MADANAPALLE INSTITUTE OF TECHNOLOGY & SCIENCE

NAME : SHAIK MOHAMMAD KHADIR

ROLL NO : 20691E00G9
BRANCH : MBA
SUBJECT : RETAIL MARKETING
ASSIGNMENT 1

A STUDY ON IMPACT OF E-COMMERCE ON TRADITIONAL BUSINESS IN INDIA

1. INTRODUCTION
India has emerged as one of the major players on the new international
business scene. Its unstoppable economic growth since reforms in 1991 has
become the focus of attention of researchers in the area of international
business and management. The purpose of this paper is to review the impact
of e-commerce on Indian Commerce that has been published in top business
and management journals, with the aim of knowing what are the most
influential papers, what are the issues that have received the most attention,
which are the main findings or what more needs to be done in terms of
research 1.1 E-Commerce:- E-commerce is a paradigm shift. It is a ``disruptive”
innovation that is radically changing the traditional way of doing
business.Electronic commerce is a type of business model, or segment of a
larger business model, that enables a firm or individual to conduct business
over an electronic network, typically the internet. E-commerce is the buying
and selling of goods and services, or the transmitting of funds or data, over an
electronic network, primarily the Internet. These business transactions are
business-to-business, business-to-consumer, consumer-to-consumer or
consumer-to-business. The term e- tail is used in reference to transactional
processes around online retail. E-commerce is conducted using a variety of
applications, such as email, fax, online catalogs and shopping carts, Electronic
Data Interchange (EDI), File Transfer Protocol, and Web services. It can be
thought of as a more advanced form of mail-order purchasing through a
catalog. ECommerce is the movement of business onto the World Wide Web.
The effects of ecommerce are already appearing in all areas of business, from
customer service to new product design. It facilitates new types of information
based business processes for reaching and interacting with customers like
online advertising and marketing, online order taking and online customer
service.There has been a rise in the number of companies taking up
ecommerce in the recent past. Major Indian portal sites have also shifted
towards ecommerce instead of depending on advertising revenue. Many sites
are now selling a diverse range of products and services from flowers, greeting
cards, and movie tickets to groceries, electronic gadgets, and computers, etc 2
Historical

2 Historical Development of E-Commerce A timeline for the development of

e-commerce
 1971 or 1972: The ARPANET is used to arrange a cannabis sale between
students at the Stanford Artificial Intelligence Laboratory and the
Massachusetts Institute of Technology, later described as "the seminal act of
e- commerce" in John Markoff's book What the Dormouse Said.
 1979: Michael Aldrich demonstrates the first online shopping system.
 1981: Thomson Holidays UK is first business-to-business online shopping
system to be installed.
 1982: Minitel was introduced nationwide in France by France Télécom and
used for online ordering.
 1983: California State Assembly holds first hearing on "electronic commerce"
in Volcano, California. Testifying are CPUC, MCI Mail, Prodigy, CompuServe,
Volcano Telephone, and Pacific Telesis. (Not permitted to testify is Quantum
Technology, later to become AOL.)
 1984: Gateshead SIS/Tesco is first B2C online shopping system and Mrs
Snowball, 72, is the first online home shopper
 1984: In April 1984, CompuServe launches the Electronic Mall in the USA and
Canada. It is the first comprehensive electronic commerce service.
 1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a
NeXT computer.
 1992: Book Stacks Unlimited in Cleveland opens a commercial sales website
(www.books.com) selling books online with credit card processing.
 1993: Paget Press releases edition No. 3 of the first app store, The Electronic
AppWrapper
 1994: Netscape releases the Navigator browser in October under the code
name Mozilla. Netscape 1.0 is introduced in late 1994 with SSL encryption that
made transactions secure.
 1994: IpswitchIMail Server becomes the first software available online for
sale and immediate download via a partnership between Ipswitch, Inc. and
OpenMarket.
 1994: "Ten Summoner's Tales" by Sting becomes the first secure online
purchase.
 1995: The US National Science Foundation lifts its former strict prohibition of
commercial enterprise on the Internet.
 1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield,
Product Manager for CompuServe UK, from W H Smith's shop within
CompuServe's UK Shopping Centre is the UK's first national online shopping
service secure transaction. The shopping service at launchfeatured W H Smith,
Tesco, Virgin Megastores/Our Price, Great Universal Stores (GUS),
Interflora,Dixons Retail, Past Times, PC World
3 KEY DRIVERS IN INDIAN E-COMMERCE
 Large percentage of population subscribed to broadband Internet,
burgeoning 3G internet users, and a recent introduction of 4G across the
country.
 Explosive growth of Smartphone users, soon to be world's second largest
Smartphone user base.
 Rising standards of living as result of fast decline in poverty rate.
 Availability of much wider product range (including long tail and Direct
Imports) compared to what is available at brick and mortar retailers.
 Competitive prices compared to brick and mortar retail driven by
disintermediation and reduced inventory and real estate costs.
 Increased usage of online classified sites, with more consumer buying and
selling second-hand goods
 Evolution of Million-Dollar startup like Jabong.com, Saavn, Makemytrip,
Bookmyshow, Zomato Etc. India's retail market is estimated at $470 billion in
2011 and is expected to grow to $675 billion by 2016 and $850 billion by 2020,
– estimated CAGR of 10%. According to Forrester, the e-commerce market in
India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over
57% between 2012 –2016. India has an internet user base of about 354 million
as of June of 2015. Despite being the second largest user base in world, only
behind China (650 million, 48% of population), the penetration of e-commerce
is low compared to markets like the United States (266 M, 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
incountry supply from authorized distributors and e-commerce offerings.
Largest e-commerce companies in India are Flipkart, Snapdeal, Amazon India,
and Paytm.
3.1 Growth and Prospects of E-Commerce in India:
Increasing internet and mobile penetration, growing acceptability of online
payments and favourable demographics has provided the e-commerce sector
in India the unique opportunity to companies connect with their customers, it
said. There would be over a five to seven fold increase in revenue generated
through e-commerce as compared to last year with all branded apparel,
accessories, jewellery, gifts, footwear are available at a cheaper rates and
delivered at the doorstep, (as per industry body Assocham). It is noted that the
buying trends during 2016 will witness a significant upward movement due to
aggressive online discounts, rising fuel price and wider and abundant choice
will hit the e-commerce industry in 2016. It observed mobile commerce (m-
commerce) is growing rapidly as a stable and secure supplement to the e-
commerce industry. Shopping online through smart phones is proving to be a
game changer, and industry leaders believe that m- commerce could
contribute up to 70 per cent of their total revenues. In India roughly 60-65 per
cent of the total e- commerce sales are being generated by mobile devices and
tablets, increased by 50 per cent than in year 2015 and also likely to continue
upwards. It noted that the browsing trends, which have broadly shifted from
the desktop to mobile devices in India, online shopping is also expected to
follow suit, as one out of three customers currently makes transactions
through mobiles in tier-1 and tier-2 cities. In 2015, 78 per cent of shopping
queries were made through mobile devices, compared to 46 per cent in 2013.
In 2015, the highest growth rate was seen in the apparel segment almost 69.5
per cent over last year, followed by electronic items by 62 percent, baby care
products at 53 per cent, beauty and personal care products at 52 per cent and
home furnishings at 49 per cent. It revealed that Mumbai ranks first in online
shopping followed by Delhi, Ahmedabad, Bangalore and Kolkata. On the mode
of payment, almost 45 per cent of online shoppers reportedly preferred cash
on delivery mode of payment over credit cards (16 per cent) and debit cards
(21 per cent). Only 10 per cent opted for internet banking and a scanty 7 per
cent preferred cash cards, mobile wallets, and other such modes of payment,
it said. Among the above age segments, 18-25 years of age group has been the
fastest growing age segment online with user growth being contributed by
both male and female segments. The survey revealed that 38 per cent of
regular shoppers are in 18-25 age group, 52 per cent in 26-35, 8 per cent in 36-
45 and 2 per cent in the age group of 45-60.
4 CHALLENGES OF E-COMMERCE IN INDIA :
India has less credit card population, lack of fast postal services in rural India.
Accessing the Internet is currently hindered down by slow transmission
speeds, frequent disconnects, cost of Wireless connection and wireless
communication standards over which data is transmitted. High-speed-
bandwidth Internet connection not available to most citizens of the nation at
an affordable rate. In India, mostly people are not aware about the English
language or not so good in English language. So that for the transaction over
internet through electronic devices, language becomes one of the major
factors to purchases, hire and sell a particular product or services. Multiple
issues of trust in e-commerce technology and lack of widely accepted
standards, lack of payment gateways, privacy of personal and business data
connected over the Internet not assured security and confidentiality of data
not in place to deploy ubiquitous IT Infrastructure and its maintenance.
5 CONCLUSION
Growth of e-commerce depend to a great extent on effective IT security
systems for which necessary technological and legal provisions need to be put
in place and strengthened constantly. While many companies, organizations,
and communities in India are beginning to take advantage of the potential of
e-commerce, critical challenges remain to be overcome before e-commerce
would become an asset for common people. With the explosion of internet
connectivity through mobile devices like Smartphone and tablets, millions of
consumers are making decisions online and in this way enterprises can build
the brand digitally and enhance productivity but government policies must
ensure the cost effective methods/solutions. E- Commerce in India is destined
to grow both in revenue and geographic reach. The challenge of establishing
consumer trust in e-commerce poses problems and issues that need further
research. The International journal of analytical and experimental modal
analysis Volume XII, Issue VIII, August/2020 ISSN NO:0886-9367 P