A STUDY OF THE RECENT BOOM OF E-COMMERCE WEBSITES AND

IT’S IMPACT ON SMALL SCALE RETAILERS IN VILE PARLE REGION

A project submitted to

University of Mumbai for partial completion of the degree of

Master of Commerce

Under the Faculty of Commerce

By

Student Name: Yash Pradeep Rane

Class: M.COM Roll No: 55

Under the guidance of

Dr. Kanchan Fulmali

M.L. DAHANUKAR COLLEGE OF COMMERCE

DIXIT ROAD, VILE PARLE EAST,

MUMBAI - 400 057.

MARCH 2021-2022
 DECLARATION BY LEARNER

I, the undersigned Mr. Yash P. Rane hereby, declare that the work embodied in this project work
titled “A STUDY OF THE RECENT BOOM OF E-COMMERCE WEBSITES

AND IT’S IMPACT ON SMALL SCALE RETAILERS IN VILE PARLE REGION”,

forms my own contribution to the research work carried out under the guidance of Dr Kanchan
Fulmali is a result of my own research work and has not been previously submitted to any other
University for any other Degree/Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such
and included in the bibliography.

I, hereby further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Yash Pradeep Rane

Name and Signature of learner

M.L. Dahanukar College of Commerce,

Dixit Road, Vile Parl(E).

Mumbai 400 057.

 ACKNOWLDGEMENT
To list who all have helped me is difficult because they are so numerous and the depth is so enormous

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me a chance to do this project

I would like to thank my Principal Dr. D.M. Doke for providing the necessary facilities required for
completion of this project.

I take this opportunity to thank our Coordinator Dr Kanchan Fulmali, for her moral support and
guidance.

I would also like to express sincere gratitude towards my project guide whose guidance and care my
project successful.

I would like to thank my College Library, for having provided various reference books and magazine
related to my project.

Lastly, I would like to thank each and every person who directly and indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout my project.
CHAPTERS TITLE PAGE NO
CHAPTER 1 INTRODUCTION
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
CHAPTER 2 REVIEW OF LITERATURE
CHAPTER 3 RESEARCH METHODOLOGY
3.1 INTRODUCTION TO RESEARCH
METHODOLOGY
3.2 OBJECTIVES
3.3 HYPOTHESIS
3.4 RESEARCH AND METHODOLOGY
3.5 IMPORTANCE OF STUDY
3.6 LIMITATIONS OF STUDY
CHAPTER 4 A STUDY OF THE RECENT
BOOM OF E-COMMERCE
WEBSITES AND IT’S
IMPACT ON SMALL SCALE
RETAILERS IN VILE
PARLE REGION

CHAPTER 5 DATA
ANALYSIS,PRESENTATION
AND INTERPRETATION

CHAPTER 6 CONCLUSION AND SUGGESTIONS

REFERANCE AND BIBILOGRAPHY

ANNEXURE
 LIST OF CHARTS

Sr no. particulars
1 Name of the respondents
2 gender
3 Age group
4 Under which category of business would you consider yourself
under
5 Which category does your business fall under
6 What were your initial thoughts when this concept of buying
goods online through e-commerce websites started to gain
traction in india
7 Do you consider the idea of growing boom of e-commerce
websites as alternatives for shopping among people as a threat to
your business
8 What do you think are the biggest factor which motivate people
towards buying goods online through e-commerce websites
9 What do you think are the major advantages of buying goods
online
10 Did this recent boom of e-commerce websites impacted your
business profits and operations
11 Do you think that the government is taking any initiatives to
advocate and supports small scale businesses during this current
boom of e-commerce
12 What kind of measures did you take to compete with this rise of
e-commerce websites
13 What do you think is the major advantage of buying goods
through shops
14 Do you think that this recent boom of e-commerce would
severely impact small scale retailers and their businesses
15 What are your views on this subject “whether this recent boom of
e-commerce websites impacted the businesses of small scale
retailers
 LIST OF TABLES

Sr. no. particulars

1 Name of the respondents
2 gender
3 Age group
4 Under which category of business would you consider yourself
under
5 Which category does your business fall under
6 What were your initial thoughts when this concept of buying
goods online through e-commerce websites started to gain
traction in india
7 Do you consider the idea of growing boom of e-commerce
websites as alternatives for shopping among people as a threat to
your business
8 What do you think are the biggest factor which motivate people
towards buying goods online through e-commerce websites
9 What do you think are the major advantages of buying goods
online
10 Did this recent boom of e-commerce websites impacted your
business profits and operations
11 Do you think that the government is taking any initiatives to
advocate and supports small scale businesses during this current
boom of e-commerce
12 What kind of measures did you take to compete with this rise of
e-commerce websites
13 What do you think is the major advantage of buying goods
through shops
14 Do you think that this recent boom of e-commerce would
severely impact small scale retailers and their businesses
15 What are your views on this subject “whether this recent boom of
e-commerce websites impacted the businesses of small scale
retailers
 CHAPTER 1. INTRODCUTION

INTROUCTION TO TITLE 1.1

For the last two and half decades, the information technology and internet changed the world entirely
into new dimension. It helped all the organizations, businesses and individuals to do their work in
more efficient and profitable way. Due to availability of good network (3g/4g) data packs,
smartphones implied more number of internet users. The numbers of internet users were increasing
high day by day. E-commerce stands for “electronic commerce and refers trading in goods and
services through electronic medium i.e. internet or phone”. It conducts business with latest and
advanced information technology such as electronic data-interchange (EDI). All the primary and
support activities i.e. Inbound logistics, operations, outbound logistics, marketing & sales, service,
firm infrastructure, human resource, technology, procurement of the firms were redesigned in the path
of e-commerce to do more business with high quality products and services and to expand their
business to global in more convenient and simple way through the help of electronic mails, phones
and internet

E-commerce can be categorized into following segments:

(1. Consumer to Consumer C2C): consumer to consumer or customer to customer, is a business

model facilitates the transaction of products or services between customers.

2. Business to Consumer (B2C): business to consumer is business or transactions conducted directly

between a company and consumers who are the end users of its products and services.

3. Business to Business (B2B): business to business is a type of transaction that exists between
businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer.

E-commerce market growing fast at good amount for every year. Lot of new products and services
are added to the current portfolio. New offers, new schemes, new cash benefits etc. are implemented
for every quarter of the fiscal year. This made huge business and expansion of the market to urban and
rural areas. The turnover of the businesses those who use e-commerce increased to tremendous
amount and profits are good when compared to previous year statistics.

e-commerce growth has led to an increase in marketable transactions a multiple times as compared
to the pre-commerce period in the India. The gap of communication between client/ customer and
firm has reduced so much due to the availability of advanced communication technologies and
products. The digital commerce market in the country is expected to cross $50 billion in value by the
end of 2018 from the current level of $38.5 billion, on the back of a growing internet population and
increased online shoppers, says a recent study. The increasing mobile and internet penetration, m-
commerce sales, advanced shipping and payment options, exciting discounts, and the push into new
international markets by e-businesses are the major drivers of this unprecedented growth, it said.
Banks and other players in the e-commerce ecosystem are providing a secured online platform to
pay effortlessly via payment gateways. However, it pointed out that the Indian e-commerce sector is
heavily dependent on the cash on delivery (cod) mode of payment as it is the most preferred choice
for Indian consumers due to lack of trust in online transactions, limited adoption of credit and debit
cards, and security concerns, among others. “More than 50% of online transactions are done on cash
on delivery method and it is available across 600 cities and towns of India,” the joint study pointed
out. On the increase in preference of mobile transactions, the study said one out of three customers
currently makes transactions through mobiles in tier-1 and tier-2 cities. In 2017, 82% of shopping
queries were made through mobile devices, compared to 76% in 2016, added the study, indicating
the increasing mobile transactions. The survey highlights that 28 per cent of regular shoppers are in
18–25 age group, 42% in 26–35, 28% in 36–45 and 2% in the age group of 45–60. While 65% of
online shoppers are male, 35% are female. The products that were highest sold in 2017 included
mobile phones, apparel, food items and jewellery, among others, it said. As per the study, there
would be more than a seven to ten fold increase in revenue generated through e-commerce as
compared to last year with all branded apparel, accessories, jewellery, gifts and footwear available
at cheaper rates and delivered at the doorstep. Definitions of Micro, Small & Medium Enterprises In
accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act,
2006 the Micro, Small and Medium Enterprises (MSME) are classified in two classes

1. Manufacturing Enterprises:He enterprises engaged in the manufacture or production of goods

pertaining to any industry specified in the first schedule to the industries (Development and
regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final
product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms
of investment in Plant & Machinery.

2. Service Enterprises: The enterprises engaged in providing or rendering of services and are
defined in terms of investment in equipment.

THE PRODUCT GROUP MATRIX

There are about twenty-one major industry groups in the small scale sector. They are Food Products,
Chemical & Chemical Products, Basic Metal Industries, Metal Products, Electrical Machinery &
Parts, Rubber & Plastic Products, Machinery & Parts Except Electrical goods, Hosiery & Garments-
Wood Products, Non-metallic Mineral Products, Paper Products & Printing, Transport Equipment &
Parts, Leather & Leather Products, Miscellaneous Manufacturing Industries, Other Services &
Products, Beverages, Tobacco & Tobacco Products, Repair Services, Cotton Textiles, Wool, Silk,
Synthetic Fiber Textiles, Jute, Hemp, Mesta Textiles and Other Services. A survey of indices of
industrial production (IIP) maintained for these major industry groups reveals what the sunrise
industries are and on what segments the sun has set. SSI units produce an amazing variety and type of
products. Over 7500 products are known to be manufactured in this sector. Even in a particular
product, there would exit a wide range of qualities or specifications catering to different market
segments, particularly in consumer/ household products. Small Scale sector has emerged as a major
supplier of mass consumption items like leather and leather goods, plastic and rubber goods, ready-
made garments, hosiery goods, sheet metal goods, stationery items-soap and detergents, domestic
utensils, toothpaste and toothpowder, safety matches, preserved foods and vegetables, wooden and
steel furniture, paints and varnishes etc

Among the sophisticated items mention may also be made of Television sets, calculators, microwave
components, plastic film capacitors, carbon film registers, electro medical equipment, electronic
teaching aids, digital measuring equipment, air-conditioning equipment, optical lenses, drugs and
pharmaceuticals, electric motors, pesticide formulators, photographic sensitized paper, razor blades,
Collapsible tubes, etc.

MSMEs AND E-COMMERCE MSME SECTOR IN INDIA

As per the latest data available from the Ministry of Micro, Small and Medium Enterprises (MSME),
the number of MSMEs in India consist of 51 million units which provide employment to around 117
million people. MSMEs manufacture more than 6,000 products, account for 45% of the total
manufacturing output and contribute 40% of total exports from the country. Studies show that
MSMEs that use Ecommerce platforms are around five times more likely to export than those in the
traditional economy.

E-COMMERCE INDUSTRY IN INDIA

The E-commerce business in India has seen exponential growth over the last decade. This growth is
due to many contributory factors, including rapid adoption of technology by Indian consumers, large
increases in the number of internet users, new enabling technologies, innovative business models and
alternative payment options offered by E-commerce companies. Moreover, the high growth in
Ecommerce continues unabated, with the sector expecting to witness a steep increase in revenues in
the coming years
The Internet and the World Wide Web (WWW) are revolutionizing the way organizations are
functioning around the world. The Web is used by organizations in a myriad of ways, some of which
include collaborating, communicating information, obtaining information, providing information, and
sharing information. One application of the Web that is grabbing headlines in virtually every media is
Internet commerce or Electronic Commerce (e-commerce). E-commerce--the marketing, promotion,
buying and selling of goods and services over the Internet is experiencing unprecedented growth
(Williams, 1999). In the past 2 or 3 years, e-commerce growth has been astonishing and is expected to
continue at a similar rate over the next four years.

Small business use of the Internet (e-commerce and other applications) has increased from 10 percent
in 1996 to about 75 percent today; this use is expected to increase to 85 percent by 2002 (Song, 2000).
However, currently, only 28 percent of small companies sell goods and services online (Maxwell,
2000). If one looks at businesses with fewer than 10 employees, one sees a slightly different picture.
In 1999, about 15 percent of these 7.5 million small businesses in the U.S. conducted e-commerce
(Business Week e.biz, 1999). This number is expected to increase to 20 percent by the year 2001.
Although these statistics provide evidence that smaller organizations are now conducting e-commerce
activities, large companies still account for the majority of e-commerce activity in the U.S. These
statistics also fail to tell us whether or not selling online is a better method for small business.
Over the past few years, a decrease in the prices for software and hosting services has reduced the
barriers to entry in the online environment. Even the smallest of businesses can now have a presence
on the web and conduct commerce. Selling online, however, is not without its perils. Blindly diving
headfirst into the Internet without a complete understanding of technical, managerial, and competitive
challenges may result in stressed operations or bankruptcy.A question, then, arises: should small
businesses and potential entrepreneurs embrace the Internet? The answer to this question lies in how
well a business understands e-commerce opportunities in its environment and implements strategies to
take advantage of these opportunities. This paper will examine the opportunities that are available for
small businesses and entrepreneurs on the Internet, identify the challenges they are likely to
encounter, and suggest strategies they can develop and implement to take advantage of e-commerce
opportunities.

1.2 CONCEPT OF E-COMMERCE BUSINESSES

As noted above, ecommerce is the process of buying and selling tangible products and services
online. It involves more than one party along with the exchange of data or currency to process a
transaction. It is part of the greater industry that is known as electronic business (ebusiness), which
involves all of the processes required to run a company online.

Ecommerce has helped businesses (especially those with a narrow reach like small businesses) gain
access to and establish a wider market presence by providing cheaper and more efficient distribution
channels for their products or services. Target (TGT) supplemented its brick-and-mortar presence
with an online store that allows customers to purchase everything from clothes and coffeemakers to
toothpaste and action figures right from their homes.

Ecommerce operates in all four of the following major market segments. These are:
  Business to business (B2B), which is the direct sale of goods and services between businesses
 Business to consumer (B2C), which involves sales between businesses and their customers
 Consumer to consumer, which allows individuals to sell to one another, usually through a
third-party site like eBay
 Consumer to business, which lets individuals sell to businesses, such as an artist selling or
licensing their artwork for use by a corporation

Providing goods and services isn't as easy as it may seem. It requires a lot of research about the
products and services you wish to sell, the market, audience, competition, as well as expected
business costs.

Once that's determined, you need to come up with a name and set up a legal structure, such as a
corporation. Next, set up an ecommerce site with a payment gateway. For instance, a small business
owner who runs a dress shop can set up a website promoting their clothing and other related products
online and allow customers to make payments with a credit card or through a payment processing
service, such as PayPal.

Ecommerce has changed the way people shop and consume products and services. More and more
people are turning to their computers and smart devices to order goods, which can easily be delivered
to their homes. As such, it has disrupted the retail landscape. Amazon and  Alibaba have gained
considerable popularity, forcing traditional retailers to make changes to the way they do business.

But that's not all. Not to be outdone, individual sellers have increasingly engaged in e-commerce
transactions via their own personal websites. And digital marketplaces such as eBay or Etsy serve as
exchanges where multitudes of buyers and sellers come together to conduct business.

1.3 HISTORY OF E-COMMERCE

Most of us have shopped online for something at some point, which means we've taken part in
ecommerce. So it goes without saying that ecommerce is everywhere. But very few people may
know that ecommerce has a history that goes back before the internet began.

Ecommerce actually goes back to the 1960s when companies used an electronic system called the
Electronic Data Interchange to facilitate the transfer of documents. But it wasn't until 1994 that the
very first transaction. took place. This involved the sale of a CD between friends through an online
retail website called NetMarket.3 3

The industry has gone through so many changes since then, resulting in a great deal of evolution.
Traditional brick-and-mortar retailers were forced to embrace new technology in order to stay afloat
as companies like Alibaba, Amazon, eBay, and Etsy became household names. These companies
created a virtual marketplace for goods and services that consumers can easily access.

New technology continues to make it easier for people to do their online shopping. People can
connect with businesses through smartphones and other devices and by downloading apps to make
purchases. The introduction of free shipping, which reduces costs for consumers, has also helped
increase the popularity of the ecommerce industry .
1960 – 1982: Invention and the Early Days 

The development of the Electronic Data Interchange (EDI) in the 1960s paved the way for electronic
commerce. EDI replaced traditional mailing and faxing of documents by allowing a digital transfer of
data from one computer to another. 

Trading partners could transfer orders, invoices, and other business transactions using a data format
that met the ANSI ASC X12, the predominant set of standards in North America for inter-industry
electronic exchange. Once an order is sent, it is then examined by a VAN (Value-Added Network)
and directed to the recipient’s order processing system. EDI allowed the transfer of data seamlessly
without any human intervention. 

Michael Aldrich’s invention, the idea for which was sparked by a conversation with his wife about
their weekly supermarket shopping expedition, involved hooking a television to their supermarket to
have them deliver the groceries. Aldrich coined his invention “teleshopping” (shopping at a distance),
which can be seen as the precursor for modern online shopping. 

1982 – 1990: Early Ecommerce Platforms 

It was apparent from the beginning that these early advancements would make B2B online shopping
commercially lucrative. B2C would not be successful until the later widespread use of PCs and the
World Wide Web.  

In 1982, France launched Minitel, an online service that used a Videotex terminal machine accessed
through telephone lines. The Minitel was free to telephone subscribers and connected millions of
users to a computing network.  

By 1997, over 7 million homes had Minitel terminals. The Minitel system was popular before falling
out of favor after the success of the internet three years later.  

Early 90’s: The World Wide Web Arrives  

In 1990 Tim Berners-Lee and Robert Cailliau published a proposal to build a “Hypertext project”

called “World Wide Web.” The inspiration for this project was modeled after the Dynatex SGML
reader licensed by CERN.That same year, Berners-Lee created the first web server and wrote the first
web browser. Shortly thereafter, he went on to debut the web on August 6, 1991 as a publicly-
available service on the Internet. When Berners-Lee decided he would take on the task of marrying
hypertext to the Internet, the process led him to develop URL, HTML and HTTP. 

In 1991, the National Science Foundation lifted its restrictions on commercial use of the NET, causing
online shopping to grow exponentially. In September 1995, the NSF began charging a fee for
registering domain names. The number of domain names quickly grew to two million by 1993. By
this time, the NSF’s role in the Internet came to an end and a lot of the oversight shifted to the
commercial sector. 

From the beginning, there were many concerns over the safety of  online shopping. However, the
development of a security protocol, Secure Socket Layers (SSL)—an encryption certificate created by
Netscape in 1994, provided a safe means to transmit data over the internet. Web browsers were able to
identify whether a site had an authenticated SSL and, based on that, determine whether or not a site
could be trusted. 

Now, SSL encryption protocol is a vital part of web security, and version 3.0 has become the standard
for most web servers today. 

Mid ‘90s to Present: Marketplaces, Payments and The Growth of Ecommerce  

Major Marketplaces Emerge: Amazon, eBay, and Ecommerce Platforms 

In the mid-90s, there were major advancements in the commercial use of the Internet. One of the first
ecommerce sites was Amazon, which started in 1995 as an online bookstore but grew to become the
largest online retailer in the world. Traditional brick-and-mortar bookstores were limited to about
200,000 titles. Amazon, being an online only store without physical limitations, was able to offer
exponentially more products to the shopper. 

Amazon’s range has expanded over the years and now includes music, video downloads, electronics,
apparel, furniture, food, and toys. The retail giant was one of the first online retailers to add user
reviews and a rating scale for their products. Product reviews are now considered one of the most
effective tactics for driving sales and building customer trust. 

Other ecommerce marketplace success stories include eBay, an online auction site that debuted in
1995, and Etsy, which launched in 2005 and by 2019 saw gross merchandise sales total $4.97
billion globally. 

The late 1990s also saw new ecommerce platform options for merchants. Miva’s first catalog-based
ecommerce product was launched in 1997, achieving wide distribution in the late 1990s. 
In 2005, Amazon launched Amazon Prime, a membership offering free two-day shipping within the
contiguous United States on all eligible purchases for a flat annual fee. The membership quickly
became popular, putting pressure on other merchants to offer fast and inexpensive shipping options.  

Evolution of Online Payments Security 

As more and more people began doing business online, a need for secure communication and
transactions became apparent. In 2004, the Payment Card Industry Security Standards Council (PCI)
was formed to ensure businesses were complying with various security requirements. The
organization was created for the development, enhancement, storage, dissemination and
implementation of security standards for protecting customer account data.  

The Rise of Mobile Commerce 

Mobile commerce was first born in 1997, when two mobile device-enabled Coca-Cola vending were
installed in Finland. Mobile commerce gained speed over the next two decades, as more users began
conducting transactions from their mobile devices and websites evolved to provide a better user
experiences. Now, mobile sales are projected to reach 54 percent of all ecommerce sales by 2021. 

Today, both consumers and business buyers turn to mobile devices for product research and coupons,
with engagement on social media becoming increasingly popular. Business buyers are expecting more
consumer-focused features like personalization and responsive design and demanding the ability to
quickly locate product details, secure pricing, and receive online help. 

The Future of Ecommerce 

Competing (And Thriving) In a Marketplace Economy 

Although popular marketplaces like Amazon have been setting the standard for customer experience
and innovation in ecommerce, there are many things independent merchants can do that Amazon
can’t, including building a memorable brand experience and gaining loyal, engaged customers for
life. Thriving in the Age of Amazon
Buyer Preferences Drive Rapid Disruption and Growth 

What will shoppers want next? That’s what both online and offline merchants are trying to figure out.
And then there are Millennials, who have disrupted the way ecommerce is done. A site that lags or
struggles to load can lose Millennial visitors faster than you can say “avocado toast”. As part of the
self-directed buying process, Millennials will typically shop around a bit and read reviews before
making a purchase decision.To be successful in the current age of ecommerce, sellers need to monitor
comments and listen to what shoppers say about their products and customer service. A site with an
outdated design will communicate outdated processes, products, and prices to Millennial buyers,
hurting your sales and holding back your business.  

So, what’s next for ecommerce? The only thing that is certain is that there will continue to be more
changes on the horizon. Your online store needs to be flexible, adaptable, and scalable enough to meet
these changes and future-proof your business for long-term success. 

History of ecommerce in India

The concept of electronic commerce first came in the year 1991, a time when the Internet was not
available in India. However, by the late 90s, more and more people became aware of the Internet and
they came to know that transactions can be done through this medium.

For most Indians, it remained a luxury until a few years ago. In 2002, when the IRCTC launched an
online reservation system, the public started accepting the Internet as something useful. People came
to know about the global leader Amazon and this marked the emergence of e-commerce in India.
Flipkart was one of the major companies that contributed a lot towards the e-commerce juggernaut
here.

And then came the growth of ecommerce in India when a few years later, Mukesh Ambani, the front
man of Reliance Industries, announced the arrival of Reliance Jio. He gave away SIM cards for free
and this is when the Internet scenario in the country changed massively.

The user base in India just exploded with this and people started availing from the ecommerce
industry, thus poising the industry to thrive with prospects.

From ordering daily essentials such as medicines, milk, and groceries to gadgets, people can now get
almost everything delivered at their doorstep with easy return policies. The evolution of e-commerce
in India has been pretty interesting till now.

Over the past few years, India has been going through a digital revolution of sorts. Over 50% of the
country’s populace, now has access to internet abled devices, and owing to our massive population, it
translates to a user base of over half a billion people. These staggering numbers have made India a
hotbed for internet-based businesses, the largest gainer of which, has been the e-commerce industry.
A report by the India Brand Equity Foundation (IBEF), projects that the revenue generated from the e-
commerce industry in the country is well on its course to breach the US$100 billion mark by the year
2020. However, this was not always the case with online businesses in India. In fact, there was almost
some kind of reluctance among the masses, in accepting all things digital.

The concept of e-commerce first formally came forth in 1991, a time when internet practically did not
even exist in India. Even worldwide, very few could fathom that the act of buying and selling goods
and services over the internet, would be as widely accepted a practice, as it is today. By the late ’90s,
people became aware of this thing called the internet, but for a majority of them, it remained
a luxury they did not particularly need. In a truly Indian manner, it was only in 2002, when the
IRCTC introduced an online reservation system, that the public widely accepted the internet as
something fruitful, by which time a company named Amazon, was already beginning to create a few
murmurs in the US.The first real stepping stone towards setting off the e-commerce juggernaut, was
perhaps the creation of Flipkart, when two engineers from IIT Delhi decided to sell books online from
an apartment in Koramangala area of Bengaluru. A business idea not too dissimilar to that of Amazon.
Little did they know that a decade later, US retail giants, Walmart, would acquire their business in a
US$ 16 billion-dollar deal, after a fierce bidding war with none other than Amazon.

However, even when Flipkart came into being, the internet still didn’t have the accessibility it needed
for such businesses to blow up. Reliance industries frontman, Mukesh Ambani, corrected that in one
stroke when he announced the arrival of Reliance Jio. If there is one thing Indians, or anyone of any
nationality unabashedly likes, it is free stuff. Perhaps, in what was one of the greatest marketing
strategies ever, Mr. Ambani handed out free sim cards as if he had stumbled onto a secret dungeon
with an endless supply of them, or at least a few months’ worth. He was offering data services at a
fraction of the cost compared to what his competitors were charging.

Naturally, this move of Ambanis’ had several implications. For starters, all other network operators
were forced to slash down their prices to a significantly more affordable range. All of this together
culminated in the aforementioned fact, wherein the user base in the country just exploded. At this time
the e-commerce industry was already doing quite well in India. However, they were about to receive a
massive push. ‘Data is the new oil’, screamed journalists and newspapers. Of course, this also birthed a
whole new set of cybersecurity risks, but as we have witnessed, it’s a risk people are willing to take if
they can have anything from milk to even a new mobile phone delivered right to their doorstep.
What followed was a host of new policies, constructed by Prime Minister Narendra Modi. He allowed
for a 100% FDI cap, in B2B e-commerce businesses. Suddenly almost every business had an online
projection of itself. The existing e-commerce businesses were now worth their weight in gold. India
emerged as an e-commerce powerhouse, which will only grow in stature in the times to come.

1.4 OPPORTUNITIES

E-commerce takes a number of forms: business-to-consumer (B2C), business-to-business (B2B), e-

procurement, and e-marketplace. According to Forrester Research (2000), the U.S. share of global
B2B e-commerce sales will grow to approximately $3 trillion by 2004, while B2C e-commerce sales
will account for $184.5 billion (see Table 1). E-commerce is growing much faster in the B2B sector
compared to B2C and is largely dominated by larger companies. By the year 2002, 85 percent of
small businesses are expected to conduct business via the WWW.

Retailing or "e-tailing" is the most typical B2C activity. New ventures or small businesses can use the
Internet to either start a new retailing or service business, enhance an ongoing business or provide
hardware, software, or services that allow other businesses to integrate the Internet into their business
model. A small business selling from a traditional store, called "bricks and mortar" may see the
opportunity to increase market share by creating a Web page and selling on the Internet.

While there are many large Internet service providers (ISP), such as America Online (AOL), there are
also many small businesses that provide this service. According to a report by Williams (2000), most
of the 7,100 ISPs in 2000 have fewer than 12 employees; the number of ISPs is expected to reach
10,000 in the next 2 to 3 years; and the U.S. ISP market generated an estimate of $15 billion in
receipts in 1998. The number of small businesses that provide Internet services have experienced
tremendous growth because of the increase in demand for Internet access. Many of them are finding
opportunities in providing additional hardware, software and service opportunities as they see the
opportunity to host and design web sites for Internet businesses. They are also providing consulting
services for those new businesses

One of the major opportunities for entrepreneurs and small business in the future will be in the area of
B2B. According to Boston Consulting Group, by 2003, more than 65 percent of all B2B e-commerce
purchases will be made by six sectors: retail trade, motor vehicles, shipping, industrial manufactured
equipment, and the government. This will provide ample opportunities for entrepreneurs and small
businesses to find niches in this market.
B2B e-commerce is primarily concerned with increasing the efficiency of businesses through the use
of Internet technology. It helps companies find buyers for specialized goods and services, time-
sensitive goods, second-hand goods, and excess inventory. Small businesses can benefit from B2B e-
commerce through the formation of coalitions that negotiate for better prices.

Sellers of goods and services can benefit through the reduction of costs associated with finding new
customers. Other advantages of B2B e-commerce include improved service and retaining customer
loyalty. B2B e-commerce also provides small companies an alternative to traditional EDI networks in
doing business with large companies (buyers) who are increasingly forcing all of their suppliers to
trade electronically.

Marketplaces have recently become an Internet application for business-to-business procurement

using an auction mechanism where businesses that supply an industry bid for the opportunity to sell
their goods. A number of general sites such as Commerce One and Ariba have pioneered this activity,
but now individual marketplaces for specific industries have grown, developed by companies within
these industries.

For entrepreneurs interested in software development, it is important that software be integrated with
other software that the clients use. This can also be a barrier to entry if programming skills and
intimate knowledge of the programming in other software packages is not available.

One of the primary reasons for the wide influx of new online ventures is the low barrier to entry. You
can start an Internet business for as little as a few hundred dollars. In addition, companies like
BigStep.com, eCongo.com, Earthlink.com, Tripod.com, and Freemerchant.com offer free online
services to setup a business with access to online catalogs, credit card processing, and order-tracking
services. However, entrepreneurs and small businesses must use caution because some companies
require long-term agreements that would eventually lead to extra expenses for added services and
expensive support for technical problems. Microsoft, Intel, Intuit also offers inexpensive sites. These
trends have accelerated the migration of entrepreneurs and small businesses towards conducting
commerce on the Web.

There are several advantages to having an Internet presence. For example, statistics show that the
Internet is increasingly becoming global (Forrester, 2000). Furthermore, having an Internet presence
allows a company to remain open seven days a week, 24 hours a day. You can also build your
business in a phased approach. Additionally, in many cases the consumer will not be able to tell the
difference between a small versus a big business, thus limiting your liability of smallness. You can be
a one-person operation that competes with a 500-employee firm.
Small businesses can use the Internet to expand their markets, improve efficiencies, attract and retain
customers, and exploit new e-Business opportunities (Oracle, 1999). Other opportunities include
customer service, technical support, data retrieval, public and investor relations, security and payment
issues, cutting costs, and obtaining advice/information. Existing businesses have the opportunity to
adopt e-commerce early and build an infrastructure that dramatically reduces the costs of doing
business while improving relationships with buyers and suppliers. Through e-commerce efficiencies,
they have the ability to reduce the costs of billing, payment, customer service, distribution/ fulfillment
costs, reduce supply chain management, procurement, and expense management costs.

Small businesses have the advantage of using the Internet to build relationships with suppliers who
before gave them little recognition. With the Internet, small businesses have the ability to gather
information and goods much quicker, reducing inventory and thus reduce costs. The use of customer
service through the Internet can also assist a company through product descriptions, technical support,
and order status information online. This frees up a company's customer service staff to handle more
complicated matters. For example, Internet sites like Realestate.com have allowed consumers to
reduce the time to purchase a home by 75 percent by providing information on purchasing homes.

One of the key opportunities of the Internet lies within the value chain. Companies have the
opportunity to cut out the middleman or become a middleman. For example, the traditional value
chain flows from the manufacturer, wholesaler/distributor, retailer, and consumer. With the advent of
the Internet, entrepreneurs and small businesses have the opportunity to develop relationships with the
manufacturers and sell directly to the consumer without having control of the products.
An example of an intermediary can be seen through an entrepreneur that developed a web site called
www.avengers.com. The Avengers is an old television series from the 1960s. The site contains a
plethora of information about the series and also has merchandise for sale that includes copies of the
old shows. When you go to purchase some of the videos, it sends you directly to Amazon.com. If the
person purchases the video from Amazon.com, the company receives a percentage of the sale.

Other opportunities on the Internet include companies whose business models are standard online
storefronts (e.g., amazon.com), transaction brokers (e.g., e*trade), content providers (e.g., espn.com),
auction sites (e.g., eBay), software development companies (e.g., ariba.com), startup consulting
companies (e.g., exodus.com), and hosting services (e.g., sitehosting.net).
Small businesses can learn from some of the most innovative companies that have successfully used
the Internet: Dell Computer, Sun Microsystems, and Cisco Systems. Dell Computer has become the
ideal example for B2B e-commerce. They set up premier pages with over 5000 U.S. companies that
allow businesses to order quickly with few errors. The pages are especially designed for each
company, connected into their Intranet, and allow the employees to order directly online.

The Internet provides for improved customer service at a lower incremental cost. This is important
since we are moving from a product driven to service driven (supplier versus demand) economy. The
Internet also provides new distribution channels and new ways of exchanging information. According
to Porter (1999), supply chain management will be more cost effective as a result of the Internet.
However, the basics of business (e.g., design, technology, and manufacturing) will not be altered.
Porter states that the industries where the Internet is likely to be transformational are industries that
provide the service or basic information (e.g., stockbrokerages, auctions, or providing digital goods).
Table 2 summarizes some of the opportunities of Internet/WWW for small businesses and
entrepreneurs.

1.5 CHALLENGES AND STRATEGIES

Small businesses have been slower than big businesses to embrace e-commerce. Although small
businesses and entrepreneurs use of Internet is increasing, they will face a number of challenges as
they start using Internet/WWW for e-commerce. Further global expansion of e-commerce will create
new challenges for small businesses and entrepreneurs. This section examines both challenges and the
strategies that small businesses and entrepreneurs can utilize to take advantage of e-commerce.

The B2C market is currently in its shakeout stage and is a low margin, high capital business that will
take until 2003 to be profitable. Over the past few years, B2C companies have skyrocketed in value,
however the recent downturn in the Internet sector has seen many companies lose 50 percent or more
of their value. Investors are putting pressure on these firms to produce profits. In the past, these firms
were valued by their sales, now investors are demanding that these firms produce net profits along
with a strong revenue model.

As a result of these activities, money raised by B2C companies has dipped 23 percent to $1.4 billion
in the first quarter 2000 from the fourth quarter of 1999. During the first quarter of 2000, only 5
percent of venture capital funding went to e-Commerce startups, down from 12 percent in the
previous quarter (Donahue & Girard, 2000).

An increasing number of B2C companies are withering away due to an increase in the number of
competitors (Oracle, 2000). This effect has been particularly felt in retail industries such as toy stores,
computer sellers, and office supplies. Survival projections for several of the dot.com retailers look
bleak (Forester Research, 2000). Clothing retailer boo.com recently liquidated their company after
burning $100 million in six months.

The low barriers to entry and increase in competition will have an increasingly negative effect on
entrepreneurs and small business owners' ability to survive within the B2C area. Both traditional and
virtual companies' weaknesses have been amplified. Consumers have gained power in the distribution
channel by demanding and receiving the lowest prices available. Consumers can achieve this through
information intermediaries like CompareNet.com who have information on prices and vendors for
over 100,000 consumer products. According to John Hagel of McKinsey & Co., "Consumer
infomediaries can save an average client household the tidy sum of $1,100 a year by searching for the
best deals on its behalf. The reduction in transaction costs will give more power to the buyer." It is
estimated that these infomediaries will grow from $290 million in revenues in 1998 to $20 billion in
2002 (Hof, 1999).

There has been a tremendous surge in the number of B2B companies or exchanges, however most of
these businesses are nothing more than meeting places. Hence, it is likely that current projections of
large-scale bankruptcies among B2B companies will also become true due to the lack of value-added
services for the trading partners. These services typically include integrating back end systems,
providing industry specific content, and assisting in the development of RFP's. Horizontal exchanges
(e.g., Freemarkets) that provide trading services for several industries are faced with the additional
burden of providing compelling content for their customers.

In a sense, the pressure is on for small businesses because they have to eventually participate in buyer
initiated exchanges. This is especially the case for small businesses that are tier two or tier three
suppliers for large companies like General Motors. In an effort to rationalize and streamline their
supply chain, larger companies are insisting their suppliers upgrade their IT systems to a level of
sophistication that is on par with the organization. Larger companies want suppliers to deliver goods
in a shorter period of time in a cost-effective manner. This requires not only sharing demand
forecasting and inventory information but also exchanging information that is in compatible formats.
It is also essential that transaction details be easily integrated with back end systems. For example,
suppliers are likely to insist that order information should directly be pushed into their order
processing systems, rather than retype all the information. On the other hand, large organizations
would prefer that supplier initiated information be fed seamlessly into their internal ERP or legacy
systems.

For small businesses that have not yet established formal relationships with large company's supply
bases, there is also the question of whether to become affiliated with horizontal versus vertical
exchanges. It is likely that eventually small businesses will have to participate in several of these
exchanges. Typically, several of these exchanges require registration fees, subscription fees, and
maybe even transaction fees. Hence, it is important for small businesses to perform a cost benefit
analysis before joining an exchange.

OTHER MAJOR CHALLENGES FACED BY SMALL BUSINESSESS

INCLUDE

Nowadays, people are more interested in buying and selling things through electronic
media. This trend has brought in an array of new opportunities and challenges for small
businesses. E-Commerce is a powerful tool that will help your small business grow and
glow all across the globe. 
In the e-commerce business, there are different sets of rules and regulations to follow.
Cybersecurity, competition and order fulfilment becomes more important, both to the
function of your business and its longevity. The major e-commerce challenges faced by
small businesses and the solutions to them are mentioned below.
Cybersecurity

Small e-commerce sites need efficient cybersecurity practices and tools in place. As a
small business cannot afford to have downtime in operations and sales in case of cyber
attacks, they need proper cybersecurity framework to keep the data safe. Small businesses
should invest in implementing policies and technologies to deal with the cyberattacks and
should have an incident response plan to face them.

Order fulfilment

Order management and fulfilment processes have a direct and immediate bearing on the
success and even survival of the business. In an e-commerce business, you should always
be prepared to handle more orders than expected. To handle such situations and to deliver
products in a  specified time, order fulfilment should be outsourced to a third-party .

Customer Experience

One of the biggest challenges in running an e-commerce site is to provide customers with
an experience better than or equal to what they get in a real store. Price handling, analytics
and customer segmentation should be given importance. There should be clarity in product
offerings, pricing and more, and it should be same as that of a face-to-face purchase. For
the success of an e-commerce venture, consistent and profitable pricing is an important
requirement.

Competition

Making your business stand out from your competitors is a tedious task in the saturated e-
commerce space of today. The first step to handle this is to build a professional website
and to make sure that it is optimized correctly to suit today's Google algorithm. To
increase your domain authority, focus on smaller demographic by providing unique
products or services.
Return and Refund Policy

To make your brand stand tall among the others, create a smooth, fast and easy return
policy. If you don't have a good return/refund policy, people are less likely to trust you.
Customers are reluctant to buy from sites that do not offer good return/refund policy.
 
Design an attractive website for Better Conversions

12Design and develop a trustworthy website that is modern, clean, user-friendly, and
virus-free, to increase your conversion rates. Create an attractive website and improve the
quality of the content using various SEO techniques. Optimize the webpages using short-
tail and long-tail keywords for attracting relevant traffic to your website.  

Visibility of the Website

The main issue with small businesses is the visibility of their website. If their website does
not show up on the first page of Google's search results for relevant keywords, then it is
unlikely that prospective customers will find them. Investing in SEO is the best way to
overcome this challenge. Understand and identify your target audience to figure out
which marketing channel will generate traffic that actually converts into sales.
Following the best SEO practices will lead to higher search visibility and an
increase in qualified leads.

Finding the Right Market

Small businesses find it difficult to find the right market for their products. To find it out,
initially make assumptions about the target market and start running Facebook ads. When a
sale is made, learn about the customer who bought your product and try to collect all
available details, to figure out your target audiences and market.

Making or Increasing Sales

Once you have set up the website, identified the market and the target audience, the next
challenge is making/increasing the sales. For increasing sales, small businesses should
have the right product at the right price. As specified earlier, the website plays a major
role in increasing the sales too.
1.6 TECHNICAL CHALLENGES OF E-COMMERCE

Once a small business or entrepreneur has decided to conduct business on the Internet, their next
strategic decision is to decide how to host their web site. These businesses have three options: host
their own web site; host their site with a web hosting service provider; and host their site with a portal
such as Yahoo or GeoCities. For a small monthly fee, portals like Yahoo will help any small business
develop its site, perform payment processing and tax calculations, maintain the site, and collect site
statistics. While this really reduces the development effort, it also reduces the flexibility. Most portals
will not let merchants have a virtual domain name. So instead of www.merchantname.com, the
address will be store.yahoo.com/merchantname. Also, these portal-based storefronts do not
necessarily grow with the business and could get tedious, expensive, and cumbersome when the order
volume increases. Since portals like Yahoo host several other storefronts, the download time for
potential customers could be very high. Increasing the growth rate will eventually require a site that is
more reliable. Finally, if the site requirements grow beyond the capability of a portal-based host, it is
impossible to transfer the site contents into a standard format.

This is because portals like Yahoo do not allow one to convert site contents developed in their
storefront into any recognizable format such as HTML.
Another alternative to portal-based hosting is buying a server. There are downfalls to this strategy as
well. For instance, the business might not be able to make decisions about hardware, operating
systems, and application servers.

This also requires considerable knowledge in installation and setup of a web server. Server
connection fees can be prohibitive. The merchant typically will need at least a 64 Kbps connection
line to the Internet backbone. This entails line installation costs as well as any other costs for network
routingequipment

In most cases it is best to start with a web-hosting provider where the business is not concerned with
hosting issues but at the same time has a certain degree of flexibility. However, selecting a web-
hosting provider requires careful consideration of several issues: length of the contract, disk space
offered per account, ability to run CGI (Common Gateway Interface) and other scripts, conduct secure
transactions, e-mail management, availability of access logs, instant credit card validation, connection
speed of the web host with the internet backbone, server redundancy in case of traffic spikes, adaptive
pricing plans which correspond to scalable requirements, throughput--the number of http requests that
a particular web server can handle, and the response time for the server to handle a page request.

Hosting the site with a web-hosting provider might require the business to incur initial development
time, cost, and effort. However, with the advent of easy to use tools, this task has become
considerably easier. At the most basic level, a typical e-commerce infrastructure for a small business
or entrepreneur consists of a web storefront for buyers to browse the site andapaymentgateway to
collect credit card payments.

In order to perform these functions, several software components are required. First, storefront
content development tools such as HomeSite, FrontPage, and PageMill are useful for developing site
content and also include features such as creating customer survey collection forms. Second, database
connectivity tools such as ColdFusion, ASP, and VisualInterDev are useful for creating database
driven applications. Database connectivity is crucial because the web catalog should be consistent
with the actual inventory database. Third, setting up a payment gateway requires an HTML based
form that collects customer credit card and shipping information. This information is then encrypted
using Secure Socket Layer (SSL) and sent to a third party provider (such as First Data), which then
forwards the information to the customer's credit card issuing bank. After authorization and a
deduction of transaction fees, the net amount is credited to the merchant's account. Typically,
payment-processing software like QuickCommerce take care of some of the above functions. It is also
important for the merchant to get authentication from a certification authority such as Verisign.
Ancillary tools are useful for functions such as tax calculations (e.g., Taxware), site traffic analysis
(WebAnalyzer), diagnostics (LinkSleuth), chat sessions (Ichat), live help (Humanclick), and e-mail
management (eGain).

Another challenge is to maintain the business 24 hours a day, seven days a week. This requires
staffing for customer service as well as technical problem troubleshooting such as site upgrades,
hosting failures (server crash), and environmental failures (power outages). Sites also need to be
constantly re-evaluated for stress testing (how well they handle peak traffic), page download times,
link validation, and usability. It is also important to evaluate how many high margin transactions
occur on the site. Small businesses and entrepreneurs with low margin items should consider offline
authorization or authorization on a batch basis as opposed to real time credit card authorization. This
is because third party payment processors such as First Data as well as the customer's issuing bank
charge fees for processing every credit card transaction on a real time basis.

Security is one of the most important aspects of web site operations. Typical attacks include hacking
into the site for credit card numbers or even denial of service. Part of the reluctance on the part of
customers to buy on-line is their perception that their credit card and other information is not secure.
Hence, entrepreneurs and small businesses need to assure their customers that they take adequate
security precautions.

It is also important to have contingency plans in the event of an attack. The consequences of not
having adequate mechanisms and a contingency plan can be severe. The inability to thwart security
related attacks on the site would be unnerving to consumers. The direct effect of this is an immediate
drastic reduction in market share because the site is now branded with an image that credit card and
other private information is not secure. While contingency plans do not really alter the damage, they
can be more useful in that they can be used to reinforce the impression of a secure site.

1.7 BUSINESS CHALLENGES

When developing a web site, small businesses and entrepreneurs must make sure that they create an
attractive site with a sense of community. Building one-to-one relationships and a quick delivery of
quality products will be keys to success. Customize your site for clients and receive e-mail to get
feedback about the site. If you are selling products, have a virtual catalogue that includes pictures on
the site. To save space and decrease the download time, place pictures in small thumbnails. Give the
consumer the opportunity to hit a thumbnail to see the big picture.
One of the keys to having a successful online business is brand name recognition. With a lack of
brand name recognition, customer perceptions may lead to a lack of trust. Customers may be reluctant
to purchase online, especially give out credit card information for fear of hackers. To overcome this
objection companies are attempting to create a strong brand name through heavy advertising. As
competition increases on the Internet, companies will be increasingly forced to develop their brand
name on the Internet and the traditional marketplace. Some strategies that companies have been using
are creating gimmicks such as free shipping or offering free items to entice customers to purchase
items from their site. The problem with these gimmicks is that they do not lead to a company's
sustainable competitive advantage.

Innovative marketing is also a key to success. Some of the more common approaches include:
reciprocal links with complementary sites, banner advertising, retailer-search engine portal alliances,
prospect fees for visitors who complete some action, and affiliate programs with other merchants.
Given the click through rates of 2 percent and then further prospect conversion rates of 3 to 4 percent,
it is not only important to attract new customers, but also devise strategies to increase purchases as
well as strategies to retain existing loyal customers. These strategies include: personalizing content
and promotions, placing complimentary items beside core products, attractive and functional design,
and building a loyal user community with chat rooms and discussion threads. For example, online
grocery sites can be personalized for specific tastes and preferences such as health conscious groups
or international foods.

For sites that feature several product categories and brands, a big issue is usability. Navigation
through 10 to 12 screens might result in a frustrating experience for the customer. Instead, it might
make more sense to create personal shopping lists that are based on usual purchases. Yet another way
companies can enhance their competitiveness is through the reduction of problems related to logistics
(e.g., late delivery) and poor inventory management (e.g., out of stock). More recently, companies
have found innovative ways of providing customer service on the web. Having links with answers to
frequently asked questions is an innovative tool being used by companies.

The Internet has also created new challenges for companies that have traditionally fulfilled the role of
middlemen; i.e. bringing buyers and sellers together (for example insurance agents). Companies that
have been operating with physical storefronts have had to devise new strategies to compete
successfully. This includes the ability to leverage their offline activities with their online operations.
For example, Williams-Sonoma, a bridal registry, allows couples to register online while gift buyers
can use kiosks located at various places in their physical storefronts to access an updated database of
gifts bought.

It is also very important to understand the people who visit your site and which products they
purchase. It would be worth investing in site evaluation tools such as SiteAnalyzer to identify typical
customer profiles. These tools also provide information related to revenue by page or by product and
also revenue by the incoming referral url address. This will help the merchant to evaluate the
effectiveness of his banner advertising strategies. Other strategies include developing strategic
alliances with other net companies and exchange banners on their sites, hosting a chat room or
discussion group, or advertising on other sites.

1.8 IMPACT OF E-COMMERCE ON SMALL SCALE BUSINESSES

Use of electronic commerce (e-Commerce) in small and medium enterprises (SMEs) has become an
important topic in information research systems. E-Commerce is a technological innovation that
enables SMEs to compete in the same level with other major companies. According to statistics,
SMEs are the main sources of innovation and are a step forward compared to large companies,
because they are more flexible to market changes. The feature of nowadays is the digitization of
business; therefore the use of the Internet and the use of technology has become a tool to gain
competitive advantage in business. Competitiveness at the global level and exports in the future will
largely depend on the deployment of new technologies in commercial matters. SMEs have grown
significantly in the global economy over the past two decades due to the fact that their number
represents about 90% of the total worldwide facilities. Even in Kosovo, SMEs represent the majority
of production units of Kosovo economy; therefore the current directions of national policy should
address the ways and means of developing capacities of SMEs. Like many other countries around the
world in Kosovo SMEs play an important role in generating employment and ensuring the economic
development, the rapid developments in information and communication technologies (ICT),
especially the Internet, have brought many changes in the world, both in developed countries and
developing countries. The purpose of this study is to determine how many SMEs in the Republic of
Kosovo are familiar with e-commerce, the opportunities it offers for business, and how many of them
use it as a basic strategic definition in their businesses. We will explain the advantages of e-commerce
for SMEs as an innovative way to improve business performance. Given that e-commerce is the future
of enterprises, managers of SME should focus their efforts on innovation processes, as part of the
development strategy of the enterprises where they work.

Many governments have an active policy of intervention to promote Internet adoption in SMEs, so
knowing the importance of the internet and Kosovo government is paying attention the support of
SMEs in terms of the necessary technical infrastructure. SMEs are generally willing to develop e-
commerce systems or to change current business models. In this society of knowledge, firms must
develop competitive advantages based on an adequate and intensive use of information and
communication technologies (ICT), which is an essential element of success in today's market. This
fact is especially important for small and medium enterprises (SMEs), whose survival depends,
among other factors, in the use of ICT todevelop new organizational models, compete in new markets
or to deepen their internal and external relations of the communication. Although there is a major
impact on the design of strategies, most SMEs do not see the Internet as a key to their business
strategy. Use of ecommerce in small and medium enterprises (SMEs) is important and there are
positive signs that their benefits are by electronic commerce as a kind of ICT, for assistance in
expanding their business. Small and Medium Enterprises (SME) are the main promoter of economic
growth of a country, and should be studied in terms of their adaptation to new technologies that make
them faster and stronger, creating new channels, reducing time to market, offering the opportunity to
work more flexible and creating new jobs. To be able to reach new customers who are away from
their countries to compete with their rivals in the national and international arena, SMEs need to be
adapted to information and communication technologies.

DEFINITION OF SMEs
The SME sector plays an important role in the economic development of any country, in particular for
Kosovo that is undergoing in the transition phase directed towards a market economy. There are many
definitions of SMEs, thus the determination and definition of SMEs is not the same in all countries
and therefore we conclude that there is no general definition defining SMEs. There is no definition or
criteria for deciding the term enterprise respectively small and medium enterprises (SMEs / SMBs).
The main factors that determine whether a company is SME are: 1. Number of employees and 2.
Turnover The definition of small and medium (SME), according to the EU is divided into three
categories: - Micro Enterprises / businesses, have 1-9employees - Small Enterprises / businesses, have
10-49 employees - Medium Enterprises / businesses, have50-249 employees EU concept is a concept
accepted by Kosovo institutions.Following in Table 1, will be presented the classification of SMEs
according to World Bank standards and the European Union

Use of electronic commerce (e-Commerce) in small and medium enterprises (SMEs) has become an
important topic in information research systems. E-Commerce is a technological innovation that
enables SMEs to compete in the same level with other major companies. According to statistics,
SMEs are the main sources of innovation and are a step forward compared to large companies,
because they are more flexible to market changes. The feature of nowadays is the digitization of
business; therefore the use of the Internet and the use of technology has become a tool to gain
competitive advantage in business. Competitiveness at the global level and exports in the future will
largely depend on the deployment of new technologies in commercial matters. SMEs have grown
significantly in the global economy over the past two decades due to the fact that their number
represents about 90% of the total worldwide facilities. Even in Kosovo, SMEs represent the majority
of production units of Kosovo economy; therefore the current directions of national policy should
address the ways and means of developing capacities of SMEs.

1.9 POSITIVE EFFECTS OF E-COMMERCE ON THE ECONOMY

Information Technology has come out as a game-changer in almost every walk of all. Book your
tickets, pay your bills, transfer your money, entertain yourself, it is all there. So, it will not be wrong
to say that the use of internet has acted as a game changer even for business activities across the
globe. In India, SMEs have been operating in a traditional manner and have been dependent on
domestic trading activities for a long time. But with the growing rate of internet penetration, SMEs in
India are also gradually modifying their activities to grab opportunities to trade globally through e-
commerce. It is very fascinating to note that around 43% SMEs are now involved in online
transactions. These SMEs have an enhanced customer base, better employment opportunities and
increased profits. And the trend is on a rise, wherein according to survey almost 565 SMEs believe
that use of e-commerce will boost their business growth. It was also observed that the SMEs who used
the internet extensively had a growth rate of around 19 % as compared to those who did not put the
use of Information Technology in an extensive manner. The growth rate of such SMEs was recorded
at around 13%. Those SMEs who used the internet extensively for their business purposes also
recorded export values which were approximately twice of those SMEs which did not use much of
internet for their business activities.

The traditional SMEs have not experimented much and have stuck to their core activities while those
who have entered the domain of e-commerce has not only seen a growth in their business but also a
growth in their status quo. It has also been ascertained that around 98 % of the SMEs who use
Information Technology and e-commerce contribute to the total exports of the country while only
11% of the traditional SMEs are contributing towards the total export values. This gap between the
tech using SMEs and traditional SMEs can be explained by the fact that e-commerce goes beyond the
geographical boundaries and provides a level playing field. E-commerce increases the trade visibility
of the seller among the buyers who are located in far flung geographical regions.
Potential Benefits to SME

1 Increase in revenues
One major disadvantage of being offline is that you are cut off geographically, and more often than
not, incremental efforts are made to expand the customer base. This takes a long period. On the other
hand, e-commerce helps SMEs carry on their business activities transcending geographical barriers,
thereby increasing the customer base, sales, and revenue. It has been perceived that due to the
increased speed to market and a global customer base, an SME can boost its revenues by 51 %.
Another benefit of e-commerce is that there is a prompt feedback channel through which any
complaint or mistake can be made good immediately. The referral system on the internet also
helps the business to tap into more potential customers.

2 Low marketing and distribution cost

There is a very sharp rise in competition these days. Businesses try to draw in as many customers as
possible to beat their rivals. To do this, they spend heavily on traditional and digital media. By
adopting e-commerce methods, the SMEs can reduce their marketing costs drastically by cutting
down on expenses of trade shows, enormous offline advertisements and call centers, thereby
optimizing their spending. These savings can reduce their expenditures up to 60-80 %. Moreover,
adoption of e-commerce methods reduces the traditional marketing cost and the cost of opening a
store in multiple places also.

3 Increase in profit margins

SMEs can take advantage of a third-party trading platform with a very little or no investment by
implementing e-commerce methods. They can host and develop their online storefront and also
manage logistics, packaging and, warehousing. The reduction in overhead costs of these activities can
potentially increase the profits of SMEs by 49%. When costs are reduced, the same resources can be
used to develop a better and more competitive pricing strategy which will have a constructive impact
on the profit margins. Adoption of e-commerce also cuts out the middle-man between the SMEs and
the consumers, thereby cutting down cost further and increasing profits.

4Better Accessibility and Geographical Reach

The internet is not restricted by any geographical limitations. The seller can connect to several buyers
across different geographical areas. In the virtual marketplace, geographical boundaries disappear and
business can go on 24×7 without any time zone restrictions.

5 Faster approach to market

A key factor in increasing business is to come up with the product in the market before your
competitor does. Time is the essence where the window of demand for any specific product is very
short. E-commerce provides the ability to SMEs to approach the market faster by avoiding possible
chaos in the supply chain. The redundant processes can be eliminated, and the process of
communication can be streamlined to reach the customer as quickly as possible.
 6 Better experience for customers
In today’s competitive business world, the principle ” the customer is the king”, holds the center
stage. E-commerce helps the SMEs to provide a better experience to the customers. Optimized after-
sale services, quick responses to the inquiries of the consumer, and an interactive and informative
process of transactions creates a strong and loyal customer base.

Key initiatives by e-commerce companies to boost MSMEs sales

o ‘SAMARTH’ by Flipkart: In July 2019, Flipkart, a local platform,

developed/introduced Samarth programme to promote Indian artisans, weavers and state handloom
industries. Through this initiative, the company aims to provide MSMEs an easy access to the online
business marketplace and support in terms of business management, storage and account
management. With Samarth, Flipkart intends to empower millions of small businessmen, leading to
rural India's development.
o ‘MSME Accelerate’ by Amazon: The company launched this initiative in June 2020 to help MSMEs
recover from the aftermath of the pandemic. Through this programme, businesses can avail offers and
bulk discounts to continue/run their businesses smoothly.
o Collateral-free loans by Paytm: The company launched an initiative to offer unsecured loans of up
to 5 lakh (US$ 6,729), at low interest rates, to MSMEs. Under this initiative, Paytm, in partnership
with banks and NBFCs, digitised the entire loan process, from application to disbursement, without
additional document requirements.
o ‘Atmanirbhar Section’ by Shopclues: As part of this initiative, Shopclues launched an online ‘Vocal
for Local’ market platform, which includes locally produced products in various categories such as
fashion, footwear, jewellery, groceries and others. The company works with thousands of local
merchants and promotes local products on the marketplace.

Key Recent Developments Supporting MSMEs

 In April 2021, Amazon announced the 'Spotlight North East’ programme (US$ 25 million) to bring
together and provide online support to 50,000 artisans, weavers and small businesses from all eight
states in the Northeast by 2025; and boost exports of key commodities such as tea, spices and honey.

 In April 2021, ICICI Bank launched ‘Merchant Stack’, a comprehensive digital banking services that
is specially curated for retail merchants. These value-added services enable users—such as merchants,
grocers, supermarkets, large retail store chains, online businesses and large e-commerce firms—to
meet their banking requirements and further serve their customers amid the pandemic. In addition,
users can avail these contactless services on InstaBIZ, the bank’s mobile banking application.

 In April 2021, Vedanta Limited, a leading producer of metals and oil & gas, launched the ‘Vedanta
Saathi’ programme, which offers services including channel financing in partnership with a host of
banks, NBFCs and fintech firms; soon to be launched e-commerce solutions (such as transparent
pricing and live pricing options, direct buy access to a diverse product portfolio with no bar on
quantity and easy delivery tracking & micro-logistics); avenues for technical upskilling; opportunities
for MSMEs to set up downstream/ancillary manufacturing units near Vedanta’s plants; and a
dedicated web portal for MSMEs to interact with Vedanta’s quality, product application, engineering
and innovation teams.
1.9 Negative effects of e-commerce on economy

 Security aims to be a major problem in electronic commerce.

 Everyone, good or bad, can easily open a website, and there are many bad sites whose goal is
the money of cybercrime users.

 Before making instant online transactions, be sure to check the site security certificates.

 It is easy and convenient to buy, No one needs the personal details to set the adoption of
electronic commerce, that is mainly in marketing and sales.

 India is gradually becoming the country with the largest number of literate people on the
Internet in the world, and Internet penetration is largely due to mobile phones, and some of the
cheapest and most basic phones now offer Internet access.

 E-commerce has the effect of increasing the transparency of the market at the macro level and
at the micro level, greater productivity.

 The greater productivity will be out in the market on the micro and macro level, E-commerce
has the effect of transparency
 CHAPTER 2 REVIEW OF LITERATURE

The chapter of the literature review is considered as the most critical chapter of a study as it
directly contributes to enhancing the knowledge base of the researcher with regards to the
subject matter. In this chapter, the researcher focuses on searching and evaluating differently
available literature to gain a better understanding of the topic selected for investigation. The
viewpoints and work carried out by other researchers and authors are taken into consideration
in this chapter. Here, different themes are developed by the researcher to gain in-depth
information about the topic chosen for the study. The key themes covered in the present
section of the literature review are an overview of the effects of current boom of e-
commerce on small scale businesses in vile parle region to study its various business
models and to study the perception of people towards online insurance. The study was
conducted in western Mumbai which consists of and mainly the areas from Bandra to
Borivali, in Mumbai. Primary data were collected through questionnaire and field work.
Secondary data were collected from government records, newspapers, business magazines,
websites and some important sources of information used in this work. The main reason for
choosing Mumbai city is that investigator is located here and is familiar with the people. The
study includes all categories of respondents. The respondents were selected on the basis of
non- probability convenience sampling. Statistical tools used for the study are Research
states that online shoppers differ in their perceptions and attributes they assign to evaluate the
service. Service providers encounter tremendous pressure in designing service attributes that
address needs of the customers. Understanding customer's behaviour toward service features
and technological innovations becomes pertinent. Service quality strategies have to be
customer-centric that focus on behavioural intentions of the customer. Internet decreases
transaction and operating costs and facilitates efficient transactions. Services are
heterogeneous in nature as they are produced and consumed during service encounters. It is
important that online service experience should prompt customer satisfaction. Evanschitzky
et al posit that online environment provides convenience to shoppers, increases interactivity,
customer support and fosters relationships. Various Web sites attributes affect customer
satisfaction and motivate them to use online services. Szymanski and His suggest the
importance of four Web dimensions; namely, convenience, merchandizing, site design and
financial security
as qualifications to customer satisfaction. Taylor and Brown state that humans select,
interpret and process stimuli or information based on their existing attitudes. The
interpretation of information is based on how well it fits into their lifestyle.

Technological attributes

Davis in his Technology Acceptance Model states that the individuals’ acceptance of technology
depends on their attitude toward using the technology. The ease of use and usefulness play a pivotal
role in adoption of the technology. Further research added a new attribute to the above-mentioned
attributes. Davis et al state that use of technology is amplified if the customers feel a sense of
enjoyment in using it. The online service experience is enhanced with the interactivity and enjoyment
features of the Web site. Lin and Wu postulate that customer satisfaction and adoption of technology
is related to attributes such as information content, customization and reliability. The customers’
responses have a significant effect on their perceived ease of use and usefulness of the Web sites. The
implications of any innovation can be measured by the volume of use and how far it fits into the
customers’ requirement.

LITERATURE REVIEW

There are a number of studies related to electronic commerce, which has become important and a new
way of trading via the internet. Nonetheless, it is still a new concept of technology that requires more
understanding and awareness . E-commerce considers the buying and selling of services or products
by businesses or customers, without the use of paper, and it is an economic activity that encompasses
many different types of business transaction, such as banking, rental, retail shopping and investing . It
is centred on sharing business information, maintaining business relationships, and conducting
business transactions by means of telecommunication networks . The growth of the Saudi population
has reached 3.7% yearly, where such rapid growth is tied with raising demands on e-services and
increasing the number of internet users in India . This huge rate of growth in internet connectivity
leads the Kingdom towards the large-scale adoption of e-commerce technology . E-commerce has
long-term benefits, which are classified into two main categories: tangible benefits, including
increased automation of processes, business efficiency, transformation of traditional market chain,
reduced operation costs, and acquisition of a niche market; and intangible benefits, including
education of customers, enhance consumer loyalty, and competitive advantage . In addition, there is
the significant increase in the profits of companies concerning the use of e-commerce technology.
Furthermore, e-commerce has many positive effects on companies, such as its ability to reduce
inventory overheads whilst lowering telecommunications costs. Furthermore, it helps to expand the
marketplace to international and national markets . Theoretically, the application of electronic
commerce has a clear impact on small and medium companies as it helps to improve performance by
two things: first, by raising number of purchases of customers; and second, by reducing costs when
implementing e-commerce. Cost reductions also can be achieved through storing costs, material
savings, and decreases in transportation . On the other side, there are several barriers affecting
companies negatively when implementing ecommerce in the business environment. Small and
medium enterprises face several difficulties that affect their planning in the application of e-commerce
more so than in the case of large firms . Furthermore, the barriers can limit and reduce the process of
e-commerce adoption . Moreover, the significant barriers facing small and medium companies include
a lack of compatibility between the company’s infrastructure and e-commerce technology . Thus, a
lack of consistency and compatibility in the infrastructure of companies is the most important barrier
for companies; after that is the cost factor . Moreover, a lack of infrastructural development is a
significant issue in Saudi Arabia in regards the application of e-commerce due to a lack of
infrastructural developments, which have slowed the rate of e-commerce usage . In addition, most
companies suffer from many security issues with ecommerce because they have relatively little
knowledge and awareness about this technical field . Moreover, a lack of governmental support also
acts as a barrier that hinders the process of ecommerce implementation; thus, governmental
regulations must be changed and transformed so as to support and protect electronic delivery systems
and credit payments in e-commerce . Furthermore, the influence of government regulations has a
significant positive effect on e-Commerce adoption . Moreover, governmental regulations are missing
the protection of privacy in e-transactions in the support of e-commerce activities in Saudi
Arabia.There are a number of studies related to electronic commerce, which has become important
and a new way of trading via the internet. Nonetheless, it is still a new concept of technology that
requires more understanding and awareness . E-commerce considers the buying and selling of
services or products by businesses or customers, without the use of paper, and it is an economic
activity that encompasses many different types of business transaction, such as banking, rental, retail
shopping and investing . It is centred on sharing business information, maintaining business
relationships, and conducting business transactions by means of telecommunication networks . The
growth of the Saudi population has reached 3.7% yearly, where such rapid growth is tied with raising
demands on e-services and increasing the number of internet users in current time.

This section presents an overview of case studies of businesses and business networks that use the
Internet to improve sales, customer service, and production and supply chain efficiencies. The case
studies differ greatly in format, but they generally include introductions to the businesses and the roles
of e-commerce in the businesses' operations. Two of the publications are in-depth analyses of the
evolution and impacts of e-commerce on a single business (a travel agency and a jewelry store). Three
additional publications examine the roles of regional e-commerce organizations, associations, and
networks in enhancing e-commerce activity among area businesses. The remaining six reports provide
multiple case studies of businesses. The individual case studies range from one to six pages in length
and include an extensive variety of business types and e-commerce experiences.

Alexander, C., J.M. Pearson, L. Crosby. 2003. "The Transition to E-Commerce: A

Case Study of a Rural-Based Travel Agency." Journal of Internet Commerce 2(1):
49-63.
support for the new strategy. Borgsmiller Travel emphasizes the need for website maintenance and
the need to continually provide new marketing material to meet the Internet customer's Alexander,
Pearson, and Crosby detail the transition of Borgsmiller Travel (Carbondale, IL) from a traditional
travel agency to an e-commerce business. The process change involves moving from offering
unspecialized services to the local market to competing in a global market with an emphasis on travel
to Malaysia. Key aspects of the change are the identification of a niche market, investing in the
technology and human resources necessary to conduct an ebusiness, and providing top management
expectation of fresh website content.

Cordeiro, W.P. 2003. "A Case Study: How a Retail Jewelry Store Learned to
Compete in the E-Commerce Market Place." Journal of Internet Commerce 2(1):
19-28.

The study describes how a retail jewelry store in a large city transitions from a traditional marketing
strategy (signs, print and radio advertising, gy creates problems in terms of project management
(deadlines, staffing, and testing) and adaptation to a new marketing culture. The store notes that their
Internet customers are more knowledgeable buyers, and that e-sales tend to be for different
merchandise than in-store sales. The net effect of adopting e-commerce is to reverse the decline in
sales and improve staff morale. Firm profits, however, do not return to prior levels because the store's
high-maaggressive sales staff) to selling over the Internet. The implementation of an e-commerce
stratergin items are not big sellers over the Internet.

Henderson, J.R. 2001. "Networking with E-Commerce in Rural America." The Main Street
Economist, September, pp 1-4, Federal Reserve Bank of Kansas City

Henderson demonstrates that e-commerce can be used to support business networks and help rural
firms overcome the challenges of small size and geographic remoteness. Business 5 networks in the
study consist primarily of supply networks where large firms purchase material inputs from other
firms. These networks may be open (access available to all) or closed (membership restricted to
specific suppliers or customers and information exchange provided through Electronic Data
Interchange - EDI). Five businesses are used as examples of rural ecommerce activity and network
building - Wallis Oil Co. (Cuba, MO); Printingforless.com (Livingston, MT); eMerge Interactive, Inc.
(Sebastian, FL); Woodnet Development Council, Inc. (Orofino, ID).

Galloway, L., R. Mochrie, and D. Deakins. 2004. "ICT-Enabled Collectivity as a

Positive Rural Business Strategy." International Journal of Entrepreneurial
Behavior and Research 10(4): 247-259.

This paper examines the development of Internet-based business forums and their potential for
overcoming difficulties faced by rural businesses in Scotland. The study starts with an overview of the
benefits of information and communication technologies (ICT) for rural firms and potential reasons
why e-commerce adoption among rural businesses is relatively low. The authors interview five
Internet forums to assess the make-up and dynamic processes involved in rural Internet forums. Four
of the forums have a geographic focus and the fifth forum targets a specific industry. The study finds
variable experiences for the forums and concludes that ideal forum make-up, organization, and
impacts are inseparable from the regional and business context. In addition, long-run sustainability of
the forums is problematic because the "more effective" the forum is in enabling rural businesses in
ICT, the less the forum is needed.

Adirondack North Country Association. 2005. "Final Report: Enhanced

Marketing and Sale of Special Forest Products." Saranac Lake, NY, pp. 1-17,
November anca@northnet.org

Adirondack North Country Association (ANCA) is a regional economic development association that
promotes economic development and quality of life in 14 New York counties. The ANCA maintains
two regional e-commerce services for area businesses: AdirondackCraft.com serves 10 craftsmen,
artisans, and small manufacturers and AdirondackWood.com lists the products and services of 163
wood products companies. The final report reviews the activities undertaken by ANCA (e.g., promote
on-line catalogs, sales, and directories) and the major accomplishments pertaining to on-line
participation by area businesses, identification of new markets, and building the human capital
required for e-commerce activities. A major finding of the study is that small business owners value
marketing and sales assistance, and a regional e-commerce service is an efficient means of providing
this assistance.

Poon, S. and Swatman, P.M.C. 1997. "Small Business Use of the Internet:
Findings From Australian Case Studies." International Marketing Review 14 (5):
385-402.

Twenty-three case studies of small businesses in Australia are conducted to determine the roles
played by the Internet among small businesses, drivers for Internet use, and benefits perceived by the
firms. The case study firms are classified by business organizations, product/services, employment,
sales, years of Internet use, and key reasons for using the Internet. The case studies focus on
identifying patterns among participants regarding

(1) the role of the Internet as a medium for communication,

(2) management's enthusiasm for Internet use in the business,

(3) perceived benefits from Internet use,

(4) differences in Internet usage among industries,

(5) extent of integration between the Internet and internal management systems, and

Chau, S. 2003. "The Use of E-Commerce Amongst Thirty-Four Australian SMEs:

An Experiment or a Strategic Business Tool? Journal of Systems and Information
Technology 7(1): 49-66.

Chau interviews 34 small and medium-sized enterprises (SMEs) in Australia that are active users of
e-commerce. Interview questions cover four broad topics: business background, current use of e-
commerce, impact of e-commerce, and problems encountered using e-commerce. The case study
businesses represent a variety of industries (manufacturing, trade, fishing, hospitality/tourism,
agriculture, education, ICT, and finance); ages (1 to 80 years old); and employment (1 to 65 full time
equivalents). Analyses of the case studies reveal a wide range of e-commerce activities that are
grouped into six categories: electronic banking, communications, customer service, sales and
marketing, enhancing existing business processes, and cost reduction. Chau concludes that the
benefits derived from e-commerce increase if the firm makes complementary changes in
organizational structure and processes.

Center to Bridge the Digital Divide. 2006. "e-Work Case Studies." Washington
State University, Pullman, WA

The Washington State University Center to Bridge the Digital Divide (CBDD) provides 27 case
studies of Washington businesses that (a) offer information and communication technologies and
services or (b) use e-commerce as a critical component of their business strategy. The CBDD website
includes a brief introduction to each business and a link to a one-page overview that presents the
business' history, products and services, uses and applications of ICT and ecommerce, and plans for
the future. The case studies on the website and their business types are listed below.

E-commerce is one of the fastest growing segments in the Indian Economy. Though marked by high
growth rate, the Indian e-commerce industry has been behind its counterparts in many developed and
emerging economies, primarily due to a relatively low internet user base. In a study conducted by
global management consultancy firm AT Kearney in 2015, there were only 39 million online buyers
in India; a tiny fraction of the 1.2 billion who live in the country. However, increased technological
proliferation combined with internet and mobile penetration, presents a favorable ecosystem for the
development of e-commerce in India. The country is currently at the cusp of a digital revolution.
Launch of 4G services and decline in the tariffs of data plans and prices of data cards/USB dongles
have reduced the cost of ownership of an effective internet connection. Availability of low cost smart
phones and the extension of internet and broadband to the remotest corners will boost the
augmentation of the internet user base, effectively bridging the gap between potential online buyers
and actual buyers. The demographic dividend of the country also seems to encourage and favor the
growth of E-commerce. The survival of the e-commerce firms in a highly dynamic environment
becomes a challenging task when coupled with the cutthroat competition prevailing in the sector. The
onus then lies on the firms to constantly adapt and innovate while providing an information rich and
seamless experience to ensure customer loyalty. This study attempts to explore the evolution of e-
commerce in India and identifies various challenges to as well the factors responsible for the future
growth and development of e commerce.

TEO AND RANGANATHAN 2004

The literature that relates to B2B e-commerce adoption levels and competitive advantage provides the
conceptual bases for this research. This research adopts the definition of B2B e-commerce that
includes the use of the internet and web-technologies for conducting inter-organizational business
transactions (Teo & Ranganathan, 2004 ). The term B2B ecommerce has been interchangeably used
with other phrases such as electronic business, electronic commerce and web technologies

SHANTARAM AND MATTHEWS 2009

The purpose of this research is to examine how the different levels of B2B e-commerce in
manufacturing SMEs affect the different types of competitive advantage in Ghana. The conception of
the growth models recognizes that information technology adoption, including B2B e-commerce in
organizations, is not fixed but involves some levels of progression. Ecommerce growth model is
referred to as “stages or levels from an initial state to maturity to help organizations assess as-is
situations, to guide development initiatives, and to control progress and the sophistication of e-
commerce use” (Al-Ghamdi Alfarraj, & Bahadad, 2014; Rahayu & Day, 2017). Therefore, e-
commerce growth models relate to sequential levels of ecommerce adoption and that the subsequent
stage is better than the previous stage. Even though the evolution is described sequentially, there is no
necessity for a business to start from the initial phase and that organizations can start from any stage.
The use of e-commerce growth models is very vital in providing a holistic description of the various
factors that may influence different B2B e-commerce adoption levels. Scholars used stages/levels of
growth models to describe organizations’ use of IT (Al-Ghamdi, Alfarraj, & Bahadad, 2014). Along
with the internet revolution in the 1990s, e-commerce development stages/levels emerged and had
been rapidly and increasingly diffused among individuals and organizations. Some studies
investigated different aspects of e-commerce adoption focusing on the individual and organizational
level. For SMEs, Information technology (IT) is one of the areas linked to competitive advantage.
One goal of using IT is to support the organization’s survival by employing internet technologies to
keep ahead of competitors and to differentiate one’s position in the world market. Therefore, the
organization’s management often considers IT as providing an opportunity to strengthen their
competitive advantage (Andrew & Malik, 2016; Elbeltagi et al., 2016; Xu & Quaddus, 2013). IT is
one of the critical resources that can be utilized by SMEs to gain competitive advantage, and
therefore, can support the firm’s strategy to achieve a competitive advantage against their rivals and to
remain competitive in both the domestic and international markets (Abdelkader & Abed, 2016;
Breznik, 2012). Figure 1 shows the research framework, which is followed by five main hypotheses.

The use of e-commerce growth model is significant to have a holistic explanation of the factors that
may affect different levels of e-commerce. According to Zandi (2013), the use of growth e-commerce
model allows firms to assess and determine the level of e-commerce that they currently use and
compare it with the levels of growth described in the model. It is widely accepted that IT plays a
significant role in creating and sustaining competitive advantage (Porter, 1985, Belton, 2017).
Moraisa, Piresa, and Gonçalvesb (2012) suggested the use of ecommerce maturity models in SMEs in
order to have a comprehensive understanding for decision makers in planning, deciding and
implementing the appropriate level of B2B ecommerce that meets their SMEs needs. This can be done
by identifying the competitive advantage associated with the levels of B2B e-commerce growth
models. Base on the above

RAGHU AND ET AL 2014

Since 2014, the government has been introducing initiatives such as Digital India, Make in India,
Start-up India, Skill India and Innovation Fund to accelerate e-commerce in India. It is also
encouraging MSMEs to market their products on e-commerce sites, especially on the government-
owned websites, such as e-Marketplace (GeM), which is used by Ministries and PSUs (public sector
undertakings) to procure materials. The platform recorded transactions worth Rs. 55,048 crore (US$
7.5 billion) until September 2020. As part of the Digital India initiative, the Ministry of MSME
undertook numerous initiatives to digitise the entire MSME ecosystem, wherein all offices have been
digitally empowered, efforts have been taken to spread awareness on benefits of digital payment
solutions such as BHIM, UPI and Bharat QR code. 

Nitin Gadkari, the Minister for MSMEs, at the Amazon Smbhav Summit 2021 said, “E-commerce
will play a decisive role in the success of the Indian MSMEs, and the sector must ensure that this
digital transformation happens at a pace that enables them to capitalise on current opportunities. It is
increasingly evident that technology will be a crucial factor in defining the success and
competitiveness of India's MSMEs, both domestically and globally, in the coming days. Digitisation
of millions of MSMEs should be a top priority”. He also urged Amazon and all other stakeholders,
industry leaders and experts to continue investing and improving the potential of MSMEs and thereby,
make them more successful and powerful.
Pilinkiene, Kurschus, & Auskalnyte,( 2013)

creation of value is the landmark of any definition associated with competitive advantage (Pilinkiene,
Kurschus, & Auskalnyte, 2013). Competitive advantage reflects a firm’s capability to create a secured
position over its competitors as a result of a critical business decision (Hazen & Byrd, 2012).
Competitive advantage is experienced by a company when its operations in the industry or market
creates economic worth and provides customers with higher values, by either selling at a lower prices
or by offering unique benefits that offset a higher price than competitors for the same benefits
(Marinagi, Trivellas, & Sakas, 2014; Wagner, 2006). Taking into account the growing level of
competition in most industries, adoption of IT has become one area that has been linked to
competitive advantage for SMEs.

IT is one of the critical resources that can be utilized by SMEs to gain competitive advantage, and
therefore, can support the firm’s strategy to achieve a competitive advantage against their rivals and to
remain competitive in both the domestic and international markets. Several extant investigations
(Hazen & Byrd, 2012; Marinagi et al., 2014; Pavic, Koh, Simpson, & Padmore, 2007) have identified
the relationship between IT adoption and competitive advantage. These researches assert that IT is not
only the weapon that can achieve competitive advantage but would equally help in sustaining and
promoting such benefits. A study by Hazen and Byrd (2012) found that IT adoption created
competitive advantage through growth in levels of efficiency and effectiveness

CHAPTER 3 RESEARCH METHODOLOGY

INTRODUCTION TO RESEARCH METHODOLOGY

Research is a systematic investigation to search new facts in any branch of knowledge.

Research helps to arrive at new conclusions. It enables to find solutions to certain problems.
Research is often referred for new conclusions. It enables to find solutions to certain
problems or situation. This is because *search for facts needs to be undertaken systematically
and not arbitrarily. The approach of research enables the research for facts in rational manner
and to arrive at logical conclusions, whereas, the arbitrary approach attempts to find
solutions to problems based on one‘s belief ad imagination

Research methodology is logical and systematic collection of how the project is being done.
It provides the reader an outline about how was the research conducted. It gives details about
target audience, how many

At last it states the limitations of the research studied

1 INTRODUCTION TO TITLE

Instrument design
The questionnaire designed to measure bank employees’ opinions about how demonetization affected
their own workings in the branches and their general opinion about how demonetization affected the
banking sector and the economy in general was adapted and modified from the research conducted
by Akinci et on customers’ attitudes toward internet banking .The original questionnaire was
modified according to the opinions provided by the bank employees of different branches of vile
parle (East) in Mumbai, India. The purpose of the research was to understand how this event of
demonetization affected the operations of banking sector in vile parle region with respect to
technological and service attributes. This is in line with the views provided as well s information
researched on the internet. The questionnaires were administered in English, as most Indians are
fluent with English language. The responses of the customers were taken on a five-point Likert scale
with responses varying on the scale of 1 for strongly agree and 5 for strongly disagree.

Respondents responded to the survey conducted for the project, what kind of respondents
responded (e.g. Students, particular professionals etc.)

It also gives information about how the material related to research was collected. The data
may either be primary or secondary depending upon the title and type of research conducted.
It then gives information about how the data was interpreted. Various tools used for
analyzing the data and arriving at conclusions also forms a part of research methodology. It
at last states to whom the research and its contents are important

Research Design

Research design includes the overall plan taken up by the analyst where by all the
components relating to the study are structured in a logical and a convenient way. It not only
presents the problem effectively, but also constitute the data in an arranged form I have used
descriptive research method, to analyse the effect of demonetization in the nation.
Descriptive method is very efficient in stating the data, which has been analyzed through the
research

Mostly the event studies in the financial literature rely on the parametric tests. However, the
parametric tests have been reported to have one disadvantage that they necessarily require the
assumptions of normal distribution of returns which have been time and again refuted by
many—e.g., Brown and Warner (1985). If this necessary assumption is violated then
parametric tests, yield misspecified test statistics. Researchers have reported the Non-
parametric tests are well-specified and more potent at detecting false acceptance of the null
hypothesis of non-existence of an abnormal return. The most successful among these tests
were the nonparametric sign and rank tests advanced in Corrado (1989), Cowan (1992). Each
of these studies documents that sign and rank tests provide better specification and power
than parametric tests.

This research paper is based on secondary sources of data. The used data has been taken
from authenticated sources such as books, journals, RBI website and relevant government
websites. The research is descriptive in nature. The period of the study is from november
2018 to March 2022

Sample Design

If the analyst is considering the total population for the research work, it will consume lots
of time and can still lead to an error. So it is quite convenient to draw sample in the
population. Sampling can be defined as the art of drawing the samples from the population.
In this report focus was on vile parle (East) region for the population sample, selecting 80 to
be the sample size. Various shop owners and retailers as well as whole sellers of Vile Parle
were the respondent of the survey

Data Collection

One of the most essential parts of any research is data collection. It can be done in two
ways- primary data collection and secondary data collection. Primary data was collected for
this research work. Questioner was prepared which was personally given to the respondents,
who were employees and information was collected from them.

OBJECTIVES
The objectives of the project are as follows:

I. To study the impact of current E-commerce boom on the sales of various small scale
businesses in vile parle region

II. To find out the positive and negative impact of this current E-commerce business boom and
how it affected the businesses of SME’s

III. To understand how the shop owners and propriters of small and medium businesses in vile
parle region reacted to this sudden increase in E-commerce market and how they dealt with it

IV. To understand the views and opinions of various owners of small scale businesses about this
sudden boom of E-commerce businesses and to understand whether they think about it as a
potential threat

HYPOTHESIS

The hypothesis is a tentative assumption made to test its logical or empirical consequences.
The hypothesis should be formulated on the basis of insight and knowledge about the
problem. It may prove to be either right or wrong.

A hypothesis has classical been referred to as an educated guess. In the context of the
scientific method, this description is somewhat correct. After a problem is identified, the
scientist would typically conduct some research about the problem and then make a
hypothesis about what will happen during his or her experiment. A better explanation of the
purpose of a hypothesis is that a hypothesis is a proposed solution to a problem. Hypotheses
have not yet been supported by any measurable data. In fact, we often confuse this term with
the word theory in our everyday language. People say that they have theories about different
situations and problems that occur in their lives but a theory implies that there has been much
data to support the explanation. When we use this term we are actually referring to a
hypothesis

The hypothesis guides the research effort and suggests what data are required
We, therefore, formulate the following hypothesis to be tested.

H0= Emergence of E-commerce websites like Amamzon and Flipkart as avenues for buying and
selling of goods affect the business markets and impacted competitive advantages of small scale
businesses

H11= Emergence of E-commerce websites like Amamzon and Flipkart as avenues for buying and
selling of goods did not affect the business markets and impacted competitive advantages of small
scale businesses

H02=This sudden growth of E-commerce businesses lead to the traditional business owners to
change their ways of doing business and lead to heavy losses and lower market share for small scale
businesses

H12= This sudden growth of E-commerce related businesses did not lead to the traditional business
owners to change their ways of doing business and did not cause heavy losses and lower market share
for small scale businesses

H03= Small scale business owners consider this current boom of E-commerce businesses as threat to
their business operations

H13= Small scale business owners do not consider this current boom of E-commerce businesses as
threat to their business operations

H04=This current boom of E-commerce websites had a positive impact on small medium scale
businesses

H14= This current boom of E-commerce websites did not have a positive impact on small medium
scale businesses

RESEARCH METHODOLOGY
UNIVERSE OF RESEARCH

The universe of this project comprises of respondents belonging to different age groups and
professional background.

METHOD OF SAMPLING

For the purpose of survey, sampling method was used to collect information. Sampling is a
statistical process of selecting few representatives from the population, called as a sample, on
the basis of which the characteristics of the total population can be ascertained.
Method of random sampling used in the research. In random sampling, every element has an
equal chance of getting selected to be the part sample. It is used when we don‘t have any
kind of prior information about the target population.

SAMPLE SIZE
For the purpose of survey, responses from 100 respondents belonging to different streams,
professional background and age groups were collected.

METHODS OF DATA COLLECTION

A. The data was collected by 2 modes

1) Primary Data Collection Method

For the purpose of this research, the data was collected by the method of questionnaire and
interviews.

2) Secondary Data Collection Method

For the purpose of this research, the data was also collected by referring to previous research
papers, reports, business journals and books relating to the topic of telecom industry.

TOOLS USED FOR ANALYSIS

For the purpose of analyzing the data collected, tools like pie diagrams and bar graphs are
put to use.
IMPORTANCE OF STUDY

The present study is significant because it will highlight the key strategies which have been
employed by various insurance companies within the Indian market. It has been identified
that there are limited studies and research papers conducted on how this event of
demonetization affected the operations of banking sector. However, most of the studies focus
on providing the overview of demonetization, and not a single research is directed towards
identifying the overall impact of demonetization on the banking industry of India as well as
the general public.
It can be asserted that data from different primary and secondary sources will be collected in
this study to understand the innovative business model and strategies adopted by insurance
industries to carry out its business operations in the highly competitive insurance industry of
the country and to understand the public perspective on online insurance. The study is
significant in an academic context as it will help the readers to understand the value of
innovations in today‘s corporate era. From a business viewpoint, the study is crucial as it will
outline the strategies which can be incorporated by companies to gain competitive
advantage and dominate the entire market. Therefore, it can be asserted that the study is
going to play a critical role in both academic as well as corporate level.
 LIMITATIONS OF STUDY

A STUDY OF THE RECENT BOOM OF E-COMMERCE WEBSITES AND ITS

IMPACT ON SMALL SCALE RETAILERS IN VILE PARLE REGION

Research suffers from the following limitations.

I. The research only takes into account the respondents from vile parle (East) region,which may
not be enough to see the complete and accurate picture of the effects of such website on small
scale businesses

II. As this boom of E-commerce a recent phenomenon not much research papers exist for the
purpose of references

III. Some of the respondents may have not read the questionnaire carefully

IV. Boom of E-commerce and its impact on small scale business is a very big topic and 80
respondents wont preview the complete picture
 CHAPTER 4 A STUDY OF THE RECENT BOOM OF E-
COMMERCE WEBSITES AND ITS IMPACT ON SMALL
SCALE RETAILERS IN VILE PARLE REGION

The recent boom of E-commerce has proved that For many people, it is ‘disruption’ (in terms
of everything). Statistics suggest that global e-commerce sales stand at 3,535 billion today
and are expected to reach an astonishing metric of 6,542 billion by 2023 alone. And if you
still need convincing, here are some more eye-opening statistics about how digital sales have
disrupted consumer habits.

 The estimated number of global digital buyers reached 1.92 billion this year.

 About 65% of shoppers compare prices on their smartphones while shopping in physical
stores.
 Nearly half of the digital shoppers today directly visit the websites of large e-commerce
marketplaces to shop. But, the most astonishing statistic of them all is that 45% of all the
small businesses in the United States do not have a website. There is no denying the fact
that the future of e-commerce is favourable to small business. So let’s dive in deeper and
understand how e-commerce can impact your small business, and how you can leverage
it to dramatically boost your sales.

Benefits of E-commerce Business for SMEs

1 Significant Increase in Revenue

E-commerce takes your business to regions where a brick-and-mortar store would not be able
to break into. Every SME battles the limitations of being confined to its geographical location
of operation. An online store makes it possible for you to reach a larger audience base,
potentially anywhere in the world.
And naturally, this has a significant effect on your sales. The reason being that an e-
commerce store is based on the ‘Purchase Funnel.’ If you’re not familiar with this concept,
let me introduce it to you below:
2 Better customer experience
Customers can shop anywhere, anytime they choose. Since they do not have to travel to your
store physically, you gain substantial brownie points. In fact, you can even introduce apps
and tools that enable customers to try the merchandise online before they make their buying
decision. For instance, virtual change rooms are proving to be the future of online fashion
shopping with brands like Lenskart and Myntra allowing customers to upload their faces or
avatars and try on products in real time.
Additionally, other customer engagement tools, such as Live Chat, make customer support a
breeze. Support agents can actively handle customer queries in real-time by adding a
minimalistic widget. In fact, leading market players in the space, such as Acquire have even
gone a step ahead and provide extended capabilities, like screen share, voice, video call, and
co-browsing. In this way, you can reach out to the right customer with the right message and
handle redundant queries with auto-messages.

3 Lower Marketing and Distribution Costs

The entire cost of conducting the business can be brought down by taking your business
online. Prominent costs that can be reduced include:
 Advertising and Marketing Costs: E-commerce stores do not require traditional
channels of marketing and advertising. Their customer journeys and purchase funnels
shift from real to virtual backdrops. Hence, cost-effective digital marketing channels,
such as organic search engine traffic, social media traffic, and pay-per-click campaigns
become more relevant.
 Operational Costs: A welcome side-effect of having a digital store is an overhauling of
operations. With significant data in your hands, it becomes feasible to automate tasks,
such as automation of check-outs, billings, inventory management, and payments.
 Economies of Scale: By eliminating the need for physical stores to drive expansion,
rental, and management costs can be significantly controlled. Thus, scaling can be
undertaken without incremental efforts.

4 Visitor Tracking and Analytics

E-commerce websites can deploy a host of tools to analyze the buying patterns and shopping
behaviors of visitors constantly. The resulting data can then be used to optimize your
storefront in a way that best matches your customers needs. You can consider this as the
digital equivalent of reshuffling the merchandise in a physical store. Details that can be
tracked include:
 Channels that are bringing in the most traffic.
 Pages that visitors are navigating before purchasing.
 Demographic details of your website visitors.
 Website elements that have high levels of engagement.
Advanced Analytics tools, such as Crazy Egg, Mousetrap, and FreshMarketer enable users to
analyze the engagement of visitors in real-time. It is practically impossible to introduce
similar technology in physical stores.
5 Faster Time to Market
The speed with which you can introduce new products into the market (or similar products in
a new market) is critical to sustain a competitive edge. Time to market refers to the time
between the point of conceiving the product or service and the point when it is actually
accessible to the customers in the market.
 Since the e-commerce model reduces existing complexity in SME supply chains, products
can reach customers faster. And this stands true for both local and foreign territories. By
eliminating bottlenecks in communication and automating processes, products can reach
customers significantly quicker.

6 Better Accessibility and Ease-of-Shopping

According to the Global Online Consumer Report by KPMG, the main reason why customers
shop online is that they can do so 24/7. This closely followed by the ability to compare
prices.

Customers can easily find a range of products to purchase, compare features with similar
products of other brands, key in a combination of various filters, and even specify the price
range of every product type. This experience has better accessibility and ease-of-use, and
features that would be impossible in your brick-and-mortar store. And in case a customer
does want to visit your physical store, he or she can first check out your digital catalog to
streamline their in-store experience.
The resulting shopping experience is rapid, appropriate, and user-friendly.
Pitfalls of Ignoring the E-commerce Model for SMEs

After the rampant proliferation of digitization and the e-commerce business model, you’d
have to be living under a rock to ignore all the new opportunities available to retailers. The
perils of ignoring e-commerce opportunities can include:
 Poor Branding and Customer Relationships: Today, 90% of the customers read online
reviews before visiting a business. Without an e-commerce store, it’s hard to form long-
lasting relationships with your customers, and your digital reputation might never take
off.
 Missed Opportunities: Digital selling has opened up a new world of commerce and has
revolutionized the way businesses interact with their customers. Similarly, smartphones
have practically become the greatest marketing channel ever created. If you don’t pounce
on such opportunities, your competitor is bound to outsmart you sooner or later.
 Asking for Wasteful Expenses: At a time when your competitors are running campaigns
that are bagging customers at a dollar each, you might be throwing money into dying
channels such as radio, printed media, and television adverts. Not only will this
significantly increase your advertising spends, but it will also paint your brand as
outdated and orthodox.

Effects of E-Commerce

E-commerce can be a great way for a small businesses to increase their sales and widen their
reach. It’s also convenient for consumers, who can buy at their convenience, without having
to leave their homes or spend the day fighting queues at the shopping mall to pick up the best
deals. However, e-commerce also has negative effects on both consumers and retailers that
must be kept in mind before launching an online shop.

Privacy
It is easy to collect a lot of personal information from a consumer using an e-commerce
website, sometimes too easy. Since all online transactions are recorded, it’s relatively easy to
create an online profile of the buyer, and use that to send targeted advertisements. However,
many will agree that this is an intrusion on a consumer’s right to privacy, and it’s something
that is heavily regulated on many countries. This means small businesses aiming to establish
an online presence using e-commerce need to be aware of the legislation that applies, as
mistakes can be costly both in terms of fines and customer trust.

Security
Another negative effect of e-commerce is its effect on consumers’
security. Online transactions are inherently more insecure than those conducted in person
because there’s no way to guarantee that the person making the payment is the actual owner
of the credit card used. At the same time, when the customer inputs the payment information
they risk a third party intercepting it if the website doesn’t comply with the adequate security
measures, giving rise to credit card fraud and identity theft. Merchants need to be aware of
the risks electronic transactions carry, and work towards securing the systems to the highest
standards.
Price Wars

Merchants used to selling at their shop may often find selling online an extremely
competitive marketplace. Their products are displayed alongside competitive offers, often
from different countries or bigger retailers with access to better wholesale prices. This can
affect the retailer negatively, as they cannot sell as much as they expected to actually make a
profit, or the consumer’s when online stores cut corners in order to become more
competitive or products are purchased from illegitimate retailers because they had the best
price.
Returns And Complaints

Selling online means usually a higher return rate on products than when the purchase was
conducted in person. This is due partly to the fact that customers haven’t seen the goods in
person prior to purchase, but also to the fact that many online shoppers buy things on
impulse, and by the time they receive them at their home they have changed their mind and
make use of favourable return policies. While a big retailer would have no problem
accommodating this, it can be highly disruptive for a small business with limited stock
management.

E-Commerce Advantages

The internet might be the single most important facet of modern society. It plays a primary
role in everything from political discourse and higher education to the way we conduct
ourselves and our businesses. It's no wonder, then, that switching to an e-commerce model
comes with significant advantages.

E-commerce eliminates the need for physical stores and allows businesses to expand
their customer base. On top of eliminating the possibility of long lines, e-commerce sites
offer a huge advantage to both shoppers and stores that aren't located in major urban areas.
Even if you are located in a big city, e-commerce opens up new markets, allowing you to
develop a new business model geared toward your expanding consumer base. Many
businesses have found particular success in developing good e-commerce Search Engine
Optimization, which drives more traffic to the site.

Your business can also save money on rent, utilities, maintenance, and other costs
associated with physical stores. Your e-commerce store can essentially remain open
24/7 without hiring employees to watch over the store and protect items. Since you aren't
confined to a set amount of shelf space, there is no limit to the number of items that can be
sold online, and your store's stock can expand exponentially. Physical products will still have
to be stored somewhere, but storage spaces are often cheaper than retail spaces, and you
won't have to worry about factors like foot traffic and parking spaces.

Digital products can be sold online with little-to-no overhead cost. Thanks to e-

commerce, consumers can purchase music, videos, or books instantaneously. Stores can now
sell unlimited copies of these digital items, without having to worry about where they'll store
the inventory.

E-commerce also allows your business to scale up easier than physical retailers. When a
brick-and-mortar store grows, it needs to consider how it will serve more customers in the
same small space. More employees are needed to expedite check-outs, more of the floor gets
dedicated to forming lines, shoppers feel more crowded as customer base and inventory
grows. Of course, logistics always get tougher as a business grows, no matter how the
business operates. With the right choice of a third-party logistics provider, however, e-
commerce companies can manage this growth without worrying about the physical store
aspects.

Keeping in contact with customers is often easier for e-commerce businesses. Since the e-
commerce merchant captures contact information in the form of email, sending out both
automated and customized emails is simple. Let customers know about a sale, promote a new
product, or just check in with customers for a personal touch—all with minimal effort.
Additionally, web tools like cookies allow for superior store customization and consumer
behavior analysis.

The benefits consumers enjoy are shared by e-commerce companies when it comes to
the supply chain. Consumers like online shopping because they don't have to deal with cash,
worry about schedules, or wait in long lines. Those benefits also apply to entire supply chains
interlinked with business-to-business e-commerce systems. Procurement becomes faster,
transparent, and there's no need to handle currency notes or cash. The result is cheaper, easier
transactions with fewer opportunities for accounting errors.

Finally, e-commerce allows your business to track logistics, which is key to a successful
e-commerce company. Having everything digitized makes it easier to automatically collect
data and crunch numbers. While you can benefit from knowing what's selling best, you can
also afford to take more risks on low-volume goods. The conventional retail strategy focuses
on stocking fast-moving goods, but the economics of e-commerce permits slow-moving and
even obsolete products to be included in the catalog. Storage is less expensive, and displaying
the product is as easy as adding another item page to your site.

E-Commerce Drawbacks

While it may initially seem like e-commerce will solve all your business problems, there are
disadvantages to switching from a physical location to an online store.

Many consumers still prefer the personal touch and relationships formed at a brick-
and-mortar shop. This can be especially valuable to customers shopping for specialized
products, as they may want to consult an expert about the best product for their needs. A solid
customer service hotline can't replace face-to-face interaction with a specialized sales rep.
Additionally, many customers want to experience the product before purchase, like when
shopping for clothes.

Security and credit card fraud are also huge risks when dealing with online
shopping. Consumers run the risk of identity fraud and similar hazards every time they enter
their details into a site. If your site doesn't convince shoppers that the check-out process is
secure, they could get scared out of buying. On the other hand, businesses run the risk of
phishing attacks and other forms of cyberattacks. If one of your employees opens just one
malicious link, it could compromise your website functionality, financial information—or
worst of all, your customers' information.

If shopping is about instant gratification, then consumers are left empty-handed. They

often have to either pay more for expedited shipping or wait for several days until the product
arrives. The wait could drive away customers. For businesses, the shipping becomes extra
complicated when a customer wants a refund. Growing e-commerce businesses need to
expand their reverse logistics functions, meaning the shipping back of goods and refunding of
costs.

Speaking of costs, there's a multiplicity of regulations and taxes that come with opening
an e-commerce shop (and a fair amount of confusion, as well). On June 21, 2018, the U.S.
Supreme Court ruled that states can charge sales tax on e-commerce transactions. But the
Supreme Court left it up to states to decide what size of online retailers must pay sales tax,
and what that tax rate will be. That's just one example of the regulatory confusion that has
stemmed from e-commerce's rapid growth, and it doesn't even touch on international trade
laws. The result is a regulatory patchwork that retailers are responsible for learning, no matter
how complicated.

VERDICT

Good for Consumers, Bad for Businesses

Some aspects of e-commerce don't fit nicely into just the pro or con side of the argument.
Unique issues present an advantage to shoppers while adding difficulty for businesses.
Customers might be buying, but the business could suffer in other ways.

Price comparison is a major advantage for online shoppers that can restrict
businesses. Consumers can compare prices with a simple click, rather than crossing town to
check another store. Many shoppers will search for the absolute lowest price, and if you can't
offer it, you will probably lose the sale.

Even if you can offer lower prices, businesses who compete in these price wars will see
their profits decline. Though there is nothing about e-commerce that's intrinsically tied to
discounts, the way online business has evolved has led to lower prices. Buyers love the lower
prices, but sellers—not so much.

Shipping is convenient for consumers, but it adds inconvenience to the

business. Shoppers love having things delivered right to their doorstep, but the logistics of
delivery adds substantial strain to the e-commerce business operation. The more you ship, the
bigger the burden becomes. Logistics and management can become a nightmare, even as the
business enjoys steady profit growth and customer retention.
 CHAPTER 5: DATA INTERPRETATION

Data interpretation refers to the implementation of processes through which

data is reviewed for the purpose of arriving at an informed conclusion. The
interpretation of data assigns a meaning to the information analyzed and
determines its signification and implications. The importance of data
interpretation is evident and this is why it needs to be done properly. Data is
very likely to arrive from multiple sources and has a tendency to enter the
analysis process with haphazard ordering. Data analysis tends to be extremely
subjective. That is to say, the nature and goal of interpretation will vary from
business to business, likely correlating to the type of data being analyzed.
While there are several different types of processes that are implemented
based on individual data nature, the two broadest and most common
categories are quantitative analysis‖ and ―qualitative analysis. Yet, before
any serious data interpretation inquiry can begin, it should be understood that
visual presentations of data findings are irrelevant unless a sound decision is
made regarding scales of measurement. Before any serious data analysis can
begin, the scale of measurement must be decided for the data as this will have
a long-term impact on data interpretation ROI
1 Gender
The respondents were asked about their gender. Following are the responses

Particulars No of respondents

Male

Female

Interpretation
According to the survey conducted, it is found that:

1 56.3% of respondents are male

2 43.8% of respondents are female

2 Age Group
The respondents were asked about their age. Following are the responses

Age group No of respondents

20-30

31-40

41-50

51-60

Interpretation

1 16.3% of people are in the age group of 20-30

2 23.8% of people are in the age group of 31-40

3 27.5% of people are in the age group of 41-50

4 32.5% of people are in the age group of 51-60

3 Under which category of business would you consider yourself under?

The respondents were asked which category of business they operate at

particulars No of respondents
manufacturer 25
Whole seller 26
Retailer 29

Interpretation

1 31.3 % are manufacturers

2 32.5% are whole sellers

3 36.3% are retailers

4 Which category does your business fall under?

 Particulars No of respondents
Food and beverages 22
Electronic equipment’s 12
Clothing and fashion 22
Medicine and 10
pharmaceuticals
others 14

Interpretation

1 27.5% are engaged in foods and beverages

2 15% are engaged in electronics

3 27.5% are engaged in clothing and fashion

4 12.5% are engaged in medical and pharmaceuticals

5 17.5% are engaged in others

5 What were your initial thoughts when this concept of buying goods online through e
commerce websites started to gain traction in india?

particulars No of respondents

I thought it would not survive and 42

did not consider it a threat
I thought it was a possible threat 17
and would increase competition
I really did not think much About it 21
and never gave it any serious threat

Interpretation

1 52.5% of respondents did not consider it as a threat

2 21.3% of respondents considered it as a threat

3 26.2% of respondents did not think much about it

6 Do you consider the idea of growing boom of e-commerce websites as alternatives for
shopping among people as a threat to your businesses

particulars No of respondents
Yes 55
No 6
maybe 19

Interpretation

1 68.8% agree

2 7.5% disagree

3 24% think maybe

7 What do you think are the biggest factors which motivate people towards buying goods
online through e -commerce websites

particulars No of respondents

Shopping through comfort of home 39

Getting better deals through 21

higherdiscounts that these websites offer
Ability to view goods from all over theworld 12
of different makes and shapes atone place
Ability to see reviews by past 8
customerswhich helps in proper decision
making

Interpretation

1 48.3% feel Shopping through comfort of home is the reason

2 26% feel Getting better deals through higher discounts that these websites offer is the reason

3 15% feel Ability to view goods from all over the world of different makes and shapes atone place
is the reason

4 10% feel Ability to see reviews by past customers which helps in proper decision making is the
reason
8 What do you think are the major disadvantages of buying goods online

particulars No of respondents

Customers are not able to see and feel the 52

products that they are buying before they
make the purchase
Customers are not able to see and feel the 11
products that they are buying before they
make the purchase
In case of return of goods, the customers 13
have to face a lot of issues in order to…
Customers are not able to enjoy the 4
experience of buying goods first hand

Interpretation

1 65% feel Customers are not able to see and feel the products that they are buying before they
make the purchase

2 14% feel Customers could end up buying fake or illegal copies of the good without them even
knowing

3 16% feel In case of return of goods the customers have to face a lot of issues in order to…

4 5% feel Customers are not able to enjoy theexperience of buying goods first hand
9 Did this recent boom of shopping through e-commerce websites impacted your business
profits and operations

Particulars No of respondents

Yes 62

No 5

It is difficult to say 13

Interpretation

1 78% agree

2 6% disagree

3 16% think its difficult to comprehend

10 Do you think that the government is taking any initiative to advocate and support small
scale business during this current boom of e-commerce websites

particulars No of respondents

Yes 44

No 9

Maybe 15

Not aware about it 12

Interpretation

1 55% agree

2 11% disagree

3 19% think maybe

4 15% are not aware about it

11 What kind of measures did you take to compete with this rise of e-commerce websites

particulars No of respondents

Gave discounts on goods 45

Came up with attractive schemes 22

Diversified my business 5

Interpretation

1 56% gave discounts

2 28% came up with attractive schemes

3 6% diversified their business

4 10% did not take any such measures

12 What do you think is the most major advantages of buying goods through shops?

particulars No of respondents

The customer gets to view the productthat 59

he/she wants to buy first hand
There is minimal chance of being cheated or 13
sold wrong goods to

The experience of buying goods 8

throughshops is superior

Interpretation

1 74% feel that customers get to review the product

2 16% feel that there bis minimal chance of being cheated

3 10% feel the experience of buying goods superior

13 Do you think that this recent boom of e-commerce would severely impact small scale
retailers and their business?

Particulars No of respondents
Yes 51
No 7
Maybe 9
Difficult to say 13

Interpretation

1 64% agree

2 9% disagree

3 11% think maybe

4 16% say difficult to say

TESTING OF HYPOTHESIS