions
has increased to 63 lakhs from 17 lakhs. Paytm, one among the biggest
players in the mobile wallet space revealed that it served 45 million
customers within 3 weeks after demonetisation. Transactions via RuPay
cards have also increased suggesting that more Jan Dhan account
holders have started using debit cards for online transactions. “We saw
an initial decline in transactions for the 1st 10 days of demonetisation,
however the transactions started getting back to normal from 1st week
of December. As of February, we see a steady increase in transactions
as well as online payments” as mentioned by Vikash Khetan, Founder of
Coupon Guru (A coupons and deals aggregator in India)

Changes in E-Commerce Segments:

Despite bringing chaos in its initial days, demonetisation in the long run
is considered beneficial to the growth of e-commerce in India. One of
the long-term benefits for the e-commerce industry is reduction in
payments via COD. For online retailers COD involves additional cost
and the risk of returns or thefts is higher in this form of payment.  Here
is how demonetisation has affected the 4 main segments of the e-
commerce industry.

 Online Retail

Online retailers like Amazon and Snapdeal welcomed the Government’s

move on demonetisation but they have also had to deal with a slump in
business. There has been a 30 per cent-40 per cent reduction in COD
orders. The final quarter of 2016 was definitely not as fruitful as in the
previous years for giants in the e-commerce industry. The consumer is
not in a mood to spend and this situation is expected to continue till
the end of the first quarter in 2017. Most of the online retail stores
continue to be dependent on cash payments as it is going to take some
time for all customers to switch to digital payments.

The digital wallet and payment segments have emerged clear winners
post demonetisation. Local vegetable shops and paani puri vendors
have been showcased on social media for displaying signs asking for
digital payments. Payment gateways have already seen an 80 per cent
growth and the number is increasing each week. There is a growth in
low-value transactions too.

 Logistics

E-commerce based logistic firms have taken a hit as 20 per cent of COD
orders were cancelled post the demonetisation announcement. In the
transport industry most of the transactions are done through cash and
this is expected to take more than a quarter to normalise. Sahil Barua,
CEO of e-commerce focused logistics firm Delivery stated that the firm
has started accepting card payments and other modes of payment like
wallets on delivery There are some other logistics firms that do not
offer card payments and will require some time to scale up their
operations.

 Hyper-local Delivery

This sector in the e-commerce industry has seen tremendous growth

post demonetisation. Hyper-local delivery firms supply groceries,
household items and food from restaurants to customers. The number
of new customers that this segment receives is increasing by the day
and there is a surge in pre-paid orders. Online food-ordering platforms
like Swiggy and Zomato have seen a rise in transactions.

E-COMMERCE IN THIS PANDEMIC SITUATION:

The pandemic has accentuated the trend towards greater adoption of
social media and growth in sales through e-commerce websites. Shifts
in consumption habits have also been observed, driven by the need for
sourcing essential items. Social media and own e-commerce shops are
important sales channels for the e-commerce companies. Both
channels have witnessed higher growth since the beginning of the
COVID-19 crisis. The COVID-19 crisis has been associated with a change
in sales composition for more than 65 per cent of them. Additionally,
the survey confirms that more customers have gone online to look for
essential products. Groceries, pharmaceuticals, health and hygiene
products, restaurant delivery, as well as financial services, are the sales
categories which saw the largest increases in the COVID-19 crisis
through third-party online marketplaces.

E-payments have experienced fast growth, but cash on delivery

remains prominent. Shifts in consumption habits have been
accompanied by a faster uptake of cashless payment methods. Nearly
60 per cent of e-commerce companies and 70 per cent of online third-
party marketplaces are seeing relatively higher growth rates in mobile
money payments, followed by transaction through e-banking and credit
cards. However, as cash on delivery remains prominent in absolute
terms, particularly in LDCs, it has continued to grow since the outbreak
of the pandemic as consumers have increasingly turned to e-commerce

While the pandemic has been an opportunity for many digital-driven

business models, business outlook looks challenging for a significant
share of e-commerce businesses. The COVID-19 crisis has adversely
affected the costs of 66 per cent of the participants in the sample.
Some 56 per cent of respondents reported that their workforce has
remained stable so far or might even increase in the short term. Still, a
high share (44 per cent) of respondents have had to downsize their
business workforce.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things. It makes big effect on
online sales.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things. It makes big effect on
online sales.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things. It makes big effect on
online sales.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things.
EGATIVE EFFECT ON E-
COMMERCE:
Demonetization makes negative
effect on e-commerce. These are
given blow.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things. It makes big effect on
online sales.
Demonetization makes negative
effect on e-commerce. These are
given blow.
Online Sales Sudden Go-Down:
Demonetization makes sudden
a big effect on online sales.
Because
Indian customer mostly
believed in cash transactions so
that Indian online sales 90 %
based on cash
transaction. Demonetization
effect 86% currency of the
country so people have very less
c ash for spending
on online purchase. Online
sales sudden go-down due to
less cash, Because purchaser
have less cash so
that he/she purchase first
essential thing for fulfil their
basic requirement than after
he/she purchase other
things. It makes big effect on
online sales.