E COMMERCE IN INDIA – The Growth Story

Sunil Brid
Enrollment Number:ODL00000893
MBA- Sales & Marketing

DY Patil University

Year of Submission: November 2022

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 Table of Contents

ACKNOWLEDGEMENTS ....................................................................................................... 3

ABSTRACT............................................................................................................................... 4

CHAPTER I – INTRODUCTION ............................................................................................. 6

CHAPTER 2 – Sample Technical Workflow for a e-Commerce- BusinessError! Bookmark

not defined.

CHAPTER 3 – RESEARCH METHODOLOGY ................................................................. 311

CHAPTER IV – ANALYSIS OF E-COMMERCE INDUSTRY ........................................... 34

CHAPTER V –RECOMMENDATIONS AND CONCLUSION ....................................... 4949

References ................................................................................................................................ 57

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 ACKNOWLEDGEMENTS

I wish to this opportunity in expressing my sincere thanks to the people, I am obliged to them
for their encouragement and inspiration that lead me through this project.

I would also like to thank all my friends , colleagues and industry experts , who had directly
or indirectly given their kind co-operation and encouragement. I admit that co-operation and
morality are keyword to success.

Sunil Brid

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 ABSTRACT

In 2021, India had over 845 million internet users across the country. This figure was projected
to grow to over 1.5 billion users by 2040, indicating a big market potential in internet services
and ecommerce business for the south Asian country.

Despite being the second-largest user base in world, only behind China, the penetration of e-
commerce is low compared to markets like the other developed nations, but is growing at an
unprecedented rate, adding around 6 million new entrants every month. The industry consensus
is that growth is at an inflection point. The largest e-commerce companies in India are Flipkart,
Amazon, Paytm , Snapdeal and e-bay The phenomena that world is fast shrinking into a Global
Village because of Internet and other communication mediums is not completely reflective in
the Indian context. While developed and fast developing countries have understood the power
of Internet, India still has a long way to catch up. Internet has brought nearly the entire world
just a click away from us. The retail industry canvass has been repainted by Internet and the
rules of the game in retailing are fast changing. The western culture has affected each and every
aspect of our Indian society.

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The life is becoming fast not only in the metros but also in the class B and Class C cities and
also in rural areas. The number of nuclear families is increasing and both husband and wife are
working, as they have less time to go to the market for purchasing every now and then. Some
other reasons like these, say shortage of time, traffic jams, late working hours, versatility of
plastic money and above all the approach of internet at the door step of whosoever desires it.
Online shopping sites have improved their service and are providing more and more
convenience to the customers. From advance payment options they moved on to payment on
delivery. From fixed delivery timings they have moved on to convenient delivery timings at
the choice of the customer.

We have seen immense opportunity and growth for online shopping portal like flipkart.com,
Amazon in last 2-3 years, however this eCommerce industry faced various risk and challenges
in terms of trust, acceptance of traditional customer, competition, and security. Aspects like
privacy, integrity, authenticity and non-repudiation which are essential elements for a
commercial transaction, are not taken care of in its elemental form. To make this medium
suitable for online shopping, significant work on a continuous basis needs to be taken up and
government is expected to take keen interest in this area of work.

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 CHAPTER I – INTRODUCTION

1.1 Penetration of Internet and User base in India

With an increase of usage of internet, companies reach out their store, shops to customers and
create new business model called online shopping, eCommerce via special type of web portal.
Online shopping provides unique opportunities for enterprises to exchange goods and services
with substantial improvements in operational efficiencies, transaction costs, and customer
satisfaction. An effective e-business solution enables your entire value chain and can give
companies a sustainable competitive advantage by improving processes and creating stronger
relationships with your business partners and customers. Internet Commerce or E-Commerce
(Electronic Commerce) uses online shopping portal connected via the Internet to assist and
enhance a variety of business processes, functions and systems.

We have seen immense opportunity and growth for online shopping portal like flipkart.com,
Amazon in last 2-3 years, however this eCommerce industry faced various risk and challenges
in terms of competition, security. Aspects like privacy, integrity, authenticity and non-
repudiation which are essential elements for a commercial transaction, are not taken care of in
its elemental form. To make this medium suitable for online shopping, significant work on a
continuous basis needs to be taken up and government is expected to take keen interest in this
area of work.

1.2 New Trend : Online Shopping : Pandemic and emergence of UPI

India, one of the fastest growing economies presents a world of opportunities to entrepreneurs,
investors, and researchers with an interest in the global economy. India’s e-Commerce industry
is on the growth curve and experiencing a spurt in growth. With this increased interest comes
a surge in demand for facts, trends and indicators. Highly concentrated urban areas with very
high literacy rates, a vast rural population with fast increasing literacy rate, a rapidly growing
internet user base, technology advancement and adoption and such other factors make India a
dream destination for ecommerce players. E-commerce combines web technology with

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business economics. As of the last 10 years, online visibility for such online enterprises now
heavily rely on the relationship between the own online sales platform and Search Engines for
improved traffic consisting of presumable customers with the intent of acquiring products or
services related to the customers’ needs. In 2008 an Internet behavioural analysis showed that
over 90% percent of internet users make use of search engines at least once a week, stating that
online visibility through the use of search engines now is a crucial business marketing aspect.

E-commerce has transformed the way business is done in India. The Indian E-commerce
market is expected to grow to US$ 120 billion by 2026 from US$ 38.5 billion as of 2020 (
economic Times). Much of the growth for the industry has been triggered by an increase in
internet and smartphone penetration. The ongoing digital transformation in the country is
expected to increase India’s total internet user base to 840 million by 2022 from 636.73 million
in FY19.

E-Commerce and Covid 19

Much before the pandemic hit India and the world, which led to the opening up of a
whole new set of rules and regulations, E-commerce has been the most preferred
mode for the majority of the audience. The factors that can be attributed towards the
preference of e-commerce, ranging from the strong and steady growth of internet
users, increase in the online launch of products, low price due to bulk purchase, and
so on.

In addition to this, a growing number of exclusive products in the market and lower
prices of goods due to the direct distribution channel also contribute towards the
growth of the global e-commerce market.

The outbreak of the coronavirus pandemic has taken a toll over the entire world and
has forced people to stay at home. The consistent lockdowns imposed in the early
outbreak of the pandemic had disrupted the way people buy products and services and
how they perceive e-commerce. The pandemic created a tectonic shift for the Indian
e-commerce industry and has enlarged the scope of this sector for 2021. Consumers
have been changing their preference from shopping at retail outlets, supermarkets,
and shopping malls to online portals for the purchase of products t hat range from
basic commodities to branded goods.

Social distancing, however new it may sound has been implemented for ages to curb
the spread of a highly contagious disease, this leads to a constant growing hesitation

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among the consumers to freely go outside and shop for essential goods further
enabling a constant flow of online purchases. This also led to many brands and small
retailers to adopt the online route leading to a consistent surge in the online business.
It has also been observed that there has been a sizeable increase in first-time buyers
on many e-commerce platforms who had been so far inhibited to shop online.

Mobile is also a profitable and promising shopping platform for the retail industry in India. In
fact, about 23 percent of Indian internet users stated that they used a mobile phone for making
a purchase in 2016. This places India as one of the leading digital markets for mobile e-
commerce penetration. About 27 percent of digital buyers in the country stated making an
online purchase via their smartphones/mobile on a monthly basis, and 24 percent stated
purchasing online goods and services weekly. About 71 percent of consumers in India also said
mobile wallet is their preferred method of digital payment. In terms of value, sales from mobile
retail e-commerce are projected to generate 63.5 billion U.S. dollars in revenue by 2020.

Rural India is driving more than half of the Internet usage in the country, as per a report
published jointly by Internet and Mobile Association of India (IAMAI) and data analytics firm
Kantar. The report, titled 'Internet in India' and based on an ICUBE 2021 study, found that
more than 50 percent of the 692 million active Internet users in India are from the rural pockets.
The report says "much of the growth continues to be driven by rural India (351 million users)
as urban India seems to have hit a plateau (341 million users", and estimates there will be 900
million Internet users in India by 2025. In terms of states, Goa has the maximum Internet
penetration while Bihar has the lowest.
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around 346 million Indians are engaged in actual online transactions such as e-commerce and
digital payments — more than the entire population of the United States. This was largely
driven by the Covid-19 pandemic, which sparked a 51 percent increase in digital transaction in
two years.

UPI Payments : India 2021

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1.3 Ecommerce Portals

Ecommerce offers the amazing benefit of making buying and selling products and services of
the internet. And Ecommerce portals act as a gateway for people across the globe to make these
transactions at the click of a button.

Portals are websites too. But they offer more extensive information and services from various
other sources. Portals bring together sites and services organized about some common theme.
They differ widely in the areas of information/ activities they deal with such as local
community portals, interest groups, commercial activity or market sector portals and the
additional features they supply such as discussion forum, surveys, expertise directories, etc.

Hence portals are like doorways on the Internet. They open to us information from a wide
variety of sources and even from other internet users. They also offer a host of services at a
single place.

Ecommerce portals offer people and businesses to sell and purchase a host of products or
services through the internet along with offering the various other features of a portal. There
are mainly two types of Ecommerce Portals: Business to Business ecommerce portals (B2B)
and Business to Consumer (B2C)

Business to business portals is the exchange of products or services on the Internet between
businesses rather than between businesses and consumers. B2B is companies buying from and
selling to each other online.

B2C Model - B2C (Business to Consumer) is the online selling of products or services by a
company to a consumer for his/her own use. It refers to the selling or buying of products and
services through the Internet from web retailers to web customers.

B2C Ecommerce portals are a great way to promote brand and products. It allows consumers
to have a better understanding of the product with information on the product, price tags,
pictures, consumer reviews etc.

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1.4 E-Commerce : B2C,B2B,C2C,P2P and Mobile Commerce

E-commerce is the process of buying and selling of various products and services by businesses
through the Internet. It deals various kind of business concern, from retail site of the consumer,
which includes auction. The main focus is to concentrate on business substitutes involving
goods and services between various corporations.

E-commerce is the purpose of Internet and the web to Conduct business but when we
concentrate on commercial deals among organizations and individuals demanding selective
information systems under the guarantee of the firm it accepts the form of e-business.
Nowadays, the word ‘e’ is hitting momentum. If you’re looking to get into this business, one
of the fore most things you have to have is a Virtual Private Cloud Hosting keeping the traffic
in mind and respecting customer’s valuable time.

There are primarily five types of e-commerce models:

1.41. Business to Consumer (B2C)

B2C stands for Business to Consumer as the name suggests, it is the model taking businesses
and consumers interaction. Online business sells to individuals. The basic concept of this model
is to sell the product online to the consumers. B2C is the indirect trade between the company
and consumers. It provides direct selling through online. For example: if you want to sell goods
and services to customer so that anybody can purchase any products directly from supplier’s
website. Directly interact with the customers is the main difference with other business model.
As B2B it manages directly relationship with consumers, B2C supply chains normally deal
with business that are related to the customer.

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1.4.2 Business to Business (B2B)

B2B stands for Business to Business. It consists of largest form of Ecommerce. This model
defines that Buyer and seller are two different entities. It is similar to manufacturer issuing
goods to the retailer or wholesaler. Crossword deals with books and other associated
accessories online but it is does not make up all those products. So, in govern to deal those
products, first step is to purchases them from unlike businesses i.e. the producers of those
products.

“It is one of the cost effective way to sell out product throughout the world”

Benefits:

• Encourage your businesses online

• Products import and export
• Determine buyers and suppliers
• Position trade guides

1.4.3 Consumer to Consumer (C2C)

C2C stands for Consumer to Consumer. It helps the online dealing of goods or services among
people. Though there is no major parties needed but the parties will not fulfil the transactions
without the program which is supplied by the online market dealer such as eBay.

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1.4.4 Peer to Peer (P2P)

It is a discipline that deal itself which assists people to instantly shares related computer files
and computer sources without having to interact with central web server. If you are going to
implement this model, both sides demand to install the expected software so that they could
able to convey on the mutual platform. This kind of e-commerce has very low revenue
propagation as from the starting it has been tended to the release of use due to which it
sometimes caught involved in cyber laws.

1.4.5 M-Commerce

It deals with conducting the transactions with the help of mobile. The mobile device consumers
can interact with each other and can lead the business. Mobile Commerce involves the change
of ownership or rights to utilize goods and related services.

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1.5 Emergence of E-Commerce in India

The Online e-commerce Industry is very well developed and is booming largely due to the
Internet-savvy urban population. The segments are categorized under travel industry and online
non-travel industry, include e-Tailing (online retail), online shopping, online classifieds and
Digital Downloads are still in a nascent stage). Though eCommerce took a beating in the
dotcom bust, it seems set to grow globally. The global revival of eCommerce is having a ripple
effect in India too where the B2B (Business to Business), B2C (Business to Consumer), C2C
(Consumer to Consumer), G2B (Government to Business) and G2C (Government to Citizens)
segments are showing rapidly increasing activity over the past few years.

India has its share of success stories in the B2C segment in the form of Indiatimes.com,
Rediff.com, Shaadi.com, Indiamatrimony.com, MagicBricks.com, Monster.com and
Makemytrip.com ,ebay.com etc. These and such other portals are generating a lot of interest
and increasing transaction traffic. Smaller businesses have jumped onto the bandwagon by
offering products and services online and have successfully carved out niches for themselves.
The online community is growing by leaps and bounds as an increasing number of consumers
have started transacting online because the initial fears and apprehensions are being laid to rest.
Research studies have indicated several factors responsible for the sudden spurt in growth of
eCommerce in India such as:

• Rapidly increasing Internet user base

• Technology advancements such as VOIP (Voice-over-IP) 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 eCommerce vendors
• Improved fraud prevention technologies that offer a safe and secure business
environment and help prevent credit card frauds, identity thefts and phishing
• Bigger web presence of SME’s and Corporate because of lower marketing and
infrastructure costs.
• Longer reach - Consumers in the Tier II & Tier III cities are fast realizing the potential
of the Internet as a transacting medium
• The young population find online transactions much easier

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E-Commerce offers several benefits to businesses

• Easy reach to a fast growing online community

• Unlimited shelf place for products and services
• Fuse the global geographical and time zone boundaries
• Helps reach national and global markets at low operating costs

There is a growing awareness among the business community in India about the opportunities
offered by eCommerce. Ease of Internet access and navigation are the critical factors that will
result in rapid adoption of Net commerce. Safe and secure payment modes are crucial too along
with the need to invent and popularize innovations such as Mobile Commerce.

1.6 eCommerce growth Segments / Verticals

ECommerce referring to the process of trading goods and services through an electronic
medium such as the internet has gained tremendous popularity in the recent years. ECommerce
involves paperless transactions and usage of EDI (Electronic Data Interchange), electronic
mail, bulletin boards, fax transmissions, and electronic fund transfers. With advancements in
technology, there have been changes in the methodology for business transactions. India, being
a rapid adaptor of technology is apace with the current scenario of electronic data exchanges
and has taken to eCommerce. The number of eCommerce transactions have increased
manifold. People use credit or debit cards for making purchases in an online store. ECommerce
is being used for purchase and sale of multiple products and there are multiple players using
various portals and websites for this purpose. The popular uses of eCommerce in India involve
the following:

1.6.1 Online Travel Industry in India ( Ex . Makemytrip,Yatra, Thomas Cook etc)

India's online travel market is approaching maturity, as more segments transition to digital
channels. Online travel gross bookings will grow in double digits and outpace the overall travel
market. With the advent of the internet and the emergence of artificial reality (AR), the online
travel industry in India is changing rapidly due to which a growing number of Indians have
turned to the convenience of the web for better travel prices and accommodations. Most of the
growth in the Indian online travel market would come from the increasing penetration of
international flight and hotel bookings offered by online portals such as Cleartrip,

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MakeMyTrip, Yatra, and others. An increase in user demand is also a factor as Indian
consumers are expected to devote almost 4% of their wallet spends on travel. The combination
of travel and transportation offers, even those which include airport transfers, as well as holiday
packages are growing hugely. Air accessibility and affordability is the biggest ongoing
development in India, and the government’s regional airport development program is
promoting connectivity to smaller cities and towns. The online travel market in India is mainly
driven by several factors that include the increasing tourism industry, along with the rising
penetration of internet usage and smartphone users across various countries. In addition to this,
rapid urbanization, increasing per capita income, economic growth, and changing lifestyle of
the customers shifting towards more enhanced services and comfort will have a positive impact
on the growth of the market.

India’s online travel industry has been hit hard by the COVID-19. However, long-term growth
fundamentals are intact. The pandemic is a major challenge, but it is also an acquisition
opportunity for stronger players as the industry consolidates. Domestic tourism however is
expected to pick up sooner and latest available data suggest plenty of pent-up demand to
support a relatively speedy recovery. Indian travel firms have reportedly seen a 25%-30%
increase in bookings both for air travel and accommodations for the Christmas and New Year
holidays.

1.6.2 Online Retailing or eTailing ( Flipkart,Amazon,Nykka etc)

Due to improved broadband connections and increased penetration of credit card facilities to a
wider population, eTailing or online retailing is witnessing a substantial growth. Internet
retailers provide a wide range of facilities to the consumers, including discounted prices,
comparison of product features offered by various vendors, areas where the products can be
procured, etc. Currently, the online retail industry in India is estimated to be worth Rs 110
Million. By 2013, India is expected to have the third largest internet user base, which improves
the prospects of online purchases. Some of the retail stores offering online retail facilities
include: Reliance's Rmoneymall, Pantaloon's FutureBazaar.com, Videocon's eDigiworld.com,
Vishalmart's Vishalmegamart.com, and the Tata Group's Westside.

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1.6.3 Online Trading in Stocks and Shares

Online stock trading activity is gaining momentum in India. Services offered by the online
stock trading companies include online buying and selling of stocks and shares, market analysis
and research, details of companies, comparison of companies, and research on equity and
mutual funds, customer services through email and chat. Online trading also has an added
advantage of real time stock trading without calling or visiting the broker's office. Major online
stock trading websites in India include: ICICIDirect.com, Sherkhan.com, Indiabulls.com,
5Paisa.com, Motilal Oswal Securities, HDFC Securities, Reliance Money, IDBIPaisaBuilder,
Religare, and Kotak Securities.

1.6.4. Online Advertisements

The Indian population accesses the internet from home, office, and cybercafés. There is a large
segment of population that is fast adapting to internet. Advertisers have identified the internet
as a medium for enhancing the awareness for their business activities. Online advertising in
India is expected to cover all organizations and their products. The online advertisement
industry grew to Rs 3250 million in India, accounting for 38% growth rate in 2008-2009. The
growth rate for the year 2009-2010 is expected to be 32% which amounts to Rs 4300 million.

1.6.5. Online Job Sites

Another area where eCommerce is widely used is that of employment. Internet has simplified
the process of search for 'right people on the right job'. There are a number of web portals and
sites that match a prospective employer's requirements with that of candidates applying for that
job. Some of the popular job sites in India include: Naukri, Monster India, Times Jobs,
Careerjet, Naukri Hub, Career India, Bixee, ClickJobs, CareerAge, and Freshersworld.

1.6.6. Real Estate Portals

There are a number of real estate portals and sites that provide information to users regarding
the property they wish to buy/sell. This information includes properties available for
sale/purchase, the cost, location, etc. Some of the popular real estate portals include:
Indiaproperty.com, 99acres.com, Magicbricks.com, and Makaan.com.

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1.6.7. Online Matrimony Websites

Matrimony eCommerce portals provide the seekers appropriate information regarding the
prospective matches, region of their residence, their religion, caste, etc. Allied services are also
provided to the listed members. These services include: astrology, information on customs and
rituals, legal issues, health and beauty, fashion, wedding planners, etc. Some of the leading
matrimony portals in India include: Shaadi.com, Jeevansathi.com, Bharatmartimony.com,
Indiamatrimony.com, and Simplymarry.com, and LifepartnerIndia.com.

1.7 Technology Behind e-Commerce

Ecommerce provides unique opportunities for enterprises to exchange goods and services with
substantial improvements in operational efficiencies, transaction costs, and customer
satisfaction. An effective e-business solution enables your entire value chain and can give you
a sustainable competitive advantage by improving processes and creating stronger relationships
with your business partners and customers. Internet Commerce or E-Commerce (Electronic
Commerce) uses online electronic technology connected via the Internet to assist and enhance
a variety of business processes, functions and systems.

Running an online business can be an overwhelming task. Extending a business to the Web
and opening an e-commerce storefront requires merchants to master many tasks not only
website development and design, but also maintaining the confidentiality and security of
consumer data and accepting and processing payments.
The benefits of E-Commerce are not just available to large corporations and government
departments and many small to medium businesses are discovering new cost -effective
opportunities to use Internet - related technology to help their business operations locally and
internationally.

E-Commerce will enable companies

Shorten procurement cycles through on-line catalogue, ordering and payment. Cut costs on
both stock and manufactured parts through efficient JIT and QR systems that reduce the
inventory and facilitate automatic replenishment. Shrink product development cycles and
accelerate time-to market through collaborative engineering and product customization.

E-Commerce Technology

• Supply chain management

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 • Video on-demand
• Remote Banking
• Procurement and purchasing
• On-line marketing and advertising

1.8 eCommerce industry : SWOT

Strengths of e-commerce

• 24 hrs a day, 7 days in a week your business in operation.

• You can do your business globally by sitting at your office, home or in bedroom.
• The products reach to customers directly from the producers at a lower price
than the market value.
• It is fast and effective.
• By visiting different websites one can within a short time can compare the price
and buy on the best deal.
• Advertising your product is cost effective in compare with conventional offline
system.
• Low staff cost.
• Financial transaction through electronic fund transfer is very fast and can be
done from any part of the world.
• Can be started with very low investment.
Weaknesses of e- commerce

• There is no direct interaction between the customer and the seller. Therefore,
the scope of convincing the customer does not exist.
• Many times, we prefer to buy the product by reaching personally to the market
rather than purchasing through Internet.
• Sometimes, transportation cost increases the product cost.
• No. of potential customers who can buy through Internet is still not enough.
Opportunities

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 • Everyday number of Internet users is increasing in a rapid way.
• People of tomorrow will feel more comfortable to buy products through Internet
only.
• Big companies are already entering in this field so; they are making people
habitual and confident about marketing through Internet at the cost of the
companies.
Threats

• Dishonest persons entering in this field which damage the confidence and faith
of common people on marketing through Internet.
• General trepidation of Internet-based business.
• Increased government regulation for supplements.
• Aggressive competition from other markets.

1.9 E-Commerce Portal :Opportunities and Challenges

Development of the internet in the 20th century led to the birth of an electronic marketplace or
it is called e-marketplace, which is now a kernel of electronic commerce (e-commerce). An e-
marketplace provides a virtual space where sellers and buyers trade with each other as in the
traditional marketplace. Various kinds of economic transactions and buying and selling of
goods and services, as well as exchanges of information, take place in e-marketplaces. E-
marketplaces have become an alternative place for trading. Finally, an e-marketplace can serve
as an information agent that provides buyers and sellers with information on products and other
participants in the market. These features have been reshaping the economy by affecting the
behavior of buyers and sellers.

1.9.1 E-Business

E-business affects the whole business and the value chains in which it operates. It enables a
much more integrated level of collaboration between the different components of a value chain
than ever before. Adopting e-Business also allows companies to reduce costs and improve
customer response time. Organizations that transform their business practices stand to benefit
immensely from innumerable new possibilities brought about by technology.

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E-commerce as anything that involves an online transaction. This can range from ordering
online, through online delivery of paid content, to financial transactions such as movement of
money between bank accounts. One area where there are some positive indications of e-
commerce is financial services. Online stock trading saw sustained growth throughout the
period of broadband diffusion. E-shopping is available to all these who use a computer. Over
the past year Amazon.Com, ebay India, Indiatimes have seen a rapid growth in categories such
as mobile handsets, jewellery, fashion apparel, books, gift items and other items.

1.9.2 E-commerce integration

The rationale for infusion of e-commerce education into all business courses is that
technological developments are significantly affecting all aspects of today's business. An e-
commerce dimension can be added to the business curriculum by integrating e-commerce
topics into existing upper-level business courses. Students would be introduced to e-commerce
education and topics covered in a variety of business courses in different disciplines e.g.
accounting, economics, finance, marketing, management, management information systems.
To help assure that all related business courses in all disciplines such as e.g., accounting,
finance, economics, marketing, management, information systems pay proper attention to the
critical aspects of e-commerce, certain e-commerce topics should be integrated into existing
business courses.

1.9.3 Open and distance learning

Education and continuous learning have become so vital in all societies that the demand for
distance and open learning will increase. As the availability of the Internet expands, as
computing devices become more affordable, and as energy requirements and form factors
shrink, e-learning will become more popular. In addition to the importance of lifelong learning,
distance education and e-learning will grow in popularity because convenience and flexibility
are more important decision criteria than ever before. E learning will become widely accepted
because exposure to the Internet and e-learning often begins in the primary grades, thus making
more students familiar and comfortable with online learning. In fact, for many countries,
distance education has been the most viable solution for providing education to hundreds of
thousands of students.

1.9.4 E-commerce and E-insurance

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The recent growth of Internet infrastructure and introduction of economic reforms in the
insurance sector have opened up the monopolistic Indian insurance market to competition from
foreign alliances. Although the focus of e-commerce has been mainly on business to consumer
(B2C) applications, the emphasis is now shifting towards business to business (B2B)
applications. The insurance industry provides an appropriate model that combines both B2C
and B2B applications.

Traditional insurance requires a certificate for every policy issued by the insurance company.
However, paper certificates encumber problems including loss, duplication and forging of the
certificate. The conventional certificate is now replaced with an electronic certificate that can
be digitally signed by both the insurer and the insurance company and verified by a certifying
authority.

Online policy purchase is faster, more user-friendly and definitely more secure than the
traditional processes. Therefore it is more attractive to the insurer. At the same time it incurs
less cost and requires fewer resources than traditional insurance and is therefore more profitable
for the insurance company.

E-insurance also makes the insurance procedure more secure since the policy details are stored
digitally and all transactions are made over secure channels. These channels provide additional
market penetration that is absent in traditional channels and help in earning more revenue than
traditional insurance processes.

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1.10 Challenges for E Commerce Portal

Internet based e-commerce portal has besides, great advantages, posed many threats because
of its being what is popularly called faceless and borderless.

Some examples of ethical issues that have emerged as a result of electronic commerce. All of
the following examples are both ethical issues and issues that are uniquely related to electronic
commerce.

1.10.1 Ethical issues:

• Privacy - 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:

1. Privacy consists of not being interfered with, having the power to exclude;
individual privacy is a moral right.
2. 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"

• Security concerns - 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.

• Other ethical issues

1. Manufacturers Competing with Intermediaries Online

2. "Disintermediation," a means eliminating the intermediary such as retailers,
wholesalers, outside sales reps by setting up a Website to sell directly to
customers.

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 3. Disintermediation include (1) music being downloaded directly from producers
(2) authors distributing their work from their own Web sites or through writer
co-operatives.
4. Dinosaurs – "Dinosaurs" is a term that refers to executives and college
professors who refuse to recognize that technology has changed our lives. When
an executive speaks in terms of the Internet being the "wave of the future," it is
a sure sign of "dinosaur.

1.10.2 Perceptions of risk in e-service encounters

As companies race to digitize physical-based service processes repackaging them as online e-

services, it becomes increasingly important to understand how consumers perceive the
digitized e-service alternative. 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 web sites, have become commonplace, and are likely to cause alarm
and fear within consumers.

1.10.3 E-commerce Integration

Beside many an advantages offered by the education a no. of challenges have been posed to
the recent education system. E-commerce Integration assures coverage of all critical aspects of
e-commerce, but it also has several obstacles. First, adding e-commerce materials to existing
business courses can overburden faculty and students alike trying to cope with additional
subject matter in courses already saturated with required information. Second, many business
faculty members may not wish to add e-commerce topics to their courses primarily because of
their own lack of comfort with technology-related subjects. Third and finally, this approach
requires a great deal of coordination among faculty and disciplines in business schools to
ensure proper coverage of e-commerce education.

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1.10.5 Human skills required for E-Commerce:

It's not just about E-commerce, It's about redefining business models, reinventing business
processes, changing corporate cultures, and raising relationships with customers and suppliers
to unprecedented levels of intimacy.

• Internet-enabled Electronic Commerce:

• Web site development
• Web Server technologies
• Security
• Integration with existing applications and processes

Developing Electronic Commerce solutions successfully across the Organization means

building reliable, scalable systems for

• security,
• E- commerce payments
• Supply- chain management
• Sales force, data warehousing, customer relations
• Integrating all of this existing back-end operation.

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CHAPTER 2 – Sample Workflows for eCommerce

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 CHAPTER 3 – Study Methods

3.1 Objectives of the study:

• To learn about the eCommerce
• To learn about web portal and eCommerce Industry in India.
• To analyse in depth the advantages of ecommerce portals
• To understand what triggers and barriers towards online shopping in India
• To find out the challenges of e-commerce industry faced
• To observe the future of the E-Commerce industry and recommend improvement for
better online shopping experience
• To contribute significantly towards the current thinking, security regarding e-commerce
online transactions
• To determine the current awareness and alert in the particular area in ecommerce like
security issues, Screening, Recommended payment method.

3.2 Problem Statement

Even though the government of India has taken positive measures to facilitate the speedy
growth of E- commerce by the introduction of cyber laws, reduction of taxes on infrastructure
etc people are hesitating to buy on lines due to confusions on security and payment methods.
There are also frauds taking place in credit cards which can happen while it on the internet.
Inadequate infrastructure and excessive tariffs also make the situation worse. Scope of this
study are
• To identify opportunity for ecommerce portal and challenges faced and suggest to
improve this challenges.
• To know history, current status and future of eCommerce industry in India

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3.3 Significance of the study

In India E-Commerce is still a relatively unknown and unused entity, but with the governments
open attitude towards progression, lot of infrastructure is dedicated to this area. The new
economics of information can transform business definitions industry definitions and
competitive advantage. The most tables of industries, the most focused of business models, and
the strongest of brands can be blown to bits by new information technologies. It can come from
nowhere and demolish brands & business that have been established for decades, ever
centuries.

In India where the internet users are growing at an alarming rate it will be helpful for the
consumer as well as for the companies, to discuss on e-retailing models, payment methods,
security features, future trends and benefits etc. predictions made on this study can be used as
a basis to foresee the future level of business.

It deals with the issues regarding electronic payments and the other legal issues in e-commerce.
It also deals with the internet strategy for Indian Brick and mortar companies. It also depicts
the imperatives imposed by e-commerce in other industry products. This study will help to
identify current status and future of eCommerce industry in India.

3.4 Research design

This is a descriptive research as it will help to know the future of eCommerce industry in India.

Data collection:
For this study I have used secondary data and collected data from various web sites, online
reports related to e-commerce and online portals

• Online publication on web portals and ecommerce sites

• Ecommerce web sites

• Some related information from the Internet

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 • Other relevant books.

3.5 Limitations of the study

In spite of my best effort, this study is not free from the following limitations:

• The time stipulated for the project.

• Limited statistical data available on ecommerce company web sites

• Relevant papers and documents were not available sufficiently

• I am also less experienced in this regard.

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 CHAPTER IV –Insights of E-COMMERCE INDUSTRY

4.1 Popular eCommerce Sites in India

There were 624.0 million internet users in India in January 2021. The number of internet users
in India increased by 47 million (+8.2%) between 2020 and 2021. Internet penetration in India
stood at 45.0% in January 2021. Despite being the second-largest user base in world, the
penetration of e-commerce is low compared to markets like the United States (266 million,
84%), or France (54 M, 81%), but is growing at an unprecedented rate, adding around 6 million
new entrants every month. The industry consensus is that growth is at an inflection point. In
India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail
activities. Demand for international consumer products (including long-tail items) is growing
much faster than in-country supply from authorised distributors and e-commerce offerings.

As of 2021, the largest e-commerce companies in India are Flipkart, Amazon, BigBasket,
Myntra, Paytm, Jabong and Snapdeal

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 1. Amazon.in

Amazon.com, Inc., is an American electronic commerce and cloud computing company based
in Seattle, Washington, that was founded by Jeff Bezos on July 5, 1994. The tech giant is the
largest Internet retailer in the world as measured by revenue and market capitalization, and
second largest after Alibaba Group in terms of total sales. The amazon.com website started as
an online bookstore and later diversified to sell video downloads/streaming, MP3
downloads/streaming, audiobook downloads/streaming, software, video games, electronics,
apparel, furniture, food, toys, and jewelry. The company also produces consumer electronics—
Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world's largest provider of cloud
infrastructure services (IaaS and PaaS). Amazon also sells certain low-end products under its
in-house brand AmazonBasics.

Amazon has separate retail websites for the United States, the United Kingdom and Ireland,
France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India, and
Mexico. In 2016, Dutch, Polish, and Turkish language versions of the German Amazon website
were also launched. Amazon also offers international shipping of some of its products to certain
other countries.

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Amazon India is currently worth $16 billion and has the same 30% marketshare as local
competitor Flipkart. That's in a country which has a $2.6 trillion GDP growing at 6-7%
annually. Flipkart, of course, just accepted a $16 billion investment from Walmart for a 77%
share of the company.

Amazon entered the India space in 2013, and has yet to turn a profit. But it's captured about
30% of the Indian ecommerce market, and is poised to grow that 23% annually until 2027. That
would mean Amazon India would reach $70 billion in gross merchandise volume and $11
billion in revenue.

2. Flipkart.com

Flipkart Pvt Ltd. is an Indian electronic commerce company based in Bengaluru, India.
Founded by Sachin Bansal and Binny Bansal (no relation) in 2007, the company initially
focused on book sales, before expanding into other product categories such as consumer
electronics, fashion, and lifestyle products.

The service competes primarily with Amazon's Indian subsidiary, and the domestic rival
Snapdeal. As of 2017, Flipkart held a 39.5% market share of India's e-commerce industry.
Flipkart is significantly dominant in the sale of apparel (a position that was bolstered by its
acquisitions of Myntra and Jabong.com), and was described as being "neck and neck" with
Amazon in the sale of electronics and mobile phones. Flipkart also owns PhonePe, a mobile
payments service based on the Unified Payments Interface (UPI).

In May 2018, U.S.-based retail chain Walmart announced its intent to acquire a 77% controlling
stake in Flipkart for $16 billion USD, subject to regulatory approval. The deal is expected to

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close by the end of the year. In April 2017, eBay announced that it would sell its Indian
subsidiary eBay.in to Flipkart and make a US$500 million cash investment in the company.
eBay promoted that the partnership would eventually allow Flipkart to access eBay's network
of international vendors, and vice versa, but these plans never actually came to fruition. In July
2017, Flipkart made an offer to acquire its main domestic competitor, Snapdeal, for around
US$700-800 million. It was rejected by the company, which was seeking at least US$1 billion.

Flipkart held a 51% share of all Indian smartphone shipments in 2017, overtaking Amazon
India (33%). Flipkart sold 1.3 million phones in 20 hours on 21 September alone for its Big
Billion Days promotion, doubling the number sold on the first day of the event in 2016 (where
it sold a total of 2.5 million phones in five days)

3. Myntra.com

Myntra is an Indian fashion e-commerce company headquartered in Bengaluru, Karnataka,

India. The company was founded in 2007 to sell personalized gift items. Established by
Mukesh Bansal along with Ashutosh Lawania and Vineet Saxena, also abinash mallick Myntra
sold on-demand personalized gift items. It mainly operated on the B2B (business-to-business)
model during its initial years. Between 2007 and 2010, the site allowed customers to
personalize products such as T-shirts, mugs, mouse pads, and others.

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In 2011, Myntra began selling fashion and lifestyle products and moved away from
personalisation. By 2012 Myntra offered products from 350 Indian and International brands.
The website launched the brands Fastrack Watches and Being Human.

In 2014 Myntra was acquired by Flipkart in a deal valued at Rs. 2,000 crore (US$290 million).
The purchase was influenced by two large common shareholders, Tiger Global and Accel
Partners. Myntra functions and operates independently. Myntra continues to operate as a
standalone brand under Flipkart ownership, focusing primarily on "fashion-conscious"
consumers.

In 2014, Myntra's portfolio included about 1,50,000 products of over 1000 brands, with a
distribution area of around 9000 pin codes in India. In 2015, Ananth Narayanan became the
Chief Executive Officer of Myntra. On 10 May 2015, Myntra announced that it would shut
down its website, and serve customers exclusively through its mobile app beginning 15 May.
The service had already discontinued its mobile website in favour of the app. Myntra justified
its decision by stating that 95% of traffic on its website came via mobile devices, and that 70%
of its purchases were performed on smartphones. The move received mixed reception, and
resulted in a 10% decline in sales. In February 2016, acknowledging the failure of the "app-
only" model, Myntra announced that it would revive its website. In September 2017, Myntra
negotiated the rights to manage Esprit Holdings's 15 offline stores in India

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4. BigBasket.com

Supermarket Grocery Supplies Private Limited d/b/a BigBasket (stylized as bigbasket) is a

Indian online grocery and food products provider, founded in 2011. Headquartered in
Bengaluru, the brand is run by Innovative Retail Concepts Private Limited in 30 Indian towns
and cities. It sells fresh fruits and vegetables, meat and dairy, groceries, and personal care and
household items via its website and mobile apps. As of 2017 it had a customer base of 6 million
and was the country's largest online grocer.

In 1999, founders of BigBasket, Hari Menon, Abhinay Choudhari, V S Sudhakar, Vipul Parekh
and V S Ramesh started Fabmart, one of the first online businesses in India. But it did not
succeed because of the low internet penetration in India at the time and lack of secure digital
payment gateways which discouraged people from making online payments. After trying other
ventures they regrouped in 2011 to try the online grocery market again and started BigBasket.

Bigbasket acquired Delyver in June 2015 for an undisclosed amount. Delyver was an online
grocery store and its specialty was using local stores to deliver groceries to people

In 2017 BigBasket partnered with MUMBAI-owned Bengal Chemicals and Pharmaceuticals

Limited (BCPL) to deliver its industrial chemicals, pharmaceuticals, and home products to its
customers in Kolkata. In April 2017, BigBasket partnered with SnapBizz, a retail technology
firm to automate supply chain and inventory management for local grocery stores.

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1.7 Few More examples from various segments :
Bookmy Show - Entertainment

Makemytrip : Travel booking sites

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India Mart : B2B Example

Netflix : OTT Platform

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4.5 eCommerce in India Analysis
The Indian e-commerce industry has been on an upward growth trajectory and is expected to
surpass the US to become the second largest e-commerce market in the world by 2034. The e-
commerce market is expected to reach US$ 200 billion by 2026 from US$ 38.5 billion as of
2017. With growing internet penetration, internet users in India are expected to increase from
445.96 million as of December 2017 to 829 million by 2021. Rising internet penetration is
expected to lead to growth in ecommerce. India’s internet economy is expected to double from
US$125 billion as of April 2017 to US$ 250 billion by 2020, majorly backed by ecommerce.
Digital transactions are expected to reach US$ 100 billion by 2020.

[eCommerce industry in India (USD billion)

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 billion by
2026 from US$ 38.5 billion in 2017. E-commerce is increasingly attracting customers from
Tier 2 and 3 cities, where people have limited access to brands but have high aspirations. With
the increase in awareness about the benefits of online trading, there has been a significant rise
in investment in E-commerce business. Hand in hand with offline trading, many established

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businesses, e.g. Shoppers Stop or Lifestyle, have setup online transaction channels. Earlier food
and grocery were never thought of as items for online trading. However, with the change of
working habits, and consumers opting for adaptability and convenience, there are now
innumerable small and large E-commerce companies selling provisions and food items like
Grofers, BigBasket, etc.

4.3 Strategies Adopted by eCommerce Companies in India

Expansion
• E-commerce companies are gradually expanding to different cities, regions and even
countries. They are also expanding their product range to cater to a larger amount of
people. In May 2017, Uber launched UberEats, an on-demand food delivery app in
India
• Flipkart, after getting acquired by Walmart for US$ 16 billion, is expected to launch
more offline retail stores in India to promote private labels in segments such as fashion
and electronics.
• Paytm Mall, ecommerce platform of Paytm, is planning to expand its groceries segment
and is targeting a Gross Merchandise Value (GMV) of US$ 3 billion from this segment
by the end of 2018.

Ancillary services
• One of the biggest advantage of E-commerce is that along with the core product or
service it can also provide numerous ancillary services without having to invest a lot.
• Guaranteed one day deliveries, exclusive deals and video streaming for a subscription
fee, as in the case of Amazon Prime. India is currently the fastest growing market for
Amazon Prime.
• Flipkart introduced its own payment gateway Payzippy and also, its own logistics and
supply chain firm Ekart.
• E-commerce websites are also introducing e-Wallet services; for example - Amazon’s
Pay Balance.

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 • 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

Subscription for ecommerce

• E-commerce companies are increasingly adopting subscription model to provide extra
benefits and tailored services to customers to suit their needs.
• Amazon introduced Amazon Prime, a subscription based service for Amazon
customers, in 2016. members of Amazon Prime could avail early access to selected
deals, free one day delivery and other benefits. Amazon Prime subscribers in India
stood at around 5-6 million as of December 2016
• In 2014, Flipkart introduced Flipkart First, a premium subscription based services
wherein a customer gets free delivery, discounted same day delivery, priority customer
service etc.

Personalised Experience
• Site visitors demand one-of-a-kind experiences that cater to their needs and interests.
Technology is available, even to smaller players, to capture individual shoppers’
interests and preferences and generate a product selection and shopping experience led
by individualised promotions tailored to them.
• Many E-commerce websites provide personalised experience to customers to cater to
their needs and interests depending upon their location, choices, products they like or
buy, websites they visit etc.
• This strategy has helped companies to know customers’ demands better and serve them
accordingly

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4.4 Growth drivers of eCommerce in India
• Web content search in Hindi grew by 155 per cent in 2015 whereas that through mobile
internet grew by 300 per cent in the same period.
• In a move to grab the opportunity, Snapdeal and Make My Trip had launched their apps
in Hindi and a few other vernacular languages in 2014.
• Online retailers see this emergent segment as a new growth driver as the incremental
growth in mobile subscribers can be credited mainly to people who are comfortable
with languages other than English.
• Consumer demand can be seen increasing even in small towns and cities.
• Less densely populated regions generated a larger proportion of online sales. Nearly 60
per cent of Snapdeal’s purchases came from cities classified as tier II and III.
• Flipkart also noted that “sales of branded products across categories saw a sharp
increase, as more of tier 2 and tier 3 Indian towns took to shopping online.”
• Online retailers’ growing reach in town and cities beyond metros is driven by an
increasing in usage of mobile internet in the country. Increased ownership of
smartphones is helping more Indians access shopping websites easily.
• Rise in smartphone usage is expected to reach 50 per cent penetration by 2020.
• The number of mobile internet users is expected to reach 478 million by June 2018
which will further boost the mobile commerce sector in India.
• Online retailers now deliver to “12,500-15,000 pin codes” out of nearly 100,000 pin
codes in the country.
• With logistics and warehouses attracting an estimated investment of nearly US$2
billion by 2020, the reach of online retailers to remote locations is set to increase.
• Indian warehousing sector is expected to grow by at least 100 per cent by 2021.
• In April 2018, Amazon announced its plans to add five new fulfilment centres in India
and retain its position as the largest warehousing space provider in the country
• A net addition of nearly 140 million debit cards has been recorded in the country in the
past few years. Usage of debit cards at points of sale terminal has increased by 86 per
cent during the same period. This clearly reflects that people are getting comfortable
with using debit cards for activities other than withdrawals at ATM.
• Digital payments will act as a game changer for the domestic e-commerce business and
the current trend of dominance of Cash-on-delivery would be reversed in the next five
years, as per Mr Sachin Bansal, Executive Chairman, Flipkart.

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 • Transactions through the Unified Payments Interface (UPI) reached 189.48 million in
May 2018. The amount transacted stood at Rs 33,288.51 crore (US$ 5.17 billion)
• Digital consumer spending in India is expected to increase by more than two times to
cross US$ 100 billion by 2020, driven by women and new internet users from smaller
cities, according to a report by Google India and BCG.
• Amazon has launched an online Business-to-Business (B2B) market place in India
where small and medium enterprises (SMEs) can buy products.
• Power2SME, one of the largest B2B online marketplaces in India that provides raw
materials to small and medium enterprises (SMEs), has raised US$ 36 million from
Inventus Capital, Accel Partners and others in September 2017, which will be used
towards technology, sales, marketing and geographic expansion.
• DesiClik a US based company has entered into strategic partnership with Indian Gifts
Portal (IGP) which will offer range of B2B solutions.
• Chinese phone manufacturer, Xiaomi Corporation, is planning to invest about US$ 1
billion in 100 Indian start-ups over the coming five years, with an aim to make an
ecosystem of apps surrounding its smartphone brand.
• US-based ecommerce giant, Amazon, has invested about US$ 1 billion in its Indian arm
so far in 2017, taking its total investment in its business in India to US$ 2.7 billion.
• Fynd a fashion e-commerce company closed its series of C round of funding at US$ 3.4
million with participation from IIFL Seed Ventures, Venture Catalyst and Google.

4.5 Triggers and Barriers for the E-Commerce market in India

In addition to the industry size, it is imperative to understand the reasons behind the growth
and reasons hampering the growth E-Commerce industry in the country. This section elaborates
the triggers and barriers that impact the adoption of E-Commerce by the Internet users we
would start by enlisting the triggers which motivate the online shoppers to buy products online.

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 Triggers in buying through internet

As evident from the table above, time saving is the major reason that drives Internet users to
shop online. It is followed by convenience of anyplace, anytime shopping online. Online stores
do not have space constraints, thus, a wide variety of products can be put for display.
Companies can display whole range of products being offered by them. This further enables
the buyers to choose from a variety of models after comparing the looks, features, prices of the
products on display.

To attract customers to shop online, eMarketers are offering great deals and discounts to the
customers. This is facilitated by elimination of maintenance, real-estate cost of the seller,
selling its products online.

An insight into some of the problems stated by customers while buying through Internet will
help us to have a closer look at the issues which need to be addressed by the online community.

Barriers in buying through Internet

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Absence of touch-feel-try creates concerns over the quality of the product on offer. Another
roadblock in the way of E-Commerce is lack of interactivity so as to allow for negotiations
between the buyer and sellers. In addition to above, the security of online payments is a major
issue requiring immediate attention of the eMarketers. Increasing rate of cyber crimes has made
customer apprehensive of revealing their credit card details and bank details online.
Moreover, the duration of selecting, buying and paying for an online product may not take
more than 15 minutes; however, delivery of the product to customer’s doorstep may take about
1-3 weeks.

Furthermore our past observation has been that in India shopping is an experience itself.
Consumers look forward to it as an opportunity to get out of their homes and interact with other
people. The recent growth in the malls and the hypermarkets only corroborate this fact. Thus,
Ecommerce has to bank on the convenience and discount platform as there is no way that they
can compete with the offline platforms on the experience that they provide.

There is no doubt that Internet shopping has a number of benefits to offer. With changing
lifestyles, E-Commerce is surely the most appealing and convenient means of shopping.
However, the grave issues surrounding the market do not make it the “choice” of most of the
Internet users. Addressing the above specified issues, thus, has become critical to expand
beyond the current user base.

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 CHAPTER V –RECOMMENDATIONS AND
CONCLUSION

Current world economic growth has slowed, and in spite of the difficulties in which the
information technology and telecommunications sectors are mired, the rapid growth of internet
use and electronic commerce continues. Estimates show that internet use is increasing by
around 30 per cent annually, and although the rate of growth of transactions through the internet
is much slower, e-commerce could represent up to 18 per cent of worldwide business-to-
business (B2B) and retail transactions in 2006. Segments such as B2B have shown rapid
growth. And in certain sectors, such as finance, travel services, software, information and other
e-services, online transactions have been growing at a much faster pace. For instance, in the
developed countries, online banking already represents between 5 and 10 per cent of total retail
banking transactions. Much of the growth has occurred in Asia. The Report classifies India as
a rising star in this regard, pointing out that India’s IT services exports have almost doubled in
two years and now account for more than 16 per cent of total exports and 8 per cent of all
foreign exchange earnings. Given the extraordinary growth rates of e-services exports, the
latter figure is expected to reach 30 per cent by 2022. Policy measures to support exporters of
e-services should focus on increasing market access in e-services for exporters from the
developing countries, as well as addressing domestic obstacles related to technology,
payments, infrastructure (telecommunications) and standards. The internet and online services
are poised to grow, and India will be one of the main beneficiaries.

The e-commerce is one of the biggest thing that has taken the business by a storm. It is creating
an entire new economy, which has a huge potential and is fundamentally changing the way
businesses are done. It has advantages for both buyers as well as sellers and this win-win
situation is at the core of its phenomenal rise. Though there are some weak links, with
improvements in technology, they will be ironed out, making the e-commerce easy, convenient
and secure. The e-commerce is certainly here to stay. 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:

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Reserve Bank of India (RBI) has decided to allow "inter-operability" among Prepaid Payment
Instruments (PPIs) such as digital wallets, prepaid cash coupons and prepaid telephone top-up
cards. RBI has also instructed banks and companies to make all know-your-customer (KYC)-
compliant prepaid payment instruments (PPIs), like mobile wallets, interoperable amongst
themselves via Unified Payments Interface (UPI). The interoperability is expected by June
2018. The Government of India has distributed rewards worth around Rs 153.5 crore (US$ 23.8
million) to 1 million customers for embracing digital payments, under the Lucky Grahak
Yojana and Digi-Dhan Vyapar Yojana. The Government of India launched an e-commerce
portal called TRIFED and an m-commerce portal called ‘Tribes India’ which will enable
55,000 tribal artisans get access to international markets. 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).

The e-commerce industry been directly impacting the micro, small & medium enterprises
(MSME) in India by providing means of financing, technology and training and has a
favourable cascading effect on other industries as well. The Indian e-commerce industry has
been on an upward growth trajectory and is expected to surpass the US to become the second
largest e-commerce market in the world by 2034. Technology enabled innovations like digital
payments, hyper-local logistics, analytics driven customer engagement and digital
advertisements will likely support the growth in the sector. With the increase in the number of
electronic payment gateways and mobile wallets, it is expected that by the year 2020, cashless
transaction will constitute 55 per cent of the online sales. The growth in e-commerce sector
will also boost employment, increase revenues from export, increase tax collection by ex-
chequers, and provide better products and services to customers in the long-term.

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5.1 Recommendations

The most important factor that is necessary in growing eCommerce in India – Trust. If we look
at the Indian context, I feel that there is a general lack of trust between online retailers and
customers. Consumers don’t trust the online retailers because they feel that they are either being
over charged or that they wouldn’t be able to get appropriate level of customer service once
the sale is complete. Retailers don’t trust the customers because they feel that the customers
will take every opportunity to misuse the return or exchange policies. It is my opinion that this
general lack of trust is the primary barrier that is impeding the growth of eCommerce within
India. Here are some of the practical techniques that online retailers can employ to improve
this level of trust and build an environment where customers feel safe in clicking that “Proceed
to Checkout” button.

5.1.1. Customer Reviews: Today’s customers are putting less trust on website marketing
messages and becoming more influenced by recommendations from other people. Customer’s
trust for an online retailer will increase if the retailer offers an ability to let customers share
their positive as well as negative reviews about products or vendors. The key is to not
“moderate” the negative reviews because by allowing customers to post negative reviews, it
will actually enhance the credibility of the retailer as well as other reviews. Obviously, any foul
language needs to be moderated but any genuine issues with the products or vendors must be
posted along with the positive reviews.

5.1.2. Clear shipping and delivery commitment: At the time of setting up products for sale,
clear shipping and handling time must be associated with the product. This information should
be displayed consistently on all product pages so that customer’s expectations around shipping
timeline can be clearly set.

5.1.3. Analytics & Personalization: Although personalized product recommendations and

content do not directly increase customer’s trust, they do demonstrate to the customer that the
online retailer is making a good effort in understanding the customer’s individual needs and is
acting upon them. This implicitly improves the comfort level that the retailer is not just looking
to sell products but is making an honest attempt in building relationship with the customer.

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5.1.4. Operational Reporting & Dashboards
Online retailers must invest in strong operational reports that provide alerts and metrics on
orders that have a risk of missing the service level that was promised to the customers. If you
have recently implemented an eCommerce platform, chances are that at times orders will get
“stuck” in various states. Therefore, it is important to establish thresholds around how long
should orders stay in various states (such as “Processing for Payment”, “Preparing for
Shipment” etc.) and then build automated alerts when orders exceed these thresholds.

5.1.5. Vendor Penalties

In the Indian context, majority of the eCommerce sites work in a “drop-ship” model. This
implies that the online retailer doesn’t physically stock the goods, and instead relies on external
vendors to directly ship the merchandise to customer’s home. In this case, it is extremely
critical to set clear SLA’s on how long will it take the vendors to ship the orders. There should
be financial penalties built into the contracts if the vendors miss the service levels. Also, there
should be penalties if the vendors receive excessive negative reviews from customers.

5.1.6. Price Match Guarantee

A Price Match Guarantee (PMG) is a store policy which entitles a customer to a refund of the
difference between the store’s asking price and a competitor’s price. It can not only help build
trust with the customer, it can also help reduce price competition across online retailers. This
may sound counter intuitive but it is one of the most discussed examples in “Game Theory”
and it has actually helped retailers in US to avoid direct price wars. Take for example a firm
like Circuit City that has a price match guarantee, which looks good to a consumer. But that
guarantee really allows Circuit City to charge higher prices since competitors will be
discouraged from setting a lower price that Circuit City only will match when it must.

5.1.7. Well trained call centre I recently called Airtel customer service to add Blackberry
service to my cell phone. There was an issue with their automated messaging system that was
directing me to a wrong group within Airtel. After calling 9 times, I gave up because every
agent that I spoke to had the same scripted response that I should call back again and press
option 2. The point I am making is that although it is important to train the call centre agents
around specific customer service issues, what is even more important is that the call centre
agents be trained to have good problem solving skills, and they should be empowered to own
the problem resolution from end to end.
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5.1.8. Fraud Protection Not only should an online retailer ensure that the appropriate security
certificates are setup to handle checkout related transactions, the sensitive customer and
payment information should be stored in an encrypted format. The messaging on the site should
clearly indicate that the checkout process is completely secure. In addition, there are third party
Fraud detection services available that help flag potentially fraudulent transaction based upon
credit card usage velocity and other parameters. These services would not only help reduce the
credit card charge-backs for the retailers, but will also improve the sense of security and trust
with customers.

5.1.9. Proactive, timely communication Are we there yet? If you have gone on a long drive
with kids, chances are that you have been asked this question. It is human nature to expect
timely communication, especially when they are waiting for something that they have already
paid for. The retailers should ensure that every single status update on the order generates an
alert for the customer. Also, if the order waits in a specific state for a timeframe longer than
what was promised to the customer, an email should be automatically sent to the customers to
make them aware of the delay. If the delay is longer than a few days, customer should be
contacted via phone and asked for approval for the delay or given an option to cancel the order.

5.1.10. Charge only after order shipment - Customers feel much more comfortable if they
know that they will only get charged once the order ships. Currently, a lot of retailers charge
the customer’s credit card immediately when customer places the order. However, they should
consider authorizing the amount at the time of order and only charge the card once the order
ships. This will also minimize any need to refund the amount back to the customer in case the
order needs to be cancelled for any reason.

5.1.11. Self Service Capabilities - The more online self service capabilities (e.g. order
cancellation, modifications) retailers can provide to the customers, it will not only help reduce
the call centre expense, but will also build more confidence with the customers. Customers will
feel more in control because they wouldn’t have to spend 10 minutes with a call centre agent
to explain the issue instead, they can directly resolve the issue online.

5.1.12. Real time inventory - updates & safety stock Retailers must invest in building
automated capabilities that keep an up to date record of how much inventory is available for
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all their products. Products must immediately become unavailable for purchase from the site
as soon as the inventory reaches below the safety stock. Cancelling customer orders due to lack
of inventory is a situation that all retailers must avoid because this not only frustrates the
customers, it drops their confidence in the retailer’s ability to keep their promise.
E-Commerce will see a significant growth in India. However, the chasm between the early
adopters of eCommerce and the ones who are waiting can only be crossed by building a strong
level of trust with our customers –

5.2 Conclusion

E-Commerce is the future of shopping. Thus, is would be apt to quote “The future is here.
It's just not widely distributed yet”- William Gibson

The Internet economy of India will continue to grow robustly; 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 billion by 2026 from US$ 38.5 billion in
2017. Large Internet users would buy more product and buy more frequently online; both new
and established companies will reap profits online by providing

• Safer Online Payment Systems: As the Internet becomes a safer place to transact, the
amount spent by the Internet Users online is bound to increase. Those apprehensive of
divulging their credit card and bank details would be active online shoppers. The
Internet users are expected to buy high-end products like automobile, property, home
durables online.
• Customization of content and offerings: As the internet users mature, the demand for
customization will increase. The content would adopt the regional flavours. More
niches will be formed, seeking for offerings made for them and content that meets their
requirements.
• More number of shoppers from Non-Metros: Currently, following the spread of
users coming from Metros and Non-Metros. The contribution from the Non-Metros is
expected to increase. This change would be bought by higher penetration of Internet in
the small towns and limited reach of physical distribution channels of the established
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 sellers to these towns. These factors coupled with higher disposable income would
compel the Internet users in these towns to buy online.
• Expanding User Base: Going at the current rate of growth in the Internet users
transacting online, the user base for E-Commerce is expected to rise expand
exponentially. A large portion of the Internet population is under the age of 35 years
and is increasingly moving northwards as far as the purchasing power is concerned.
The uncanny nature of this segment “to use now and pay later” is going to play an
important part in the future growth of e commerce market. Be it picking new stocks or
new clothes, finding a job or a bride, the web way of doing things will gain precedence.
• Mcommerce - Currently E-Commerce is synonymous with PC and browser-based
interaction. However, in the near future GPRS-enabled mobile phones will rule the
online transactions. Today, online downloads to mobile phones is limited to low value
services like music downloads, picture message downloads and ring tone downloads.
However, as the mobile users get more familiar with buying online, the purchase of
high-involvement products is expected to rise. Certain verticals like Banking and
Finance, Travel, Entertainment, and Retail are likely to drive the growth of m-
Commerce in the country. In the recent past, E-Commerce and it variants like the m-
Commerce have yearned for the position of being the most important drivers of the
Internet. They are continuously evolving and upgrading to make a consumer’s e-
Spending experience hassle free and memorable.

However, to attain that position, it needs to awaken its inner beauty – simplicity and security
of transaction. From the survey, it is evident that the potential benefits offered by e-commerce
are far from realised. The perception that trading on electronic channels cannot make money is
challenged as incorrect, at least in the Business-To-Business sector. There is also some
expectation that, although trading on electronic channels may take longer in the consumer
sector due to the trading barriers on the Internet, this, too, will soon follow. Electronic channels
are forcing companies to re-think major aspects of the way they are organised and do business.
E-commerce raises major strategic issues and is accelerating developments in areas such as
globalisation, branding, customer service, and supply chain.
Markets are being transformed as barriers to entry are torn down. This survey shows that the
application of e-commerce and the Internet in particular, extend beyond marketing to all

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aspects of the supply chain. It also shows that the technical aspects are no longer as important
as the integration of business processes and the resulting need to re-engineer them across the
organisation. But companies are approaching these developments piecemeal. If companies are
to make profitable use of e-commerce, then, its champions must make their cases heard at the
highest levels. This is an opportunity for the infotech and marketing departments to make their
Board aware of the effect of e-commerce not just from the technical point of view, but also in
terms of its impact on the bottom line. In our opinion, only those companies with an
organisation-wide initiative, funded from the centre or, at least, on a joint venture basis between
functions, with Board approval, will emerge as leaders in what is a rapidly changing
environment. Senior management members who have earlier been responsible for the e-
commerce initiative in their organisations need to prepare a compelling business case, detailing
the likely returns on investment, and submit it to the Board. The rewards, both for the company
and for the individual involved in shaping its adaptation to the information age, promise to be
well worth the effort.

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 References

1. https://www.statista.com/statistics/255146/number-of-internet-users-in-india/
2. https://en.wikipedia.org/wiki/Web_portal
3. https://www.statista.com/topics/2454/e-commerce-in-india/
4. https://en.wikipedia.org/wiki/E-commerce
5. https://en.wikipedia.org/wiki/E-commerce_in_India

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