Current issues faced by the

e-commerce brands in India

Submitted by
Amuliya v.s
 E-commerce
• E-commerce stands for electronic commerce. E-commerce provides
multiple benefits to the consumers in form of availability of goods at
lower cost, wider choice and saves time. E commerce involves
conducting business using modern communication instruments:
telephone, fax, e-payment, money transfer systems, e-data
interchange and the Internet.
• Electronic Business is more than just buying and selling products
online. It also includes the entire online process of developing,
marketing, selling, delivering, servicing and paying for products and
services.
• This paper is outcome of a review of various research studies carried
out on E-commerce. This paper examines current issues faced by the
e-commerce brands in India.
• E-commerce is an outcome of Information and Communication Technology
(ICT) revolution in economic fields or the most visible way of contribution of
ICT to economic growth. ICT, as a tool of socio economic development, is a
significant issue for developing countries. A common definition of e-commerce
is to provide trade processes through data interchange, transaction of goods
and services via computer networks such as the Internet.
• E-commerce and online shopping in India is getting a noticeable growth as
more usage of internet facilities, high educational standards, changing life style
and economical growth of the country reasons in the demand of ecommerce
techniques and tools. This significant impact has resulted in more numbers of
customers to explode various fields of ecommerce for their benefits. There is
also a significant national diversity in e-commerce adoption, particularly in
downstream marketing, sales and other customer-oriented activities .
• The primary purpose of this study is to examine and uncover the impact of e-
commerce and also identify the issues and areas important to the
implementation of ecommerce that may help in enhancing the productivity in
the economic growth of the country.
• Electronic commerce comprises core business processes of buying and selling,
goods, services and information over the internet. Today Ecommerce is a
backbone in Indian society and it has become integral part of our society life.
The first e-commerce site in India was rediff.com. E-commerce allows different
payment through debit card, credit card of EFT (Electronic fund transfer)
payments. Ecommerce provides multiple benefits to the customers in form of
availability of goods at lower cost, wider choice and saves time, along with the
need to invent and popularize innovations such as Mobile Commerce. E-
commerce provides a new place for connecting with consumers and
conducting transactions. Virtual stores operate 24 hours a day, 7 days a week.
MARKET SIZE AND GROWTH OF E-COMMERCE IN INDIA
• E-commerce market worth
1. $ 3.8 Billion (2009) and
2. $ 12.6 Billion (2013)
3. $ 2.3 Billion (2013) e-retail market
• About 70% of India’s ecommerce market is travel related.
• India has close to 10 million online shoppers, and is growing at an estimated 30
percent CAGR vis-à-vis a global growth rate of 8 to 10 percent.
• According to report by Avendus Capital, entitled “India goes Digital”, the Indian
e-tailing industry is estimated to grow to Rs 53,000 crores ($ 11.8 Billion) in 2015
• A report recently published by the Boston Consulting Group also stated that
online retail in India could be an $84Billion industry by the year 2016 more than
10 times its worth of the year 2010.
• The way in which you manage your business relationships has
not changed, but the way they are referred to when using e
Business tools has. They are becoming more often known as:
• Business to business (B2B)
• Government to consumer (G2C)
• Government to business (G2B).
• Business to consumer (B2C) (also known as e Commerce)
• Keeping the first category in research the Business-to-
Consumer (B2C) segment, which includes the popular, Wall
Street friendly businesses like Amazon, e-Trade, etc.
E-BUSINESS CHALLENGES ON THE SIDE OF MARKETERS ARE

The developing countries face a number challenges in utilizing the benefits in

raising incomes and trade flows in the area of e-commerce. A range of
technical, legal and international governance considerations need to be
addressed.
• Personalization: - It can be the single most important challenge for suppliers
when it comes to e-commerce and its competition its competition with retail
stores. Retail stores have facility of personal touch which is difficult to
replace with selling online.
• Shipping Challenges: - Issues related to lack of supply chain integration,
delay in delivery and lack of proper courier services in some areas make
customers frustrated.
• Currency Challenge: - Different countries have different import and export
specifications. Issues related to credit card limits and currency exchange
rates. This hinders smoothness in e-commerce shopping..
• Refund: - If the quality, size, color of acquired product does not match
with the expected product then arise a situation of product return. But
the refund for such situation usually takes a long time.
• Trust: - Consumers are seriously concerned about a number of
dimensions of trust. These concerns are discussed, and can be
analyzed into the following categories:  Goods and services offered
and acquired; and  Assurances that refund is available for
unsatisfactory goods and services;  Trust in the privacy of personal
data arising from electronic transactions.
• Privacy :- As far as the privacy of personal data is concerned, many
people are concerned about the trails that they leave behind them in
cyberspace, and by the use of models of their behavior using the
Issues faced by Consumer in e-commerce
• Poor Knowledge and Awareness: When it comes to ratio of internet
consumers, scenario is not so admirable one. Majority of Indian rural
population are unaware of internet and it uses. Surprisingly, most of
internet savvies or urban population are also suffering from poor
knowledge on online business and its functionalities. Very few are aware
of the online corruption and fraud and thus darkness still exists. A reliable
survey reveals that 50% of Indian online users are unaware of the solution
of online security.
• Online Transaction: Most of Indian customers do not possess plastic
money, credit card, debit card and net banking system, which is one of
the prime reasons to curtail the growth of ecommerce. Nevertheless, in
recent years, some of the nationalized banks have started to issue debit
cards to all its account holders. This is undoubtedly a positive sign for
Indian online entrepreneurs.
• Cash On Delivery: Cash on Delivery (COD) has evolved out of less
penetration of credit card in India. Most of Indian E-commerce
companies are offering COD as one of mode of payment for the
buyers. 30%-50% of buyers are also taking advantage of this mode of
payment while making purchase of any product and service over
internet. COD has been introduced to counter the payment security
issues of online transaction, but this mode has been proving to be
loss and expensive to the companies. It is seen that majority of the
customers denied to make the payment at the time of delivery of the
product. Hence, companies tend to lose the sale along with product
transit fees. In order to curb the problem of COD, online companies
should take some judicial steps; otherwise basic logic behind the
eCommerce business will be at risk.
• Online Security : In case of start up and small business, Business owners
are ignoring the importance of authentic software due to budget
constraints. They are even failing to take the initial steps to secure and
protect their online business through installation of authentic protection
services like antivirus and firewall protection, which indeed a crucial step
for successful online business players. In India, maximum number of
business entrepreneurs used unauthorized software in their server, which
usually does not come with upgraded online security. Such pirated
software leaves room for virus, malwares and Trojan attacks and it is
highly risky task to make online transactions in the systems, which may
disclose or leak sensitive details of credit cards and online banking of the
users. These kinds of droopiness should be banned in Indian eCommerce
sectors. Affiliation to SSL certificate should be imposed as a mandatory
action for every owner.
• Logistics and Shipment Services: In India, logistics and courier services
required lots of improvement. While, perfect and strong logistics service
is one of the key reasons behind the success of any online company,
India is lagging far behind in this sector as most of the town and small
villages are still not covered under serviceable area of many of the
courier and logistic companies. eCommerce is hampered in a big way
owing to the limited services offered by the courier service companies.
• Tax Structure: Tax rate system of Indian market is another factor for
lesser growth rate of eCommerce in India in comparison to other
developed countries like USA and UK. In those countries, tax rate is
uniform for all sectors whereas tax structure of India varies from sector
to sector. This factor creates accounting problems for the Indian online
business companies.
• Fear factor: Fear of making online payment is a universal psychological factor
of Indian customers. With the spread of knowledge on online transactions
and its reliability, some percentages of customers have overlooked this fear
and they are fearlessly engaging themselves in online shopping. But still,
majority of customers are not aware of online transactions and its security.
They often reluctant to disclose their credit card and bank details and
preferred to stay away from online world of shopping.
• Touch and Feel’ factors: Indian customers are more comfortable in buying
products physically. They tend to choose the product by touching the product
directly. Thereby, Indian buyers are more inclined to do ticketing and booking
online in Travel sectors, books and electronics. Companies dealing with
products like apparel, handicrafts, jewelry have to face challenges to sell their
products as the buyers want to see and touch before they buy these stuffs.