GROWTH PROSPECTS OF ONLINE RETAILORS ANDE-COMMERCE IN INDIA

➢ CHAPTER 1. INTRODUCTION

WHAT IS E-COMMERCE?

E-commerce stands for electronic commerce. ‘E-commerce’ and ‘online shopping’ are often used
interchangeably but E-commerce is much broader than online shopping – it includes a broad concept for
doing business online, incorporating a multitude of different products and services e.g., Money Transactions,
Online lectures and Making appointments etc.

E-commerce deal in goods and services with the help of the internet and electronic media. The growth of
E-commerce in India is due to It being customer friendly and improved comfort with the help of internet
the online retailers who sells products or services and goods directly to the customer from the online
marketplace using a digital cart and allows payment through Debit/Credit Card, wallets, UPI, Net
banking. The benefits of E-commerce include its 24x7 Availability, the easy access, the extensive
availability of products and services for the customer, and across the world reach. In the present
environment E-commerce industry is increasing in demand. E-commerce makes customer to get the
goods at cheaper cost, multiple choice and saves time. E-commerce business is expanding in India
because of wide availability of product with cheaper cost multiple suppliers and customers. In this field
every business in India is still growing stage but it offers massive opportunity.

E-commerce has experienced massive growth since its humble beginnings. Now E-commerce sales are
estimated to grow to 60 thousand crores by 2020. The scope of E-commerce should not be underestimated
as it continues to be present in everyday life and present opportunity for MSME Sector and online investor.
Amazon, for example, which started focusing on customer-orientated websites as well as an own shipping
network Amazon Prime, has been seen to sell more than 1000 items per second.

The growth of E-commerce in India in the last twenty years, rising internet and mobile phone penetration
has changed the way do business. E-commerce is a new concept. It is, currently, dependent on the internet
and mobile phone to fundamentally alter the way businesses connect to their customers. While in major
economies such as the United States and China, E-commerce has experience massive growth to achieve sales
of over $500Billion USD in revenue and 25$ Billion in Net profit, the E-commerce industry in India is, still
at Its initial phase of growth. However, over the past few years, the E-commerce sector has grown by almost
25%CAGR from 3 billion Dollar in 2015 to 12 billion dollars in 2020 and is estimated to grow up to billion

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The rapid emergence of e‐commerce is radically transforming the business landscape. Start‐up firms are
capturing new opportunities in the electronic marketplace through existing or innovative business models.
Established firms are racing to transform and adapt their old business models to the new environment.

• An e‐commerce firm would be any business that derives a substantial part of its total revenue from internet
transactions. Additionally, a pure play firm would be one that derives all its revenue through e‐commerce.

• The sector has experienced phenomenal growth, breaking down old shopping habits &amp, inculcating
new ones. Also, inspiring a new way that people transact.

• Indians, in a matter of minutes, can literally shop from a wide range of services and goods, from travel,
movies, clothes, groceries, pharmaceutical products, gadgets & even handymen services such as
plumbers, electricians, etc.

• E‐Commerce in India is now characterized by low pricing, fast shipping, and a multitude of options to
choose from.

• India is home to over 5000 e‐Commerce hubs dedicated exclusively to exploiting the burgeoning growth
rate of this sector.

• Though, the bug of e‐Commerce seems to have been late to catch on in India, it doesn’t look very likely
to deflate or even disinflation anytime soon.
The rise of the Indian economy has not given millions of Indians the privilege of technology but also enabled
them to utilize the internet in a way to have a great shopping experience. The world seems to be watching
on excitedly as India fast becomes a major E-commerce player. There is everything to play for in this
industry, but many brands are in need of a little guidance. E-commerce has changed the lives of people around
the world and its growth in India is not showing any signs of slowing down. The year 1991 noted a new
chapter in the history of the online world where E-commerce became a hot choice amongst the commercial use
of the internet. At that time nobody would have even thought that the buying and selling online or say the
online trading will become trend in the world and India will also share a good proportion of this success.
India first came into interaction with the online E-commerce via the IRCTC. The government of India
experimented this online strategy to make it convenient for its public to book the train tickets. The
acceptance of the E-commerce on a large scale by the Indian people influenced other business players
also to try this technique for their E- businesses and gain high profits. It gained popularity only with
deep discount model of Flipkart. E- commerce has become almost indispensable for Indian consumers
and is expected to have a greater impact in the future.
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In the past decade E-commerce firms have gone from their humble beginnings to becoming a threat to
established, behemoth retail chains like Malls, Organized Retailers, and unorganized shopkeepers. The
rapid growth in internet sales has served to provide consumers with an alternate medium to purchase goods
they would traditionally buy at brick-and-mortar stores. The “touch-and-feel” method of product evaluation
is still prevalent, especially for moderate and high-involvement products such as furniture that are purchased
relatively in-frequently. Worldwide internet consumer expenditure has gone from 3% in 2006 (as a % of
total retail sales) to an estimated 25% in 2025 (Cole, 2016). Within the E-commerce space, sales grew more
than 20% worldwide in 2019 to almost ₹840 hundred crore, as E-commerce giants such as Amazon
continued to expand to new geographies and traditional retailers also started offering their products virtually.
This boom Ine-commerce can be seen in the skyrocketing valuations of new firms, the most notable of these
being Alibaba which conducted a hugely successful ₹25 hundred crore IPO in September of 2015, valuing
the Chinese internet giant at almost ₹170 hundred crore (Ben-Shabat, Uniflorous, Yuen, & Moriarty, 2015).
In the United States alone, E-commerce sales grew 12% in the first quarter of 2019 compared from the fourth
quarter of the previous year, totaling ₹89.1 hundred crore (U.S. Department of Commerce, 2019).

Despite these rapid advancements in E-commerce, many consumers still prefer to visit a physical store to
evaluate a product. Researchers have studied and created models to elicit and predict consumer preferences
however it is extremely important to understand how consumer preferences change regarding the different
attributes of the same product when they assess them online and offline. One of the easiest ways to construct
consumer preference models is to conduct a conjoint analysis (Green and Srinivasan, 1978) in which
subjects are asked to rate pairs of products in which only one attribute is changed. Using this technique,
researchers can determine which attribute a subject prefers in the product and these attributes are then
ranked. The value that the subject assigns to each attribute can be calculated as a statistical estimate, which
then enable the researcher to map out trade-offs between these attributes.

Most marketing researchers conducted this survey online and then used the results for the offline
preference mapping as well, incorrectly assuming that preferences are symmetrical both online and offline.
Past research has shown that there is a change in preferences and utilities when evaluating a product
online and offline. This phenomenon is very common as consumers usually do not realize how important
certain features are to them until they physically see the product. For instance, you might compare and
select a desk chair online and decide to visit a physical store to “test” it out. While reading the product
description online, you might feel the ability to adjust the height, color and presence of wheels are the most
important features, however when you actually see the chair you realize you actually care more about the
comfort when you are sitting and whether or not it can recline as the most important features.

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HISTORY OF E-COMMERCE

History of E-commerce dates back to the invention of the very old notion of "sell and buy", electricity,
cables, computers, modems, and the Internet. E-commerce became possible in 1991 when the Internet was
opened to commercial use. Since that date thousands of businesses have taken up residence at web sites.

At first, the term E-commerce meant the process of execution of commercial transactions electronically
with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds
Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic
transactions. The ability to use these technologies appeared in the late 1970s and allowed business
companies and organizations to send commercial documentation electronically.

Although the Internet began to advance in popularity among the general public in 1994, it took
approximately four years to develop the security protocols (for example, HTTP) and DSL which
allowed rapid access and a persistent connection to the Internet. In 2000 a great number of business
companies in the United States and Western Europe represented their services in the World Wide Web.
At this time the meaning of the word E-commerce was changed. People began to define the term E-
commerce as the process of purchasing of available goods and services over the Internet using secure
connections and electronic payment services. Although the dot-com collapse in 2000 led to unfortunate
results and many of E-commerce companies disappeared, the "brick and mortar" retailers recognized the
advantages of electronic commerce and began to add such capabilities to their web sites (e.g., after the
online grocery store Waban came to ruin, two supermarket chains, Albertsons, and Safeway, began to use
E-commerce to enable their customers to buy groceries online). By the end of 2001, the largest form of
E-commerce, Business-to-Business (B2B) model, had around ₹700 hundred crore in transactions

E-commerce has a great deal of advantages over "brick and mortar" stores and mail order catalogs.
Consumers can easily search through a large database of products and services. They can see actual
prices, build an order over several days and email it as a "wish list" hoping that someone will pay for their
selected goods. Customers can compare prices with a click of the mouse and buy the selected product at
best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to
be found by customers without expensive advertising campaign. Even small online shops can reach global
markets. Web technology also allows to track customer preferences and to deliver individually tailored
marketing.

History of E-commerce is unthinkable without Amazon and eBay which were among the first Internet
companies to allow electronic transactions.
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Amazon.com, Inc. is one of the most famous E-commerce companies and is located in Seattle, Washington
(USA). It was founded in 1994 by Jeff Bezos and was one of the first American E-commerce companies to
sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business
model, however, in 2003 the company made its first annual profit which was the first step to the further
development. After which it gave a 6000% rate of retune in last 16 years only.

The history of E-commerce started 40 years ago and, to this day, continues to grow with new technologies,
innovations, and thousands of businesses entering the online market each year. Electronic Data Interchanges
and teleshopping in the 1970s paved the way for the modern-day E-commerce store. The history of E-
commerce is closely intertwined with the history of the internet. Online shopping only became possible when
the internet was opened to the public in 1991. Amazon.com was one of the first E-commerce sites in the
US to start selling products online and thousands of businesses have followed since. The convenience, safety,
and user experience of E-commerce have improved exponentially since its inception. This article will
address some of the key players and milestones of E-commerce.

Electronic commerce (E-commerce) is relatively new, emerging and constantly changing area of business
management and information technology. “Electronic commerce is sharing business information,
maintaining business relationships and conducting business transactions by means of telecommunications
networks”

DISTINCTION BETWEEN E-COMMERCE & E-BUSINESS:

Electronic commerce can be broadly defined as the exchange of merchandise (whether tangible or
intangible) on a large scale between different countries using an electronic medium – namely the Internet
whereas E-business is the conduct of business on the Internet, not only buying and selling but also servicing
customers and collaborating with business partners.

KEY DRIVERS OF E-COMMERCE:

Key drivers of E-commerce are used to identify a comparison between technological advancement of E-
commerce of different countries. It is often claimed that E-commerce is more advanced in the USA than in
Europe. These drivers can be measured by a number of criteria that can highlight the stages of advancement
of E-commerce. They are:

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1. Political factors – including the role of government in creating government legislation, Initiatives, and
funding to support the use and development of E-commerce and information technology.

2. Social factors – incorporating the level and advancement in IT education and training which will enable
both potential buyers and the workforce to understand and use the new technology.

3. Economic factors – including the general wealth and commercial health of the nation and the elements
that contribute to it.

SIX MAIN INSTRUMENTS BY WHICH E-COMMERCE IS CONDUCTED: -

1. Telephone: – The most important instrument of electronic commerce is the telephone. The telephone
succeeded to achieve and maintain a leading role in commercial transactions because of its widespread
availability, its versatility, low cost, user-friendliness of the instrument, necessity of a very little bandwidth
i.e., capacity for data transmission and its cheap use for local calls and declining costs of long distance and
international calls.

2. Television: – Television benefits from an even more widespread distribution than the telephone. The
relatively low costs of a TV set and subscription charges for the viewer, as well as the user friendliness of
TV, have contributed to its success as a means of commerce.[3]

3. Electronic payment and money transfer: – Electronic payment and money transfer systems like automatic
teller machines (ATM), credit cards, debit cards or smartcards are also part of electronic commerce. These
instruments typically only serve to make or receive payments.

4. Electronic data interchange (EDI): - EDI typically entails the exchange of documents and information
between the computers of two businesses without human intervention.

5. Internet: – The Internet is an extremely versatile means of commerce. Strength of the Internet is its
multimedia potential with simultaneous voice, image, and text transmission. The Internet is not only more
versatile than other instruments of electronic and “traditional” commerce, but also more advantageous in
terms of delivery time and user costs. It also has disadvantages, such as, necessity of moderate computer
skills, uncertainty about technical standards, the jurisdiction of transactions, the validity of contracts, the
security and privacy of information, and the future role of government in regulating and taxing Internet
activities.

These characteristics have made the fax important in communication and commerce mostly between
businesses, and less important among individual consumers.
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REASONS FOR THE GROWTH OF E-COMMERCE: -

• Rapidly increasing Internet user base.

• Technology advancements have bridged the gap between buyers and sellers online.
• The emergence of blogs as an avenue for information dissemination and two-way communication
for online retailers and E-commerce vendors.
• Improved fraud prevention technologies that offer a safe and secure business environment and help
prevent credit card frauds, identity thefts and phishing.
• The young population finds online transactions much easier.

MODES OF CONDUCTING E-COMMERCE

Electronic commerce operates in all four of the major market segments:

i) Business to business,

ii) Business to consumer,

iii) Consumer to consumer and

iv) Consumer to business.

• BUSINESS TO BUSINESS: On the Internet, B2B (business-to-business), also known as e-biz and
is defined as the exchange of products, services, or information between businesses such as
between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
• BUSINESS TO CONSUMER: A transaction that occurs between a company and a consumer [5].
The term may also describe a company that provides goods or services for consumers.
• CONSUMER TO CONSUMER: Consumer-to-consumer (C2C) electronic commerce involves the
electronically facilitated transactions between consumers through some third party. A common
example is the online auction, in which a consumer posts an item for sale and other consumers bid
to purchase it; the third party generally charges a flat fee or commission.
• CONSUMER TO BUSINESS: In internet commerce, means through which consumers decide what
they want to pay, and the vendors decide whether to accept. When a consumer writes reviews, or
when a consumer gives a useful idea for new product development, then this individual is
creating value to the firm, if the firm adopts the input.

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Marketing Strategy
When launched, Amazon was first of its kind. When it was establishing its niche in the industry, websites
like mydala.com and Deals and You came as its core competitor. But working and focusing primarily on its
goal, within 2 years, Amazon succeeded in making 8-9 million user bases. They entered in top 100 Indian
websites in terms of traffic. To further increase their members and traffic, they started referral programs on
their websites in which a user was paid a fixed amount for successful sign up of a friend after receiving the
referral link to use Amazon. Other than this, they started “Get your first deal free” offer which got huge
response from the user side. This led to the strong brand value of Amazon. Side by side to these
strategies, affiliate marketing
campaign was also working. This campaign was launched after 8-9 months of its inception. They started
cost per lead (CPL) campaign in which the affiliates were paid Rs. 30 for each lead generated. But the
problem was that the margin was very less related to cost per acquisition that was very high, and the average
revenue generated on each transaction was approx. Rs. 50-100. But Amazon knew how to remain in the
market and for this they kept on promoting themself in any situation. After leads were generated, an
aggressive email marketing campaign was launched to reach out those leads. Every day on regular basis,
promotional emails were sent to the registered users. But it was not the end. The names like Myntra and
Flipkart were entering the market at the same time. So, to survive in the market, Amazon started to add more
products listing into their website. Soon Amazon ventured into a proper E-commerce site including
categories like electronics, fashion, kitchen appliances, apparels and many more. Finally in September 2011,
Amazon turned into a marketplace. Advertisements Flipkart launched its “Big Hundred crore Day” offer in
October 2014, and Amazon left no room for others to take its advantage. It introduced its own advertisement
along with Flipkart showcasing users the advantage to shop with them.

A FEW TECHNOLOGIES IN E-COMMERCE

Finally, with the intention to make the online browsing expertise much better, there are a lot of new applied
sciences like verify, Digi Scent’s smell and Touch Sense that have emerged over the final couple of years.
Even though smell and Touch Sense are very new applied sciences and they haven't been adopted via
the vast majority of web patrons but, they promise a purchaser-friendly future. verify is one science that
has been widely adopted at present, and for good purpose. According to a latest Berate study, over 50% of
on- line consumers stated that they might not make extra purchases from an online service provider
that delivered an object in a color that wasn't what they expected. That is the obstacle that Imation have
designed their verify procedure to resolve. This is how it works. When a consumer visits a verify-
enabled website online for the first time they're invited to take an internet centered survey that establishes
how their monitor,
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laptop, working procedure and browser control color. This understanding in then stored as a cookie in the
consumer's browser. Then, after they view a product snapshot, the Verify method reads the expertise within
the cookie and combines this with the profile of the scanner (or digital camera and so on.) that the service
provider used to supply the image to generate a color-correct picture within the consumer's browser.

The rapid growth of E-commerce in India Over the last two decades, rising internet and mobile phone
penetration has changed the way we communicate and do business. E-commerce is relatively a novel
concept. It is, at present, heavily leaning on the internet and mobile phone revolution to fundamentally alter
the way businesses reach their customers. While in countries such as the US and China, E-commerce has
taken significant strides to achieve sales of over 150 hundred crore USD in revenue, the industry in India
is, still at its infancy. However, over the past few years, the sector has grown by almost 35% CAGR from
3.8 hundred crore USD in 2009 to an estimated 30 hundred crore in 2020. I indicate that online travel
dominates the E-commerce industry with an estimated 70% of the market share. However, e-retail in both
its forms; online retail and marketplace, has become the fastest-growing segment, increasing its share from
10% in 2009 to an estimated 18% in 2019. Calculations based on industry benchmarks estimate that the
number of parcel check-outs in E-commerce portals exceeded 1000 million in 2019. However, this share
represents a mini scale proportion (less than 3%) of India’s total retail market but is poised for
continued growth in the coming years. If this robust growth continues over the next few years, the size of
the e-retail industry is poised to be 10 to 20 hundred crore USD by 2017-2020. This growth is expected
to be led by increased consumer-led purchases in durables and electronics, apparels and accessories,
besides traditional products such as books and audio-visuals.

E-commerce logistics models:

A radical shift from regular Logistics The strong emergence of E-commerce will place an enormous
pressure on the supporting logistics functions. The proposition of E-commerce to the customer is in offering
an almost infinite variety of choices spread over an enormous geographical area. Firms cannot
compete solely based on sheer volumes in today’s ever-evolving, information symmetric and globalized
world of E- commerce.
Instead, the realm of competition has shifted to delivering to ever-shortening delivery timeliness, both
consistently and predictably. Negligible or zero delivery prices, doorstep delivery, traceability solutions and
convenient reverse logistics have become the most important elements of differentiation for providers.
While the current logistics challenges relating to manufacturing and distribution of consumer products and
organized retail are well-known, the demands of E-commerce raise the associated complexities to a different
level. E-commerce retailers are well-aware of these challenges and are cognizant of the need to invest in

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CapitaLand operational assets.

mortar stores, to their very doorstep. However, the base of the e-retailing model is technology and logistical
solutions that facilitates the customer acquisition and the final ‘reach’ process. E-commerce further brings
to the table vagaries in customer orders accompanied with difficult scenarios such as free delivery,
order rescheduling, cancellation, returns and cash-on-delivery.

Additionally, an expected minimized turn-around-time (TAT) which will potentially lead to word-of-mouth
publicity, feedback and customer retention to the e-portal or website. An information network which shares
updated information with respect to inventory status, demand schedules and forecasts, shipment schedules
and promotion plans among all the stakeholders of the supply chain will form the backbone of an e-retailer.
Domestic Suppliers Master warehouse regional distribution centers Domestic suppliers’ Domestic suppliers
Parcel hub / sortation center E-fulfillment center Delivery Pick-up point International Suppliers Need for
different management of physical infrastructure The business model of the conventional retailers and E-
commerce providers differ significantly. The conventional infrastructure model relies on increasing depth
and breadth of coverage through several inventory nodes, warehouses and stocking points connected by
based on various other factors ranging from production cycles, nature and variety of the SKUs to even local
taxation laws. The conventional order point occurs at retail stores and static customer fronts located at the
end of the chain, and inventory requirements are predicted empirically based on several months or years of
past data. In fact, competing sales channels may also duplicate infrastructure, an indication of the typical
sub-ordination of the logistics function within the overall sales and distribution process. On the other hand,
E-commerce providers operating either through inventory-led or marketplace models, are entering an
entirely different paradigm of operations, where management of the supply chain is core to the business
of creating more business. With real-time demand and tight delivery expectations, the supply chain needs
to be built from the customer-end, with the fundamental difference being the proliferation of delivery
points and the need to move large number of orders of small parcels (one or two goods) across the
length and breadth of the country at an affordable cost. In India, foreign direct investment (FDI) within
the business- to-consumer (B2C) E-commerce segment is not allowed where as foreign investment in
the business-to- business (B2B) E-commerce segment is allowed. This means that inventory led e-
retailing model cannot attract FDI whereas market-place base de-retailing model can still attract FDI. Most
e-retailers have started practicing the market-place business model with suppliers storing on their behalf
and delivering as per the requirement and thus falling under the B2B category. The need to build
infrastructure for increased agility the key to success in E-commerce is an efficient last-mile network to
ensure time-bound delivery while maintaining agility in the logistics chain. The fundamental SKU at the
delivery point is a ‘parcel’, of varying shapes and sizes, while the pin-codes of the operation become the
determinant of the last-mile network model.
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• FDI in the inventory-led retail will also be an important factor in shaping up the future of the industry. In
the current scenario, global e-retailing giants like Rakuten and Alibaba are eyeing an entry into Indian e-
retail market. Amazon has recently announced a 2 hundred crore USD investment operating on marketplace
model. FDI allowance could be a vital factor in attracting significant investments resulting in better
infrastructure and robust supply chains.

• Evolution of taxation policies in the country will in a large way effect the way industries practice
warehousing. With uniformity in taxation laws across the country, e-retailers are expected to move closer
to consumption centers with an aim to address the duplicities in the logistics chain by removing the overlaps
in form of delivery and sortation centers which are traditionally closer to the consumption centers. It will
also result in uninterrupted access to the e-retailing market. In a recent case, a south Indian state had sent a
tax notice to e-retailers resulting in all e-retailers withdrawing services in the particular state because of
differing tax policies.

• The evolution of the existing logistics providers and more players entering the 3PL domain will result in
realization of the huge potential of the e-retailing industry. Major 3PL players (such as FedEx, DHL, UPS,
Gati, etc.) will have to gear up to the increasing demands of the e-retailing industry thereby helping in
rationalization of delivery costs and provide much needed balance between using captive logistics network
and 3PLs. To take the opportunity and help the e-retailing industry to overcome infrastructural bottlenecks,
resurrection of the Indian Postal Service can be a game changer. Collaborating the strong last-mile
capability with technological upgradation will ease the dependence on the other modes of
transportation. After taking a holistic view of the industry trends, E-commerce is poised for an exciting
period of exploding growth in a period of three to five years. This is expected to lead to substantial
investments in supporting infrastructure and innovative and game changing business models.

CONCEPT OF E-COMMERCE IN INDIA

1. Multi Product E-commerce:

Some internet portals provide almost all categories of goods and services in a single site; they are targeting
customers of every possible product or service. Indian E-commerce portals provide goods and services in
a variety of categories like apparel and accessories for men and women, health and beauty products, books
and magazines, computers and peripherals, vehicles, collectibles, software, consumer electronics, household
appliances, jewelry, audio/video entertainment goods, gift articles, real estate and services, business and
opportunities, employment, travel tickets, matrimony etc. Examples: www.indiayplaza.com,
www.thebestofindia.com, www.khoj.com, www.sify.com, www.rediff.com, www.indiatimes.com etc.
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 In automobiles, the portals are http://www.indiacar.com and http://www.automatindia.com, on these sites
we can buy and sell four wheelers and two wheelers new as well as old vehicles online. Some of the services
they provide are car research and reviews, online evaluation, technical specifications, vehicle insurance,
vehicle finance, dealer locator etc.

In stock and shares markets some of the sites are http://www.equitymaster.com. Some of the services
offered to registered members are online buying or dealing of stocks and share, market analysis and
research, company information, comparison of companies, research on equity and mutual funds, tracking
market trends etc.

In real estate, the portals like http://www.indiaproperties.com. This website facilitates online dealing in
real-estate, they offer outright purchase or lease of a property through their portal. They also provide
information on new properties as well as for resale. Some of the allied services are housing finance,
insurance companies’ architects and interior designers, property management consultant services etc.

In travel and tourism industry a major government of India portal is http://www.tourismindia.com. The
tourist destination sites are categorized according to the themes like eco-themes pertains to jungles, flora
Emerging Trends Of E-commerce In India: An Empirical Study and fauna, beaches of India, architectural
attractions, forts and places, hill resorts, adventure-trekking, mountain climbing etc. Other services offered
are passport and visa, travel and accommodation information, weather information, festival and fair dates,
shopping, tour operators etc. There are other sites like http://www.incredibleindia.org, it highlight the tourist
destinations of a specific region in India, which covers North East India.

In gift items, there are specific Indian websites making the act of gifting quick and easy to suit one’s
lifestyle. One such site is http://www.indiangiftsportal.com. The gifts are categorized as collectibles like
paintings and sculptures, toys and games, chocolates, flowers, wood-craft and metal craft, luxury items like
leather goods perfumes, jeweler boxes etc.

In case of hobbies, the most popular hobbies from time immemorial are reading books, listing music and
watching films. On the Indian website http://www.firstandsecond.com, one can buy more than 3,00,000
titles of books, cassettes, VCDs and DVDs. The books cover a wide range of topics such as business, art,
cookery, engineering, children’s stories, health, medicines etc. For music and videos, they are available
in English and other Indian languages to cater to the needs of public and the topics range from
devotional songs, old time favorites and pop etc.

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 In case of employment, two major portals like www.monsterindia.com and www.naukri.com are
instrumental in providing job seekers with suitable employment facility. The service for job seekers is free
and for employment they charge a nominal fee. Jobs are available online in fields, ranging from secretarial
to software development and from real estate to education.

EXTERNAL CHALLENGES:

External forces impact how E-commerce companies plan their growth strategy and provide seamless
customer experience onsite and post transaction

Product and Market Strategy:

E-commerce companies have to address issues pertaining to rapidly evolving customer segments and
product portfolios access information on market intelligence on growth, size and share manage
multiple customer engagement platforms focus on expansion into new geographies, brands and
products and simultaneously tackle a hypercompetitive pricing environment.

Customer and Digital Experience:

Companies have to provide a rich, fresh and simple customer experience not geared towards discovery,
manage inconsistent brand experience across platforms; manage proliferation of technologies; and handle
time to market pressure for new applications. In the recent past, social media has become more influential
than paid marketing.

Payments and Transactions:

E-commerce companies may face issues around security and privacy breach and controlling fictitious
transactions. Further, RBI restrictions for prepaid instruments or E-Wallets act as impediments. From a
transactions perspective cross border tax and regulatory issues and backend service tax and withholding tax
can have serious implications.

Fulfillment:

Companies will need to check if the physical infrastructure gets affected by the internet speed. Also, the lack
of an integrated end to end logistics platform and innovation focused fulfillment option could cause delivery

issues. Challenges around reverse logistics management and third-party logistics interactions could also act
as barriers to growth

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INTERNAL CHALLENGES:

Internal forces impact how E-commerce companies can organize to drive and sustain growth. Emerging
Trends of E-commerce in India: An Empirical Study

Organization Scaling:

E-commerce companies will have to make sure organization design keeps pace with the rapidly evolving
business strategy, along with fluid governance, strong leadership and management development. From a
growth perspective, identifying acquisition opportunities, fund raising and IPO readiness becomes
necessary. From a technology perspective, it is important to transform IT as an innovation hub and address
the lack of synergy between business, technology and operations functions of the enterprise.

Tax and Regulatory Structuring:

Companies will need to address issues around sub optimal warehouse tax planning imbalance between FDI
norms vis-à-vis adequate entity controls, inefficient holding IPR or entity structure and international tax
inefficiencies. Future challenges include the new companies act, policy on related party transaction pricing
and the uncertainty around GST roadmap.

Risk Fraud and Cyber Security

From a risk perspective E-commerce companies could face issues around brand risk, insider threats and
website uptime. Issues around employee vendor nexus, bribery and corruption make companies vulnerable
to fines. Cyber security also raises some concerns around website exploitation by external entities.

Compliance Framework:

E-commerce companies have to comply with several laws, many of which are still evolving. Potential
issues around cyber law compliance, inefficient anti-corruption framework, legal exposure in agreements
or arrangements, indirect and direct tax compliance framework and rules and regulations could pose
problems. Uncertainty around VAT implications in different states due to peculiar business modes could
cause issues.

14
 OPPORTUNITIES OF E-COMMERCE

At present E-commerce is the most preferred sector in India and it's moving towards the No. 1 destination.
Due to the rising of E-commerce sector, and due to rising business, sometime customer going to disappear
with the service, and as well as E-commerce sector become the highly employable sector. Through the E-
commerce platform, the customer can get our daily needs solution under one roof. It’s maybe domestic or
global product.

◻ Strategies for growth

The growth rate of E-commerce in India is mentionable and higher than other countries. In terms of E-
commerce, it places the third position in the world but due to lack of proper IT infrastructure, logistic
support, and financial infrastructure it faces challenges for its development. The smartphone user and
internet subscriber in India are growing rapidly which stimulates the E-commerce growth in India. Now E-
commerce traders provide a wide range of services from daily necessities to logistics which help them to
spread the E-commerce business all over in India.

◻ Low inventory cost

Inventory cost is an important element for maintain business. E-commerce t r a d e r s is getting
benefit for reducing their inventory cost due to living as a big country like India. It helps them to minimize
the cost by storing the product at any places in India. It also provides a big opportunity for E-commerce
traders to provide just-in-time (JIT) services and forecast the demand of the product more accurately.

◻ Better customer service

E-commerce is a best approach to provide maximum level customer services in terms of low cost, quality
products, and just in time. Customer satisfaction is an asset for businessman to increase their business
growth. Best level customer satisfaction can be given by E-commerce business. In this business, both traders
and customers get benefit from it. It is an alternative system of traditional business which provides an
opportunity to deal their business from distant places and without physical interaction by saving money,
cost and minimizing risk.

◻ Reducing distribution costs

Since E-commerce is based on virtual market i.e., internet, so it reduces distribution cost and time by
providing just-in-time (JIT) services. It is a great opportunity for buyer and sellers to deal their business
by sitting their own places. It helps to avoid all kinds of risk. Generally traditional business requires a
mentionable amount for its distribution cost, but E-commerce is an alternative system of traditional business.

15
◻ Globalizing business
E-commerce is a business platform which can provide the same kind of services to its customer crossing
the country’s boundary. The people can easily buy products from an online shop which is situated within
the country or from abroad by online payment through debit or credit card, m-cash, and other related
methods. It also helps to market the products easily to mass people over the world within a short time. India
is a country which is favorable for globalizing the E-commerce business as well as crores of Indian people.

◻ Quick marketing of products

Since E-commerce is mainly based on internet and connected with the virtual arena, so it is a big opportunity
for E-commerce trader to do marketing to a large number of people through various social networking site
and websites. It is a platform to explain all details about the product to its consumers. E-commerce is
providing a complete solution for purchasing the products from online and pay online by avoiding so many
types of hassle and risk. It provides an opportunity to reach the product information to people of the
domestic country as well as abroad within a short time.

◻ Integration of E-commerce
Integration among various stakeholders is an essential tool for making the business easily. E-commerce
business is usually connected to the other service providers like internet service provider, government
agency, commercial bank, the central bank, payment gateway, businessman, and business cooperative
society for maintaining the smooth running of E-commerce b u s i n e s s. Coordination is necessary
among all stakeholders. Integration should be done by including E-commerce in the academic
syllabus, including latest business-related technology to E-commerce, coordination among E-
commerce businessman, university professors, expert, IT experts and government agency for proper
implementation and enhancement of E-commerce in India.

16
PRESENT CHALLENGES FACING E-COMMERCE

Speaking of barriers, there are a variety of them that need to be uprooted before E-commerce can compete
with average commerce. The biggest quandary within the course of development of E-commerce is that
the customer's senses are limited to seeing and listening to the product. The second largest main issue that
E-commerce has been dealing with over the past few years is that of safety. Average customers and retailers
are still paranoid about conducting industry online. In step with Hal Lovey, vice chairman of global
marketing and Partnerships for Essonite, "despite all the noise about E-commerce, which is massive, firms
still need to preserve their old business practices: can I believe who I am buying from? Who am I doing
trade with? What is their trading history? Am I obeying the legislation? Will I obtain the items as particular
on reveal and who do I method if I’ve a trouble?". According to eMarketer. Com, "70% of US shoppers are
worried about on-line security; this discourages shoppers from utilizing bank cards to buy online (Payment
One)". Additionally, according to e-marketer. Com, in December 2001, 91% of web sites gathered
individual understanding and in April-May 2001, 68% of US internet customers were worried that
transactions will not be at ease and other organizations and individuals would acquire entry to their
personal expertise.

According to Rawat, ASSOCHAM Secretary General as per the survey in India 75% youth, in the age of
15-34 years, using online services or user in India, and India is an example of the youngest demography
globally. As per given age distribution, this may expect to be a continuing tendency in coming years. The
growth among categories focused on younger generations in last one year, it is not very surprising to
see. It is observed that maximum online shoppers in India are youth, and their age is between 15-24
years including females and males both. Recently in India, increasing of internet subscribers is beneficial
for E- commerce growth in India.

Customers consider online transactions or turnover and safety to be the second biggest challenge faced
by E-commerce companies in India. Present days news about online fraud, tricky coupons, fake adds, spam
e-mail and scam of credit card information being stolen has dynamic
customer confidence in this system. As per present scenario, most of the customers in India prefer to buying
stuff on (COD) cash on delivery basis. Due to lack of confidence security system, most of the customer
using COD service. Developing Electronic Commerce solutions successfully across the Organization means
building reliable, scalable systems for:

POSSIBLE CHALLENGES OF E-COMMERCE

17
Poor Infrastructural Problems Infrastructure is an essential part of E-commerce business. It is not possible
to continue the business without a good infrastructure. The Internet is an essential tool for E-commerce

18
 ensure it. Infrastructure is not only essential for the trader but also essential for the buyer. The major E-
commerce infrastructures are available computers, mobile and electronic devices of buyer and seller,
available internet service providers and internet penetration rate, quality and speed of internet connectivity,
internet security, and online payment gateway. Now the traders of various part of India faces poor E-
commerce infrastructure, though the penetration rate is 60% in urban areas and 20.26% in rural areas.
The growth rate of penetration is increasing day by day. But the logistics and supply chain infrastructure and
financial infrastructure are not up to mark for conducting E-commerce business in India.

Lack of proper Cyber Laws

Cybersecurity is a vital tool for maintaining trust in the E-commerce business. The appropriate cyber law
is necessary to maintain the cyber security in the country. So, it is not possible to conduct E-commerce
business smoothly without implementing timely and appropriate cyber law in India. But cyberlaw is not
up to mark in India, it needs reform and makes law according to the types of offense for its proper
implementation. The cyber law should be standard so that individual property rights, the privacy of data
and content, data protection should be reserved with its commercial and criminal.

◻ Lack of Privacy and Security

The privacy and information of buyer and trader should be secure for maintaining a trustworthy business
relation. Because sometimes data may be used by the criminal groups for hacking customer and
trader’s money which decreases the trust of E-commerce business. Lack of privacy and security is a big
challenge for E-commerce business in India. Privacy has been and continues to be a significant issue of
concern for both current and prospective electronic commerce customers. With regard to web interactions
and E-commerce, the following dimensions are most salient: Privacy consists of not being interfered with,
having the power to exclude individual privacy is a moral right. Privacy is a desirable condition with respect
to possession of information by other persons about him/herself on the observation/perceiving of
him/herself by other persons. In addition to privacy concerns, other ethical issues are involved with
electronic commerce. The Internet offers unprecedented ease of access to a vast array of goods and services.
The rapidly expanding arena of "click and mortar and the largely unregulated cyberspace medium have
however prompted concerns about both privacy and data security. Manufacturers Competing with
Intermediaries Online Disintermediation, a means eliminating the intermediary such as retailers,
wholesalers, outside sales reps by setting up a website to sell directly to customers Disintermediation
include (1) music being downloaded (2) directly from producer’s authors distributing their work from
their own Web sites or through writer co-operatives. Dinosaurs - “Dinosaurs” isa term that refers to
executive changed our lives. When an executive speaks in terms of the Internet being the “wave of
the future”.
19
◻ The confidence of Customers for Payment and Tax Related Issues
Most of the people of the rural areas are not aware of the tax-related issues. As a result, it creates some
problems in the E-commerce business. People are anxious about the products which are available in E-
commerce business because of the price which integrated with tax. Tax administration should be
cooperative to put the tax in a way to avoid double taxation. Another issue is related to the payment system.
People do not want to use their credit card for online payment to avoid fraudulent activities. Indian E-
commerce market can easily gain success by reducing the tax on consumer goods.

◻ Lack of Digital Illiteracy

Digital illiteracy is a top requirement for adopting E-commerce. But in India, the digital literacy rate
is not satisfactory which creates a barrier for smooth development of E-commerce in India. Though E-
commerce requires a group of top-level IT professional for software development. Infrastructure
development, customization of software according to consumer’s demand, and negotiate global level E-
commerce service providers but top-level IT professionals are interested to go abroad for personal gain as
a process of brain drain. So, it is a major challenge for a country like India to engage his IT expert and
researcher to engage spreading the E-commerce market. Besides this, an E-commerce friendly curriculum
is necessary to develop new professionals and spreading digital knowledge.

◻ Virus Problem
A computer virus is a threat to E-commerce. There are thousands of viruses’ manufacturer who continuously
develop a various virus to steal the information of various levels of people. Indian E-commerce is not out
of the influence of the harassment. A computer virus is a tough problem for execution of E-commerce in
India. Many buyers and traders are worried about a computer virus, as a result, their trust level on E-
commerce are very low. The government should take initiative to implement the antivirus related program
for the smooth running of E-commerce in India.

◻ Localization in-terms of place and language

India is a big country in terms of population and area. So, E-commerce business in one province is not
enough to deliver their product to other areas because of carrying cost, time and other related risks. So,
localization is necessary to deliver the product timely which can stimulate the E-commerce business easily.
But unfortunately, it is not up to the mark in India. Internet-based E-commerce has besides, great advantages,
posed many threats because of its being what is popularly called faceless and borderless.

◻ Consumer’s Perceptions

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 Consumer’s perception is an important element for E-commerce business. E-service replacements may
seem unfamiliar, artificial and non-authentic in comparison to traditional service processing methods.
Consumers may believe that new Internet-based processing methods expose them to new potential risks the
dangers of online fraud, identity theft, and phishing swindles means schemes to steal confidential
information using spoofed websites, have become commonplace, and are likely to cause alarm and fear
within consumers.
◻ Unrealistic competition
The vibrancy of the Indian startup ecosystem over the past couple of years has channeled a lot of investment
into the E-commerce sector. The long-term prospects for E-commerce companies are so exciting that some
investors are willing to spend irrationally high amounts of money to acquire market share today. Naturally,
the Indian consumer is spoiled for choice. However, this trend has reversed as investors are getting worried
about slipping further down a slippery slope. While this article focuses one-commerce challenges in India,
an intrinsically one-sided topic, it is important to note that E-commerce giants are increasingly attracted to
India. Cross-border E-commerce to India is growing, and many large international players are also
making a significant investment in setting up shop in India.

Most of the companies moving towards the digitalization, it's growing rapidly an important to realize, where
consumers perceive the alternative of the digitized e-service. Consumers may trust that new Internet-based
technology and expose them to new potential risks the dangers of the online bluff, identity theft and beside
many, benefit offered by the education a number of challenges have been possess to the recent learning
view. E-commerce integration assures coverage of all critical aspects of E-commerce, but
it also has several obstacles.

In addition to the E-commerce, many business faculty fellows may not wish to add E-commerce subject
to their courses primarily because of their own lack of comfort with knowledge and technology related
subject’s materials to existing business, courses can overweigh faculty and students alike trying to anger
with the extra subject matter in courses already moist with the required information. Finally, this perspective
requires a great deal of coordination during faculty and disciplines in the business trade to ensure reasonable
coverage of E-commerce education.

ADVANTAGES OF E-COMMERCE

Technology and Market Key market and technology trends that we believe will define E-commerce in
near future include: Brand loyalty Price has been the dominating factor in the Indian market and the
customer is not hesitant in changing brands frequently to avail the lucrative offers presented by competing
21
 brands. There is a lot that E-commerce players in India would have to do to make their customers feel
special to retain promotions and deals. Knowing what your customers want and offering them accordingly
can possibly drive this, which is possible by using big data techniques to predict consumer preference and
behavior.
◻ Logistic Shipment
Retailer’s own logistics have been a major issue for online retailers in India, which leads them to build
their own strategies in the absence of established systems to handle cash-on-delivery and same-day
shipments. Online market leaders are choosing to build their own logistics such as Flipkart, who has
launched kart that is open to its rivals as well. The Indian market is yet not comfortable to adopt payments
through credit or debit cards. Cash-on-delivery accounts for up to 60 percent of transactions, according to
Internet and Mobile Association of India and audit firm KPMG. Overdependence on the cash-on-delivery
mode of payment remains worrisome as the transactions add about 3 percent additional costs.
Also, the additional processes required for cash-on-delivery orders, longer payment cycle, higher instances
of returns and associated costs are hurting margins.

◻ Experience of Customers
Improving customer experience with varied offerings and options with the advent of technology, online
retailers are devising attractive delivery options such as same-day delivery or delivery within an hour to
door of consumers which gives advanced customer services. To further improve customer experiences, we
might also see the adoption of international practices such as digital or experiential stores and showrooms,
pop-up and fulfillment stores and drones that will fascinate the Indian market. The other technologies that
will affect these trends and help shape the E-commerce business include:

◻ Applications of Big data

To gain, retain and attain more customers, online retailers would have to leverage technology to the fullest,
and by developing strategies through analytics produced using big data will help in making customers feel
special and increase brand loyalty. With the increasing adoption and use of Smartphone’s, businesses are
able to collect a large amount of data on consumers, which can be further utilized to do target-based
marketing and advertising.

22
◻ Application of Mobile
Brands have taken the mobile advertising route and are gradually picking up. Online retailers have realized
the potential increase of online shoppers through their mobile phones in future. And as consumers grow
more comfortable with using mobile devices for browsing and shopping, they are now more open to getting
messages from brands via their mobiles.

Fixing the mobile clicks is imperative as an unresponsive design may lead to the customer abandoning
the site in a few seconds causing a low conversion rate and poor return on investments.

◻ Using social media

Another important consideration is the social aspect and marketers have realized its importance very well.
Product and service feedback via social media channels have an impressionable effect on the minds of the
larger customer base Looking on the brighter part nonetheless, E-commerce certainly has numerous
advantages over common commerce, the quantity one advantage being comfort of use. The person can
browse on-line stores, compare costs and order merchandise sitting at residence on their pc. According to
Forrester, 37 percent of on-line patrons use purchaser provider more from internet retailers than normal
retailers because of its knowledge for ease of use and speedy response occasions. "Once nice proactive
consumer service is in situation, retailers ought to construct their brands around the promise of a pleasant
expertise," said Forrester's Christopher Kelley. "This implies now not handiest advertising a call middle
but additionally bragging about rapid response occasions and educated service reps". Dell, for example
has adopted the same method to selling their merchandise each on-line and offline. This, nevertheless, has
tested worthwhile for the enterprise, on account that it helped them decrease on warehousing fees.

DISADVANTAGES OF E-COMMERCE

The main disadvantages associated with E-commerce are the following: Strong dependence on information

and communication technologies (ICT).

Lack of legislation that adequately regulates the new E-commerce activities, both nationally and

internationally.

Market culture is averse to electronic commerce (customers cannot touch or try the products); The users’

loss of privacy, the loss of regions and countries’ cultural and economic identity; Insecurity in the conduct

of online business transactions.

23
 NOWADAYS E-COMMERCE FACING PROBLEMS

Talking of limitations, there are plenty of them that need to be uprooted earlier than E-commerce can
compete with common commerce. The largest concern within the course of advancement of E-commerce
is that the purchaser's senses are restrained to seeing and hearing the product. The second greatest situation
that-commerce has been going through during the last few years is that of safety. Traditional customers
agents are still paranoid about conducting industry on-line. In line with Hal Lovey, vice chairman of global
advertising and Partnerships for SGS on SITE, "despite the entire noise about E-commerce, which is
tremendous, firms still have to keep their old industry practices: can I believe who I’m buying from? Who
Ami doing business with? What's their trading historical past? Am I obeying the law? Will I receive the
items as exact on reveal and who do I approach if I have a predicament?". In keeping with eMarketer. Com,
"70% of US purchasers are involved about online safety; this discourages purchasers from making use of
Dr. P. Devaraj, IJECS Volume 05 Issue 12 Dec., 2016 bank cards to buy on-line (payment One)". Also, in
line with-marketer. Com, in December 2001, ninety-one% of websites accrued personal understanding and
in April- could 2001, sixty-eight% of US web users have been worried that transactions is probably not
relaxed and other firms and contributors could acquire entry to their individual knowledge.

ECONOMIC IMPACT OF E-COMMERCE

◻ Disintegration of omnirange online retail

The previous decade was the time of huge retail platforms consolidating the entire array of products and
commodities. However, the independent sources and custom E-commerce solutions are starting to build the
unique experiences noninferior to the huge enterprises. The retail stores specializing in the proprietary
product lines with expertise in a certain niche will nudge the existing online retail giants.

◻ Expansion of E-commerce sales performance

As of now, sales from the E-commerce segment including website retail and purchases in mobile apps,
count 12% of the US market sales. The advances in technologies, new marketing strategies, and user
experience of-commerce platforms allow us to predict the further rise in share of online retail to 40 and
even 50% in the next 10 years. This means the brands that embrace E-commerce leader status today will
become a force to be reckoned with in future.

◻ Augmented & virtual reality in E-commerce

The topic of AR and VR technologies have been buzzing for quite some time. Some of the major brands
have already implemented augmentation into their sales models. If we are talking about the increase of
online sales, this goes in hand with the substitution of the customer’s ability to try the product before buying.
This will also mean the more immersive personalized experience for every user.
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◻ Now talking about the impact on consumer

Enabling people to enabling people to shop online has a Massive positive impact on consumer throughout
the world consumer have become more important than ever before and had a greater Joy of goods
available to them at much lower price than they would be in show local Store due to love fact that they
can shop anywhere in the world and take advantage of currency exchange rate and economic difference
throughout the world.

◻ Direct communication direct communication with customer

One thing one thing you could say about using E-commerce as mean to sell your product could be that some
customer maybe we'll of not having that face-to-face contact with sales representative this could be particular
torrent with the older generation who are not digital native and these there is a ridiculous to purchase online
as its take away from try before you buy element.

People who people who are confident using the web to order can communicate online and our Reliance on
face-to-face contact is the does cut man hours the need of direct contact with consumer as product are
ordered pant and shift the communication takes place online and the customer for my contact and try before
they buy researching the product reviews for individual product to see what order have.

◻ Lower price

E-commerce is the best E-commerce is the best example of lower price customer can easily compare the
product to their offline market Merchant. E-commerce completes tried to communicate with customer with
the help of so many online tools like emails.

They can communicate they can communicate with customer using email newsletter informing them of
special offers and discounted stock that they might be interested in again this empowers customer and keep
them in form of the latest deal that may be part of interest to them

E-commerce has altered the practice, timing, and technology of B2B and B2C markets, affecting everything
from transportation patterns to consumer behavior.

Thanks to the development of electronic commerce, the most basic of economic transactions— the buying
and selling of goods—continues to undergo changes that will have a profound impact on the way companies
manage their supply chains. Simply put, E-commerce has altered the practice, timing, and technology of

25
business-to-business (B2B) and business-to-consumer (B2C) commerce. It has affected pricing, product
availability, transportation patterns, and consumer behavior in developed economies worldwide.

B2B E-commerce leads the way

Business-to-business electronic commerce accounts for the vast majority of total E-commerce sales and
playas leading role in global supply chain networks (see Figure 1). In 2003, approximately 21 percent of
manufacturing sales and 14.6 percent of wholesale sales in the United States were E-commerce related; by
2008 those percentages had increased to almost 40 percent for manufacturing and 16.3 percent for wholesale
trade. One reason why B2B E-commerce is more sophisticated and larger in size than director- consumer
E-commerce is that B2B transactions developed out of the electronic data interchange (EDI) networks of
the 1970s and 1980s.

The steady growth in business-to-business E-commerce has changed the cost and profit picture for
companies worldwide. At the microeconomic level, growth of B2B E-commerce results in a substantial
reduction in transaction costs, improved supply chain management, and reduced costs for domestic and
global sourcing. At the macroeconomic level, strong growth of B2B E-commerce places downward pressure
on inflation and increases productivity, profit margins, and competitiveness.

Double-digit growth for B2C

E-commerce retail has become the fastest growing trade sector and has outpaced every other trade and
manufacturing sector since 1999, when the U.S. Census Bureau started collecting and publishing data on
E-commerce. That year, E-commerce retail sales represented less than 1 percent of total U.S. retail sales.
In 2003 that number climbed to a little less than 2 percent; by 2008 it had grown to 3.6 percent, and by the
fourth quarter of 2010 B2C E-commerce reached 4.4 percent of total U.S. retail sales. In dollar terms, E-
commerce retail revenue currently stands at approximately US ₹165 hundred crore, considerably less than
the US ₹3.9 trillion that represents the total U.S. retail market.

During the "Great Recession," which lasted from December 2007 through June 2009, manufacturing,
wholesale, and bricks-and-mortar retail sales took a heavy beating. By the fourth quarter of 2010 they still
had not fully recovered, even though U.S. gross domestic product (GDP) and personal spending (adjusted
for inflation) had surpassed their previous peaks seen in late 2007.

Retail E-commerce, by contrast, weathered the recession relatively well, albeit with considerably slower
growth than had been seen prior to the financial crisis. In the first quarter of 2002, retail E-commerce
experienced quarterly, year-over-year growth of about 42 percent. On the eve of the recession, that rate
dropped to a still-respectable 18 percent. Quarterly sales continued to grow until the latter part of 2008, and
in the fourth quarter of 2009 sales surpassed the previous peak.

26
It's important to note here that a large portion of B2C sales come through mail-order houses, many of which
have an online presence as well as traditional storefront outlets. Contrary to popular opinion, mail-order
houses still have a very strong online presence, and until just recently their sales outperformed online-only
retailers.

Economic, behavioral changes

The changes that B2C E-commerce has sparked arguably have had a more significant impact on the
economy and on buyers' behavior than has B2B E-commerce. In the past, when consumers wanted to make
purchases, they had to set aside time to shop during certain hours of the day, or they had to read through
catalogs sent to them by mail-order houses. Today, many consumers can simply use their computers— and
now smart phones or other portable electronic devices—to shop online. Buyers and sellers that engage in
E-commerce retail trade are no longer restricted by store hours, geographic marketing areas, or catalog
mailing lists. Witha few simple clicks they can gain access to a variety of goods 24 hours a day, seven days
a week.

The characteristics of retail E-commerce merchandise also have changed significantly over the past decade.
Back in 2000, computer hardware was the most common type of merchandise sold over the Internet. Today,
the variety of merchandise is extremely diverse, and shoppers can buy almost anything online.

Online shoppers have benefited in other ways. The growth of E-commerce retail sales has reduced
consumers' search cost, placed downward pressure on many consumer prices, and reduced-price dispersion
for many consumer goods. But this has led to a substantial decrease in the number of small companies
operating in certain industries, as they tend to be less involved with E-commerce. Larger businesses, most
notably retail book outlets, new automobile dealerships, and travel agents, are better able to compete in this
new market environment.

The extremely rapid growth of E-commerce retail sales has provided a major boost to residential parcel
delivery services. That's because online merchandise purchases involve some form of residential delivery
by a third-party vendor such as FedEx, UPS, or the U.S. Postal Service. In addition, there appear to be
considerable synergies related to B2C parcel and heavier freight volumes—parcel industry insiders have
observed that businesses with strong E-commerce related B2C parcel shipment volumes often have stronger
B2B shipment volumes than those that do not engage in B2C E-commerce.

The internet has changed many aspects of our lives, including the way we communicate with each other,
how we keep our finances. It has made a profound impact on society. Now we shop online from our houses.
This forces retailers to open online division.

27
 IMPACT OF E-COMMERCE

Product promotion E-commerce enhances promotion of products and services through direct, attractive and
interactive contact with customers. New sales channel E-commerce creates a new distribution channel for
existing products. It facilitates direct reach of customers and the bi-directional nature of communication.
Direct savings the cost of delivering information to customers over the Internet results in substantial savings
to senders when compared with non-electronic delivery. Major savings are also realized in delivering
digitized products versus physical delivery (Turban, 2010). Reduced cycle time the delivery of digitized
products and services can be reduced to seconds (Turban, 2010). Also, the administrative work related to
physical delivery, especially across international borders, can be reduced significantly, cutting the cycle
time by more than 90 percent.

MARKET SIZE AND GROWTH

India's E-commerce market was worth about ₹3.8 hundred crore in 2009, it went up to ₹12.6 hundred crore
in2013. In 2013, the e-retail segment was worth US₹2.3 hundred crore. About 70% of India's E-commerce
market is travel related. According to Google India, there were 35 million online shoppers in India in 2014
Quarter 1 and is expected to cross 100 million marks by end of year 2016. Compound Annual Growth
Rate (CAGR) vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in
terms of sales.

Propelled by rising smartphone penetration, the launch of 4G networks and increasing consumer wealth, the
Indian E-commerce market is expected to grow to US₹ 200 hundred crores by 2026 from US₹ 38.5 hundred
crores in 2017 Online retail sales in India are expected to grow by 31 per cent to touch US₹ 32.70 hundred
crores in 2018, led by Flipkart, Amazon India and Paytm Mall.
During 2018, electronics is currently the biggest contributor to online retail sales in India with a share of 48
per cent, followed closely by apparel at 29 per cent.

INVESTMENTS/ DEVELOPMENT
Some of the major developments in the Indian E-commerce sector are as follows:

◻ Flipkart, after getting acquired by Walmart for US₹ 16 hundred crores, is expected to launch more offline
retail stores in India to promote private labels in segments such as fashion and electronics. In
September 2018, Flipkart acquired Israel based analytics start-up Upstream Commerce that will help the
firm to price and position its products in an efficient way.
◻ Paytm has launched its bank - Paytm Payment Bank. Paytm bank is India's first bank with zero charges on
online transactions, no minimum balance requirement and free virtual debit card

28
◻ As of June 2018, Google is also planning to enter into the E-commerce space by November 2018.India is
expected to be its first market.
◻ E-commerce industry in India witnessed 21 private equity and venture capital deals worth US₹ 2.1hundred
crore in 2017 and 40 deals worth US₹ 1,129 million in the first half of 2018.
◻ Google and Tata Trust have collaborated for the project ‘Internet Saatchi’ to improve internet penetration
among rural women in India

Government initiatives
Since 2014, the Government of India has announced various initiatives namely, Digital India, Make in India,
Start-up India, Skill India, and Innovation Fund. The timely and effective implementation of such programs
will likely support the E-commerce growth in the country. Some of the major initiatives taken by the
government to promote the E-commerce sector in India are as follows:

◻ In order to increase the participation of foreign players in the E-commerce field, the Indian Government
hiked the limit of foreign direct investment (FDI) in the E-commerce marketplace model for up to 100 per
cent (in B2B models).
◻ In the Union Budget of 2018-19, government has allocated Rs 8,000 crore (US₹ 1.24 hundred crore) to
Bharat Net Project, to provide broadband services to 150,000-gram panchayats
◻ As of August 2018, the government is working on the second draft of E-commerce policy,
incorporating inputs from various industry stakeholders.

Achievements
Following are the achievements of the government in the past four years:

◻ Under the Digital India movement, government launched various initiatives like Udaan, Umang, Start-up
India Portal etc.
◻ Under the project ‘Internet Saatchi’, the government has influenced over 16 million women in India
and reached 166,000 villages
◻ Udaan, a B2B online trade platform that connect small and medium size manufacturers and wholesalers
with online retailers and also provide them logistics, payments and technology support, has sellers in over
80 cities of India and delivers to over 500 cities.
◻ According to the UN’s governance index, India has jumped 11 positions to 107 in 2016 from 2018in 2014.
◻ The government introduced Bharat Interface for Money (BHIM), a simple mobile based platform for
digital payments.

29
 RECENT TRENDS IN INDIAN E-COMMERCE INDUSTRY

India is a massive E-commerce marketplace now with every age group comfortably transacting online –
more often preferring shopping online instead of visiting offline stores for a bigger gamut of choices
and offers.
E-commerce industry is growing at an astounding rate in India and is expected to account for 1.61% of the
global GDP by 2018. According to a report by Forrester, India is set to become the fastest growing market
in the Asia-Pacific region with an expected growth rate of over 57% between 2012 and 2016.

1. Men in India shop 3X more than women

While women continue to dominate the in-store markets, men with disposable incomes have taken it upon
themselves to play the larger role in online shopping.

2. Cash-On-Delivery (COD) remains the most preferred online payment method.

We Indians love the Cash-On-Delivery option; it gives us more control over online transactions since we
don’t have to pay until the product is at our doorstep. COD option during checkout has also been proven to
boost impulse purchases.

3. 60% of online purchases happen during business hours. (9AM-5PM)

This proven trend is a myth-buster that shows how integral a part online shopping has become in our day-
to- day lives. Marketers can use this fact to schedule their promotions across advertising channels
accordingly.

4. The Rural Pitch

E-commerce companies would emphasize more on attracting the customers from rural areas. Along with
this, traditional business houses such as Tata Group and Reliance Industries will enter more aggressively
into the E-commerce business.

5. Smartphone Apps:

However, users browse products on desktops or laptops, they prefer transacting via smart phones because
of their faster linkages to payment gateways. Smartphone E-commerce apps are also preferred as they offer

company. Further apps are also an opportunity to curate targeted promotions based on browsing or shopping
cart history.
30
OPPORTUNITIES AND CHALLENGES

Backed by increased online user base and mobile phone penetration, Indian E-commerce has seen
impressive growth in the last few years. Considering India’s demographic dividend and rising internet
accessibility, the sector is slated to scale greater heights. Although India’s overall retail opportunity is
substantial, the sector is beset with some serious challenges. We take into the current E-commerce landscape
and the sector’s key drivers & challenges. Internet penetration is one if the factors affecting the growth of
E-commerce.

FUNCTIONS OF E-COMMERCE

Communication function Aimed at the delivery of information and/or documents to facilitate business
transactions.
Example: E-Mail.

Process management function Covers the automation and improvements of business processes.
Example: networking two computers together.

Service management function Application of technology to improve the quality of service. Example: Federal
Express website to track shipments and schedule.

Transaction capabilities Provides the ability to buy/sell on the internet or some other online services.
Example: Amazon.com.

31
 SCOPE OF STUDY

In the current Information Technology scenario various organizations and companies all over the world are
relying heavily on access to information in the electronic medium. The internet is the major source of
information in knowledge-based societies. The last decade in India has witnessed a major Information
Technology revolution. An example growing use of Internet in a very short span of time the use of
computers at offices and homes has become a reality. E-commerce has helped the banking, financial
institutions and industry to automate their business process and minimize the transactional days. In the
industrial and banking the performance is measured in terms of processing speed and customer satisfaction
with the application of computer it has become possible to clear the recurring dues like payment for
electricity bills, telephone bill, shopping bill by instructing the bank for payments from customers account
online fund transfer from one account to another in the bank has also become possible in the bank’s Credit
card, Debit card, ATM, E-cash, E-cheque it has become possible for customers to made a payment or to
withdraw cash from the bank round the hour. E-commerce has proved to be extremely useful for education
and research. It is not too far from now when people used to collect the relevant information in the Library
Journals and books. A lot of time used to be wasted in finding the relevant information source with the help
of Information Technology or popularity of World Wide Web and easy accessibility to the Internet, it now
takes a few seconds to find any designed information.

E-commerce is a new phenomenon that has resulted from the rapid commercialization of the Internet in the
recent years. Strictly speaking the definition of what constitutes E-commerce changes as new forms of
doing business on the Internet in the rapid commercialization of the Internet in the recent years.
Strictly speaking the definition of what constitutes E-commerce changes as new forms of doing
business on the Internet emerge. For the purpose of this thesis “E-commerce is much more than buying
and selling on the Net.

It is about doing business electronically both within enterprises and externally, using computer networks
and mobile communication.” There are many forms of E-commerce. Business to Business, Business to
Consumer, Consumer to Business and Business to Government E-commerce is “predominantly a business
issue, enabled by Information Technology” The ability to do business electronically has resulted in the
development of new business models at a rapid pace, which models will prevail is still being decided. It is
up to Government to facilitate E-commerce by providing the necessary infrastructure, providing the
basic communications connectivity to allow people to access the Internet. The proposed duration for the
study is two years each company from 2008 and 2009. It is to identify the different problems and
prospects of E- commerce in the concerned places in Maharashtra during the period.

32
Key market and technology trends that we believe will define E-commerce in near future include Brand
loyalty Price has been the dominating factor in the Indian market and the customer is not hesitant in
changing brands frequently to avail the lucrative offers presented by competing brands. There is a lot that
E-commerce players in India would have to do to make their customers feel special to retain them, as the
loyalty erodes fast when the shopper is confronted with promotions and deals. Knowing what your
customers want and offering them accordingly can possibly drive this, which is possible by using big data
techniques to predict consumer preference and behavior.

Logistic Shipment
Retailer’s own logistics have been a major issue for online retailers in India, which leads them to build
their own strategies in the absence of established systems to handle cash-on-delivery and same-day
shipments. Online market leaders are choosing to build their own logistics such as Flipkart, who has
launched kart that is open to its rivals as well. The Indian market is yet not comfortable to adopt payments
through credit or debit cards. Cash-on-delivery accounts for up to 60 percent of transactions, according to
Internet and Mobile Association of India and audit firm KPMG. Overdependence on the cash-on-delivery
mode of payment remains worrisome as the transactions add about 3 percent additional costs. Also, the
additional processes required for cash-on-delivery orders, longer payment cycle, higher instances of
returns and associated costs are hurting margins.

Experience of Customers
Improving customer experience with varied offerings and options with the advent of technology, online
retailers are devising attractive delivery options such as same-day delivery or delivery within an hour to
door of consumers which gives advanced customer services. To further improve customer experiences, we
might also see the adoption of international practices such as digital or experiential stores and showrooms,
pop-up and fulfillment stores and drones that will fascinate the Indian market. The other technologies that
will affect these trends and help shape the E-commerce business include:

Applications of Big data

To gain, retain and attain more customers, online retailers would have to leverage technology to the fullest,
and by developing strategies through analytics produced using big data will help in making customers feel
special and increase brand loyalty. With the increasing adoption and use of Smartphone’s, businesses are
able to collect a large amount of data on consumers, which can be further utilized to do target-based
marketing and advertising.

33
 CHAPTER 2. REVIEW OF LITERATURE

• Sharma Anukriti (2013)

The article entitled “A study on E-commerce and Online Shopping: Issues and Influences”. In this article
an attempt is made to study the recent trends, influences, preferences of customers towards E-commerce
and online shopping and to give the suggestions for the improvement in online shopping websites. The
study found that, most of the people who are engaged in making the decision of purchasing are in the age
of 21-30years. While making the websites for online shopping it must be designed in a very planned and
strategic way.

• Abhijit Mitra (2013)

The article entitled “E-commerce in India-A review”. In this article an attempt is made to study the present
status and facilitators of E-commerce in India, analyze the present trends of E-commerce in India, and
examine the barriers of E-commerce in India. The study found that, there has been a rise in the number of
companies taking up E-commerce in the recent past. The study also found that, major Indian portal sites
have also shifted towards E-commerce instead of depending on advertising revenue.

• Nisha Chanana and Sangeeta Goel (2012)

The article entitled “Future of E-commerce in India”. In this article an attempt is made to study the overview
of the future of E-commerce in India and discusses the future growth segments in India’s of E-commerce.
The study found that, various factors that were essential for future growth of Indian E-commerce. The
study also found that, the overall E-commerce will increase exponentially in coming years in the emerging
market of India.

• Saraiya Ray (2011)

The article entitled “Emerging Trends of E-commerce in India: Some Crucial Issues Prospects and
Challenges”. In this article an attempt is made to present a snapshot of the evolution of E-commerce business
indicating the chronological order, category of E-commerce business, description of organizations involved
in E-business in India. The study found that, the role of government should be to provide a legal framework
for E-commerce so that while domestic and international trade are allowed to expand their horizons, basic
rights such as privacy, intellectual property, prevention of fraud, consumer protection etc. are all taken care
of.

34
 • Khosla (2017)

Khosla (2017) explains why E-commerce Boom in India: Why online shopping is here to stay. The study
conducted on the retail market in India says that the growing popularity of online shopping is affecting
offline retailers since online companies are offering better prices and have attractive promotional strategies.
It is also easy to reach the consumers online. The online channel gives consumers the opportunity to shop
anytime anywhere with the help of the internet and this is motivating the retail chains to get into the online
business.

• ET Retail (2015)

ET Retail (2015) predicted that E-commerce will help empower women. The article said that E- Commerce
will not only contribute to growth in jobs but also empower women. E-commerce is an important to remove
social inequalities as E-commerce had become an indispensable part of the lives of the people.

• Bansal (2012)

Bansal (2012) gave his opinions on E-commerce in India – Present and Future which clearly proves that E-
commerce has made a difference by introducing cash on delivery. It has been observed majority of the
Indians do not rely on credit cards and so cash on delivery has turned out to be a convenient option.
. Consequently, the companies have gained a lot of trust. It was also told that Cash on Delivery’s cultural
affinity and will be a major part of payment mechanisms for at least the next four to five years.

• Kamath (2017)

Kamath (2017) says GST to benefit E-commerce the most as he believes Goods and Services Tax (GST)
will eliminate supply chain issues which are important from E-commerce perspective. There will be
less documentation in case of shipments and return of goods. Efficiency in supply chain is the key to
quicker deliveries and GST is expected to play a role. Companies will also be able to execute more
efficient supply chain strategies, with warehousing based on strategy rather than tax requirements
(like Octroi). More importantly goods can be priced and margins can be calculated properly.

35
 • Nayyar (2015)

Nayyar (2015) asked to be Beware of India's E-commerce Bubble. After an analysis of the Indian economy,
it is understood that there is uncertainty surrounding Government’s foreign direct investment in E-
commerce. A clear tax policy on E-commerce is absent and some of these companies as a result of having
high valuations may welcome scrutiny. Infrastructure may affect the growth too.

• Rajasekar and Agarwal (2016)

Rajasekar and Agarwal (2016) reveals their study on impact of India's E-commerce on India's commerce.
Asa result of their research, it is evident that growth of E-commerce depends to a great extent on effective
IT security systems for which necessary technological and legal provisions need to be put in place and
strengthened constantly. While many companies, organizations, and communities in India are beginning to
take advantage of the potential of E-commerce, critical challenges remain to be overcome before E-
commerce would become an asset for common people.

• Mitra (2013)

Mitra (2013) conducted a study on E-commerce in India. The study considers logistics to be an obstacle to
E-commerce ‟s prospects. The companies will have the responsibility of delivering the products to the right
person at the right time and failure may have implications. The service of the post/courier services is not
satisfactory. Vendor will have to come down and deal in an inefficient system for inventory management.
This will slow down drastically. Most of them won't carry any digital data for their products. No nice-
looking photographs, no digital data sheet, no mechanism to check for daily prices, availability to keep your
site updated.

• Shatter (2016)

Shatter (2016) conducted an empirical study on Emerging trends of E-commerce in India and discloses the
threat the wholesalers in India might face. The producers may no longer need to depend on the wholesalers
as a channel of distribution as producers may directly see their products to the consumers with the help of
E-commerce. On the other hand, the retailer can save his existence by linking with online distribution. The
retailers can provide additional information to the consumers, meet electronic orders and be in touch with
consumers.

36
 ➢ CHAPTER 3. RESEARCH METHEDOLOGY

AIMS AND OBJECTIVES

• To study the concept of E-commerce.

• To analyze the present trends of E-commerce in India.

• To study the various challenges faced by E-business players in India.

• To study the prospects of E-commerce in India.

• To study the impact of E- commerce on Indian consumers.

HYPOTHESIS

The research topic was selected to understand how E-commerce emerged as a new sector in the
Indian Economy and brought several benefits to the Indian consumers across cities who explored
a new medium of purchasing.

Alternative Hypothesis

Consumers will prefer to buy from E-commerce websites in the future and the industry will grow
because it is reliable.

Null Hypothesis

Consumers will not prefer to buy from E-commerce websites because it is not reliable, and the
industry will not grow

37
 CHAPTER 4. DATA ANALYSIS, INTERPRETATION AND PRESENTATION

RESEARCH DISIGN

The researcher has used only secondary data that has been collected from various articles, journals, books,
websites etc. It has been used to study the evaluation, conceptual framework, definition, key players,
present trends, future prospectus & barriers of E-commerce.

DATA COLLECTION

Survey

An online survey was Conducted by me in order to collect information from more than 100 people
regarding their opinion and application on E-commerce as well as to predict the future behavior of them
towards the E-commerce platform and online retailors
We successfully collected data from more than 100 participant the question and answer of those are given
below further the questions are also highlighted in appendix

Background – Revenue models

The revenue model is a key component of the business model. It primarily identifies what product or service
will be created in order to generate revenues and the ways in which the product or service will be sold.
Since there are possibilities of multiple variations, many companies do not use one single revenue model.
Some of the commonly used models have been enumerated below.

• Advertising revenue model

The advertising revenue model is based on contacts (CPC or CPX) making it one of the indirect sources of
revenue. E.g., Google, Facebook

• Subscription revenue model

Users are charged a periodic (daily, monthly, or annual) fee to subscribe to a service. E.g., Flipkart Media,
NASSCOM

38
PRIMARY DATA
An online survey was conducted in order to find the Peoples opinion about online shopping as well as
their view on future of online shopping and also whether they currently use or in future will use online
shopping platform for their betterment
1)

As the Above graph suggest that almost 92.2% of more than 100 respondent undertaking the survey have
used online shopping platforms. Which indicates a very high penetration of online retailers in the market 2)

In the above graph it is shown that 39.8% of people buy more than 40% of their electronics, FMCG
goods and apparels through online shopping Further about 38.8% of respondent spend between 20% to
40% of their expenses on online shopping the remaining 22.30% spend less than 20%
39
3)

IN this pie chart the respondent were asked whether they will increase their E-commerce purchase over
next year as it can accurately predict that whether there will be future growth in e-commerce in this survey
56.3% answered yes while 27.2% said no the other respondent were unsure

4)

As 95% of respondent have shopped online further 80% of respondent spend more than 20% of their
income on online shopping as their income increases so there spending and so the sales of E-commerce and
online retailors so this question can help to correctly predict whether there will be growth in E-commerce
in future 60% of people expect their income to grow by 7% pa over next 5 year

40
5)

One of the biggest sectors other than online retailers in E-commerce a r e Travel industry which
includes travelling arrangement like Flight, train, bus etc. as well as hospitality like hotels, Restaurant as
well As in the survey suggests that more than 70% of the respondent book there travel ticket via E-
commerce sites as people income grows so their travels and this results in growth of E-commerce in travel
sector as a whole

6)

E-commerce firms currently are operating at a massive loss for Ex amazon revenue was 18000cr
in 2019 with losses of 7000 cry the losses are because of deep discounting policy to gain customer and
capture market share from offline retailers the question was asked to knew whether they knew about deep
discounting policies about 30% people did not knew about this policy
41
7)

As in above question the respondent were asked about deep discounting policies if in future the E-
commerce firms change their strategy and increased prices to stay profitable than will Indian continue to buy
the question was important for servility, growth of ecommerce firms a 50% people said that they will not buy
if good are not cheaper in online store and will go to offline store which indicate a threat to online retailors
growth

8)

The government policy towards E-commerce is extremely important if the sector wants to grow
the above question were too knew whether respondent support government policies towards E-commerce
firms.

42
9)

This question was asked to knew whether respondent actually consider online goods to be cheaper than
office retailors the finding were that 65% of people consider online goods to be cheaper whereas as 28% feel
offline goods are cheaper and about 8% people don’t know

10)

The Above question was asked to know whether the respondent have paid for games, matrimonial sites
before. The division was roughly 50-50 with 50% of respondents have paid for matrimonial and online
gaming whereas about 50 % have not paid for any matrimonial and gaming sites.

43
11)

There is another major E-commerce wing apart from online retailers and online services and in today’s
era most people use job portals like LinkedIn, indeed, shine, naukri.com to search for job
And many students also use Intern Shala to get Internship.

12)

One the New sector that online retailers are growing at an extremely high rate is grocery, FMCG and daily use
goods E-commerce retailors like Gofers and big basket are dominating this field with recent entry of amazon
pantry and Flipkart in this field as well about 55% of people use this site for grocery and 45% don’t which
represent an opportunity of growth in future

44
 13)

Another major growth sector in E-commerce field is of online music streaming and Ott streaming of
movies and TV Series in the survey 67.3% use these services with rising income their consumption will
rise further 30% people don’t use steaming and Ott services which represent that there is a market to
be conquered

14)

Another major E-commerce opportunity is Justdial and Suleka that connect business to the customer who

need their services it is also an attractive growth opportunity as 35% of respondent had not used services
provide by E-commerce platform like Justdial and Suleka further seller can partner with amazon and flip
45
Background – Recent M&A activity

Like any high‐growth cash‐intensive sector, E‐Commerce industry has witnessed a burgeoning increase in
the amount of funding made available to e‐Commerce portals through Private Equity firms or Venture
Capitalists.

• This funding is primarily aimed towards consolidation & has been taking place via closures, mergers and
acquisitions. Larger players have been acquiring smaller ones to consolidate their position in the sector.

• The main feature of funding received by e‐Commerce players in 2019 was the reduction in time (by half)
between two rounds of funding against 2018 levels. This is due to the need for funds to scale up rapidly.
This can be seen in chart 6.2, by the number of increases in number of deals.

• The average deal size of each round of funding received by e‐Commerce players in 2019 was substantially
less than that received in 2018.

• The increase in funds parked by VCs, circa 2009, have attracted private equity (PE) funds, which invest in
mature companies.

Another noteworthy feature is the increase in the fund size of VCs, which gives PE players the flexibility to
make large investments in high‐return deals outside their focus areas.

46
Drivers of growth

• User Connectivity

– Greatly increased internet user base & time spent on the internet

– Abundance of economically viable Internet‐enabled handheld devices

– Increased broadband penetration & launch of 3G services

• Demographics

– Rising disposable income per capita due to rise in middle class

– Rapid urbanization & modernization of towns & villages alike

– Clear increase in discretionary income over the years

– Largely untapped market, only about 20% technologically competent users transact online

– Implementation & heavy endorsement of customer‐centric services

Non-discretionary

• Evolving payment methods

– Multiple payment instruments i.e., Cash, Net Banking, Cards, etc.

– Increased average transaction value circa 2008, the gateway having become more efficient

• Easy availability of funds

47
– Risk‐Return tradeoff for sector is favorable for PE funds

–current market sentiment is conducive for business Discretionary Non‐discretionary the phenomenal
growth experienced by the sector is a result of more than several favorable factors in play. Some of which
are given below.

Hurdles to the growth story

• Competition

‐ Entry barrier to new entrants, as set up cost is quite reasonable (₹5,000‐₹20,000)

‐ Players are indulging in an all-out price war, to entice footfalls/generate traffic on their respective portals

‐ Indian consumers are fickle in nature, due to which the customer lifecycle value or ARPU (average
revenue per user) is very low

‐ E‐commerce in India used to primarily be a start‐up only industry, which resulted in an extremely high
mortality rate among such enterprises due to various reasons

‐ High cost of customer acquisition, and small basket size which stokes competition

• Operations

‐ High attrition rate, as high as 60% for junior employees, combined with shortage of skilled labor, threaten
such rapid rate of growth

48
‐ Reach of e‐Commerce sector, is still curtailed to the urban regions of India (urban internet penetration rates
are also quite dismal). Hence, reducing its audience to a nominal percent

‐ Although cash on delivery is a favorite amongst its audience, it proves to be quite expensive, painstaking,
and risky

‐ The infrastructure in India is quite poor, hence the companies must reply on in‐house logistics to suffice
their supply chain requirements due to inefficiency of 3PL (3rd party logistics)

‐ Lack of touch‐n‐feel factor, which is a must for many shoppers & changing such consumer habits is a long
process

• Legal

‐ No specific or jurisdictional laws in existence with respect to e‐commerce

‐ Loosely governed through IT Act, 2000, which in itself is quite obsolete to keep up with constantly
maturing e‐Commerce sector

‐ Most players have to comply with a myriad of laws (Indian Contract Act) & regulations to operate within
legal framework of the 193 e‐commerce sites that were operational in India in October 2012, 89 have either
shut down or merged with other retailers, essentially wilting under pressure from high operating costs.

Current trends & analysis – Online travel agencies

• MakeMyTrip, Yatra & Clear trip are the major Indian online travel agencies (OTAs)

• Growth in India’s travel and tourism industry is the second fastest worldwide

• Largest component of the Indian e‐Commerce sector with a market share of about 70%

• India is poised to feature among the top five civil aviation markets in the world over the next decade.

• The entry of low-cost carriers (LCC) in the country made air travel affordable for many people.

• Domestic air tickets are driving the online ticketing market.

• India is witnessing the entry of international players and mushroom‐Ing domestic OTAs.

• OTAs have taken a physical form, with the establishment of new MakeMyTrip retail outlet in Mumbai, to
leverage their brand

49
• There is a clear perceived change in the approach of the OTAs, from e‐Travel to m‐Travel

• Emergence of Meta search engines which enable consumers to view & compare tariffs across different
portals

Snapshot of the online travel industry:

Particulars MakeMyTri Clean Yatra
pp trip
Year founded 2000 2005 2006
Unique monthly visitors 83 lakhs 85 55 lakhs
lakhs
Employee strength 1000+ 450 1000
Funding Public in ₹45mn ₹56.40m
2010 * n*

Current trends & analysis – E- retails

There are many players in this segment, but the bigger players are notably Flipkart, Amazon & Amazon

• Online retailers are moving to the marketplace (consignment) model from the inventory‐holding model`

• Online retailers are developing in‐house logistical capabilities

• Complex tax structures are making decisions relating to warehouse locations difficult for online retailers

• COD has emerged as a preferred payment choice for customers, accounting for at least 60% of transactions

• Due to the cap of 51% FDI allowed in B2C sector, dilution or complete exit is prohibited, which proves to
be a hindrance to foreign investors or buyers

• It has attracted investments of over ₹3bn due to the promising high growth nature of the business from PE
Funds &VCs (domestic & international)

Flipkart Amazon Paytm Mall

Net Revenue (in 43,615 33,977 6000
Crores)
Loss (in crores) 17,231 27,000 9000
Loss per Rupee 0.40 0.8 1.50
(2019)
Year founded (India) 2007 2013 2010
Notable Walmart Amazon LLC SoftBank, Blackrock
Investors/Backers
Latest Market Value ₹21 Hundred ₹15 Hundred crore ₹10Hundred crore
crore
Model Online retailer Marketplace Marketplace
Funding so far ₹5bn ₹5bn* ₹3mn
Head Office Bangalore Hyderabad New Delhi
Employee Strength 30000+ 50000+ 20000+
50
Current trends & analysis – Classifieds

There are many players in the said segment, the noteworthy ones being OLX, Naukri, Car Dekho &
Shaadi.com

• The online classifieds segment has overtaken the offline segment in 2013

• Subscription revenues constitute the main source of revenues for the online classifieds segment

• Online recruitment is the largest category in the online classifieds segment, followed by online matrimonial

• Online recruitment players are increasing their focus on providing enhanced search functionalities and
value‐added services

• The evolution of the real estate classifieds segment is dependent on how well it piggybacks the growth in
Indian real estate

• The Indian auto classifieds market is still at its nascent stage

• The primary target of the classifieds market is restricted to urban areas due to location of both, the buyer
&the seller

• Leading newspaper dailies are launching their own classifieds sites to leverage their own brand image &
reader base

• Most players are now making content available in local vernacular languages to engage a wider audience

• A wider audience is also targeted by localizing the content available online to one’s city or locality, etc.

51
Current trends – Miscellaneous

• Mukesh Ambani’s Reliance Retail, India’s largest offline retail chain, is planning to enter E-commerce space,
according to a recent report in The Economic Times.

• The USD 40‐hundred crore Aditya Birla Group will launch a project to identify opportunities in the-
commerce space, the Economic Times said in a recent report.

• The Mahindra Group, which has a presence in the retail sector through a few offline specialty retail units,
is looking at small steps to build its presence in the online retail market, Anand Mahindra told CNBC‐
TV18 recently.

• The pioneer of organized offline retailing in India is not too far behind. Future Group’s Kishore Biyani
plans to launch Big Bazaar Direct, which will launch all of Big Bazaar’s products on an online platform by
2014. Rising number of niche e‐commerce players.

• Health Kart, a Gurgaon‐based niche e‐Commerce player in the healthcare space, is betting big on the multi‐
hundred crore health and nutrition market in India, since increasing number of people are now going online
to buy products like health supplements and testing kits.

• Delhi‐based Burnish, which retails furniture, kitchenware and home décor products online, was started by
Vaibhav Aggarwal, Vikram Chopra and Mehul Agrawal in March 2012.

• Bangalore‐based BigBasket.com is yet another start‐up in the online food and grocery space. The start‐up
is also present in Mumbai and Hyderabad. BigBasket.com has shown huge growth potential and is
aggressively planning to expand its presence in major metro cities in the country.

• Launched three years ago, Bluestone.com is based on the concept of virtual jewelry mall for brands and
vendors to market their products.

• TinyOwl, a food ordering app, launched in Mumbai leads the home delivery segment, in direct competition
with the Rocket Internet group’s Foodpanda.in The growth rate experienced by a niche player is far more
phenomenal than any other sector, primarily because the models are extremely differentiated & they aim to
appease its customers by offering a unique experience. The second wave of e‐Commerce has witnessed the
introduction of new business models and the rapid growth of players in the domain. Most e‐Commerce
players in this wave are startups that are on a steep growth curve.

• However, these players need additional capital to scale up and maintain the pace of this growth. The need
for capital, coupled with the growth potential of the sector, has made it a favorite among VCs.
52
• However, most of these companies are not yet profitable and are only growing on volumes. This raise
concerns relating to a valuation bubble.

• Such valuations have been arrived at using indicators & market research. Also, putting a number on the
potential of e‐Commerce is a difficult. The growth potential is what is enabling such high valuations.
Markers or indicators of such high valuations.

1. Scarcity of genuine business potential

There is a shortage of high-quality companies which have at least a sizeable presence. Multiple investors
chasing said companies drive up the value by offering plump deals, pushing the sentiment & general
valuation up.

2. Potential market size

The market size of India is barely at 1‐3% of the entire retail sector, which is valued at ₹500bn. About 20
million people out of a potential 120 million people. Fig 13.4 shows the e‐commerce forecast

3. Favorable demographics

Due to India being so geographically diverse, e‐Commerce to far flung tier 2 & tier 3 cities is a very
attractive prospect, and possibly prosperous too. There is significant increase in the disposable income.

4. Technological advancements

Due to recent innovations in the handheld & PC market, internet‐ enabled mobiles & tablets have become
accessible to most. Hence, increasing the reach of e‐Commerce enterprises. As seen in fig 13.1, the
difference in sales of units of PCs & handheld devices is increasing. Fig 13.3 is the users transacting online.

5. Internet coverage

Internet penetration in India among lowest in the world. The current internet user base and penetration levels
in India are like those of China’s in 2005, and that seems to indicate that India’s growth story will be akin
to China’s. Also, given is table 14.1, which shows the past, present & future scenario with regards to the
internet coverage.

6. Surge of funds

Over 14 PE firms or VCs back 2 or more e‐Commerce enterprises. Such inflow is on a steep growth
trajectory, since 2008. A list of given foreign body corporates & the number of e‐commerce enterprises
53
backed by the same is given in table 14.2 Also, there have no notable exits that have been made in the recent

past, which shows the confidence in the sector. This builds up, results in more active funding rounds
witnessed by investees.

7. Exit Strategy

So far, no major exits by VC/PE Funds have been recorded in the industry so far. Currently, it is under the
process of consolidation. Exits in the e‐commerce sector are most likely in the form of IPOs or a takeover
bay larger company. But larger companies like Flipkart, Amazon can now only solely rely on IPOs as
they’re now valued in hundred crores & any form of exit is unlikely in the coming years. The E-commerce
market in India is not for the faint‐ hearted or those looking for an ROI in a short timeframe. It is also not
without its share of challenges.

54
 CASE STUDY ON E-COMMERCE

1. How Mellow Made ₹200000+ In Preorder Sales in Less Than a Month

Mellow is a company that makes a magical kitchen robot that syncs with your smartphone to cook for you
at your convenience. The founder, Ze Pinto Ferreira was interning at Braun when he realized everything he
knew (mechanical engineering, food, product designer) could intersect to create impactful work.

He knew the sous-vide he wanted to create should change home cooking dramatically, but he also knew he
couldn’t do it alone.

That’s when he set off to find a co-founder, Catarina who was working as a freelance designer. He managed
to convince her to use her talents on a potentially groundbreaking company and the two of them built
Mellow together.

What They Did to Succeed?

Using Trycelery.com as their pre-order platform, Mellow was launched to great success. They collected a
total of ₹64,000 in pre-orders in ONLY 3 days, and eventually made ₹200,000+ in less than a month.

Key Takeaway

In the case study, Ferreira mentioned how he marketed Mellow by reaching out to 100+ reporters
themselves. Given the background of both Ferreira and Catarina, PR seemed to be out of their reach.

However, this is classic Paul Graham. To get your startup off the ground, you have to do things that don’t
scale. Don’t know how to do PR? Teach yourself, reach out to reporters, and get coverage in publications
like TechCrunch and Atheneite.

2. Sum Jerky – The Results of the 24-Hour Business Challenge

Noah Kagan is known for starting multiple companies and growing all of them to 7- and 8-figures in revenue
(including the budgeting startup Mint.com).

As part of a 24-Hour Business challenge to prove to anyone that they can start a business today, Noah asked
his followers which business he should start so he could show he would make ₹1,000 a day.

The end results.

A beef jerky subscription company that made more than ₹1,000 in 24 hours.
55
What He Did to Succeed?

Noah made ₹3,030 in total revenue in 24 hours.

1. Made a basic budget so he could work backwards to find out how much he needed to sell to make
₹1000.
2. Created a customer avatar so he knew who he should target
3. Started reaching out to people who he thought fit the customer avatar
Not only did he complete the challenge, but he also exceeded it (not after downing 4 cups of coffee though.)

Key Takeaway

Create a customer avatar. It’s astounding how many businesses do not know who their ideal customer is.

Find out who is already buying your products and then reach out to more people like them.

3. How Two Friends Turned Up the Heat and Sold ₹170K Worth of Spicy Honey in 10 Months

What They Did to Succeed?

Their first ₹1,000 came from emailing their personal contacts and posting to their own personal Facebook
pages.

Then, they made a list of potential press targets and aggressively pursued them. This worked to great success.

A few modest mentions on smaller sites like Hackberry later then grew into features on Uncrate, The
Kitchen, CNBC, the Today Show, Bon Appetite, Esquire and Vanity Fair.

Result?

The press coverage exploded their business.

Key Takeaway

Everyone loves being featured on national media, but press begins from the smaller guys.

In Trust Me, I’m Lying, media genius Ryan Holiday discusses the concept of “trading up the chain”, where
larger publications often take content from smaller publications.

56
Start by getting yourself featured on smaller blogs and publications, and slowly “trade up the chain” to bigger
features on national media.

4. How Opena Case Hit 189% Of Their ₹15,000 Kickstarter Target and Built a Million Dollar Business

What They Did to Succeed?

Opena launched on Kickstarter in June 2011 and successfully raised ₹28,303 (surpassing their initial
₹15,000 target.) How did they do it?

They built a tribe of early adopters before they even launched the campaign. When they launched the
campaign, they rewarded the early backers with early bird rewards, who then gleefully spread the word for
them.

Within half an hour, the early bird backers were all sold out.

Key Takeaway

The takeaway I want to highlight here has nothing to do with Opena’s excellent customer acquisition tactics.
It has, however, to do with the founder Chris Peters.

Just look at his bio:

• Studied Industrial Design right out of high school.

• Spent 4 years working at a large firm that specialized in medical machines. He was involved in
industrial design work, prototyping and graphic interfaces.
• Then worked at various design consultancies.
• Took a year off to wakeboard.
• Worked for a much smaller design consultancy, which helped him get a sense of what it’s like to run
a small business.
• Sold software for a year to learn how to do sales.
• Ran his own design consultancy for 3 years.
This means that he had at least a decade of experience before even founding the company. This also means
that he had deep expertise – both to identify a problem worth solving and developing a solution to fix the
problem.

Get this:

57
Most people make the jump to entrepreneurship without understanding that many successful entrepreneurs
had built up deep domain expertise in their fields before starting a company.

5. #TheGreatBuild Project

Richard Lazzara was part of Shopify’s Growth Team, where he helped the platform grow from 60,000 to
200,000 merchants. A Better Lemonade Stand is his blog, where he shares comprehensive guides on how
to build and grow E-commerce businesses.

#TheGreatBuild was a project he undertook to inspire others to build their own E-commerce site. He built
an-commerce company – Finch Goods Co. – and detailed the entire journey on #TheGreatBuild

What He Did to Succeed?

Although Richard withheld his sales reports (so we don’t know how much he actually made), the entire case
study is an incredibly detailed step-by-step guide on how to start, brand and build your own E-commerce
store.

Richard considers these 6 elements crucial to your E-commerce store — and he addressed it by introducing
several apps:

1. Up-Selling at Checkout
2. Email Capture/Newsletter Signup
3. Abandon Cart Emails
4. Referrals (Download Referral Candy for your Shopify store here.)
5. Exit Intent Offer
6. Retargeting
Key Takeaway

The 6 elements that Richard mentioned in his post are fantastic. There are usually some holes that E-
commerce entrepreneurs miss out in their rush to build their store and sell quickly, which Richard has kindly
pointed out here.

Fix those areas and you should see your sales soar.

BONUS: How to Setup a Referral Program for Your Shopify Store

58
 6. Social Media Marketing: How A Small E-commerce Site Attracted 293,000 Facebook Fans

Diamond Candles is a company that offers scented, soy-based candles that has a ring at the bottom. This has
resulted in their customers spreading word-of-mouth about them due to the excitement of potentially
winning the prize.

Instead of purchasing ads online to drive sales to their business, their predominant strategy has been to utilize
referrals and social media.

What They Did to Succeed?

The key strategy behind their success has been customer-contributed photos.

Without spending a single cent on ads, these photos grew the company’s Facebook Fan Page to 469,661
fans while also boosting their product page conversion rate by 13%.

Knowing that more customer-contributed photos essentially made them more successful, they then created
an environment of encouraging their customers to share more photos.

Here’s what they did:

• A call-to-action found on the candle urging customers to take a photo with the ring and share it on
social media
• Giveaways that encourage customers to create and share images for a chance to win free products
• Share all the photos gathered on social media to create an impression that it is normal to share
Diamond Candle-related photos
Key Takeaway

Your customers are your greatest ambassadors. Find a way to incentivize them to spread word-of-mouth
for you (or use Referral Candy).

7. How To Create a ₹4,000 Per Month Muse In 5 Days

What He Did to Succeed?

Noah taught him the same thing he did for his Sum Jerky business (detailed above):

• Reverse-engineer the number of sales you need

• Try different tactics to make it work
59
The purpose of this was to help Daniel figure out what marketing tactics work… and double down on them.
In just 5 days, Daniel and Noah tried at least 10+ tactics, and found his most successful channel.

The result:

Daniel received a message from a large online site, who placed an order of ₹4,200!

Key Takeaway

You will never know what will work for your business. Reverse-engineer the number of sales you need, try
different tactics, review them and double down on those that worked for you.

8. How We Built an E-commerce Business from Scratch and Generated ₹922.16 in Revenue in 3 Days

Richard Lazzara took up the challenge and proceeded to do everything (from determining what to sell to
making sales) … in only 3 days.

What He Did to Succeed?

In total, Richard made ₹922.16 in total revenue from this little experiment.

He went down every single possible marketing channel one-by-one, tried it and see what results it delivered.
In fact, in only 3 days, he tested channels like Reddit, Product Hunt, personal outreach, Facebook,
Instagram, Pinterest and Twitter.

Key Takeaway

Building an E-commerce store (in fact, any business) is a culmination of multiple small decisions. Make
those decisions fast and push forward. You will never discover the results through thinking, only by testing.

9. How To Build a Menswear Brand – An Interview with Owen & Fred

What They Did to Succeed?

Repeat orders make up 35% of Owen & Fred’s revenue. In their industry, that’s incredible.

60
TechCrunch and Forbes later featured them — and that skyrocketed their Kickstarter funding to ₹400,000.

Key Takeaway

Find a unique angle to your product that everyone can easily remember — which will encourage your
customers to “remark” about your product to their friends.

Their first product, Apollo was remarkable because it was clothes infused with space tech.

Their second product, a pressure-mapping sock, was eventually re-positioned to be “coffee socks” because
everyone remembered they used coffee beans to remove the odors in the socks.

Make it easy to share, and people will.

10. How I Built an Online T-Shirt Business and Made ₹1,248.90 in 3 Weeks

Shopify’s core value on their blog is “do something, tell people.” (And of course, promote their own
platform.)

That’s why it’s in their interest to show how easy it is to set up an E-commerce store in minutes and get
sales in as little as 3 days (as seen in example #8.) But it’s also to our delight that we get to see firsthand
how to build something from scratch.

(By the way, it’s also as easy to set up Referral Candy for your Shopify store.)

This time round, Shopify staff Tucker Schreiber took on the challenge of building a T-shirt business in a
month.

In less than a month, Think Pup, the store they set up generated ₹1,248.90 in revenue. Not fantastic, but a
great start for a new store.

What They Did to Succeed?

Tucker tried a variety of online marketing channels to acquire customers, and found that he got the most
sales from Reddit and Instagram.

This shows that you don’t have to overthink your marketing channels. Sometimes posting to free places like
Reddit (where people already gather) will help you get sales.

Key Takeaway

Always test new marketing channels for your product. While you may think that [insert your niche’s favorite
channel] is the way to go because that’s how people have done it, you will actually never know which
channel will be profitable for you.

11. How An Ex-Con Turned His Life Around and Built an ₹80k per Month E-commerce Business as

Robert himself mentions in this case study, the odds seemed stacked against him.
61
However, something about being an ex-felon drove him to want to be different and stand out. And that’s
how he eventually created National Parks Depot, an E-commerce business that sells outdoor adventure
gears and apparels.

What He Did to Succeed?

Facebook Ads.

Starting with a small ad budget of ₹60, he got a return of nearly ₹1,000 in sales. He then doubled the ad
spend and got back double his ROI. He eventually scaled up his ad spend, and hit ₹80,000 in sales.

Key Takeaway

Don’t be afraid to spend money to promote your products. Even without much money, Robert was willing
to invest to test if Facebook Ads would work for his business.

Invest money to get more sales, so test to see if paid advertising can work for your business.

12. How I Imported Gaming Glasses with Alibaba and Made ₹2,416.51 In 5 Weeks

What He Did to Succeed?

Similar to the rest of the guys who took up challenges at Shopify, he ran through multiple marketing channels
pretty quickly.

The one that generated the most sales for him were setting up affiliate commissions and getting influencers
to help promote his product.

(Pro-Tip: Supercharge your influencer marketing and get more word-of-mouth sales with Referral Candy.)

Key Takeaway

Are there people who command massive audiences in your niche? Reach out to them and propose an affiliate
deal and get them to promote your product to their audience.

62
 ➢ CHAPTER 5. CONCLUSION AND SUGGESTIONS

CONCLUSION

E-commerce refers to all forms of business activities across the internet. This can include E-tailing, B2B,
intranets and extranets, online advertising, and simply online presence of any form that are used for some
type of communication. E-commerce has several advantages and disadvantages as indicated in this paper.
E-commerce applications that started in early 1970’s needs to be still developed in terms of security and
efficiency. For the developing country like our India advancement in E-commerce is a challenge to compete
with the developed countries. With the opening of these brick-and-mortar stores comes the issue of optimal
assortment of products in the offline and online channels (Dzyuba & Jaganath, Offline Assortment
Optimization in the Presence of an Online Channel, 2015). While Dzyuba and Jaganath discuss the
optimal mix of products that should be included in the two channels, it is imperative for firms to understand
how consumer behavior changes when they view products both online and offline. This knowledge will
enable the firms to determine which features to highlight online, and which features to focus on in the
physical stores. Firms can avoid highlighting features that tend to make consumers more non- compensatory
offline to ensure that the consumer evaluates all features before making a decision. This will help consumers
also make an informed decision and potentially avoid them on missing out on a product which otherwise
would have been a great fit but was left out due to the absence of one feature.

With the emergence of technology, Economies around the world have benefitted and new ideas have been
implemented to reach out to consumers. India is no different and so embraced a phenomenon named E-
commerce to such an extent that is significant for the economy and organizations to thrive these days.
E-commerce has brought a massive change to the consumers and is responsible for growth and employment
as well. This research has completely focused on how E-commerce has evolved during the last 5 years and
made a contribution. About a decade back, the success of E-commerce was unthinkable but the impact it
created in the last decade was something that couldn’t have been easily estimated. The research explores
how E-commerce as an industry has grown over the years, developed and brought consumer benefits. The
study also reveals the extent of significance of E-commerce for the Indian economy and talks about future
growth. We studied consumer behavior and understood how it has changed. A survey was conducted to
know the perception and extent of acceptability of E-commerce among consumers. Maximum responses
turned out to be favorable.

Over the years after witnessing the success, new players have come out in the market. Competition has led
to upgrade of the quality of service of different brands and there has been a surge in the consumer satisfaction

63
level as well. E-commerce has also been a platform for launch for various new products as various
companies seek to grab the attentions in the form of special offers not only to boost sales but increase
brand awareness. The study also understands that E-commerce has scored high on convenience and
reliability as E-commerce has made shopping much easier backed by impressive customer care service.
Consumers no longer are dependent on traditional retail stores as a result of this revolution. Companies
always look for innovation to attract consumers and lack of innovation may affect survival of any
business organization. Until and unless an industry caters to the needs of its consumers, the industry can
never thrive. E-commerce provided a new option to consumers to purchase at will just at the click of a
button with the opportunity to avoid visiting the market and time consumption for anything like
clothes, electronic goods, grocery, medicine, jewelry etc.
. The quality of the products and services has generated dependence among the consumers and the credit
goes to the internet and logistics for establishing reliability. Companies are also dependent on the
internet for maximizing sales.

E-commerce has grown by leaps and bounds in the last five years and its further growth is imminent as
more companies will come in the picture in the future. Consumers should also develop awareness as
each brand may not able to provide quality service with more companies getting into the business. Success
of all companies is not guaranteed as the competition is only expected to get extensive and a few notable
brands is expected to survive having already developed a huge customer base. Companies will have to
adopt unique strategies for survival. The rapid pace of growth of the E-commerce industry is not only
indicative of the increasing receptiveness of the public but has also brought to the fore the issues that the
legal system of the country has been faced with.

From the initial years when internet was a new phenomenon to recent times where internet has become a
basic necessity for every household in most metropolitan cities, the E-commerce industry has come a long
way. The legal system has constantly tried to catch up especially with the enactment of the various rules
under the IT Act to deal with a host of issues emerging from the use of internet. Moreover, the IP issues
in E-commerce transactions have taken a new form with users finding loop holes to not only easily
duplicate material but also mislead other users. Hence, much more is needed to effectively regulate the
tangled web. Therefore, an in-depth understanding of the legal regime and the possible issues that an
E-commerce business would face coupled with effective risk management strategies has been the need of
the hour for E- commerce businesses to thrive in this industry.

64
emergence of technology, Economies around the world have benefitted and new ideas have been
implemented to reach out to consumers. India is no different and so embraced a phenomenon named E-
commerce to such an extent that is significant for the economy and organizations to thrive these days. E-
commerce has brought a massive change to the consumers and is responsible for growth and employment
as well. This research has completely focused on how E-commerce has evolved during the last 5 years and
made a contribution. About a decade back, the success of E-commerce was unthinkable but the impact it
created in the last decade was something that couldn’t have been easily estimated. The research explores
how E-commerce as an industry has grown over the years, developed and brought consumer benefits. The
study also reveals the extent of significance of E-commerce for the Indian economy and talks about future
growth. We studied consumer behavior and understood how it has changed. A survey was conducted to
know the perception and extent of acceptability of E-commerce among consumers. Maximum responses
turned out to be favorable. Over the years after witnessing the success, new players have come out in the
market. Competition has led to upgrade of the quality of service of different brands and there has been a
surge in the consumer satisfaction level as well. E-commerce has also been a platform for launch for
various new products as various companies seek to grab the attention in the form of special offers not only
to boost sales but increase brand awareness.

The study also understands that E-commerce has scored high on convenience and reliability as E-commerce
has made shopping much easier backed by impressive customer care service. Consumers no longer are
dependent on traditional retail stores as a result of this revolution. Companies always look for innovation
to attract consumers and lack of innovation may affect survival of any business organization. Until and
unless an industry caters to the needs of its consumers, the industry can never thrive. E-commerce provided
a new option to consumers to purchase at will just at the click of a button with the opportunity to avoid
visiting the market and time consumption for anything like clothes, electronic goods, grocery,
medicine, jewelry etc. The quality of the products and services has generated dependence among the
consumers and the credit goes to the internet and logistics for establishing reliability. Companies are also
dependent on the internet for maximizing sales. E-commerce has grown by leaps and bounds in the last
five years and its further growth is imminent as more companies will come in the picture in the future.
Consumers should also develop awareness as each brand may not able to provide quality service with
more companies getting into the business. Success of all companies is not guaranteed as the
competition is only expected to get extensive Anda few notable brands is expected to survive having
already developed a huge customer base. Companies will have to adopt unique strategies for survival. Due
to fast adoption of internet enabled devices like Smartphone and Tablets, we have seen an unparalleled
growth in E- commerce. The telecommunication technology has completely changed the way of our living,
communication methods, shopping etc. It has a huge impact on how we communicate with friends and
relatives how we travel, how we access the
65
information and the way we buy or sell products and services. The growth of E-commerce volumes in India
is attracting the attention of players around the globe.

E-commerce creates new opportunities for business it also creates new opportunities for education and
academics. It appears that there is tremendous potential for providing E-business education. According to
Indian population their vast scope for E-commerce because currently in India only 19% people using internet
for selling & buying goods & services so remaining percentage, we can consider that we are having scope
in Indian Market. There is weak Cyber security Law in India that is why Indian People are facing challenges
toward E-commerce. The future of e- commerce e in India would be bright in the upcoming years if all
essential factors would be implemented, by establishing cyber & have their benefits as per people wish. The
role of government is to provide a legal framework for e -commerce so that while domestic & international
trade are allowed to expand their horizons, basic right such as privacy, intellectual property, prevention of
fraud, consumer protection etc. are all taken care of. The expansion of e -commerce has been developed in
rural as well as urban area in reign able cost for consumption, because of that more people are getting linked
with E-commerce & the ratio of that is getting increase day by day.

E-commerce provides tremendous opportunities in different areas but it requires careful application for
consumer protection issues. Growth of E-commerce would also depend to a great extent on effective IT
security systems for which necessary technological and legal provisions need to be put in place and
strengthened constantly. While many companies, organizations, and communities in India are beginning to
take advantage of the potential of E-commerce, critical challenges remain to be overcome before E-
commerce would become an asset for common people Hence, there is a need to establish the value of such
enterprise, using one or more means which are indicative of the actual value. The e‐commerce space in
India is still evolving and companies have limited history. Many of them function at negative operating cash
flows and are dependent on investments from venture capital firms.

66
Due to fast adoption of internet enabled devices like Smartphone and Tablets, we have seen an unparalleled
growth in E- commerce. The telecommunication technology has completely changed the way of our living,
communication methods, shopping etc. It has a huge impact on how we communicate with friends and
relatives how we travel, how we access the information and the way we buy or sell products and
services. The growth of E-commerce volumes in India is attracting the attention of players around the
globe.

E-commerce creates new opportunities for business it also creates new opportunities for education and
academics. It appears that there is tremendous potential for providing E-business education.

SUGGESTIONS

1. An in-depth understanding of the legal regime and the possible issues that an E- commerce business
would face coupled with

effective risk management strategies have been the need of the hour for of E-commerce businesses to thrive
in this industry.

2. Intellectual Property Rights (IPR) issues in E-commerce transactions have taken a new form with users
finding loopholes to

not only easily duplicate material but also mislead other users. Hence, much more IPR is needs to effectively
regulate tangled

web.

3. The development of educational standards has enabled a great demand in the market.

4. The powerful influence of various social media tools like Facebook allows consumers to organize their
favorite items and

segment it into them and collections to share with others.

5. With the increase in small and medium enterprises, foreign direct investment, multinational companies,
creating millions new

jobs, a new generation of globally minded consumers. With growing job opportunities, customers are
willingly able to pay for

the products online.

67
6. The website for online shopping should be in understandable language. The language should be kept
simple while making the websites.

E-commerce is changing the way of buying & selling of product & services in India. E-commerce is future
of shopping. Due to E-commerce the gap has been reduced between manufacturer & consumer. According
to Indian population their vast scope for E-commerce because currently in India only 19% people using
internet for selling & buying goods & services so remaining percentage, we can consider that we having
scope in Indian Market. There is weak Cyber security Law in India that is why Indian People are facing
challenges toward E-commerce. The future of e- commerce e in India would be bright in the upcoming
years if all essential factors would be implemented, by establishing cyber & have their benefits as per people
wish. The role of government is to provide a legal framework for e -commerce so that while domestic
& international trade are allowed to expand their horizons, basic right such as privacy, intellectual
property, prevention of fraud, consumer protection etc. are all taken care of. The expansion of e -
commerce has been developed in rural as well as urban area in reign able cost for consumption, because of
that more people are getting linked with E-commerce & the ratio of that is getting increase day by day.

E-commerce provides tremendous opportunities in different areas, but it requires careful application for
consumer protection issues. Growth of E-commerce would also depend to a great extent on effective IT
security systems for which necessary technological and legal provisions need to be put in place and
strengthened constantly. While many companies, organizations, and communities in India are beginning to
take advantage of the potential of E-commerce, critical challenges remain to be overcome before E-
commerce would become an asset for common people. It is clear that in coming years customers will give
orders for their products from their homes and form their office. Mobiles and computer are widely used in
India now adays and user are eager to do shopping in internet. With the rapid expansion of internet, e-
commerce is set to play an important role in next coming years.

68
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 APPENDIX:

Question Asked in Survey for Primary Data

1) Do you shop Online?

a) Yes
b) No

2) What percent of your FMCG, Electronic and Apparels are brought through E-commerce sites? A) More
than 40%
b) 20% to 40%
c) less than 20%

3) Are you going to increase your E-Commerce Purchase over the next year?
a) Yes
b) No
c) Maybe

4) Is your expected percentage growth in income over next 5 years is more than 7%?
a) Yes
b) No
c) Maybe

5) Do you book travel tickets online?

a) Yes
b) No
c) Maybe

6) Are you aware of massive losses of E-commerce firms due to deep discounting policy to gain market share?
a) Yes
b) No
c) Maybe

7) Do you consider E-commerce goods and services cheaper than through offline retailers?
a) Yes
b) No
c) Maybe

8) Will you continue to buy from E-commerce sites even if their price is above offline retailers in future?
a) Yes
b) No
c) Maybe

9) Have you ever paid for online gaming, matrimonial, Dating sites?
a) Yes
b) No
c) Maybe

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10) Will you subscribe for online streaming services like Netflix, Spotify in future?
a) Yes
b) No
c) Maybe

11) Do you use gofers and big basket or other online grocery stores for FMCG goods?
a) Yes
b) No
c) Maybe

12) Do you think that CCI policy, Government of India hostile treatment of online retailers justified?
a) Yes
b) No
c) Maybe

13) Have you used or are going to use online job portal like linkedin/Indeed/shine/naukri.com or internship
sites like interns Hala?
a) Yes
b) No
c) Maybe

14) Are you planning to use E-commerce platform like Justdial/Suleka or sell through Flipkart/Amazon in
future?
a) Yes
b) No
c) Mayb

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