E-commerce companies face many challenges, including: 1) It can take 6-8 years for companies to become profitable as they focus on growing market share over profits. 2) Challenges vary depending on factors like company size, cultural differences in operating countries, and product type. 3) India is a focus for growth due to its large population, young demographics, and rising disposable incomes, but has low rates of banking, smartphone use, and internet penetration currently.

1. CHALLENGES IN
E-COMMERCE

2. Making Profits
Companies are growing only by increasing
their market share & market value but not
by returning profits
Ecommerce business takes at least
6 to 8 years to yield profits

3. Challenges depends on various factors
Size of the company
Ex: Small companies
struggle for the funds
Cultural differences of
operating country
The kind of customer we are dealing with
Ex:
1) Women are different to men
2) Highly earning person behaves differently
The product that we are dealing with
Ex: Food items are different to tickets

4. China
South
Korea
Japan
India
Top Asia Pacific
Ecommerce Countries

5. Why India is on Focus?
- 2nd largest country & ready to beat China soon
- By 2020 an Avg. of Indian would be around 30 years – More young people
tend to buy more from the digital world – disposable income is high
- Only 30% of the Indians have bank accounts
- Only around 20% of the Indians using smart phones
- 15% internet penetration & long way to go

6. Addressable Markets
• To grow their businesses, the Indian eCommerce sector needs to
closely watch the growth of their markets in the Tier 2 and 3 cities.
• Need to improve their logistics and supply chain management in these
cities, do an effective demand management to keep an eye on what
products are being sought in these cities.

7. Payments and Transactions
• India continues to be a cash-based society due to limited banking and
credit card penetration.
• This, combined with a lack of consumer trust in online merchants, has
forced companies to offer CoD services, which imposes significant
financial cost for firms in the form of labour, cash handling and higher
returns of purchased items.
• Data protection and the integrity of the system that handles the data
and transactions are serious concerns.

8. Cyber Crime
• One of the biggest fears that consumers have in ecommerce is cyber
crime.
• Cyber crime includes criminal acts such as viruses, phishing and
denial of service attacks that cause e-commerce websites to lose
revenues.
• E-commerce companies suffer heavy losses due to stolen assets,
breakdown of websites and so on. Apart from the financial loss, the
company’s reputation is at stake.

9. Convergence of offline and online channels
• As the customers progress from research to purchase to fulfilment
stages, their expectations change fast.
• eCommerce companies need to understand these change drivers and
adapt their proposition accordingly.
• They should also ensure sufficient after sales service and support.
• Online product reviews and ratings, videos, more advanced sizing and
fitting tools should be provided.

10. Price War Among Retailers
-Companies need market share & ready to entertain the customers
- When we get off the quality of products also inferior

11. Technological Advancements
• E-commerce companies constantly have to upgrade with changing
technology.
• They need to ensure that their websites have the required speed to
do fast business, especially during sale, deals and discounts.
• For instance, shopping through mobiles have truly arrived, they need
to devise easy to use mobile apps for their websites.

12. Border
• With e-commerce largely being a borderless activity
• Companies need to keep in mind that customers always have the
option to buy across the border if they cannot fulfil customers’
expectations.

13. Free
Delivery
Big Discounts
Same Day
Delivery
High
Quality
Products Warranty
Not only
discounts
but also
Coupons
Customer Expectations