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Subject       E-BUSINESS (OEC)               Course:        BBA         Semester         SECOND
Chapter 4     E-STARTUPS
             Meaning, Definition AND Nature of E-Startups. Challenges and Steps of
             Launching Online Business. Benefits and Limitations of Online Business.
Syllabus
             Meaning and benefits of E-Procurement. Types & Drives of e-procurement.
             Components of e-procurement systems. Implementation of e-procurement
             system. Reasons behind the success of e-commerce companies – Case
             studies of Walmart, Amazon, IKEA, Starbucks, PhonePe, Flipkart, Big
             Basket, Justdial, OLX and OYO.
     Meaning of E-Start-up:
     The term E-startups refers to a company in the first stage of operations.
     Startups are founded by one or more entrepreneurs who want to develop a
     product or service for which they believe there is demand.
     OR
     A startup is a young company established by one or more entrepreneurs to
     create unique and irreplaceable products or services. It aims at bringing
     innovation and building ideas quickly.
     Definition of E-Startups:
     According to Steve Blank, a startup is a “temporary organization designed to
     search for a repeatable and scalable business model”, while the small
     business runs according to the fixed business model.
     Nature of E-Startup:
           1. It is easy to Set up the e-start as it is an online process.
           2. There are no geographical boundaries; whole world is a single market.
           3. Much cheaper than traditional business expenses attributable to
              setting up of the business is eliminated.
           4. There are flexible business hours, the business can be done 24/7
           5. Marketing strategy cost less, product or services promotion is done
              through internet
           6. Online business receive subsidies from the government
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     7. There are few security and integrity issues, as the customers need to
        give their personal information.
     8. There is no personal touch, customer might miss the traditional way
        of business.
     9. Buyer and seller don’t meet since business is done virtually.
    10. Delivery of products takes time
    11. There is a transaction risk due to network issues.
Challenges of launching online business
     1. Cyber and data security:
The biggest challenges faced security breaches in the online e-business. The
volume of data is too huge. These data are prone to severe damage due to
network issues and cyber crimes.
     2. Online identity verification:
A shopper visiting e-commerce site, The retailer know if the shopper is
genuinely interested in the e-commerce products. The accuracy details or
information is required to proceed to invest in online identity verification.
     3. Attracting the perfect customer:
Shoppers have options to choose from various suppliers in the e-business.
     4. Customer experience:
Customer experience is important factor for successful e-commerce website
they prefer a similar experience. The flow of the website, the segmentation of
the website and the retail personalization of products based on the shoppers
preferences are imperative.
     5. Customer loyalty:
The importance of customer loyalty is that the cost to acquire a new
customer is five Times more than the existing a cost and the success rate of
selling to occur in customer is more that 60 to 70% this is Important to
customer retention or loyalty.
     6. Converting shoppers into paying customers:
The biggest e-commerce challenge is to convert visitors into paying
customers, lots of traffic, a lot of clicks and impressions but they aren’t
making the sales they anticipated.
     7. Competition and competitor analysis:
It is more likely they are to actually purchase.
     8. Price and shipping:
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The customers that prefer to purchase products from places that have free
shipping. E-commerce giants like Amazon provide such attractive shipping
deals that customer seldom want to look at other places
    9. Product return and refund policies:
Online shoppers say that they look at a retailers return policy before making
a purchase. If the website mansions double “no returns or refunds” it makes
a shopper nervous and less likely to trace the retailer. When shopping
online, customers want the flexibility of making a mistake that doesn’t cost
them.
10.    Choosing the right technology:
To fix your e-commerce challenges, the right technology will make or break
your business if not right choice. There are lot of aspects that need to be in
place for a successful retail business, but a good technology foundation is
crucial for online business.
Steps of Launching Online Business:
Starting an online business involves planning, making budgetary decisions,
conducting market research, and developing knowledge in specific areas you
never imagined. While there is no universal approach to launching a new
business, these steps will assist you in organizing your thoughts and ironing
out essential issues so that when you can launch your business. And by
that time, you may have already addressed all critical start-up questions.
    1. Develop your business plan:
       When considering how to start an online business, it can be tempting
       to take immediate action. Therefore, if you’re tempted to develop a
       website, choose a business name, or design a logo, refrain for the time
       being.
       If you want to launch a profitable internet business, you must first
       develop a strategy.
    2. Validate your business plan:
       Before putting your time and energy into launching your business,
       conduct research to determine its viability and possible buyer interest.
Consider the following steps for identifying your best-fit
market niche:
      • Look for a problem to tackle: Every successful firm was
              founded to address a specific issue. Consider an activity that
              you wish was simpler and utilize it to inspire your business
              concept. Inquire of family, friends, or co-workers about any
              daily duties that frustrate them to generate additional ideas.
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              •
              Emphasize your strengths: Consider what you enjoy doing and
              what you are good at. Create a list of your abilities and skills
              and use them to build a firm that can survive even the most
              fierce competition.
          • Concentrate on whom you wish to sell to: Rather than on the
              product you want to create, consider the type of customer you
              want to attract. By reorienting your thoughts in this manner,
              you might increase your chances of tapping into a specific
              market.
          • Connect with your network: Communicate with your friends,
              family, and co-workers and solicit feedback and suggestions.
              Please inquire about the assets and attributes they perceive in
              you. In this manner, you may come across concepts that you
              previously overlooked.
          • Fill in the gaps: You are not required to develop a new
              company idea. Concentrate on all of the leading businesses in a
              particular industry and identify any services that they are
              missing. Determine whether you can fill those gaps.
    3. Be familiar with your competitors:
       The sheer presence of competition – contrary to popular belief – is an
       excellent indication for new businesses. The competition evaluates the
       market and ensures that the niche is profitable. What you should do
       now is study your competitors and the things they can teach you.
       Here is an example of what you could do:
              •   Determine your direct competitors.
              •   Discover who the niche’s “rock stars” are.
              •   Determine who the more prominent players are who may not
                  directly target the niche but produce revenue.
              •   Take note of the aspects of their approaches that you admire
                  and despise.
              •   Make a note of the aspects of their websites that you like and
                  dislike.
              •   Consider how you can mimic their techniques as you begin your
                  online venture.
              •   Determine which is their specific consumer base — to the best
                  of your ability.
    4. Create a new product or service:
       You’ve proven your business concept; now it’s time to bring it to life.
       Regardless of whether you’re selling a product or a service, you must
       first develop it. Track down a manufacturer to get your product to life,
       package your service offers, or write your book and research self-
       publishing options.
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       If you choose drop-shipping, the product is already developed for you.
       It is entirely up to you to select products about which you are
       passionate or for which you have recognized a lucrative market.
    5. Determine a scalable business plan:
       A scalable company strategy combines increased income sources with
       efficient operations and cost savings. To accomplish this, however,
       much research and meticulous planning are required. For
       determining the viability of your online business idea, you might
       utilize the product demand matrix.
      The demand matrix for a product is a quadrant which follows:
          1. High supply and low demand: If you have a high supply
             volume but low demand for your products or services, your
             business plan will likely fail.
          2. High supply and high demand: An ample supply of your
             product is available on the market. Additionally, the product is
             in great demand, implying you have a moderate chance of
             success while taking fewer risks.
          3. Low supply and high demand: For products and services with
             high market demand but a low supply. As a result, this
             quadrant offers excellent prospects for the success of your
             business idea.
    6. Establish your financial structure:
       “How do I open a business bank account?” is frequently asked by new
       entrepreneurs. Once your firm is officially registered with your local
       authority, you should receive the tax identification numbers and other
       information necessary to open a business bank account. As
       your online business grows, you may require funds for future
       activities, such as product launches or marketing and advertising
       expenditures. Having company bank accounts simplifies the
       management of that capital and the tracking of revenue and expenses.
       A bank account also aids in tax preparation since all of your business-
       related transactions will be consolidated in one location. As your
       business finances become more complicated with time, you may want
       to consider employing a professional accountant or tax professional.
    7. Locate potential vendors and suppliers:
       Online firms that sell products, in particular, may require a large
       number of business contacts—for instance, a manufacturer, a drop-
       shipper, or a third-party logistics coordinator. When deciding which
       partnerships to pursue, it’s prudent to shop around and compare
       your options to ensure you’re getting the most satisfactory answer for
       your unique circumstances. Other types of online enterprises may
       necessitate a different kind of connection or contractor. For instance,
       if you’re writing a book, you may choose to employ a professional
       editor and designer.
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     8. Create your business website:
        If you want to start online business, you will need a website.
        Additionally, you’ll need to add payment processing capabilities to
        create online sales. To begin, select a domain name and ensure that it
        is available. From there, you can create your store using an online
        platform and immediately begin receiving payments from clients.
     9. Choose an Ecommerce platform:
        Simply put, an Ecommerce platform is your online store’s operating
        system. Similarly, to how iOS or Android operate your phone, an
        Ecommerce platform runs your store. This may come as a surprise to
        those unfamiliar with the world of Ecommerce, yet there are dozens of
        excellent Ecommerce platforms available! They all work (technically)
        and allow you to create a viable Ecommerce store. Not all of them,
        however, are designed for all types of users.
    10. Select the right marketing technique:
      When you’re ready to market your online business, you must select a
      marketing strategy.
      There are numerous online marketing techniques available. However,
      some are superior to others when it comes to learning how to start an
      online business. Use social media to develop and share content, engage
      with your target audience, and drive visitors to your website to close
      purchases.
       Here are three online marketing techniques that you may utilize to
                              generate sales fast:
          1. Direct Outreach: Make direct contact with individuals within
             businesses to pitch your services.
          2. Paid Advertising: Promote your business and generate sales by
             advertising on Facebook, Instagram, Google, and YouTube.
          3. Collaboration with influencers: Collaborate with influencers to
             advertise your items directly to their existing audiences.
Benefits of Online Business:
     1. Low Operating Cost:
        Moving your business online does not require any kind of warehouse,
        inventory, transportation vehicles, or staff. The shift is so smooth that
        all you have to do is sell the same product that you sell at your offline
        store to a wide base of customers. With the help of an online business,
        you can simply have products sent directly to the customers via
        suppliers.
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    2. 24/7 Availability:
       With the help of an online website, you can let your customers visit
       and know about your services at any time from any corner of the
       world. This cannot be possible with an offline business. Your clients
       and customers can read about your products and place orders as per
       their convenience. So ultimately having an online website for your
       business will increase your lead and sales in the market.
    3. Better Customer Support:
       Let me tell you one fact, the internet was made for business and if you
       are an opportunist you must leverage the online world. The
       undeniable advantage of having an online business is that it enables
       you to answer the queries of your customers and resolve their
       problems without consuming much of your time. So with the internet,
       you can simply have better customer support for your potential
       customers. What you can do is simply create a video including
       instructions or a guide that can help customers get the answers to
       their questions. And the best part, you can simply make use of that
       video for years!
       The online business enables you to provide your customers with the
       exact information they want. It saves both the time of you and your
       customers as they can simply go through a video so the number of
       calls and messages about the product query will simply be reduced by
       itself. Out of the numerous proven benefits of having a website for
       your business, the most important one is that helps you get to
       connect with your audience at any time and anywhere.
    4. Boundless Business:
       The importance of online business is that it enables you to connect
       with customers across the globe. This may sound rude to you, but if
       you are not thinking about the growth of your business then you are
       actually not doing business. Going online with your business can be
       considered to be a part of growth for your business. By creating an
       online presence your business simply becomes available to the
       customers even when it is closed. One great benefit of having an online
       business is having a greater audience pool. This will directly result in
       an increase in sales and revenue.
    5. Feasibility to operate from anywhere:
       Having an online business enables you to operate and handle it from
       any corner of the world. This great benefit of having an online
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       business lets you have the freedom to operate your business from
       anywhere by not just being stuck to a physical location.
       You can easily conduct your online business from anywhere all you
       need is a solid internet connection. Also with reduced paper, works,
       and virtual databases, managing a business has never been easier
       than this. With the help of detailed sales and product information
       online, you will be simply able to keep a record of all the activities and
       purchase orders.
    6. Automatic Systems and Resource Sharing:
      The internet has given you many ways to simplify your life as a
      business owner. You can handle your bookkeeping, customer service
      and bookkeeping support online and get custom solutions that will
      automate the way customers buy your goods and services. In other
      words, it will simplify processes and save valuable time from doing
      repetitive tasks.
      Additionally, it allows you to share information and data quickly and
      efficiently. Sharing information has been made simple and effective
      when sharing documents, best practices in business applications,
      emails, webinars, or anything else.
Limitations of Online Business:
1) Customer Support
Contrary to traditional enterprise, an online business is completely devoid of
face-to-face interaction. This is a major issue for customers as most of them
prefer to communicate directly.
Although some businesses online provide the option of contact via chat, email
or call to get customer support, it's not enough to provide the level of customer
support provided through face-to-face communication.
2) Potentially Lower Profit Margins and Possibly Lower Profits
The internet has widened the competition for all kinds of companies. Although
it allows consumers to find your services and products, it can also make it
easier for customers to gain access to your competition's services and
products.
To stay at the top of their minds, businesses have cut prices dramatically and
have also diminished profits. If you operate your business online, be prepared
to be unable to sell if your customers get the same item in the marketplace
for less.
3) Customer Satisfaction
Naturally, when it comes to online businesses like e-commerce websites,
customers do not get the opportunity to interact with the items physically.
When the product is handed over to the buyer, they are not guaranteed to be
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pleased with the product. If the client does not receive the expected goods,
they may return the item.
4) Reduction of Physical Interactions
Many of the most innovative concepts are born out of people's interactions.
Although the internet has successfully superficially connected people, it's not
enough to match the human interaction of speaking in person with customers
and colleagues.
5) Competition
Being an online business owner is not easy because of the fierce competition
in the internet world. The big corporations always come up with more effective
advertising promotions, marketing and even more affordable products that
could steal your business. If the right business strategy is not followed, the
company could face significant losses. Competition is always considered
among the business disadvantages.
6) Negative Reviews
Buyers may use social media to share their frustrations and opinions about
businesses. The public is more inclined to complain than be a positive
reviewer of a business, which could damage the image of a business. Many
examples can be seen in complaints that have become viral and have caused
businesses to alter their strategies or even change their products, resulting in
revenue and reputation loss.
The internet is a potent tool, not just for companies but also for consumers.
Be careful and use it in line with your company's requirements and model to
ensure that the benefits are maximised and the disadvantages are reduced.
7) Cost to Start
While online businesses can benefit from cost savings over time, the
implementation is not the same. The business must be prepared to deal with
the huge initial cost as the website needs to be created and maintained by an
experienced professional.
Furthermore, additional costs related to web hosting, SEO, etc., add to the
total costs. However, a proper solution to lack of investment can be a
government loan scheme that perfectly suits your business.
Meaning of E-Procurement:
E-procurement, or electronic procurement, is a digital transaction process
that involves using the internet to buy and sell goods and services. This
process employs a supplier's closed system, meaning that only their
registered customers can use and gain benefits from it. Implementing e-
procurement creates a direct connection between the supplier and buyer,
helping to streamline business-to-business (B2B) or business-to-consumer
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(B2C) processes like emails, invoices, purchase orders and bids. Since e-
procurement is an online business measure, it uses networked systems and
web interfaces for supply chain operations.
Benefits of e-procurement:
There are benefits you can gain from using e-procurement, such as:
a. Creates information transparency: E-procurement makes the
   transference of information and data more transparent to the company
   and its supplier. You can use this information to view purchasing
   behaviours, leverage buying power, control non-compliant spending, and
   identify opportunities to consolidate suppliers.
b. Helps companies save money: E-procurement can help a company
   save substantial amounts of money because it eliminates costly errors
   that may occur when handling manual orders and paperwork. The
   company can then use the money they save for other initiatives, like
   marketing and advertising.
c. Automates procurement process: By automating your procurement
   processes, you're able to sustain more consistent and cost-effective
   operations. There's a diverse range of procurement software that you can
     use to help you achieve this goal, helping lower the need to perform
     monotonous activities, like data entry and analytics
d. Shortens procurement and purchasing cycles: The benefit of shorter
process cycles is that you're able to obtain the goods and services that you
need at a much faster rate. This helps to limit operation downtime, which
ultimately helps to increase productivity, save costs and increase profits.
e. Improves inventory management and control: It's important for a
company to better manage their inventory because it enables them to gather
accurate information about their current supply of goods. They can then use
this information to make more informed business decisions.
f. Streamlines operations: This is an essential benefit of using e-
procurement because it helps you save time and increases productivity.
Having all of your online purchasing and selling processes functioning
seamlessly creates a more uniform system and makes it easier to identify
and resolve problems before they escalate.
g. Larger product and service selection: Because all the transaction and
procurement processes occur online, you have access to a broader range of
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products and services to choose from. This variety enables you to make
comparisons between what's available and select the goods that are best for
your company and most cost-effective.
Drives of e-procurement:
1. E-Informing:
The e-procurement cycle starts with e-informing – it refers to the process of
researching and transferring purchasing information within departments by
means of online channels.
During this stage, the organization collects information about the need,
timelines, vendor requirements, etc. It’s passed within the organization or
communicated to one’s supply chain partners to achieve higher efficiency of
the supply chain.
2. E-Sourcing:
Next, the organization researches the best-suited vendors based on the
outlined requirements, by using online technologies. The purpose of e-
sourcing is to collect relevant information about potential vendors and
choose the one that offers the most tangible benefits in the long-term
perspective.
3. E-Tendering:
While gathering information about vendors, the organization also needs to
electronically request and receive quotations from them. This part of the
process is called e-tendering.
4. E-Auctioning:
E-auctioning is a dynamic negotiation carried out online between the
company and pre-qualified suppliers. The parties negotiate pricing and
contract terms in a real-time auction.
The process is usually conducted through a web-based system that allows
buyers and vendors to bid online.
5. E-Ordering:
After agreeing on the pricing and contract terms, the procuring organization
orders products or services from the vendor and monitors delivery. E-
ordering involves using an electronic ordering system that automates the
purchasing process.
6. E-Invoicing:
E-invoicing is a digitized invoicing process where the bill is electronically
presented to the procuring organization. With e-Invoicing, the company can
receive, process, and pay invoices touchless. It’s best to create a
standardized e-Invoicing procedure that provides vendors with clear
guidelines and invoice templates to enable frictionless automatic invoice
processing.
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7. Contract Management:
To maintain strong vendor relationships, the buyer manages and optimizes
the contract management lifecycle through a contract management system.
A contract management software serves as a secure, centralized repository
for creating, managing, and storing contracts, and completely automates the
contract process.
Components of E-Procurement System:
a. Indent Management: Indenting is the process of recording the demand.
   Indents can be prepared in the e-Procurement system or can be pulled
   from an ERP or EDI system. Most e-Procurement solutions have indent
   approval and indent assignment features.
b. Request for Quotation: Request for quotation is the process for
   requesting vendors to submit their bid against demand. RFQ document
   contains procurement requirements details along with terms and
   condition for supply the goods or services. e-procurement software
   solution suggests matching vendors based on their registered category.
c. Quotation Submission: Vendor submits their quotes for requested
   items against RFQ. Bids/ Quotes also include details such as delivery
   days required, make of items, freight type, payment terms, other terms
   (such as insurance, packing forwarding, etc). If requested by buyers,
   vendors can also submit a revised quotation.
d. Reverse Auction: In the eProcurement process, buyers may also request
   vendors to participate in the reverse auction process. In reverse
   auctions, vendors submit their quotations/bids/ prices in decreasing
   order. This creates competition among suppliers and improves the
   efficiency of the procurement process such as lower purchase time, lower
   cost of procurement, etc.
e. Bid Evaluation: After receiving bids/quotations from vendors,
   evaluation of quotes is done by buyers. Bid evaluation is generally done
   through a comparative statement (CS). A comparative statement is a
   report which displays a list of items requested in RFQ and list of all
   quotes received through vendors along with other terms & condition
   mentioned by the vendor. Listing all items and quotes from all vendors
   along with their terms and condition makes it easy for buyers to evaluate
   all quotes in a single place.
f. Vendor Management: An e-Procurement software solution provides a
   platform for vendors to manage their own profiles. They can manage
   their profile information and/or make changes to their contact details,
   items category they deal in, bank details, and other profile information.
   Vendors can also see their pending inquiries, orders, etc.
g. Catalog Management: Vendors can manage their own catalog in e-
   Procurement solution. In the basic form of catalog management vendors
   can quickly specify items they supply, along with their price and terms
   conditions. A catalog help buyer to instantly evaluate their demand with
   available prices, terms & conditions. An updated catalog save time and
   efforts of both buyers and suppliers.
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h. E-communication: The major advantage of e-Procurement is
   automating the entire procurement process. Procurement either manual
   or through electronic means requires communication among various
   stakeholders. E-Communication facilitates all such communication for
   various events among various stakeholders. It provides the facility to
   define, configure and execute communication during various
   procurement activity and events.
i. ERP/EDI integration:
   Leveraging on technology e-Procurement solutions can be integrated
   with existing ERP/ MIS solution. This integration can be done using
   intermediate EDI (electronic data interchange) integration tools which
   facilitate communication of data with different computer application
   such as ERP and e Procurement solution.
Implementation of E-Procurement System:
Here are 12 key steps for planning and implementing a successful e-
procurement strategy at your organization:
   1. Assess and document your current procurement process
   2. Assess and document your desired future procurement strategy
   3. Identify the gaps between where you are now and where you want to
      be
   4. Identify the process and system solutions that will be required to
      bridge the gaps
     5. Document the important benefits that will come from implementing an
        e-procurement system (hard, soft and intangible benefits)
     6. Develop key performance indicators (KPIs) to measure success against
        your identified procurement goals
     7. Create a business case that addresses the most critical pain points of
        your buying organization
     8. Secure executive sponsorship and an internal champion for the
        initiative
     9. Develop a plan and commit resources to the project
  10. Review and select the optimal e-procurement solution provider for
     your needs
  11. Create an implementation plan that reduces deployment/maintenance
     times and resource demands on your IT department
  12. Deliver and measure the benefits
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    Reasons Behind the Success of E-Commerce Companies:
✓ Mobile Friendly Site: More people today are using their mobile phone to
         purchase products online. Research shows that mobile users worldwide
         have reached close to 3 billion. People are no longer using laptops, desktops
         for interaction and online shopping. Designing your e-commerce website to
         be mobile friendly is crucial. Remember to use a simple and clear mobile
         version to enhance easy navigation. Buttons on the page should have
         sufficient space for a person’s finger to press on.
✓ Search Bar: This enables customers to quickly find what they want and
         save time. Buyers don’t like skimming over pages to find what they what to
         buy. An advanced search bar turns your site into an automatic search
         engine for your products. Giving result suggestions from the typed search
         helps the client find what they are looking for.
✓ Convenient Payment Method: Any eCommerce web design needs a
         payment process. When developing your website, ensure that you pick a
         convenient payment platform for your users. One of the major difficulties
         e-commerce sites face is having a reliable source of payment. Setting
         multiple payment plans can cater to your users depending on your
         audience. Consider simple facts like the geographic location of your clients.
✓        Quality Images: This is the first experience that buyers have with your
         product, make it count. Present good quality pictures so that the client can
         be able to see what they want. Provide multiple pictures of the product for
         clients to view all the features. Include a photo of the product being used
         or in context. This will make the customers relate to the experience of using
         the product. Zooming in feature eliminates any haziness of the product in
         terms of quality, design, and colour.
✓     Live Chats: Live chat makes it easier for clients to make inquiries and get
     answers in real time. It is convenient and time-saving compared emailing a
     question or calling the support team. Direct interaction with the client can
     not only increase sales of the store but also form a trusting relationship with
     the customer. Direct feedback shows the client that the site is reliable and
     trusting. This will motivate them to return to shop more. Other than that, it
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  will cut down the cost of handling a bunch of buyers’ queries. Ensure that
  the hotline and live chat are visible in the site and available 24/7.
✓ Clear Return Policy: When outlining a return policy, first ensure that they
  are no chances of returns. People return products because they are
  unsatisfied. Make sure that the products on the site are clearly described to
  the customers. A well-structured return policy should be customer friendly.
  The purpose of it is to make the client feel confident that they can buy the
  product and they can get a refund they are not pleased with it. The policy
  should aim at seeking customer’s satisfaction rather than making profits.
 Write the policy in a language that the buyers will understand, simple and
 clear, no policy jargon. It is advisable not to include return cost, but if there
 are state them out. Clarify the terms of refund, will it be cash or credit.
 URL’s of Case Studies: Walmart, Amazon, IKEA, Starbucks,
 PhonePe, Flipkart, Big Basket, Justdial, OLX and OYO.
 PhonePe Success Story - Founder, Funding, Revenue, Valuation and More (startuptalky.com)
 Walmart Case Study | Walmart Marketing Strategy (startuptalky.com)
 Starbucks Case Study | Starbucks Leads the Coffee Industry (startuptalky.com)
 BigBasket Success Story - India's Largest Online Grocer | History (startuptalky.com)
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