E-Commerce

What is Commerce?
Meaning of Commerce

Commerce refers to the exchange of goods,

services, or something of value, between
businesses or entities.
What is E-Commerce?
What is E-commerce?
Electronic Commerce (EC) is where business
transactions take place via telecommunication
networks, especially the Internet.

Electronic commerce describes the buying and

selling of products, services, and information via
computer networks including the Internet.

Electronic commerce is about doing business

electronically.

E-commerce, ecommerce, or electronic

commerce is defined as the conduct of a
financial transaction by electronic means.
Features of E-Commerce
 Features of E-Commerce
• Non-Cash Payment E-Commerce enables the use of credit cards, debit cards, smart cards,
electronic fund transfer via bank's website.
• 24x7 Service availability automates the business of enterprises and the way they provide
services to their customers. It is available anytime, anywhere.
• Advertising / Marketing increases the reach of advertising of products and services of
businesses.
• Improved Sales orders for the products can be generated anytime, anywhere without any
human intervention.
• Support provides various ways to provide pre-sales and post-sales assistance to provide better
services to customers.
• Inventory Management Reports get generated instantly when required. Product inventory
management becomes very efficient and easy to maintain
• Communication improvement provides ways for faster, efficient, reliable communication
with customers and partners.
Traditional Commerce
Vs.
E-Commerce
Sr. No. Traditional Commerce E-Commerce

Information sharing is made easy via electronic

Heavy dependency on information
1 communication channels making little dependency on
exchange from person to person.
person to person information exchange.

Communication/ transaction are done in Communication or transaction can be done in

synchronous way. Manual intervention is asynchronous way. Electronics system automatically
2
required for each communication or handles when to pass communication to required person
transaction. or do the transactions.

It is difficult to establish and maintain A uniform strategy can be easily established and maintain
3
standard practices in traditional commerce. in e-commerce.
Communications of business depends upon In e-Commerce or Electronic Market, there is no human
4
individual skills. intervention.

Unavailability of a uniform platform as

E-Commerce website provides user a platform where all
5 traditional commerce depends heavily on
information is available at one place.
personal communication.

No uniform platform for information sharing

E-Commerce provides a universal platform to support
6 as it depends heavily on personal
commercial / business activities across the globe.
communication.
 Future of Ecommerce:
Let’s check International Growth Trends
1. Global eCommerce retail sales to hit $4.9
trillion by 2021
2. Social shopping is on the rise
TikTok, Instagram, Twitter, Pinterest, Facebook, and YouTube are among the social media channels which rolled
out the “buy” buttons and made significant improvement their social selling features.
3. The center of eCommerce is shifting
from the western hemisphere
4. Domestic shoppers go cross-border shopping
5. Ecommerce personalization will be a standard
6. Mobile shopping revolution
Mobile is continuously shaping the landscape of customer engagement. For
the past couple of years, the mobile market has already matured and will
already be reaching 70% of eCommerce traffic.

This growing ubiquity of mobile usage in eCommerce is due to the desire of

shoppers to accomplish their transaction without having to go through a
desktop. They want that convenience of shopping right at their fingertips.
With their mobile devices, shoppers can now browse, research and
purchase products, whenever and wherever they want
7. Voice commerce is on the horizon
• A very recent trend to the eCommerce world is the rise of voice
technology. It introduces voice devices, like Amazon Echo and
Google Home.
• In fact, it was estimated that by 2020, voice commerce will generate
a total of $40 billion in sales in the U.S. alone. And Amazon already
activated its voice purchasing last 2016.
8. New payment options will emerge
• Currently, digital wallets, such as Google Pay, Paypal, Apple or
Samsung Pay are widely implemented by eCommerce
businesses.
• In fact, 70% of people expect that digital payments will overtake
cash and cards by 2030.
• Another payment option that’s been cooking up a storm for a
while now is cryptocurrency.
The Future is Clear
Ecommerce is an ever-expanding world. With intensifying purchasing
power of global consumers and the continuously progressing
infrastructure and technology, the future of eCommerce in 2021 and
beyond is still more vibrant as ever.
Advantages of E-Commerce
Advantages of E-Commerce

E-Commerce advantages can be broadly classified

in three major categories.
• Advantages to Organizations
• Advantages to Consumers
• Advantages to Society
 Advantages to Organizations
Using e-commerce, organizations can expand their market to national and
international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers, and suitable business partners
across the globe.
E-commerce helps organizations to reduce the cost to create process, distribute,
retrieve and manage the paper based information by digitizing the information.

E-commerce improves the brand image of the company.

E-commerce helps organization to provide better customer services.

Advantages to Organizations (Contd.)

E-commerce helps to simplify the business processes and

makes them faster and efficient.

E-commerce reduces the paper work.

E-commerce increases the productivity of organizations. It

supports "pull" type supply management. In "pull" type supply
management, a business process starts when a request comes
from a customer and it uses just-in-time manufacturing way.
Advantages to Customers
It provides 24x7 support. Customers can enquire about a product or service
and place orders anytime, anywhere from any location.

E-commerce application provides users with more options and quicker

delivery of products.

E-commerce application provides users with more options to compare and

select the cheaper and better options.

A customer can put review comments about a product and can see what
others are buying, or see the review comments of other customers before
making a final purchase.
Advantages to Customers (Contd.)

E-commerce provides options of virtual auctions.

It provides readily available information. A customer can see the

relevant detailed information within seconds, rather than waiting for
days or weeks.

E-Commerce increases the competition among organizations and as

a result, organizations provides substantial discounts to customers.
Advantages to Society
Customers need not travel to shop a product, thus less traffic on road and
low air pollution.

E-commerce helps in reducing the cost of products, so less affluent people

can also afford the products.

E-commerce has enabled rural areas to access services and products,

which are otherwise not available to them.

E-commerce helps the government to deliver public services such as

healthcare, education, social services at a reduced cost and in an improved
manner.
Disadvantages of E-Commerce
Disadvantages of E-Commerce

The disadvantages of e-commerce can be broadly classified into

two major categories:

• Technical disadvantages

• Non-Technical disadvantages
Technical Disadvantages

There can be lack of system security, reliability or standards owing to poor

implementation of e-commerce.
The software development industry is still evolving and keeps changing
rapidly.
In many countries, network bandwidth might cause an issue.
Special types of web servers or other software might be required by the
vendor, setting the e-commerce environment apart from network servers.
Sometimes, it becomes difficult to integrate an e-commerce software or
website with existing applications or databases.
There could be software/hardware compatibility issues, as some e-
commerce software may be incompatible with some operating system or
any other component.
Non-Technical Disadvantages
Initial cost − The cost of creating/building an e-commerce application in-
house may be very high. There could be delays in launching an e-
Commerce application due to mistakes, and lack of experience.
User resistance − Users may not trust the site being an unknown faceless
seller. Such mistrust makes it difficult to convince traditional users to switch
from physical stores to online/virtual stores.
Security/ Privacy − It is difficult to ensure the security or privacy on online
transactions.

Lack of touch or feel of products during online shopping is a drawback.

E-commerce applications are still evolving and changing rapidly.

Internet access is still not cheaper and is inconvenient to use for many
potential customers, for example, those living in remote villages.
Nature of e-commerce
It has also been described as a "fusion of telecommunications and computing technology to
conduct business. That is the creation and management of relationships between buyers
and sellers, facilitated by an interactive and pervasive electronic medium" . Some of the main
reasons for the increase in electronic trading are:

• the drive to reduce the costs;

• easy accessibility to the Internet;
• the lack of regulation on the Internet;
• access to global markets for vendors;
• greater choice and potentially lower prices for purchasers;
• lower inventory costs for vendors;
• the ability to enter new markets more easily.
Reasons for Transacting Online
• They eliminate geographical boundaries.

• Provides ease of convenience.

• Saves valuable time.

• Offers extra protection.

• Minimizes Spending

• Rewards and Bonuses.

EDI (Electronic Data Interchange)
Electronic Data Interchange (EDI) is the computer-to-computer
exchange of business documents in a standard electronic format
between business partners.

By moving from a paper-based exchange of business document

to one that is electronic, businesses enjoy major benefits such as
reduced cost, increased processing speed, reduced errors and
improved relationships with business partners.
Exchange of documents through fax or email
Exchange of documents through EDI
Business documents

The most common documents exchanged via EDI are

• purchase orders,
• invoices and
• advance ship notices.
But there are many, many others such as
• bill of lading,
• customs documents,
• inventory documents,
• shipping status documents and
• payment documents
How Does EDI Work?

There are 3 steps to

sending EDI documents
• Prepare the documents,
• Translate the documents
into EDI format,
• Transmit the EDI
documents to your
partner.
Difference between E-Commerce and
E-Business
Activities of E-Commerce are : Activities of E-Business are :
• Buying and selling product • Online store setup
online • Customer education
• Online ticketing • Buying and selling product
• Online Payment • Monetary business transaction
• Paying different taxes • Supply Chain Management
• Online accounting software • E-mail marketing
• Online customer support
 E-Commerce E-Business
E-Commerce refers to the performing online E-Business refers to performing all type of business
1.
commercial activities, transactions over internet. activities through internet.
E-Commerce is a narrow concept and it is E-Business is a broad concept and it is considered as a
2.
considered as a subset of E-Business. superset of E-Commerce.
Commercial transactions are carried out in e-
3. Business transactions are carried out in e-business.
commerce.
4. In e-commerce transactions are limited. In e-business transactions are not limited.
It includes activities like procurement of raw
It includes activities like buying and selling
materials/goods, customer education, supply activities
5. product, making monetary transactions etc over
buying and selling product, making monetary
internet.
transactions etc over internet.
It requires the use of multiple websites, CRMs, ERPs
6. It usually requires the use of only a website.
that connect different business processes.
7. It involves mandatory use of internet. It involves the use of internet, intranet or extranet.
E-commerce is more appropriate in Business to E-business is more appropriate in Business to Business
8.
Customer (B2C) context. (B2B) context.
E-Commerce covers outward/external business E-Business covers internal as well as external business
9.
process. process/activities.
Glossary
• Bill of lading: A bill of lading is a legal document between a
shipper and carrier detailing the type, quantity, and destination
of goods being shipped.
E-Commerce Models
E-commerce business models can generally be categorized into
the following categories.
✓ Business - to - Business (B2B)
✓ Business - to - Consumer (B2C)
✓ Consumer - to - Consumer (C2C)
✓ Consumer - to - Business (C2B)
✓ Business - to - Government (B2G)
✓ Government - to - Business (G2B)
✓ Government - to - Citizen (G2C)
Business - to - Business (B2B)
Business - to - Business (B2B)
• A website following the B2B business model sells its products to
an intermediate buyer who then sells the product to the final
customer.

• As an example, a wholesaler places an order from a company's

website and after receiving the consignment, sells the end
product to the final customer who comes to buy the product at
one of its retail outlets.
Business - to - Business (B2B)
Business - to - Business (B2B)

• Alibaba and India-mart are the popular names in the present

B2B segment.

• B2B typically occurs when

o A business purchases raw material for business.

o A business needs the services of another company.

o A business re-sells goods and services produced by others.

Business - to – Consumer (B2C)
Business - to – Consumer (B2C)
• A website following the B2C business model sells its products
directly to a customer. A customer can view the products shown
on the website. The customer can choose a product and order
the same. The website will then send a notification to the
business organization via email and the organization will
dispatch the product/goods to the customer.
• Popular items sold using B2C are air tickets, electronic items,
books etc.
Business - to – Consumer (B2C)
Consumer - to – Consumer (C2C)
Consumer - to – Consumer (C2C)
• A website following the C2C business model helps consumers
to sell their assets like residential property, cars, motorcycles,
etc., or rent a room by publishing their information on the
website. Website may or may not charge the consumer for its
services. Another consumer may opt to buy the product of the
first customer by viewing the post/advertisement on the website.

• Free online classifieds, auctions, forums etc.

Consumer - to – Consumer (C2C)
Consumer - to - Business (C2B)
Consumer - to - Business (C2B)
In this model, a consumer approaches a website showing multiple
business organizations for a particular service. The consumer places
an estimate of amount he/she wants to spend for a particular service.
For example, the comparison of interest rates of personal loan/car
loan provided by various banks via websites. A business organization
who fulfills the consumer's requirement within the specified budget,
approaches the customer and provides its services.
Consumer - to - Business (C2B)
Business - to - Government (G2B)
Business - to - Government (G2B)
B2G model is a variant of B2B model. Such websites are used by
governments to trade and exchange information with various
business organizations. Such websites are accredited by the
government and provide a medium to businesses to submit
application forms to the government.
Business - to - Government (G2B)
Government - to - Business (G2B)
Government - to - Business (G2B)

Governments use B2G model websites to approach business

organizations. Such websites support auctions, tenders, and
application submission functionalities.
Government - to - Business (G2B)
Government - to - Citizen (G2C)
Government - to - Citizen (G2C)
Governments use G2C model websites to approach citizen in
general. Such websites support auctions of vehicles, machinery,
or any other material. Such website also provides services like
registration for birth, marriage or death certificates. The main
objective of G2C websites is to reduce the average time for
fulfilling citizen’s requests for various government services.
Government - to - Citizen (G2C)
Types of E-Commerce
Major Ecommerce Business
Classifications

1. B2B: Business to Business Ecommerce

2. B2c: Business to Consumer Ecommerce
3. C2C Ecommerce
4. C2B: Consumer to Business Ecommerce
5. Government / Public Administration Ecommerce
Types Of Ecommerce Business Revenue
Models
1. Drop Shipping

2. Wholesaling and Warehousing

3. Private Labeling and Manufacturing

4. White Labeling

5. Subscription
What Model Fits Your Idea Best?
B2B: Business To Business Ecommerce
B2c: Business To Consumer Ecommerce
C2C Ecommerce
1. Drop Shipping
• The simplest form of ecommerce, drop shipping lets you set up a
storefront and take the customers’ money through credit cards or
PayPal. The rest is up to your supplier. This frees you from managing
inventory, warehousing stock, or dealing with packaging, but there’s a
major caveat.
• If your sellers are slow, product quality is lower than expected, or
there are problems with the order.
• Many dropshippers use Shopify and Oberlo. Its quick and inexpensive
to set up. A popular model is to set up a quick store and drive traffic
with Facebook Ads. it’s on your head
2. Wholesaling And Warehousing

• Wholesaling and warehousing ecommerce businesses require a lot of

investment at the start – you need to manage inventory and stock,
keep track of customer orders and shipping information, and invest in
the warehouse space itself.

• DollarDays is an online wholesaler with a massive product catalog

that includes more than 260,000 products. They employ a key
strategy for retailers in this space – by offering case prices AND piece
prices, they can sell to the general public and to retailers. This gives
them a higher profit margin than a strictly wholesale model.
3. Private Labeling And Manufacturing

If you’ve got an idea for the perfect product, but don’t have the cash or
desire to build your own factory, this might be the right business model
for you. Companies that manufacture products offsite for sale send the
plans or prototypes to a contracted manufacturer who produces the
product to meet customer specifications and can either ship directly to
the consumer, to a third party such as Amazon, or to the company
selling the final product.
4. White Labeling

White labeling is similar. You choose a product that is already

successfully sold by another company, but offers white label options,
design your package and label, and sell the product. This is common in
the beauty and wellness industries, but more difficult to encounter in
other niches.
5. Subscription

One of the most popular and successful pure ecommerce brands is the
Dollar Shave Club. Other examples of subscription services include
Stitch Fix, Blue Apron, and Nature Box. On the local level, community-
supported agriculture boxes are popular.
Challenges in eCommerce
Environment
1. Finding the right products to sell
• Shopping cart platforms like Shopify have eliminated many barriers of
entry. Anyone can launch an online store within days and start selling all
sorts of products.
• Amazon is taking over the eCommerce world with their massive online
product catalog. Their marketplace and fulfillment services have enabled
sellers from all over the world to easily reach paying customers.
• Let’s not forget about Aliexpress. They’ve simplified product sourcing by
giving access to Chinese manufacturers within a couple of clicks.
• All of this has made it very difficult for retailers to source unique products
unless you decide to manufacture your own.
2. Attracting the perfect customer
• Online shoppers don’t shop the same way as they used to back in the
day. They use Amazon to search for products (not just Google). They ask
for recommendations on Social Media. They use their smartphones to read
product reviews while in-store and pay for purchases using all sorts of
payment methods.
• Lots has changed including the way they consume content and
communicate online. They get easily distracted with technology and social
media.
• Retailers must figure out where their audience is and how to attract them
efficiently without killing their marketing budget.
3. Generating targeted traffic
• Digital marketing channels are evolving. Retailers can no longer rely one
type of channel to drive traffic to their online store.

• They must effectively leverage SEO, PPC, email, social, display ads,
retargeting, mobile, shopping engines and affiliates to help drive qualified
traffic to their online store. It must be visible where their audience is
paying attention.
4. Capturing quality leads
• Online retailers are spending a significant amount of money driving traffic
to their online store. With conversion rates ranging between 1% to 3%,
they must put a lot of effort in generating leads in order to get the most out
of their marketing efforts.
• The money is in the list. Building an email subscribers list is key for long
term success. Not only will help you communicate your message, but it
will also allow you to prospect better using tools such as Facebook
Custom Audiences.
• Not all leads are created equally. Retailers must craft the right message
for the right audience in order to convert them into leads with hopes of
turning them into customers.
5. Nurturing the ideal prospects
• Having a large email list is worthless if you’re not actively engaging with
subscribers.

• A small percentage of your email list will actually convert into paying
customers. Nonetheless, retailers must always deliver value with their
email marketing efforts.

• Online retailers put a lot of focus on communicating product offering as

well as promotions, but prospects need more than that. Value and
entertainment goes a long way but that requires more work.
6. Converting shoppers into paying
customers
• Driving quality traffic and nurturing leads is key if you want to close the
sale. At a certain point, you need to convert those leads in order to pay for
your marketing campaigns.

• Retailers must constantly optimize their efforts in converting both email

leads as well as website visitors into customers. Conversion optimization
is a continuous process.
7. Retaining customers

• Attracting new customers is more expensive than retaining the current

ones you already have.

• Retailers must implement tactics to help them get the most out of their
customer base in increase customer lifetime value.
8. Achieving profitable long-term growth
• Increasing sales is one way to grow the business but in the end, what
matters most is profitability.

• Online retailers must always find ways to cut inventory costs, improve
marketing efficiency, reduce overhead, reduce shipping costs and control
order returns.
9. Choosing the right technology & partners
• Some online retailers may face growth challenges because their
technology is limiting them or they’ve hired the wrong partners/agencies to
help them manage their projects.
• Retailers wanting to achieve growth must be built on a good technology
foundation. They must choose the right shopping cart solution, inventory
management software, email software, CRM systems, analytics and so
much more.
• In addition, hiring the wrong partners or agencies to help you implement
projects or oversee marketing campaigns may also limit your
growth. Online retailers must choose carefully who to work with.
10. Attracting and hiring the right people to
make it all happen
• Let’s face it, online retailers may have visions and aspirations but one true
fact remains, they need the right people to help them carry out their
desires.
• Attracting the right talent is key in order to achieve desirable online growth.
Also, having the right leader plays an even bigger role.
• Retailers should be out there getting their name out within the online
community by attending eCommerce conferences, speaking at events and
networking. Employees want to work for companies that care about them
and their future. Having a sense of purpose is key.
The Biggest Challenges in
eCommerce During 2021
 1. Higher Customer Expectations
•Low-cost or free returns.
•Free shipping.
•A website where it’s easy to find information about
products and policies.
•24 x 7 customer service options right on your
eCommerce site.
•Personalization.
•A consistent shopping experience across their phones,
their desktops, and mobile apps.
•The ability to use any number of digital payment
options, including PayPal, Apple Pay, AliPay,
Masterpass, Visa Checkout, GooglePay, Payoneer,
WeChat, and more, as well as credit and debit cards.
2. Expanded Customer Options

Customers’ options for where and

how they shop are expanding too,
which presents more potential
challenges in eCommerce.
3. Increased Difficulty in Attracting
Customers
Advertising channels and
platforms are constantly
expanding. The result is that
consumers find products and
brands in a lot of different
ways today. That makes
connecting with and
attracting customers more
and more challenging.
4. Increased Importance in Using
Technologies to Automate
With all the complexity of
eCommerce and to ensure you
maximize on the
opportunities, technology can
be your best friend. Not any
technology though, the right
technology.
5. Continuing Uncertainty

A significant eCommerce challenge in 2021 will be continued

uncertainty. Not just the uncertainty resulting from COVID-19, but
the everyday uncertainty that a rapidly changing industry and
technologies bring.
Barriers to E-Commerce
1.Search Engine Rankings
The difficulty to rank high in search engines is the leading barrier facing by
the majority of e-commerce websites, especially newer ones.

Using descriptive and relevant page titles, descriptions and URLs are some
of the easiest things you can do to influence your rankings, according to
Google.
2.Lack of trust
With news of devastating data breaches constantly in the headlines, many
people are understandably wary of giving their sensitive personal information to
e-commerce websites.
more than half of consumers who don’t shop online said that they are worried
about scams, personal data breaches, and identity theft.
E-commerce stores that want to win over new customers must therefore
demonstrate their serious intentions to safeguard shoppers private data.
3.Poor shopping experience
• Physical retail stores, customers who have one poor shopping experience
aren’t necessarily gone forever. Proximity, convenience, and the lack of
alternatives are all factors that can cause unhappy customers to return (and
perhaps improve their opinion).
• However, competition is much fiercer when it comes to e-commerce. The
2018 Pitney Bowes Global Ecommerce Study finds that 36 percent of online
shoppers will go elsewhere after just a single poor experience.
• After all, with so many websites available at a single click, why keep shopping
somewhere that didn’t wow you the first time?
• What’s more, the effects of a bad impression have a ripple effect on the
unhappy customer’s social circle. 54 percent of shoppers say that they share
their poor experience with others, including telling their friends and leaving a
negative review.
• In other words, creating a positive experience for shoppers is even more
important for e-commerce stores than for physical retail outlets.
 4.Lack of favorable reviews
• “Social proof” is one of an e-commerce marketer’s favorite buzzwords. At heart,
people want to know that there are other people like them doing the same things
and patronizing the same businesses.
• Because consumers can’t see and interact with products when shopping online,
it’s even more important to know that other users approve of the items they’re
considering.
• 88 percent of consumers say that they trust online product reviews as much as
they would trust a recommendation given to them in-person.
• As a result, a lack of favorable reviews – or a lack of reviews at all – can be
crippling for e-commerce stores. 57 percent of consumers say that they won’t
patronize a business with fewer than 4 stars out of 5, and 11 percent more say
that they require a perfect 5-star rating.
5.Cart abandonment
• Convenience is one major reason that consumers prefer online shopping,
but it also comes with its downsides. For example, abandoning your
shopping cart on an e-commerce website is as simple as exiting the
window.
• 54 percent of consumers say that they will leave an e-commerce site if
they can’t find what they’re searching for.
• In addition, 46 percent will abandon their carts if they believe the price is
too high, and 17 percent will leave if the check-out process is too long.
E-Commerce in India
E-Commerce in India
India has an Internet user base of about 504 million as of May 2020, about
40% of the population. This number is expected to be 99 billion by the end
of 2024. Despite being the second-largest user base in world, only behind
China (650 million, 48% of population), the penetration of e-commerce is low
compared to markets like the United States (266 million, 84%),
or France (54 M, 81%), but is growing, adding around 6 million new entrants
every month. The industry consensus is that growth is at an inflection point.
E-Commerce in India
In India, cash on delivery is the most preferred payment method,
accumulating 75% of the e-retail activities. Demand for international
consumer products (including long-tail items) is growing faster than in-
country supply from authorized distributors and e-commerce offerings.
Long tail business strategy allows companies to realize significant
profits by selling low volumes of hard-to-find items to many customers,
instead of only selling large volumes of a reduced number of popular
items. The term was first coined in 2004 by Chris Anderson.
E-Commerce in India
In 2017, the largest e-commerce companies in India
were Flipkart, Snapdeal and Amazon. In 2018, Amazon beat
Flipkart and was recorded the biggest ecommerce in India in
terms of revenue.
Government initiative
While Indian e-commerce is growing at a stellar rate, initiatives such as
Digital India, Skill India, Startup India and Make in India are also contributing
to the growth of the online trade.
Some of the major initiatives taken by the Government to promote E-
commerce in India are as follows:

• In a bid to systematize the onboarding process of retailers on e-commerce

platforms, the Department for Promotion of Industry and Internal Trade
(DPIIT) is reportedly planning to utilize the Open Network for Digital
Commerce (ONDC) to set protocols for cataloguing, vendor discovery and
price discovery. The department aims to provide equal opportunities to all
marketplace players to make optimum ecosystem in the larger interest of
the country and its citizen.
 Government initiative (Contd.)
• National Retail Policy: The government had identified five areas in its
proposed national retail policy—ease of doing business, rationalization of the
license process, digitization of retail, focus on reforms and an open network
for digital commerce—stating that offline retail and e-commerce need to be
administered in an integral manner.
• The Consumer Protection (e-commerce) Rules 2020 notified by the
Consumer Affairs Ministry in July directed e-commerce companies to display
the country of origin alongside the product listings. In addition, the companies
will also have to reveal parameters that go behind determining product
listings on their platforms.
• Government e-Marketplace (GeM) signed a Memorandum of Understanding
(MoU) with Union Bank of India to facilitate a cashless, paperless and
transparent payment system for an array of services in October 2019.
• Under the Digital India movement, Government launched various initiatives
like Umang, Start-up India Portal, Bharat Interface for Money (BHIM) etc. to
boost digitization.
Government initiative (Contd.)
• In October 2020, Minister of Commerce and Industry, Mr. Piyush Goyal
invited start-ups to register at public procurement portal, GeM, and offer
goods and services to government organizations and PSUs.
• In October 2020, amending the equalization levy rules of 2016, the
government mandated foreign companies operating e-commerce
platforms in India to have permanent account numbers (PAN). It imposed a
2% tax in the FY21 budget on the sale of goods or delivery of services
through a non-resident ecommerce operator.
• In order to increase the participation of foreign players in E-commerce,
Indian Government hiked the limit of FDI in E-commerce marketplace
model to up to 100% (in B2B models).
• Heavy investment made by the Government in rolling out fiber network for
5G will help boost E-commerce in India.
Statistics for sales
In India, the share of electronics and accessories sales is the highest on
e-commerce platforms with over 40% sales happening in these two
categories. Lifestyle and apparel is another leading category with over
25% sales. Home & Living account for 5%, food and grocery for 2-3%
and other category sales are about 20-30%, according to the report.
Currently, the Indian e-commerce landscape is dominated by players
such as Jeff Bezos’ Amazon and Walmart acquired Flipkart.
Indian Laws
According to a recent press release by the Ministry of Commerce and
Industry, India has created several laws and regulations to govern
present e-commerce activities.

Some of these include the Income Tax Act, 1961; Consumer Protection
Act, 1986; Information Technology Act, 2000; Foreign Exchange
Management Act, 2000; Payment and Settlement Systems Act, 2007;
Companies Act, 2013; and laws related to goods and services tax.
Road Ahead
• The E-commerce industry has been directly impacting micro, small & medium
enterprises (MSME) in India by providing means of financing, technology and
training and has a favorable cascading effect on other industries as well.
• Indian E-commerce industry has been on an upward growth trajectory and is
expected to surpass the US to become the second largest E-commerce market in the
world by 2034.
• Technology enabled innovations like digital payments, hyper-local logistics, analytics
driven customer engagement and digital advertisements will likely support the
growth in the sector.
• The growth in E-commerce sector will also boost employment, increase revenues
from export, increase tax collection by exchequers, and provide better products and
services to customers in the long-term. Rise in smartphone usage is expected to rise
84% to reach 859 million by 2022.
Indian readiness for e-commerce
Is India ready for e-commerce?
How Ecommerce emerged?

E- Commerce is the process of buying or selling products on the internet. The

process of buying and selling products through the internet has become
quite popular these days. E-commerce also involves activities like developing
products, marketing them and also delivering them to the consumers.
However, it was only in 1979 that Michael Aldrin invented online shopping.
During the late 1980s and 1990s, the big companies and business houses
entered the market of online shopping.
India is the second fastest growing economy in the world. In the
last few years, Indian has developed radically. There has not only
been economical development but the country has also become
technologically advanced. In India, the year 1990 marked the
year of science and technological advancement in the country. In
the last two decades, the country has come a long way.
Computer and internet have become available in almost every
home. This has created a market for e-commerce in India. Also
the consumers have become quite smart and are looking for
ways which prove they can make profitable purchase. India is not
only ready for e-commerce; e-commerce has already become
quite popular in India too.
Reasons which make India a suitable
market for e-commerce
There are many reasons which make India a suitable market for
e-commerce. Here are some of the reasons:
1.The mindset of consumer has changed: The consumers have
become quite technological friendly these days. Earlier,
consumers in India preferred going out and shopping in the
markets. However, e-commerce does not only provide one with
comfort but also gives them a chance to avail on various kinds of
offers which helps the consumer to save money. Thus,
consumers have now started developing a penchant for e-
commerce rather than shopping in the markets.
2.Internet friendly users: In India, people have become quite
internet friendly these days. The numbers of users have grown
phenomenally over the years. According to a survey, there were
only 7 million internet users in India in 2001. The number had
grown to 100 million in 2010. Since people are becoming quite
internet friendly these days, e-commerce is becoming a
comfortable option for the people. It is believed that around 75
million household are ready for e-commerce in this nation.
3.Entry of big names in the Indian e-commerce market: Many big
names have entered the market of e-commerce in India. Thus,
the consumers get the best of the options while sitting at home
only. These big names are investing in the e-commerce market
from a long term perspective rather than small term. Thus, the e-
commerce market is to grow even more bigger and better in
times to come.
4.The success of the some of the sectors in the e-commerce
market: Some of the sectors like travelling and retail have already
proved to be quite successful in the field of e-commerce. These
sectors have already made a lot of profit through the e-commerce
market. The success of these sectors has incited other sectors to
enter the market of e-commerce and this is precisely the reason
why the e-commerce market has expanded so quickly in India.
However, there is still a slight bit of reluctance in the Indian

Consumers regarding online shopping and e-commerce. Eventually

this hesitation and reluctance will go with better services and offers

and this is precisely the reason for believing that the market for e-

commerce will only grow in India in times to come. According to a

survey, it is believed that the number of e-commerce consumers will

grow to 460 million individuals by 2024-2025.

Flipkart, Superbazaar.com, olx. Com, snapdeal are some of the
e-commerce of online shopping websites that have already made
it big in the Indian e-commerce market. With bigger and better
online shopping sites like Amazon to enter the Indian e-
commerce market in the near future, it would be right to say that
the future of e-commerce is quite bright in India.
To set your own online business

E-commerce requires an investment at the beginning and also a little

time to grow. However, it gives excellent returns provided that you
have developed a loyal customer base. Businesses, which are
confident about their products and have patience, should choose this
path. To setup an online business, you will need the following:
• A good looking user friendly website

To make a good e-commerce website with all basic features costs

between Rs 50,000 and Rs 1,00,000, depending upon the design and
need. The future recurring cost for domain and hosting will be Rs 3000-
5000 annually, which again depends upon number of products and
website visitors.
• Credit Card or Net banking Payment gateway setup
In India, there are many payment gateway providers are available like
CCavenue, Direcpay, EBS who provides credit card payment as well as
NET banking facility. The setup cost is around 30,000 and every bank
charges some transaction fee based on turnover.
• Back office team
A good back office team is required to maintain the products and
content for the website. Online promotion is the key for business
growth and a definite strategy is required for online marketing. You can
also find a right technology partner and can outsource it completely.
Many times, this option is cheaper than setting up your own team as to
set up a skilled team is a difficult job in IT sector.
• Shipping Channel
Shipping in India is one of the big concerns for eCommerce as product
delivery and safety is still a challenge. So, to have a setup with right
partner is a must. There are shipping agencies, which also provide
service of Cash on Delivery facility, at an additional cost. They also
insure your product to recover cost in case of damage.
Conclusion:

Online commerce believes in the theory of “World is Flat” that was

developed by Thomas L. Friedman. In the era of globalization now, your
business has No boundaries , your growth has No limitations and your
only destination is the PEAK.
E-transition challenges for Indian
Corporate
 Biggest e-transition Challenges Faced by
Indian Corporate
• With the e-commerce industry in India rising at a booming rate, more so with the
invasion of highly-sophisticated gadgets and faster-than-light internet. However,
still, the e-commerce industry in India lags far behind compared to the western
countries. There are several challenges faced by the e-commerce industry in
India that come in the way of Indian online stores and merchants.
• Among factors that bother India online shoppers, safety and security of online
money while transacting is the biggest concern. Apart from them are the quality of
products as the online shoppers can't really touch and feel the products they want
to buy.
• Although the majority of e-commerce platforms in India have been hit by the
challenges I am going to discuss below, there are a few like Snapdeal, Flipkart,
Myntra, Yatra, and more have overcome these challenges and appear fairly
victorious.
1.Lack of Awareness

When it comes to the ratio of people having awareness of the internet and online
shopping, the scenario isn't quite flattering. The majority of the Indian population is
still not aware of the internet's existence and its uses. Even when you talk about
the internet savvy urban population that are having smartphones, awareness of
online shopping and its functionality is still a far cry. Most of them aren't aware of
the online fraud and corruption while making online transactions and thus the
darkness prevails. This is by far the biggest challenge faced by the e-commerce
industry in India.
2. Inadequate Plastic Money Holders

While all major e-commerce platforms require a debit card, credit card, net banking,
and mobile wallets to operate; there aren't enough plastic money holders in India.
This is one of the biggest challenges in the growth of the e-commerce industry in
India. While on the upside, all major nationalized banks have started giving out
debit cards to all its account holders and encourage its use. This is definitely a
positive sign to overcome challenges faced by the e-commerce industry in India.
3. Cash on Delivery

• In order to curb the problem of security of online transactions, all e-commerce portals
started this option of Cash-on-Delivery (COD) wherein an online shopper can skip paying
online while placing an order and choose to pay at the time of delivery instead. Although
this initially seemed to be exciting for the e-commerce platforms as well as users slowly it
became a boon for them.

• Many of the customers refused to pay money at the time of product delivery which
resulted in heavy losses incurred in product transit and eventually losing out on sales and
revenue. It is one big challenge faced by the e-commerce industry in India that has both
its pros and cons.
4. Online Security

• While big e-commerce players can afford to have security

software that offers enhanced security for its customers while
transacting online, many small e-commerce setups and small
business owners ignore the importance of authentic security
software.
• Transacting at such platforms can be extremely risky and is
prone to the Trojan and malware attacks comprising a user's
financial details' insecurity. To overcome this challenge faced by
the e-commerce industry in India, SSL certification must be
made mandatory for all e-commerce platforms.
5. Touch & Feel Constraint

India buyers demographics are such that they want to touch and
feel the product before buying it to be assured of its looks and
quality. However, online booking and ticketing business in India
grew as it didn't suffer from these constraints but e-commerce
platforms selling apparels, jewelry, cosmetics, and accessories
are still struggling with these challenges faced by the e-
commerce industry.
6. Fear factor

Despite the awareness happening in the world of e-commerce

and online shopping, there are still many not able to overcome
their fear of transacting online. They are usually reluctant to
disclose their credit card, debit card, and net banking details
online due to the fear of being duped. This largely remains as
one of the biggest challenges faced by the e-commerce industry
in India.
7. Legal barriers

• Many e-commerce ventures shut down their business due to legal

violations. Fast growth of e-commerce also raises new issues from the
legal perspective which gives rise to the e-commerce challenges in
India. As an online seller, you need to be aware of these.
• Also, consumer protection laws now safeguard online shoppers from
fraudulent sellers. This is the necessary step as cases of fake selling
had increased to a great extent but there are fears that such laws are
likely to be misused by fake buyers too.
• So, online merchants need to understand and follow the e-retailing
laws and regulations to avoid legal problems.
8. Logistic Challenges

• Sellers need to deliver items faster for better customer service but that largely
depends on the service provided by courier partners. As there is also the risk of
items getting damaged during transit, choosing a wrong shipping service provider
can turn out to be disastrous for your business.
• Though courier companies are working hard to cover remote locations and
villages, shipping to such areas is still one of the major e-commerce challenges in
India.
• India Post has succeeded to a great extent to help e-tailers overcome this
challenge. So, sellers should use India Post as one of their shipping partners to
cater to customers living in areas that other courier companies find inaccessible.
• Sellers can also use services like FBA(Fulfillment By Amazon) as packing and
shipping is done by Amazon.
Conclusion:

Despite all the e-commerce challenges in India, online sellers can build
a big business by following the suggested steps to overcome these
challenges. Take these challenges as an opportunity to improve the
overall performance as an e-commerce entrepreneur.
SWOT ANALYSIS
One popular technique for analyzing and evaluating business opportunities.
Most electronic commerce initiatives add value by the reducing transaction
cost, creating some type of network effect, or a combination of both. In
SWOT analysis (the acronym is short for Strengths, Weaknesses,
Opportunities and Threats), the analyst first looks into the business unit to
identify its strengths and weaknesses. The analyst then reviews the
environment in which the business unit operates and identifies opportunities
presented by that environment and the threats posed by that environment.
Following figure shows the questions that an analyst would ask in
conducting a SWOT analysis.
In the mid- 1990s, Dell Computer used a SWOT analysis to create a strong
business strategy that has helped it become a very strong competitor in its industry
value chain.

• Dell identified its strengths in selling directly to customers and in designing its
computers and other products to reduce manufacturing costs.

• It acknowledged the weakness of having no relationships with local computer

dealers.

• Dell faced threats from competitors such as Compaq and IBM, both of which had
much strong brand names and reputations for quality at that time.

• Dell identified an opportunity by noting that its customers were becoming more
knowledgeable about computers and could specify exactly what they wanted
without having Dell salespersons answer questions or develop configurations for
them. It also saw the Internet as a potential marketing tool.
The results of Dell's SWOT analysis appears in following figure: