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ECommerce in India
ECommerce in India
Study Objective
Logo of e commerce
The eCommerce industry continues to grow at a rapid pace translating the rules of traditional
retailing and enabling merchants to tap into customer segments, demographics and regions
that were difficult to access through the traditional retailing methods. As the rapid Internet
Penetration, the widening network of online payment solutions, the progressively wider
acceptance of online commerce and the maturity in fulfilment solutions provide a robust
backbone for wider and rapid adoption of eCommerce, merchants today are also faced with
some of the most unique challenges retailing has ever witnessed. ECommerce business
houses small or big, generic or specialized, today need to deal with fierce global competition
right at the doorstep. Rapid loss of differentiation, extremely price sensitive fickle customer
loyalty, evolving global regulations, short product lifecycles and dropping margins are just
some of the significant business challenges that eCommerce business today need to deal with
upfront. These challenges require merchants to develop unique strategies to liaison with
partners & service providers and adopt radical strategies for eMarketing, Internet
Advertisement, Brand identity management, pricing, fulfilment, payments, channel
convergence, customer behaviour analysis & personalization and an online as well as offline
shopping experience besides core commerce that is beyond the realms of traditional
eCommerce.
The Five Different Types of E-Commerce
E-commerce is the process of buying and selling of various products and services by
businesses through the Internet. It deals various kind of business concern, from retail site of
the consumer, which includes auction. The main focus is to concentrate on business
substitutes involving goods and services between various corporations.
E-commerce is the purpose of Internet and the web to Conduct business but when we
concentrate on commercial deals among organizations and individuals demanding selective
information systems under the guarantee of the firm it accepts the form of e-business.
Nowadays, the word ‘e’ is hitting momentum. If you’re looking to get into this business, one
of the fore most things you have to have is a Virtual Private Cloud Hosting keeping the traffic
in mind and respecting customer’s valuable time.
B2C stands for Business to Consumer as the name suggests, it is the model taking businesses
and consumers interaction. Online business sells to individuals. The basic concept of this
model is to sell the product online to the consumers. B2C is the indirect trade between the
company and consumers. It provides direct selling through online. For example: if you want
to sell goods and services to customer so that anybody can purchase any products directly
from supplier’s website. Directly interact with the customers is the main difference with other
business model. As B2B it manages directly relationship with consumers, B2C supply chains
normally deal with business that are related to the customer.
“It is one of the cost effective way to sell out product throughout the world”
Benefits:
It is a discipline that deal itself which assists people to instantly shares related computer files
and computer sources without having to interact with central web server. If you are going to
implement this model, both sides demand to install the expected software so that they could
able to convey on the mutual platform. This kind of e-commerce has very low revenue
propagation as from the starting it has been tended to the release of use due to which it
sometimes caught involved in cyber laws.
M-Commerce
It deals with conducting the transactions with the help of mobile. The mobile device
consumers can interact with each other and can lead the business. Mobile Commerce involves
the change of ownership or rights to utilize goods and related services.
Fig Overview of e-commerce industry
This report provides a brief overview of the ecommerce in India with information on the
market characteristics, the various ecommerce models, key players and the future potential of
the e-commerce industry.
India has its share of success stories in the B2C segment in the form of Indiatimes.com,
Rediff.com, Shaadi.com, Indiamatrimony.com, MagicBricks.com, Monster.com and
Makemytrip.com ,ebay.com etc. These and such other portals are generating a lot of interest
and increasing transaction traffic. Smaller businesses have jumped onto the bandwagon by
offering products and services online and have successfully carved out niches for themselves.
The online community is growing by leaps and bounds as an increasing number of consumers
have started transacting online because the initial fears and apprehensions are being laid to
rest. Research studies have indicated several factors responsible for the sudden spurt in
growth of eCommerce in India such as:
There is a growing awareness among the business community in India about the opportunities
offered by eCommerce. Ease of Internet access and navigation are the critical factors that will
result in rapid adoption of Net commerce. Safe and secure payment modes are crucial too
along with the need to invent and popularize innovations such as Mobile Commerce.
ECommerce referring to the process of trading goods and services through an electronic
medium such as the internet has gained tremendous popularity in the recent years.
ECommerce involves paperless transactions and usage of EDI (Electronic Data Interchange),
electronic mail, bulletin boards, fax transmissions, and electronic fund transfers. With
advancements in technology, there have been changes in the methodology for business
transactions. India, being a rapid adaptor of technology is apace with the current scenario of
electronic data exchanges and has taken to eCommerce. The number of eCommerce
transactions have increased manifold. People use credit or debit cards for making purchases
in an online store. ECommerce is being used for purchase and sale of multiple products and
there are multiple players using various portals and websites for this purpose.
Use of eCommerce in India is increasing in the travel segment. Online travel industry is
expected to be worth US $6 billion in 2011. It is the most successful eCommerce initiative in
India. It has contributed Rs 340 Million to the total eCommerce business of Rs 900 Million.
The Indian Travel Ministry has introduced a travel portal called Incredible India. This portal
is a big success as tourists can easily contact travel agents, tour operators and hoteliers easily.
This portal has also caused a surge in medical tourism to India. By the year 2010, the medical
tourism market in India is expected to be around US$ 2 million. Other travel portals include
Makemytrip, Yatra, Cleartip, and Travelguru. Makemytrip has targeted revenue of Rs 230
Million for the financial year ending March 2010.
Due to improved broadband connections and increased penetration of credit card facilities to
a wider population, eTailing or online retailing is witnessing a substantial growth. Internet
retailers provide a wide range of facilities to the consumers, including discounted prices,
comparison of product features offered by various vendors, areas where the products can be
procured, etc. Currently, the online retail industry in India is estimated to be worth Rs 110
Million. By 2013, India is expected to have the third largest internet user base, which
improves the prospects of online purchases. Some of the retail stores offering online retail
facilities include: Reliance's Rmoneymall, Pantaloon's FutureBazaar.com,
Videocon's eDigiworld.com, Vishalmart's Vishalmegamart.com, and the Tata Group's
Westside.
Online stock trading activity is gaining momentum in India. Services offered by the online
stock trading companies include online buying and selling of stocks and shares, market
analysis and research, details of companies, comparison of companies, and research on equity
and mutual funds, customer services through email and chat. Online trading also has an added
advantage of real time stock trading without calling or visiting the broker's office. Major
online stock trading websites in India include: ICICIDirect.com, Sherkhan.com,
Indiabulls.com, 5Paisa.com, Motilal Oswal Securities, HDFC Securities, Reliance Money,
IDBIPaisaBuilder, Religare, and Kotak Securities.
D. Online Advertisements
The Indian population accesses the internet from home, office, and cybercafés. There is a
large segment of population that is fast adapting to internet. Advertisers have identified the
internet as a medium for enhancing the awareness for their business activities. Online
advertising in India is expected to cover all organizations and their products. The online
advertisement industry grew to Rs 3250 million in India, accounting for 38% growth rate in
2008-2009. The growth rate for the year 2009-2010 is expected to be 32% which amounts to
Rs 4300 million.
Another area where eCommerce is widely used is that of employment. Internet has simplified
the process of search for 'right people on the right job'. There are a number of web portals and
sites that match a prospective employer's requirements with that of candidates applying for
that job. Some of the popular job sites in India include: Naukri, Monster India, Times Jobs,
Careerjet, Naukri Hub, Career India, Bixee, ClickJobs, CareerAge, and Freshersworld.
There are a number of real estate portals and sites that provide information to users regarding
the property they wish to buy/sell. This information includes properties available for
sale/purchase, the cost, location, etc. Some of the popular real estate portals include:
Indiaproperty.com, 99acres.com, Magicbricks.com, and Makaan.com.
Matrimony eCommerce portals provide the seekers appropriate information regarding the
prospective matches, region of their residence, their religion, caste, etc. Allied services are
also provided to the listed members. These services include: astrology, information on
customs and rituals, legal issues, health and beauty, fashion, wedding planners, etc. Some of
the leading matrimony portals in India include: Shaadi.com, Jeevansathi.com,
Bharatmartimony.com, Indiamatrimony.com, and Simplymarry.com, and
LifepartnerIndia.com.
The IT Act 2000 was substantially modified through the Information and Technology
Amendment Act, 2008, which came into effect from October 27, 2009.The IT Act of 2008
covered amendments that provided additional focus on information security. It has added
sections on offences, such as Cyber terrorism and Data Protection. This act, however, has
been criticized because of lack of legal and procedural safeguards to prevent violation of civil
liberties of Indian people.
The IT Act covers cyber laws and crimes, which are subject to the Indian Penal Code. Such
cyber crimes include:
Crimes related to technical aspects, such as unauthorized access and hacking, Trojan
attack, virus and worm attack, email related attacks (email spoofing and email
spamming, email bombing), and denial of service attacks (DOS). DOS include:
o Consumption of limited or non-renewable resources like NW bandwidth and
RAM, alteration or destruction of configuration information, destruction or
alteration of network components, and pornography.
o Forgery
o IPR violations, which include software piracy, copyright infringement,
trademark violations, etc. This also includes cyber terrorism, Banking and
credit card related crimes, eCommerce and investment frauds, sale of illegal
articles, defamation.
o Cyber stacking, identity theft, data diddling, theft of internet hours.
o Breach of privacy and confidentiality.
Online payments are generally credited to the intermediaries like PayPal, who transfer these
payments to merchants. To address this situation, Reserve Bank of India has issued new
norms for facilitating eCommerce transactions. As per the directives, the payment will be
credited directly to the merchants and not the intermediaries. With this arrangement, money
will be available to the merchant within 3 days of transaction. This will expedite shipping of
goods to the customer on time. Online transactions require use of electronic cards – credit or
debit. The credit card market is currently not too vast, with less than 25 million credit cards
issued in the market. However, debit cum ATM cards are widely used by account holders.
Issue appropriate instruments (cards) to facilitate online payments: For example, all
debit cards are ATM cards, but all ATM cards are not debit cards. Additionally, there
are some co-operative banks offering internet banking facilities. This facility is mostly
for checking account balance, and this should be extended to online transactions as
well.
Take steps to improve debit and credit card penetration. RBI should specify a time
frame to banks to issue credit cards, debit cum ATM cards.
Improving the network connectivity of ATMs: Users can use one bank’s ATM card
for holding transactions with another bank because these ATMs are connected to
BANKS ATM network. Several banks still need to be connected to this network. RBI
should facilitate to expedite this connectivity.
Improving payment gateway infrastructure: There is a need to improve payment
gateway infrastructure in the country. The payment gateways should accept all credit
cards, debit cards, and internet banking facilities that all banks are offering. RBI
should provide a mandate to the payment gateways to integrate such services of any
new bank within some stipulated duration of the new bank operations going live.
E-business provides unique opportunities for enterprises to exchange goods and services with
substantial improvements in operational efficiencies, transaction costs, and customer
satisfaction. An effective e-business solution enables your entire value chain and can give
you a sustainable competitive advantage by improving processes and creating stronger
relationships with your business partners and customers. Internet Commerce or E-Commerce
(Electronic Commerce) uses online electronic technology connected via the Internet to assist
and enhance a variety of business processes, functions and systems.
Running an online business can be an overwhelming task. Extending a business to the Web
and opening an e-commerce storefront requires merchants to master many tasks not only
website development and design, but also maintaining the confidentiality and security of
consumer data and accepting and processing payments.
The benefits of E-Commerce are not just available to large corporations and government
departments and many small to medium businesses are discovering new cost -effective
opportunities to use Internet - related technology to help their business operations locally and
internationally.
E-Commerce Applications
Supply chain management
Video on-demand
Remote Banking
Procurement and purchasing
Home shopping
Today's computer systems, linked by global networks, face a variety of security threats that
can result in significant financial and information losses such as credit card numbers,
financial data or medical history. To minimize risk, win customer confidence, ultimately,
gain a competitive edge. We can arrange with leading Security provider, for Secure Sockets
Layer (SSL) technology, which is the industry- standard protocol for secure, Web-based
communications and your web server is ready to work with if it's from Apache Freeware,
C2Net, IBM, Lotus, Netscape, Microsoft, Open Market, or dozens of other vendors.
There are several advantages and disadvantages of electronic commerce application for
customers, business and non-profit organizations. Different levels of product information can
be obtained online globally through the Internet, which makes very easy for customers to
compare and evaluate the particular product or service. Electronic commerce can offer wide
range of choices to extend markets and opportunities to both consumers and business firms.
Customers could save delivery time because of contribution of digital services and product.
On other hand, business firms could decrease operating and marketing cost and increase
profit. The negative aspect of electronic commerce includes different anticipations of
products such as clothes when the customers are purchasing online. Another disadvantage
associated with electronic commerce includes issues related to security and privacy of
customers’ credit card detail.
The latest report on Ecommerce in India published by the IAMAI (Internet and Mobile
Association of India) indicates a healthy growth rate over the previous years. PC users have
increased from 72 million in 2009 to 87 million in 2010. This is primarily due to the
penetration of PC into the lower Socio Economic Classes (SEC) spread across smaller towns
in India. With increasing literacy rates and growing incomes, people from these classes have
readily adopted the Internet for Ecommerce and other uses. Claimed Internet Users (those
who have used the Internet at least once in the past) have grown by a substantial 20% in 2009
over 2008. This rate is significantly higher than the growth rates in the previous years. The
Internet penetration level in small towns of rural India has increased from a mere 5% in year
2000 to 36% in 2009. The Internet usage figures of these smaller towns have even overtaken
those of the Top 8 Metros indicating the impact of the Internet on the lives of people residing
in rural India.
The recent survey conducted by Nielsen, India has emerged as the 3rd biggest nation when it
comes to online shopping and using a credit card online. Drawn by the facilities offered by
the Web and the diversity of products available on it, Indian netizens have emerged as the
third biggest credit card users globally for online purchasing, next only to the Turkey and
Ireland. The survey shows more than 85 per cent of Internet users in the world are purchasing
goods or services online, with credit cards as the most used method of payment. Despite the
improved penetration of Internet usage, both in urban and rural India, the actual figures are
far short unlike in the US and Europe. India’s economy is pegged at about Rs.1.2 trillion (by
2008 estimates) and its Ecommerce market is approximately Rs.9000 – 10000 crore (nearly
US$ 2 billion). In comparison, the US economy is $14.2 trillion and its Ecommerce market
(B2C) is estimated at $ 220 billion in year 2008. Thus India’s ecommerce to GDP ratio is
disproportionate considering its economy is 7% of the US economy but the size of its
ecommerce market being only 1% that of the US. These figures, though disappointing,
indicate the potential for growth of India’s Ecommerce market and that it is getting there –
slowly but surely. There is still tremendous scope for investors and entrepreneurs in India’s
Ecommerce space.
With internet reaching a wider base of population, eCommerce transactions happen over a
vaster segment of Indian society. According to the survey conducted by Internet and Mobile
Association of India (IAMAI), the rural internet users have outgrown the number of urban
internet users. According to the eBay Census Guide 2009, India has 2471 eCommerce hubs.
These hubs are spread over the entire country and cover cities, towns, villages, and smaller
towns. All 28 states and 7 Union Territories have witnessed eCommerce transactions. It was
also found that rural Indians are actively involved in online shopping. Online buying and
selling trends have been observed in Bundy (Rajasthan), Thevaram (Tamil Nadu), and Tezpur
(Assam). Online shopping is underway in 747 rural towns of India. The study reveals that
181 rural towns, including Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra, and Gujarat
are active entrepreneurship hubs. These hubs cater to online selling in India and worldwide.
India is the fourth country in terms of Internet usage. The internet-savvy population has a
number of online markets catering to a huge number of products. The eCommerce market in
India is expected to be around Rs 950 Million, out of which market for online shopping is at
Rs 130 Million. The global growth rate for online shopping is around 8%-10%, but India has
a much higher growth rate of 30%.
Some of the areas that have observed a successful eCommerce activity include:
Travel and tourism: In India, it is the most successful eCommerce initiative. It has
contributed Rs 340 Million to the total eCommerce business of Rs 900 Million.
Online Shopping: In metro cities, particularly Delhi and Mumbai, online shopping is
becoming popular. Some of the stores providing online shopping facilities include: The
Bombay Store, Big Bazaar, Pantaloons, and shopping portals on websites such as
www.rediff.com.
Coimbatore is the 15th largest eCommerce Hub in the country, according to a recent study
released by eBay India, the e-commerce marketplace. In 2008, eBay India Census ranked
Coimbatore as its 28th hub.
Guide
The eBay Census Guide documents the trends in online buying and selling across the
country. An e-commerce hub has been defined in it as selling and buying transactions (global
and domestic) on eBay from the city, according to a release from the company. The release
said that India had over 2,470 e-commerce hubs. Andhra Pradesh, Tamil Nadu, Kerala,
Maharashtra and Gujarat were the most wired States in the country and these had most of the
eCommerce cities. The study also found that online shopping was active in 747 rural towns in
the country. Of these nearly 180 were active entrepreneurial hubs that sold to buyers in India
and other countries.
Online products
According to the press release issued here, Coimbatore entrepreneurs sold mostly Indian
stamps, Indian notes, gold plated bangles, toys and T-shirts. They purchased through online
products such as handsets, CPUs, Indian stamps, British Indian coins and diamonds.
Food products
Books
Magazines
Cds
Beauty products
Home Appliances
Gift Vouchers
Health Coupons
They will find it for you right away! Treat your near and dear to tasty Italian dishes not
available anywhere else in Coimbatore. There is assurance of 100% security in visiting the
site. Regarding the delivery of food products, the dishes are packed hygienically and
delivered in fresh, hot condition.
Why them?
Privacy Policy
At mall.coimbatore.com they value customer’s privacy. They will not sell or rent your
personal information to anyone. The details of your purchases are not revealed to third
parties. They use the information collected about you to personalize the services offered, to
speed up your orders, and to serve you better. Your email id's are not sold or hired outside.
Security
Additionally, your card CVV number is an added security feature to help protect you
against misuse of your card. The CVV Number is a group of 3 or 4 digit numbers
printed on the back of the card, immediately following your credit card number.
Excellence
They strive for excellence in whatever they provide and focus on continuous improvement
in interactions with people, efficiency of products and their delivery, and the well being of
the site.
Customer Centricity
They mainly give importance to customers, both internal & external, by giving them
priority. They strive to exceed their expectations in terms of the value and quality
delivered.
Integrity
They ensure consistency between their words and actions, always delivering what they
commit, thereby maintaining transparency, trust and accountability.
Accountability
They feel responsible and accountable for the commitments they make and the quality of the
results we deliver to all their stakeholders.
Strengths of e-commerce
The products reach to customers directly from the producers at a lower price
than the market value.
By visiting different websites one can within a short time can compare the
price and buy on the best deal.
Financial transaction through electronic fund transfer is very fast and can be
done from any part of the world.
Weaknesses of e- commerce
There is no direct interaction between the customer and the seller. Therefore,
the scope of convincing the customer does not exist.
Many times, we prefer to buy the product by reaching personally to the market
rather than purchasing through Internet.
No. of potential customers who can buy through Internet is still not enough.
Opportunities
Big companies are already entering in this field so; they are making people
habitual and confident about marketing through Internet at the cost of the
companies.
Threats
Dishonest persons entering in this field which damage the confidence and faith
of common people on marketing through Internet.
General trepidation of Internet-based business.
Increased government regulation for supplements.
Aggressive competition from other markets.
While E-Commerce may not completely replace other forms of Commerce, it is likely to be
the dominant mode of the commercial transactions in the future. Colleges and Schools
including Business Schools should reflect this trend in the curriculum to train the future
generation of Managers. India is increasingly expanding its horizons as a new centre for
business idea for global industrialists. Novel promotion and selling ideas are being
formulated according to needs of the new age middle class customers.
There are many products which can be sold and exported. It could be anything
ranging from spices to coffee. It is not essential to set up a warehouse; rather tie-ups
with Indian companies or by creating a website of your own would serve the purpose.
This gives an opportunity to manage a diverse range of products sans any risk and
cost. The step towards starting an e-commerce export business is to find a niche
market in India. It could be in any area ranging from healthcare to herbs, etc. Search
the net and find out which product can meet the requirements of a certain category of
customer. Test your product online before taking any risk. The probable risk in this
business is that the good or service may not appeal to the customers or there might not
be any sales.
E-commerce business prospects within India:
With the development in customer market the Indian economy has flourished over
the years giving rise to a class of people with disposable income. For budding
entrepreneurs it is advisable to get indulged in e-commerce boom. The potential of e-
commerce business within India is restricted for another two years. Going by the past
records of other countries, China witnessed a massive upsurge in its internet users by
4 million users in the year 1999 from 600,000 Internet users in November 1997.
But one major disadvantage of establishing an e-commerce business in India is that
only 1 million people have direct access to the internet and out of 36 Indians only 1
have phone access and many of them even do not have credit cards. Export of
animations, multimedia, graphics, etc.: The potential of this business is to cater to the
massive requirements for quality content that the web creates. To execute this idea an
entrepreneur requires expert professionals. The possible risk involved in such kind of
business is that the animations or graphics might turn out to be visually unattractive to
the Western audience. Hence, to avert any such situation a meticulous supervision is
required to ensure that the service appeals to the western audience.
The geographic barriers are fading and with the internet revolution this type of
business opportunity has emerged in India. The potential of this type of business
undertaking is cost effective. India has the skilled workforce of people who speak
quality English as the cost of hiring a call centre employee in India is around US
$150-$200 per month. This paved way for setting up a decent online support system
in India for the United States. Indian entrepreneurs can easily surpass any problem by
training the online support staff and educating them about the attitude and lifestyle of
the American customer.
For establishing a successful business in India, outsourcing of data entry is the best
option. This business is the most recent in India and is already a hit in big cities like
Bangalore. This business undertaking has a great potential. Companies in Bangalore
are flourishing to a great extent after undertaking data services like medical
transcriptions. There is a massive demand for these kinds of services because
international companies prefer their documents in an electronic format. This business
is promising as well as money spinning. The prospective entrepreneurs can
collaborate with Indian companies in order to offer high quality skilled employment.
If the quality of work is not sustained then the risk may surface with complaints
coming from the clients.
Mobile Commerce is also growing rapidly and proving to be a stable and secure
supplement to eCommerce due to the record growth in mobile user base in India, in
recent years.
Conclusion
In sum, the most successful marketplaces are expected to be those that cater to consumer's
loneliness, boredom, education and career. For instance, look at the success of on-line
chats and home shopping channels. But debates rage over whether interactive TV or on-
line computer services will become pivotal medium for solving consumer loneliness.
Nobody would want to get into something that wasn’t secure. So when you are ready for
e-business you’ll find that many organizations have developed solutions like Real Time
Intrusion Detection and Anti Virus software. These along with personal codes and
passwords make sure that any transaction that takes place or any information that is
shared is seen only by the people it’s meant for. So ensure that it is real safe to do
business online, before opting for one!