Chapter 1: E-commerce

1.1 Meaning of E-commerce

E-commerce, also known as Electronic commerce, refers to conducting business activities

through electronic mediums. It involves performing trade and trade-supporting activities on
online platforms using the internet. The transfer of goods, funds, data, and performance of
services over the internet constitutes E-commerce when it involves monetary transactions or
their equivalent value.

Popular online stores like Amazon, Flipkart, Shopify, Myntra, eBay, Quikr, and OLX serve as
prime examples of E-commerce websites. E-commerce transactions can take various forms
including Business to Business (B2B), Business to Customer (B2C), Customer to Customer
(C2C), and Customer to Business (C2B).

1.2 Features of E-commerce

Ubiquity

E-commerce is characterized by its ubiquity, making it pervasive and universal. Online

platforms remain available and accessible 24 hours a day, 7 days a week, and 365 days a year.
This constant availability ensures that customers can access services anywhere and anytime,
provided they have an internet connection. The global reach of e-commerce makes it
uniquely appealing and convenient for users worldwide.

Interactivity

The technologies employed in e-commerce create seamless and easy consumer interactions.
This enhanced interactivity significantly improves individual user experiences by engaging
and retaining consumer attention and interest on platforms. Advanced algorithms transform
low-contact e-commerce environments into feature-rich, interesting platforms.

Personalization

E-commerce technologies enable the personalization and customization of marketing

messages delivered to specific groups or individuals. For instance, websites can provide
product recommendations based on a user's search history when they create an account on the
platform.

Information

E-commerce platforms provide comprehensive information about products, including

variants, features, benefits, and other details that enable consumers to make informed
purchase decisions. They also offer valuable information about product comparisons,
promotional offers, delivery terms, and related services.

Consumer Reviews

Consumers actively share their feedback on e-commerce platforms, which helps other
shoppers make informed purchase decisions. This feature makes the shopping experience
more authentic and genuine. A balanced mix of positive and negative reviews creates greater
transparency in the purchase process.

Product Comparisons

Product comparison features enhance the shopping experience and lead to more fulfilling
purchase journeys for consumers. This functionality increases website traffic and results in
higher sales. Consumers can assess characteristic features of products side-by-side instead of
visiting multiple physical stores.

Live Chat

Live chat functionality provides a human voice to assist with internet-based transactions. This
feature proves effective in closing sales as customer queries and doubts can be resolved in
real-time. Various live chat platforms solve customer queries and lead to higher sales turnover
while fulfilling the human element often missing in e-commerce transactions.

Product Demos

Video-based product demonstrations help educate consumers about products. These

informative videos reduce return rates by helping consumers make informed decisions about
their purchases. They effectively address doubts or queries about product usage, features, or
benefits.

1.3 Categories of E-commerce Business

Based on Online and Offline Presence

Pure Click Companies

Pure click companies represent organizations that exist entirely online without any physical
presence where customers can visit and shop. These companies maintain only an electronic
existence through websites. Search engines, content sites, commerce sites, and transaction
sites fall into this category. Examples include Flipkart and OLX.

Brick and Click Companies

Brick and click companies represent the middle ground, enjoying the benefits of both
physical and electronic presence. These companies operate through both traditional physical
stores and online platforms. Examples include Shoppers Stop, Global Desi, and Tata CLiQ.

Based on Buyer and Seller Types

Business to Business (B2B)

B2B e-commerce occurs when commercial transactions between two business organizations
take place online. Electronic Data Interchange (EDI) enables the fulfillment of such
transactions. Alibaba.com serves as a prime example of B2B e-commerce.

Business to Consumer (B2C)

B2C represents the most common business mode where organizations and consumers enter
into transactions. Popular examples include Flipkart.com, Amazon.com, and Snapdeal.com.

Consumer to Business (C2B)

This unique business model allows consumers to determine product prices using a reverse
pricing model. Examples include the former eBay model, Shutterstock, and Fiverr.

Customer to Customer (C2C)

This type enables two or more consumers to enter into electronic transactions with each other,
generally using auction-style models. OLX.com exemplifies this category.

1.4 Sub-categories of E-commerce Business

Retail

In retail e-commerce, enterprises sell goods directly to consumers without intermediaries. For
example, Titan sells its watches through its website at https://www.titan.co.in.

Wholesale

Wholesale e-commerce involves enterprises selling goods in bulk, often to retailers who then
sell them directly to consumers. Alibaba's wholesale platform at
https://wholesaler.alibaba.com/ exemplifies this model.

Drop Shipping

Drop shipping involves the sale of products that are manufactured and shipped to consumers
by third parties. Zappos initially started as a drop shipping company before transitioning to
handle their own inventory for greater business control.

Crowdfunding
This popular technique raises capital for businesses by collecting money from customers in
advance. Goods transfer occurs after collecting sufficient funds from customers. Catapooolt,
founded by Satish Kataria, serves as a crowdfunding platform helping fund raisers bring
creative, sports, political projects, social enterprises, and business startups to life.

Subscription

Subscription models involve automatic repeated purchases of products or services on a

regular basis until subscribers choose to cancel. Birchbox, a New York City-based online
monthly subscription service, sends subscribers boxes containing four to five selected
samples of makeup and other beauty-related products.

Aggregator

Aggregator firms do not produce or warehouse items but collect information on goods and
services from various competing sources on their websites. They create environments that
attract website visitors and design systems allowing easy price and specification comparisons.
Examples include Ola, Uber, and OYO.

Affiliate

Affiliate e-commerce involves enterprises paying affiliates in exchange for providing

advertisements and links to merchant websites. Each sale generated through customer clicks
from affiliates to merchants results in small commissions for affiliates. This creates revenue
streams for affiliates while bringing new traffic to host merchants and reducing
customer-acquisition costs. Flipkart offers free merchant joining with commissions up to 15%
on every product sold.

1.5 Advantages and Limitations of E-commerce

Advantages of E-commerce

Global Reach

E-commerce reaches customers worldwide, allowing purchases anywhere and anytime. This
offers maximum convenience at consumers' fingertips with very few physical limitations
preventing products from reaching consumers.

Lower Cost and Greater Profit

E-commerce businesses avoid costs associated with office space at multiple locations,
resulting in huge real estate savings. The online nature of business keeps logistics and supply
chain costs relatively low. Fewer or no intermediaries lead to additional cost savings.

Customer Insights
By tracking customers' digital footprints and using advanced predictive analytics, businesses
can study entire user journeys to gain insights on keywords for search advertising, user
experience, marketing messages, and pricing strategies.

Information

While physical stores can provide only limited product information, e-commerce websites
can include comprehensive details such as demo videos, reviews, and customer testimonials
to help increase sales.

Customization

E-commerce firms use artificial intelligence and algorithms to provide customized content
and product recommendations to registered customers. Such remarketing efforts can increase
sales turnover by showing the most relevant content to each visitor.

Easy Scaling

Online business growth is not dependent on physical space availability. While inventory
management and logistics can present challenges during scaling, these issues are less
problematic than those faced by brick-and-mortar businesses. E-commerce firms can more
easily scale operations up or down based on market trends and consumer demands.

Limitations of E-commerce

Security

E-commerce sites record important customer details including names, phone numbers,
addresses, and bank information. Keeping this information secure is crucial as many
businesses fall prey to malicious hackers who steal customer information. Such breaches can
have legal and financial implications while reducing customer trust.

No Personal Touch

The lack of personal touch in the buying process represents one of e-commerce's biggest
limitations. Many consumers prefer visiting physical stores and interacting with sales
associates. Personal interaction is important for making the buying process experiential and
allowing consumers to inspect products.

IT Infrastructure

IT infrastructure serves as the backbone for e-commerce transactions. The availability of

internet, computers, mobile devices, and servers is essential for e-commerce. Poor internet
penetration and inadequate IT services act as hindrances for consumers.

Quality Concerns
The challenge of "what is shown is not what is sold" affects many consumers. Sometimes
counterfeit or duplicate products are sold on genuine and popular e-commerce sites.
Sub-standard quality goods sold online deter many from buying through e-commerce
platforms.

Delivery Issues

Poor physical infrastructure prevents e-commerce from realizing its full potential. Goods
often fail to deliver on time, and some areas remain unreachable. Consumers sometimes pay
additional delivery costs that nullify the benefits of low prices or discounts offered by
e-commerce sites.

Unsuitable for Certain Products

Certain goods require high involvement from consumers and their families or friends.
Significant time and energy must be spent analyzing purchase decisions. Due to the inability
to inspect and physically experience products, many consumers prefer offline buying for
categories like gems and jewelry or expensive television sets.

1.6 Traditional Commerce vs E-commerce

Definition

Traditional commerce represents the oldest form of face-to-face buying and selling of goods
and services in physical stores. E-commerce represents a modern form of electronic buying
and selling of goods and services via the internet.

Accessibility and Time

Traditional business operations are limited to prescribed hours based on law and business
type. E-commerce is available round the clock, 24 hours a day, 7 days a week, and 365 days a
year, with no time limitations on business operations.

Transaction Processing

Traditional commerce involves manual, time-consuming give-and-take of goods, services,

and payments. E-commerce enables online, automatic, and time-saving transactions.

Physical Inspection

Traditional commerce permits touch-and-feel experiences and physical inspection of goods or

services. E-commerce does not allow physical inspection of products before purchase.

Customer Interface
Traditional commerce features face-to-face customer interactions and high-contact services.
E-commerce involves screen-to-face interactions with low-contact services.

Coverage and Reach

Traditional commerce has local or limited geographical reach. E-commerce provides

worldwide coverage and reach.

Delivery

Traditional commerce facilitates instant and real-time delivery of goods. E-commerce

involves distant delivery, typically taking at least a couple of days for goods or services to
reach consumers.

Variety

Traditional commerce provides limited variety due to physical store size constraints and
investment requirements. E-commerce offers extensive variety with limited constraints
regarding physical space or investment requirements.

Product Introductions

Traditional business product introductions require significant time and money, with
time-consuming customer response analysis. E-commerce enables easier product introduction
on websites with instant customer feedback.

Overheads and Profit

Traditional commerce incurs costs from middlemen, overhead, inventory, and limited sales,
reducing organizational profits. E-commerce helps enterprises gain greater profits by
increasing sales, cutting costs, and streamlining operating processes.

1.7 E-commerce Environmental Factors

Economic Factors

Economic factors including inflation rates, interest rates, foreign exchange rates, economic
growth patterns, and Foreign Direct Investment (FDI) directly influence business operations
regarding demand, supply, pricing, sales, revenue, and profits. Overall economic prosperity
determines the extent of e-commerce activities. Organizations typically target developed
countries over developing economies for higher internet-based transactions. Globalization has
encouraged single market development for trade and commerce across boundaries, reducing
social and cultural differences between countries and leading to price standardization and
business model variations.

Political and Legal Factors

These factors include tax policies for individuals and businesses, fiscal policy, trade tariffs,
political ideology, economic stability, business approaches, and applicable laws. Legal
compliance is crucial for global businesses as non-compliance can result in financial losses
and reputation damage. Most e-commerce companies maintain separate teams to handle legal
issues across different nations. Companies must carefully navigate applicable laws and
compliance requirements regionally, nationally, and internationally. Countries develop ethical
codes of conduct advocating correct internet use. Privacy protection represents a major user
concern, as consumers worry about protecting their online identity when sharing personal and
financial information.

Technological Factors

These factors relate to innovations and technology applications affecting business operations,
including automation levels, research and development, and market technological awareness.
Investment amounts in research significantly affect e-commerce, which thrives on recent
technological developments. E-commerce heavily depends on technology from sales to
customer service. All e-commerce brands compete to stay technologically ahead of
competitors. Technology serves as a deciding factor in the e-commerce world, influencing
everything from popularity to profits.

Socio-cultural Factors

These factors determine economic psychographic profiles, considering religion, language,

behavior patterns, social class, family influence, and festivals. Many e-commerce companies
announce sales around festive seasons when consumers spend heavily. India's collectivist
economy bases major buying decisions on family or friend opinions, which e-commerce
companies capture through promotional content emphasizing family togetherness and
collective decision-making.

1.8 Factors Responsible for Growth of E-commerce

E-Portals for Business Operations

The Government of India has promoted e-portals or websites for e-commerce, including
compulsory online reservations, applications, payments, auctions, and public procurement.
For example, http://www.ebiz.gov.in serves as India's Government-to-Business e-portal,
offering services including industrial licenses, company affairs, PAN and other CBDT-related
services, and importer-exporter codes.

Digital India

This highly ambitious project focuses on transforming India into a digitally empowered
knowledge economy. Key areas include building digital infrastructure as core utility,
providing services to government and people, and enabling digital empowerment of citizens.
Start-up India

This program builds entrepreneurship ecosystems that nurture innovation and start-ups. The
government provides funding support through a "Fund of Funds" with INR 100 billion
corpus, a US$ 1.5 billion 'Start-up India hub' serving as a single contact point, tax exemptions
for initial three years, and faster exit processes for start-ups.

Make in India

This initiative aims to boost India's industrial development through improved business
environments, enabled manufacturing, and allowed FDI in key sectors. Key pillars include
research, innovation, and conducive business environments.

Increasing Internet and Smartphone Penetration

Rising internet usage, 3G and 4G penetration, increasing smartphone users with mobile
internet availability, high-quality user experiences delivered by e-commerce companies, and
rising digital literacy contribute to e-commerce growth in India.

Changing Mindset of Indian Customers

Indians are becoming more aware and embracing online shopping, showing changed
consumer behavior. People have less time for traveling and shopping, increased expenditure
on luxury items, and greater availability of global products making customers conscious of
quality alongside price.

Curated E-commerce

Exponential social media platform usage has led to curated e-commerce rise, creating "Select
now, share with all, buy later" culture. Social media platforms strongly influence users, with
Pinterest and Facebook allowing consumers to organize favorite posts into themed collections
for sharing, enhancing personal interest expression in purchase decisions.

Remarketing

Also known as conversion marketing, remarketing aims to convert window shoppers to actual
online shoppers. Companies follow potential customers who visit websites without
purchasing, convincing them to revisit and complete previously incomplete purchases.
Consumers experience remarketing through targeted advertisements based on their online
website visits.

Payment Options

Digital wallets and UPI (Unified Payments Interface) provide consumers with numerous
payment options. Previously, e-commerce transactions relied heavily on cash-on-delivery due
to trust issues. Demonetization encouraged electronic payment adoption, and companies'
heavy investments in online payment security have increased online shopping usage.

Price Consciousness

Indians are typically price-conscious with high bargaining needs, inherently searching for
attractive deals and discounts. E-commerce companies use this by offering deep discounts to
attract and retain customers. Cashbacks, incentives, and referrals serve as attractive marketing
tools for getting consumers engaged in shopping.

1.9 Issues and Challenges in Implementing E-commerce

Attracting the Right Customer

Consumer online shopping behavior has undergone significant changes. Consumers now use
Amazon or Flipkart for product searches instead of Google or Bing. They use social media
and smartphones to read product reviews while in-store and pay using various payment
methods. Technology and social media easily distract them. E-commerce companies must
determine where their audience is and how to attract them efficiently without exhausting
marketing budgets.

Generating Targeted Traffic

Digital marketing channels are evolving rapidly. E-commerce firms cannot rely on single
channel types to drive traffic to online stores. They must effectively leverage SEO, PPC,
email, social media, display ads, retargeting, mobile, shopping engines, and affiliates to drive
qualified traffic while maintaining visibility where audiences pay attention.

Converting Shoppers into Paying Customers

Driving quality traffic and nurturing leads is key to closing sales. Lead conversion is crucial
for sustaining marketing efforts. Conversion optimization is a continuous process requiring
constant optimization of efforts to convert email leads and website visitors into customers.

Retaining Customers

Attracting new customers costs more than retaining existing ones. Companies must
implement tactics to maximize existing customer base value and increase customer lifetime
value.

Choosing Right Technology and Partners

Many online companies face growth challenges because their technology limits them or
they've hired wrong partners or agencies. They must choose appropriate shopping cart
solutions, inventory management software, email software, CRM systems, and analytics.
Return of Merchandise

India experienced many first-time e-commerce buyers who didn't know what to expect from
e-commerce websites. Buyers sometimes fell prey to hard selling, but demonstrated
dissonance and remorse upon product delivery, leading to returns. Consumer remorse is
particularly prevalent in countries like India where much growth comes from new buyers.
Returns are expensive for e-commerce players as reverse logistics presents unique challenges.

Cash on Delivery

Low credit card penetration and low trust in online transactions has made cash on delivery
the preferred payment option in India. Unlike electronic payments, manual cash collection is
laborious, risky, and expensive.

Payment Gateways

Indian payment gateways have unusually high failure rates by global standards. E-commerce
companies using Indian payment gateways lose business as many customers don't reattempt
payment after transaction failures.

Unstandardized Postal Addresses

Online orders in India often result in calls from logistics companies asking about exact
delivery locations because customer-provided address details are insufficient. Little
standardization exists in postal address writing, and last-mile issues add to e-commerce
logistics problems.

Logistics Issues

Given the country's large size, thousands of towns are not easily accessible. Metropolitan
cities and major urban centers have fairly robust logistics infrastructure, but logistics
problems are compounded by cash-on-delivery preferences. International logistics providers,
private Indian companies, and government postal services are working to solve logistics
problems.

1.10 Myths of E-commerce

Myth 1: Customers Flock to Websites Upon Launch

Reality: Customers need information about website presence via various digital platforms.
Businesses should include website URLs on all business-related materials, use social media
platforms to drive traffic, engage in online networking, ensure mobile compatibility, and use
QR codes on communication platforms.

Myth 2: Online Customers Are Easy to Please

Reality: Experienced online shoppers tend to be unforgiving and quickly move to other
websites if their shopping experience is subpar or they cannot find desired products and
information. Relevant content is key to retaining customers, and easy navigation improves
customer interface.

Myth 3: Making Money on the Web Is Easy

Reality: Without proper plans and strategies, making money through online transactions is
challenging. Defining target audiences and their needs and wants is critical to online business
success.

Myth 4: Lowering Prices and Deep Discounts Provide Competitive Edge

Reality: Businesses should become established merchants before offering heavy discounts
and undercutting others. Deep discounts lower brand equity long-term and might become the
only reason customers buy from vendors. Some customers may associate lower prices with
lower quality.

Myth 5: Amazing Products Don't Need Marketing

Reality: While word-of-mouth is excellent promotion, it cannot be the only communication

form for online business. Poor or no marketing kills businesses as no one knows their nature.
Investing in marketing budgets to leverage various promotional tools is important.

Myth 6: Content Marketing Is a Waste of Time

Reality: Content is the king of marketing. Content marketing has strong links with Search
Engine Optimization (SEO) campaigns, and only good content helps reach targeted users.
Relevant content improves search engine rankings, generates sales, and enhances brand
visibility.

Myth 7: Negative Online Reviews Destroy Businesses

Reality: Negative feedback doesn't mean the end of the world. It's a blessing in disguise,
providing opportunities to rectify and revive. It informs other customers that businesses are
open-minded toward constructive feedback and shows capacity to acknowledge and act upon
negative feedback. Dealing with negative comments properly can increase brand credibility.

Myth 8: Online Business Is Cheaper Than Offline Business

Reality: E-commerce involves significant costs for building IT infrastructure and is much
more than just catalogue business. It involves supply chain management, shipping,
warehousing, and extensive marketing, with significant costs for managing all these aspects.

1.11 Impact of E-commerce on Business

Enhanced Customer Service

Customer service can be greatly enhanced by enabling customers to find detailed information
online. Customer service executives can answer standard email questions quickly, and human
expert services can be expedited using help-desk software.

Reduced Cycle Time

Delivery of digitized products and services can be reduced to seconds. Administrative work
related to physical delivery, especially across international borders, can be reduced
significantly, cutting cycle time by more than 90 percent.

Learning Opportunities

Rapid e-commerce progress forces companies to adapt quickly to new technology and offers
opportunities to experiment with new products, services, and processes. New technologies
require new organizational approaches, and organizational units dealing with e-commerce
might differ from conventional sales and marketing departments.

Changing Nature of Work

The nature of work and employment transforms in the Digital Age. Driven by increased
global marketplace competition, firms reduce employees to essential staff and outsource work
to countries with significantly lower wages. Digital Age workers must become very flexible
to constantly learn, adapt, and make decisions.

New Product Capabilities

E-commerce allows new product creation and existing product customization in innovative
ways. Such changes may redefine organizational missions and operations. E-commerce
enables suppliers to gather personalized customer data, building customer profiles and
collecting data on customer groups for improving products or designing new ones.

Impact on Manufacturing

E-commerce changes manufacturing systems from mass production to demand-driven and

possibly customized, just-in-time manufacturing. Production systems integrate with finance,
marketing, and other functional systems, as well as with business partners and customers.
Web-based Enterprise Resource Planning (ERP) systems can direct customer orders to
designers and production floors within seconds.

Impact on Finance

E-commerce requires special finance and accounting systems. Traditional payment systems
are ineffective or inefficient for electronic trade. Digital payment systems are complicated
due to legal issues and international standards agreements but offer high convenience
degrees, leading to real-time transactions and error-free records.

Impact on Marketing

E-commerce enhances product and service promotion through direct, attractive, and
interactive customer contact. It creates new distribution channels for existing products and
facilitates direct customer reach with bi-directional communication. The cost of delivering
information to customers over the Internet results in substantial savings compared to
non-electronic delivery.

1.12 E-commerce in India

The Indian e-commerce market is expected to grow to US$ 200 billion by 2026 according to
IBEF reports from 2018. This growth is propelled by rising smartphone penetration, 4G
network launches, and increasing consumer wealth. During 2018, electronics contributed 48
percent to online retail sales in India, followed by apparel at 29 percent.

Government Initiatives to Boost E-commerce

The Government of India has announced various schemes and initiatives over the past 5-6
years to scale up manufacturing, digitization, and start-up ecosystems. These schemes include
Digital India, Make in India, Start-up India, Skill India, and Innovation Fund, all having
ripple effects on the e-commerce industry.

The Digital India movement has paved the way for initiatives like Udaan, Umang, and
Start-up India Portal. Under the 'Internet Saathi' project, the government has influenced over
16 million women in India and reached 166,000 villages.

Udaan is a B2B online trade platform connecting MSMEs and wholesalers with online
retailers, providing logistics, payments, and technology support. It aims to offer low prices,
good quality, and best selection to retailers.

According to the UN's E-Governance index, India jumped 11 positions to 107 in 2016 from
118 in 2014. The government introduced Bharat Interface for Money (BHIM), a simple
mobile-based platform for digital payments.

E-commerce Growth Statistics

Indian Online Retail growth is ranked 8th globally at 53% CAGR from 2013-17 according to
Bain & Company reports. This growth is fueled by discount-driven online marketplaces,
infrastructure advances, and rising smartphone penetration and data usage.

Regulatory Framework Requirements

E-commerce in India is governed by several regulatory bodies, rules, and regulations. A
holistic policy framework for e-commerce should include dynamic infrastructure (physical
and IT), domestic manufacturing boost, common taxation policies for online and offline
businesses, conducive environments for cross-border e-commerce, and enabling ecosystems
for domestic start-ups.

1.13 Trends in E-commerce Across Various Sectors

E-commerce Trends in Retail

AR and VR Technology

Augmented Reality (AR) and Virtual Reality (VR) showed potential in 2018 with famous
brands like IKEA, Samsung, and Amazon using them in supply chains and marketing
campaigns. These technologies help customers view and try products on devices before
making purchase decisions, bringing real customer experiences especially for online retailers
selling home decor, furniture, clothes, and cosmetics.

Rise of Voice Commerce

Voice commerce refers to transactions occurring when customers purchase products by voice.
Voice technology drives more sales, with huge developments allowing people to search,
select, and purchase by talking with devices. This technology was used by 41% of Amazon
Echo and Google Home customers in 2017, with projections that 50% of total searches will
use voice search by 2020.

Modern Delivery Systems

Online retail trends are transforming delivery services. Amazon has started using drones to
ship products and uses subscription-based delivery. Customer experience in delivery services
improves remarkably with 2-hour shipping or same-day shipping options.

Interactive Chatbots

Modern chatbots with Artificial Intelligence (AI) integrations help improve conversion rates
significantly. They can talk to customers under different scenarios naturally through
pre-configurations to consult, qualify leads, close deals, and collect accurate insights for
merchants to make right decisions.

Omnichannel for Promotion and Delivery

Omnichannel retail requires multi-channel marketing and multi-channel interactions to sell

products. Studies show multi-channel communications have 150% higher engagement than
single-channel campaigns. The most difficult task for merchants in multi-channel funnels is
content management, ensuring message coherence through different channels.
On-site Personalization

According to Accenture's 2018 E-Retail report, 40 percent of current consumers prefer

companies offering personalized experiences. Businesses seeing high sales growth will be
those investing in personalization.

Mobile Commerce

Mobile trends continue impacting day-to-day activities. It's easier to use phones for browsing
than sitting at computers, leading to mobile commerce rise.

Rise of Subscription E-commerce

Today's buyers want tailor-made shopping preferences with instant delivery to their
doorsteps, leading to subscription e-commerce rise. Such businesses curate products and ship
them to customers regularly. According to McKinsey & Company, 15% of online consumers
signed up for subscription services in 2017.

E-commerce Trends in Banking

Website Sales

Banking institutions have changed how they perceive websites. Once used for branding and
information, banking websites now serve sales purposes. Many banks have moved website
responsibility from marketing to digital departments reporting specific KPIs concerning
business objective achievement. Banks present offers similarly to e-shops, using
micro-interactions and pro-sales mechanisms like short-term special offers.

Comparison for Banking Products

Some banks draw from e-commerce experience and introduce product comparison engines.
Banking products are much harder to compare than consumer goods, requiring preliminary
calculations and risk assessments to present binding offers and loan installment amounts.

Product Search Engines on Home Pages

Many e-commerce platforms ease resource browsing by placing product search engines
centrally on home pages. Some banks have adopted such solutions, providing two
advantages: users with specific expectations can quickly find what they seek, and banks can
analyze search queries to gain valuable user knowledge.

Omnichannel in Banking

Customer shopping journeys are non-linear. Consumers rarely buy on first contact, instead
starting with research, reading opinions, thinking through options, and looking for cheaper
alternatives. Banks understand their customers behave similarly, often starting processes
online then continuing with consultants via helplines or branches.
Cloud Services

Most banks are heading toward cloud computing. Disruptive advances changing banking
business include blockchain, Big Data, IoT, and artificial intelligence (AI) utilizing cloud
computing services.

Mobile Banking

Mobile banking will improve speed in banking practices, enhancing navigation and interfaces
for customers. Consumers will be well-informed in real-time, improving digital banking
systems, password-free biometrics, new cryptocurrency opportunities, and conversational
interfaces.

E-commerce Trends in Tourism

E-commerce has brought new business opportunities to the global travel and tourism
industry, completely changing how people choose to travel. Travel companies can now reach
consumers worldwide, easily match competitor prices, and offer customers the best possible
options.

Online Booking

Customers no longer need to visit travel company offices or travel agents. The entire booking
system is online with feasible payment systems. Online booking has been the biggest boon
for consumers, making pre-travel planning comfortable and convenient.

Automation and Networking

GPS is among the most popular technologies helping the travel and tour industry. App-based
travel aggregators have made travel very convenient for everyone. People can book trips to
any destinations from anywhere in the world.

Additional Global Market

The travel industry can globally target customers. E-commerce allows connections to
additional worldwide markets and provides pocket-friendly services to local and overseas
clients.

Ease of Accessibility

Travel companies can learn about competitor products and price plans to plan their businesses
accordingly, providing easy accessibility to customers.

Empowering Customers
Customers are empowered to arrange their own itineraries for airlines, hotel rooms,
transportation, and other travel amenities directly via the Internet. Predictions suggest the
internet will take the majority of reservations directly from customers.

MakeMyTrip Limited, an Indian online travel company founded in 2000, provides online
travel services including flight tickets, domestic and international holiday packages, hotel
reservations, and rail and bus tickets.

E-commerce in Government

Information technology has become key in e-commerce success and brought many new
developments to Internet government concepts. E-commerce in Government uses technology
to enhance access to and delivery of government services benefiting citizens, business
partners, and employees. It has the power to create new public service modes where all public
organizations deliver modernized integrated and seamless services for citizens.

Accountability plays very important roles in e-government implementation. Government

accountability equals government openness, transparency, and interactivity. Research
suggests transparency refers to the extent organizations reveal work and decision processes
and procedures. Website transparency is equivalent to basic organizational maps revealing
access depth, knowledge depth about processes, and attention levels to citizen response.

E-commerce in Education

The Indian education sector has undergone slow but certain transformation with digital
technology emergence. Various education portals have emerged providing basic to advanced
learning opportunities. The Indian education sector presents multiple prospects and
challenges due to diverse socio-economic population mix, demographic dividend, tech-savvy
users, and government initiatives.

With over 1.2 billion population and over 30% of school age, India boasts the world's
second-largest education system. India still lacks infrastructure in its conventional education
system to serve growing populations. Distance and e-learning programs are solutions to this
problem.

Technology is part of almost every learning experience. With mobile learning advent,
e-learning websites, MOOCs, gamification, and educational videos, there are numerous
opportunities in future E-education segments. Education depends on e-learning software,
hardware, and technologies such as Learning Management Systems (LMS), Web 2.0, cell
phones, laptops, connectivity solutions, and hybrid devices like tablets and phablets.

Byju's is India's largest education-technology (ed-tech) company trying to help millions of

students learn better through the internet. In 2015, for the K-12 segment, Byju's launched its
flagship product Byju's The Learning App, which became India's most popular learning app.
As of December 2017, this app had 12 million downloads and 700,000 paid users.
1.14 M-commerce

Meaning of M-commerce

Mobile Commerce is described as a "retail outlet in the customer's pocket." This term was
coined by Kevin Duffey in 1997 at the Global Mobile Commerce Forum launch. The same
year, it was first used when mobile-phone enabled Coca-Cola vending machines were
installed in Finland, accepting payment via SMS text messages. Since the iPhone launch in
2007, mobile commerce has moved away from SMS systems into actual applications.

M-commerce (mobile commerce) involves buying and selling goods and services via
smartphones and tablets. Examples include in-app purchasing and mobile banking. The
Amazon mobile app enables retail-based M-commerce. Digital wallets such as PayTM,
Google Pay, Apple Pay, Android Pay, and Samsung Pay are popular sites promoting
M-commerce.

Benefits of M-commerce

Global Reach

Mobile commerce allows brands to enter previously unconsidered markets. It is estimated

that two-thirds of world adults will own smartphones by the end of 2019. This large user base
offers numerous potential sales leads for brands.

Consumer Analytics

Mobile commerce provides companies with better consumer data. In traditional retail stores,
consumers visit, purchase, and leave with little insight into why they make purchases. With
mobile commerce, brands can connect with consumers from discovery through purchase,
gaining access to valuable purchase intent signals.

Rapid Expansion

Mobile commerce allows brands to avoid market saturation issues by changing market focus
to differentiate from competitors. As new markets open and are discovered, they provide
extensive sales opportunities to brands, offering immense opportunities for market
penetration and development.

Scalability

Through mobile commerce, brands better scale everything from inventory to marketing. For
example, they can increase mobile app marketing when consumer interest spikes and
downscale when interest decreases.

Targeted Timing
Mobile commerce allows brands to reach consumers at right times, whether browsing items
while traveling or shopping in stores during lunch breaks. Geotracking technology and
programmatic advertising help companies connect with consumers in moments before
purchase decisions, increasing purchase completion likelihood.

Limitations of M-commerce

Poorly designed m-commerce transactions can prevent customers from making purchase
decisions. Mobile payment options are not available in every geographic location and may
not support every type of digital wallet.

Data breaches and lack of transaction security restrict several consumers from using
M-commerce. Lack of mobile-friendly websites for easy usage and interface also limits
M-commerce use.

Businesses must know and comply with tax laws and regulations of all countries they ship to.
Lack of information on taxation of various delivery countries can create problems for all
stakeholders involved.

Ways to Improve M-commerce

Quick-loading webpages are likely to win more sales because consumers can be impatient
and demand instant gratification. Mobile checkouts should ensure smoother checkout
experiences so buyers can easily enter payment information, preferably with mobile wallets
that eliminate manual entry. This reduces human error and ensures transaction process safety.

Mobile-friendly websites are the need of the hour. Most websites do not function optimally
on mobile phones, creating barriers for users seeking seamless experiences.

Trends in M-commerce

Mobile Traffic Outgrew Desktop Traffic

Consumers rely more and more on their smartphones. Research shows 9 out of 10 consumers
keep their phones within reach 24/7. This has huge impact on how people search, view, and
buy products online. Mobile usage is one of the primary drivers for growing mobile traffic.

Mobile Share of Retail E-commerce Transactions

With shoppers increasingly using smartphones to search and browse, it's essential for online
retailers to track mobile share of e-commerce transactions. Mobile transactions are
outgrowing desktop. In the U.S., 52% of all e-commerce transactions were mobile in 2016.
Mobile phones offer greater ease and convenience in meeting consumer shopping needs.

Usage of Smartphones
Research shows 90% of time spent on mobile devices is spent within apps, versus 10% spent
on mobile browsers. Time spent in apps grew from 126 to 198 minutes over the last 3 years,
while time spent on mobile browsers decreased from 32 to 22 minutes. Although social
media and news account for most usage, customers are also embracing mobile apps for
shopping. Retailers should meet customers wherever they are.

Consumers Prefer Apps over Mobile Websites

Consumers who prefer mobile apps over browsers do so for convenience, speed, and
personalized experience. Apps offer access to more features and capabilities than websites.
For example, receiving push notifications at regular intervals. Research says new mobile app
users are twice as likely to return within 30 days versus mobile web users. Higher retention
means better chances at creating lifetime consumers.

Conclusion

E-commerce has revolutionized the way businesses operate and consumers shop. From its
basic definition as electronic commerce to its complex ecosystem involving various
stakeholders, e-commerce continues to evolve and shape the global economy. The growth of
e-commerce is driven by technological advancement, changing consumer behavior,
government initiatives, and the increasing penetration of internet and mobile devices.

While e-commerce offers numerous advantages such as global reach, cost efficiency, and
enhanced customer insights, it also faces challenges including security concerns, logistics
issues, and the need for continuous technological upgrades. The distinction between
traditional commerce and e-commerce continues to blur as businesses adopt omnichannel
approaches to serve their customers better.

The impact of e-commerce extends beyond retail to sectors like banking, tourism,
government services, and education. Mobile commerce (m-commerce) represents the next
frontier, with smartphones becoming the primary device for online transactions and
interactions.

As we move forward, the success of e-commerce businesses will depend on their ability to
adapt to changing trends, address consumer concerns, leverage emerging technologies, and
provide seamless, personalized experiences across all touchpoints. The future of e-commerce
looks promising, with continued growth expected across all sectors and geographical regions,
making it an essential component of the modern economy.