E-commerce in India


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A presentation of the E-commerce Industry in India with special emphasis on the factors that influence it's business environment

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E-commerce in India

  1. 1. Electronic Commerce or eCommerce is often misunderstood as buying and selling of goods and services over internet and financial transactions between organizations and customers. Though mostly known, this definition doesn’t cover all the business areas. In broad terms, eCommerce encompasses all transactions that take place electronically – buying, selling,customer service, inventory management, marketing, delivering, pre-sale and post-sales activities. “eCommerce is the exchange of information across electronic networks, at anyWhat is E-commerce? stage in the supply chain, whether within an organization, between businesses, between businesses and consumers, between the public and private sector, whether paid or unpaid” – Cabinet Office, UK government
  2. 2. The Different perspectives of e-Commerce:1. A Communication perspective – the delivery of information, product/services or payment byelectronic means.2. A business process perspective – the application of technology towards the automation ofbusiness transactions and workflows.3. A service perspective – enabling cost cutting at the same time as increasing the speed and qualityof service delivery.4. An online perspective – the buying and selling of products and information online.We can look at those transactions from sell-side and buy-side.Buy-side e-Commerce – This section involves the supplier, manufacturer, intermediaries and theorganization and its functional unitsSell-side e-Commerce – This section involves interactions between corporates, customers and theorganization.backbYEAR EVENT1994 Netscape Launched; SSL encryption enabled shopping.1995 Backbone of eCommerce formed;Amazon, eBay and Verisign launched.1997 Dell first company to reach @ 1Mn in online sales.1998 Google launched, USPS launched eStamps.2000 Dot-com bubble burst.2002 eBay acquired PayPal.2003 Facebook launched for college students.2006 Google acquired YouTube; iTunes became first digital music retailer.2007-08 Private Sales Model, Social eCommerce, Mobile eCommerce, Daily Deals/Local eCommerce
  3. 3. Different formats of eCommerceeCommerce CategoriesThe Interactions between an organization and its customers can be classified into 3categories:
  4. 4. Global Reach Personalizati Cost on ReductionWhy is it Emerging? Measurem Interactivity ent
  5. 5. Mobile Commerce Continued Evolvement catching up Expansion of 3rdSocial Media Consolidation of deals / Emerging with virtual goods Driving among local e- new business Party seller traditional andConsumption private sales Commerce models platforms online and currencies companies sector offline business Retail Online Stores Stores
  6. 6. Services Offered
  7. 7. OnlineStores
  8. 8. InternalEnvironmentAggressivenessInnovationRisk-TakingAttention ToDetailExternalEnvironmentGovt. Rules &RegulationsEconomicYoung demographyEmergence of newcustomer baseTechnologyNew Competitors
  9. 9. Govt. Rules and Regulation & Legal Aspect(IT LAWS)   There are no specific e-commerce laws and regulations in India and they are still evolving.  The Information Technology Act 2000 (IT Act 2000) governs the online issues of e-External Environment commerce in India.  IT Act 2000 is the sole cyber law of India. The cyber law of India mandates that the e-commerce entrepreneurs and owners must ensure cyber law due diligence in India.  E-commerce entrepreneurs and owners in India must understand that legal issues of e-commerce in India are different for different categories of e-commerce.  The legal requirements for undertaking e-commerce in India also involve compliance with other laws like contract law, Indian penal code, etc.  Further, online shopping in India also involves compliance with the banking and financial norms applicable in India.  Perry4Law and Perry4Law Techno Legal Base (PTLB) recommend that all e- commerce entrepreneurs and owners must do a proper techno legal due diligence before opening an e-commerce website.  Further, e-commerce websites in India must ensure privacy protection, data protection, data security, cyber security, confidentiality maintenance, etc as well.
  10. 10.  Economic Condition  Total e-commerce revenue in India is expected to increase by more thanfive times by 2016, from $1.6 billion in 2012 to $8.8 billion in 2016. In2011, venture capitalists invested $ 177 million in e-Commerce in India (FDI) is limited to traditional brick-and-mortar stores. The entry offoreign-owned virtual stores – online e-commerce platforms – continues tobe restricted Foreign firms, which are merely a “listing platform for brands”, arewelcome to operate in India. But, foreign firms that buy and sell any goodsor services are still banned from conducting their activities. e-commerce firms can though invest in warehousing and back endinfrastructure, which allows 100 per cent FDI e-commerce companies, which have FDI infusion, have createdcorporate structures which technically enable them to receive FDI infusioneven while sticking to the regulatory guidelines.
  11. 11.  SocialYoung Demography•According to a 2007 report by McKinsey &Co., “India is set to grow into the fifth largestconsumer market in the world by 2025”, McKinsey &Co Report, 2007•Today, over 35% of our population is below the ageof 20•In 2020, the average Indian will be only 29 yearsold, compared with 37 in China and the US, 45 inWest Europe•By 2020, 325 million people in India will reachworking age, largest in the world. With a hugeworking population there will be huge consumptionboom, as it has happened in China.•India is and will remain for some time one of theyoungest countries in the world.
  12. 12. Emergence of new Customer base The bird of gold: The rise of Indias consumer market -By McKinsey Global Institute“Who are the new consumers?...... TheUrban Indian Woman & The Youth The Indian Woman“The Indian woman is perhaps less homogenousand more conflicted as a consumer groupcompared to the Indian man.” — jacobkurian, neW silk route•E commerce offers variety of women products•In the past five years, there has been a largeincrease in the product categories specificallytargeted towards the urban woman.•Be it mobilephones, computers, apparel, jewellery or evenfinancial products, women in the cities arefinding themselves spoilt for choice.
  13. 13. The Indian Youth: charting their own path•With the majority of its populationbelow the age of 25 years, it is theprimary target of every consumergoods company•Increased brand awareness•A larger number of younger peoplenow have cash in hand•Technology Oriented•Spends on leisure and personalgratification•Concept of saving for a rainy day isalien to most of them
  14. 14.  Technology  “The rural consumer will have his debit card within his phone and will use the device to transfer funds between his and the seller’s accounts.” — Mr Vaghul, chairman, icici banking corporation E payment is a subset of an e-commerce transaction to include electronic payment for buying and selling goods or services offered through the Internet. The Internet has the potential to become the most active trade intermediary within a decade. Internet shopping may revolutionize retailing by allowing consumers to sit in their homes and buy an enormous variety of products and services from all over the worlds. Many businesses and consumers are still wary of conducting extensive business electronically. However, almost everyone will use the form of E Commerce in near future.
  15. 15.  Competition from New Competitors In 2007, Walmart announced an agreement with Bharti Enterprises to establish a Bharti Walmart Private 100% commitment to quality Limited, a wholesale cash-and- Most competitive price carry and back-end supply Doorstep delivery of products under strict chain management operations supervision in India. Right weight/quantity 100% disclosure policy across all products A typical wholesale cash-and Convenience of phone shopping carry facility stands between State-of-the-art Quality Control labs in Delhi 50,000 and 100,000 square (NCR), Mumbai, Lucknow, Nagpur, Hyderabad, Kol feet and sells a wide range of kata and Patna fruits and vegetables, groceries Pan-India quality team of 800 and people, comprising 50 Quality Experts and Associates, 150 Quality Control Executives, 30 staples, stationery, footwear, cl Quality Assurance Managers and 500 Quality othing, consumer durables and Advisors other general merchandise 305 warehouses in 285 cities items. The first Best Price Modern Wholesale opened in 2009.
  16. 16.  AggressivenessInternal Environment Out of stock notification Free Vouchers on new arrival via e-Mail Ads on Extensive ads Facebook on primetime which has networks 8Mn users
  17. 17.  Innovation COD 3D-View 30 day Online Chat return with policy executives
  18. 18.  Risk-Taking Attitude
  19. 19.  Attention to detail • Specification • Minute detail of the product • Customer Feedback
  20. 20. Conclusion
  21. 21. Impacts of e-commerce and e-business in developingcountries :For SMEs in developing countries e-commerce poses the advantages of reduced information search costs and transactions costs . IFAT: Empowering the Agricultural Sector through B2C E-Commerce.Offshore Data Processing Centres: E-commerce at Work in the Service Sector E-Mail and the Internet in Developing Countries Women and Global Web-Based Marketing: The Case of the Guyanan Weavers’ Cooperative
  22. 22. The main issues of concern that act as barriers to the increased uptake of information technology and e- commerce. Lack of awareness and understanding of the value of e-commerce.Lack of ICT knowledge and skills.Financial costs Infrastructure. Security Other privacy-security-related issues.