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Start online Retailing Business in India : Part of e-Bizwire of StartBizIndia


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Online Retailing on high in India and
Biz India News
Biz Policy Updates
Business Idea of the Month
StartBizIndia Discussion Platform
Upcoming Business Summit

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Start online Retailing Business in India : Part of e-Bizwire of StartBizIndia

  1. 1. Industry of the Month “Online Retailing in India”eBizWire Vol . I Issue. V, June 2012 InsightBiz India News 2Biz Policy Updates 3Online Retailing on high in India 4-7Business Idea of the Month 7StartBizIndia Discussion Platform 8Upcoming Business Summit 9Contact us 10 For more info on Business setup visit Page |1 For Business setup queries email at or call at 011 40622239
  2. 2. Biz India News Headlines• Twenty five foreign direct investment (FDI) proposals worth Rs 2,973.40 crore AIF III Mauritius FDI proposal (US$ 530.46 million), including that of AIF III Mauritius to bring in FDI worth Rs among 25 cleared 1,000 crore (US$ 178.38 million), have been approved by the Government of India on 30th May, 2012.• On 29 May, 2012, Ranbaxy Laboratories Ltd has got approval from the US Food th Ranbaxy gets US FDA nod for and Drug Administration (USFDA) to launch Absorica, an acne treatment drug in acne treatment drug the US market. "Absorica is a milestone in our commitment to serve the dermatology community and will be the flagship brand for Ranbaxys specialised dermatology sales force.• The Government of India is promoting a pharmaceutical cluster with an Centre promoting pharma cluster investment of Rs 66.16 crore (US$ 11.98 million) at the Petroleum, Chemicals, in coastal AP Petrochemical Investment Region (PCPIR) in coastal Andhra Pradesh (AP) on th 28 May, 2012. The State ranks first in manufacturing of bulk drugs and hence the push further, according to Mr M Gopinath, Regional Joint Director General of Foreign Trade.• International cash and carry chains in the retail sector plans to expand in India. India expansion on for global Walmart, the US$ 446 billion American retail giant, which operates cash and carry cash & carry chains outlets in India in a 50-50 per cent joint venture (JV) with the Bharti Group, expects to open 12 to 15 wholesale outlets in 2012. Japan likely to be a partner in• Japan External Trade Organization (JETRO), an arm of the Ministry of Economy, national manufacturing policy: Trade and Commerce, wants to be a partner country while promoting Indias JETRO India chief manufacturing policy, which aims at creating 100 million jobs and enhancing the countrys share in the gross domestic product (GDP) to 25 per cent in 10 years.• The Government of UK has expressed keen interest to invest in some big projects UK looking to invest in select in the information technology (IT), healthcare, infrastructure and education sectors sectors in Kerala in Kerala, according to Mike Nithavrianakis, British Deputy High Commissioner in Chennai• India has signed the gas sale purchase agreement (GSPA) for the Turkmenistan- Tapi agreement set to expand Afghanistan-Pakistan-India (Tapi) gas pipeline, which upon completion would Indias gas basket diversify its gas basket. Within five years, the country would have access to imported natural gas, in addition to imported liquefied natural gas (LNG) and th domestic sources, including coal bed methane gas on 24 May, 2012• The Free Trade Agreement (FTA) between India and Switzerland is expected to India, Switzerland may conclude be concluded by the end of 2012, according to Rolf Frei, Consul General of FTA by year-end Switzerland for India. "The agreement will give a significant boost to bilateral trade rd between India and Switzerland," Frei added on 23 May, 2012. The two-way trade expanded from US$ 7 billion in 2005-06 to US$ 35 billion in 2009-10 For more info on Business setup visit Page |2 For Business setup queries email at or call at 011 40622239
  3. 3. Biz Policy Updates Legal Headlines• The present provisions of Foreign Exchange Management Act, 1999 does not Transfer of Funds from Non- allow the funds in the NRO account to be transferred into NRE Account. With a Resident Ordinary (NRO) th view to ease the provisions for individuals, The RBI on 7 May, 2012 has allowed account to Non-Resident External (NRE) Account NRI to transfer their funds from the NRO account to NRE account within the overall ceiling of US $ 1 million per financial year.• Where the individual wants to remit the amount outside India for miscellaneous Release of Foreign Exchange for purpose he can remit upto USD 5000 without submission of any document Miscellaneous Remittances including Form A2 (declaration form) rather only simple letter containing names and the addresses of the applicant and the beneficiary, amount to be remitted and the purpose of remittance, is required to be submitted with AD. Now, with a view to further liberalize the documentation requirements, the limit for foreign exchange remittance has been raised from USD 5000 to USD 25000 with immediate effect from the issue of circular No. 118 issued by RBI on May 07, 2012. So, the individual can remit upto USD 25000 without submission of any document with Authorised Dealer• As per the extant provisions ECB proceeds can be utilized for Foreign exchange External Commercial Borrowings expenditure as well as for Rupee expenditure. Vide A.P. (DIR Series) Circular No. (ECB) Policy - Utilization of ECB 52 dated November 23, 2011, it became mandatory to bring the ECB proceeds in proceeds for Rupee expenditure India which is to be utilized for Rupee expenditure. Now, as per the Circular No. 119 issued by Reserve Bank of India on May 07, 2012, and on a review of the policy it has been decided that at the time of availing Loan Request Number (LRN) from RBI, borrowers are required to give bifurcation of the utilization of the ECB proceeds towards foreign currency and rupee expenditure in Form 83.• On 8 May, 2012, RBI has come up with circular for limiting the timeline for th Investment by FIIs in commodity exchanges under automatic investment by FII in Commodity exchanges and creating liquidity. route Under the Erstwhile FDI Policy, foreign investment by FDI and FII together allowed in commodity exchanges up to 49% under the approval route. Within this cap of 49%, FDI investment is allowed up to 26% and FII investment under portfolio investment scheme (“PIS”) is allowed up to 23%. With the change in the policy, DIPP has now removed the condition of seeking prior approval of FIPB before any investment by FIIs into commodity exchanges. However, the FDI investment in commodity exchanges would continue to be under the approval route. For more info on Business setup visit Page |3 For Business setup queries email at or call at 011 40622239
  4. 4. “What is driving E-commerce adoption in small towns of India?”Online Retailing On High in India Rising Living Standards Indias Information Technology (IT) and information technology enabled services (ITeS) segments are aligned in a way that the growth in one avenue Increased Awareness has ripple effects on another. The IT & ITeS industry, as a whole, is the mainstay of Indian technology sector as it has driven growth of the economy Greater Wireless in terms of employment, revenue generation, standards of living etc and has Internet Access played a major part in placing the country on the global canvas areas. Lack of goods offline In the recent times, it has been seen that emergence of internet retailing and e retail channels commerce is driving the growth of number of online shoppers resulting in more and more number of internet retail companies being attracted towards Improving Online Indian Markets. There are about 17 million online shoppers in India and the Availability number is projected to grow over three times in the years to come. The online shopping trend is not just restricted to mass market shopping, but New Payment options also extends to luxury goods, the fastest growing segment. However, the online market still continues to be dominated by shoppers looking for premium, affordable products at the cheapest prices. Demographics of Internet The digitally-enabled environment is fast changing consumer shopping habits. Market Starting the Online Store----- • Total Internet users with over 121 million as of  Find a niche market and products that can make a profit selling online December 2011  Identify the gap in the market • Much of the tech savvy  Obtain the Domain Name population is now buying  Find genuine wholesale vendors online though the  Design the website as attractive as you can numbers lag far behind  Obtain Payment Gateway at your website neighbor China  Market your store through Multiple traffic sources and get customers • Almost 75% of India’s in the door without spending a dime Internet users are under the age of 34  Convince your customers to buy once they land at your website • Large number of mobile  Sell goods online and earn huge profit users access data services Legal Steps to start the online Business: • Women are increasingly important presence • List out the different Business Entities i.e. Company (Private or Public online- 20-22% of India’s Limited)/ LLP Internet Users are • Compare and Choose the Best Suitable Business Entity Women • Incorporate and register your Business Entity with the Registrar • Top 10 products bought online are Books, • Obtain Income Tax Registrations such as PAN, TAN, Service Tax, Electronic goods, and Sales Tax. Railway tickets, • Make sure that you apply for the Sales Tax Number if in case you are accessories, Apparel, selling goods online Gifts, Computer, Airline, • Hire Legal consultant to draft legal agreements, website policy and Music, Movies terms & conditions Source: Nasscom For more info on Business setup visit Page |4 For Business setup queries email at or call at 011 40622239
  5. 5. Advantages of doing BusinessOnline Retailing On High in India Online in India Other things to be kept in mind: Costs • Arrange a web designer for designing your web portal to sell goods One of the biggest advantages • Tie up with the vendors/ distributors for sourcing the goods of doing business online is the • Tie up with the courier agencies savings that can be achieved by both consumers and • Employ the Delivery staff to deliver goods businesses. Reducing gas • Protect your Brand name by registering the Trademark, Patents, etc. consumption, paper use and employee time are just some Milestones to run a successful online Business: of the cost-saving benefits e- commerce provides. Proper guidance and education are the two points from where aspiring Maintaining websites is getting entrepreneur can run a successful online business. For any start ups, a less expensive with tools BUSINESS PLAN allows you to gain a better understanding of your available that anyone with a business idea, of your industry structure, competitive landscape; this will computer can easily learn to give a confidence in proceeding ahead in the business successfully use. So if you’re ready and have gained considerable business sense, here Reach are the top touch points about starting your own business. Online trading easily goes global through the Internet.  Starting A Business with extensive Market Research Reaching customers around the world is possible through This is a wrong statement that starting your own business has to be the Internet, while markets expensive and chancy attempt. Also, it is true that many of the open for a worldwide audience. Payments are successful entrepreneurs have self-funded their startups by putting in automatic through secure huge debts; it definitely does not have to be that way. credit card services and online payment services such as Many of the e commerce sites have witnessed that the fact is that you PayPal. can earn huge profits within a span of a year or two from your online store! And afterall, we are blessed with great Google tools on Internet, Flexibility starting your own online business is as inexpensive and risk free as Rarely can a business keep its ever provided you have already analyzed the gap in the market i.e. doors open 24 hours a day, MARKET RESEARCH. Online Business means reaching the large seven days a week. When doing business online, there size of market and reaching large number of customers. And, this is are no time restraints. one of the most remarkable aspects of running an online business Businesses can reach rather than a traditional retail store is that you can reach hundreds of customers at any time. Small millions of potential customers 24 hours a day, 7 days a week. The business owners, often best part about opening a store online is that your business will overwhelmed by the time continue to grow as word of mouth travels about your store and you constraints they face during become further entrenched in the search engines. the day, can conduct business with vendors and clients after hours. Students looking to  Designing a Attractive Website further their education can attend classes when its Despite people are Internet Savvy, still they are not aware of convenient, providing a huge market for online training. designing and launching the business website. Source: ehow For more info on Business setup visit Page |5 For Business setup queries email at or call at 011 40622239
  6. 6. Online Retailing On High in India So, what if you are not that tech savvy, there are freelancers/ web designers available in the market to which you can outsource your assignment of designing and launching website division at reasonable charges for the designed simple templates.  Time Constraint To open an online store is all about doing a little bit each day and setting your sights on your long term goals. If you were to start an online store today, you should be willing to devote at least 3 hours a week if you are serious about starting your own business. division at Online Shopping portals reasonable charges for the designed simple templates. in India Starting the Business will make sure you stay motivated. Talk to the existing Entrepreneurs, bounce your ideas, and share your thoughts in a highly supportive environment. So, don’t just think, implement the same, remind yourself of your real dreams again and again which will motivate you to start early and gain early.  Sourcing the Products to sell Finding products to sell by using the search engines and the Internet is difficult to do. Why? It’s because the Internet is full of scammers and middlemen who pretend to be wholesalers and are just waiting to cleave you off. In fact, looking online for products to sell using the search engines is probably the worst way to find wholesale vendors for your online store. The truth is that most wholesalers don’t advertise online and rarely advertise at all. They don’t advertise because they don’t want every little mom and pop store contacting them to ask to sell their products. Instead, most wholesalers only want to deal with legit, honest businesses that can sell in sufficient volumes. So, the best way is to survey the wholesale markets physically and source the goods from there through different vendors. There is a option to procure goods from existing importers, distributors and suppliers. And, retail the goods online. You may opt for affiliate schemes with similar business  Marketing the Online Store Initially there is no need to have large marketing budget. In fact, there are many effective methods of marketing and advertising that are absolutely free. You can very well achieve a high search ranking for your website in your targeted niche by inserting key words related to your business on your website. Have your presence at Social Networking websites like at Facebook, Google+, Twitter, blogs and many more. For more info on Business setup visit Page |6 For Business setup queries email at or call at 011 40622239
  7. 7. Online Retailing On High in IndiaBig numbersInternet retailing is emerging as an entirely new avenue to be explored.According to estimates made by an industrial body, Indias online retailindustry is anticipated to surge to Rs 70 billion (US$ 1.43 billion) by 2015 fromRs 20 billion (US$ 405.93 million) as broadband is becoming increasinglyaccessible and internet penetration is increasing. Another report by AvendusCapital Pvt. Ltd states that e-tailing would become a Rs 53,000 crore (US$10.76 billion) market by 2015 from the current Rs 3,600 crore (US$ 731million). ent, this sector is capable of maintaining the growth momentum in thefuture. Source: ibefBusiness IDEA OF THE Month Online General Store: Do you want to own an online Shop? If yes, then, go ahead with starting online business in India. These days’ people are so busy in their lives, that they don’t have time to go out for shopping daily needs. Online businesses have an advantage over businesses in the real world. They all have 13 inch monitors as our windows to the customer. The idea is to start an online daily needs store like online Big Bazaar including grocery products, bathing products, etc. Online Business is need of the hour as more than 60% of the online shoppers planned to buy even more on Internet in the coming year. Also, the maximum number of online shoppers is females. So, you have many options to start this business. But before starting, keep in mind that, naming the business is very important before starting the business and marketing strategy is also important. The e-commerce model also saves the administrative costs. However, just like starting a physical shop, online shop also demands the entrepreneur passion and high level of optimism. All you have to do is planning, excellent marketing approach including SEO tool, 24 / 7 presence, timely delivery of products, transparency and customer satisfaction. And there are high chances to have your presence globally if you have updated information at your portal. You can appoint dedicated personnel for managing the web portal. Make sure that you get associated with paypal or payment merchant for receiving payments online. Always remember, “Doors for online business never close” For more info on Business setup visit Page |7 For Business setup queries email at or call at 011 40622239
  8. 8. StartBizIndia Discussion Platform What do I need to do, if I wish to start an IT consulting business in India? Just like before starting any business, you have many questions to ask, like whether the business will be profit earning objectives or non profit objectives, be it a short term or Long Term, who will be the owners, which business entity to choose, which business entity is best suitable to my business, how to save tax, etc. Also, youll need to determine if youll be providing these services through an online platform or offline. And, it matters that what will be the location of the business taking in consideration different number of facts like the tax incentives, and which form of business entity will best serve your needs. In brief, there are number of things to work out before starting the business like working on the Market Research, draft Business Plan, planning the best location to open at, may be as per the tax incentives offered in different states in India, registering the Company with the Registrar of Companies, obtain the business licenses, comply with the FEMA Act, recruitment of IT consultants and other personnel, register with Intellectual Property Rights and then, you are ready to move ahead and do the business legally. Can a foreign national invest in IT Industry in India through LLP as the Business Structure? Yes, a Foreign National can invest in LLP subject to FIPB Approval. LLPs with FDI will be allowed, through the Government approval route, in those sectors/activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance related conditions. By FDI-linked performance related conditions, it is meant that in sectors, where conditions like minimum capitalization etc are prescribed like development of Townships, NBFC, even though 100% FDI is allowed under automatic route, LLP’s will not be allowed to bring FDI with the approval of Government of India. Since, FDI in IT sector is 100% allowed, so, a foreign national can invest in LLP with the objective to do business in IT sector. For more info on Business setup visit Page |8 For Business setup queries email at or call at 011 40622239
  9. 9. Upcoming Business Summit National SME Conclave – Meet Your Bankers • SME Conclave- Meet Associated Chambers of Commerce and Industry of India (ASSOCHAM) is Your Bankers organizing a Seminar on “SMEs Conclave - Meet Your Bankers” on 19th June, 2012 at Hotel Chancery Pavilion in Bangalore. The seminar will focus • Indo-German SME on the SME business opportunity in India which can be seen in possibly every Pavillion sector - Financial Services, Telecom, Education, Automobiles, Media, Food, Real Estate, Pharmaceutical, Textile & Garments, Retail, IT and ITes, Agro and Service sector and so on making India a hub for best small business opportunity in various segments. th Date: 19 June, 2012 Venue: Hotel Chancery Pavillion, Bangalore Indo-German SME Pavillion It is a platform for Indo-German small and medium sized businesses to show- case their products/ processes/ ideas/ ideology/ company image in line with the central theme. nd Date: 22 June, 2012 Venue: Palace Ground, Bangalore The India Show Inter National With the rising aspirations of the Indian industry to expand its global horizons and with Africa fast positioning itself as a promising business and investment • The India Show destination, "The India Show" is an excellent opportunity for Indian and African business community to showcase their best. A three day event, this important business platform provides you ample of opportunities to network with the key stakeholders like policy makers, captains of industry, financial institutions and business solutions providers. th th Date: 9 July 2012 to 11 July 2012 Venue: ACCRA, Ghana For more info on Business setup visit Page |9 For Business setup queries email at or call at 011 40622239
  10. 10. Contact Us Visit us at Neha Seth D: +91.11.40622239 A Venture of Shipra Paul D- 38, Ist Floor, South Extn. Part I New Delhi – 110049 T: 40622200 F: 91.40622201 D: +91.11.40622246 E: info@startbizindia.comDisclaimer:This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of this paper havebeen developed for the new startups. The author and the Company expressly disclaim all and any liability to anyperson who has read this paper, or otherwise, in respect of anything, and of consequences of anything done, oromitted to be done by any such person in reliance upon the contents of this paper. For more info on Business setup visit P a g e | 10 For Business setup queries email at or call at 011 40622239