E commerce in India-Present and Future

E-commerce in India:
Present and Future
Dr.R.VASANTHAGOPAL
University of Kerala

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E-commerce
 E-commerce: doing business on line
 The delivery of product/service is being done over the
Internet using technology such as Electronic Data
Interchange (EDI) and Electronic Funds Transfer (EFT)
 Also called e-tailing(i.e. on line retailing)

Innovative Services….
E-tailers are offerings innovative
service like one-day delivery, 30-
day replacement warranty, cash
on delivery (Cod), cash back
offers etc.

Increased Penetration
With the increasing penetration of
internet & smart phones, on line
trade has grown rapidly.
A swift change in the shopping
experience of customers.

E-commerce Ecosystem
Banks and other player’s in e-commerce ecosystem
are providing a secured online platform to pay
effortlessly via payments gateways.
Cont

The Players
 Amazon, Alibaba, and Walmart leading cos. in the world
 Flipkart, Snapdeal are the leading players in India
 The entry of global biggies has taken the competition
to a new level

Dimensions of E-commerce
 Product, process and delivery agent can be physical or
digital
 Traditional Commerce
All three dimensions are
physical
 Pure E-commerce
All dimensions are digital
 Partial E-commerce
At least one dimension must
be digital

Why E-commerce is Important?
 Faster buying/selling procedure
 Easy to find products
 Buying/selling 24/7
 Low operational costs
 Better quality of services
 Easy to start and manage a business
 No need of physical company set-ups
 Possible to select products from different providers
without moving around physically.

An Interesting Case of IRCTC
(Indian Railway Catering and Tourism Corporation)
 Indian railway portal irctc.co.in has started its
operations in the year 2002.
 It has booked 29 tickets only on first day of launching.
 Today it books 13 lakh tickets a day.
 It is India’s one of the largest ecommerce companies
with a turnover of Rs 1506 crore in 2015-16
 IRCTC is the most successful ecommerce model in India

E-commerce Models
The Three Fundamental Models: B2B
B2C
C2C
Other Models:
B2B2C, B2G,C2B,B2E,
G2G,G2E,G2B,G2C

Present Status
 India is at the cusp of an e-commerce revolution
 Contributing over 4% to India’s GDP
 Growth rate of E-commerce market in India is 30%
(CAGR)
 Total value of business:
 2015-Rs.1.25 lakh crore; 2016-1.69 lakh crore; 2017-
220 crore
 2015 known as the ‘BILLION DOLLAR YEAR
 Online travel accounts for nearly 61% of e-commerce
business while e-tailing contributes about 29%.

Growth of Shoppers

Share of E-tailing

Contribution to Different Segments

Internet Users

Challenges of E-commerce In India
 Taxation (The issue has been solved to an extent after
GST)
 Poor logistic and supply chain
 Business of thin margins
 Poor Internet penetration (34.8% internet penetration
in 2014)
 Online fraud, identity theft etc
 Fragmented back-end (Need a better structure for
payments and logistical infrastructure)
cont’d

 Poor credit card penetration (currently only 2% of our
population holds a credit card)
 Increase in cyber crimes
 Price undercutting among E-commerce players
 Inconsistent behavior of Indian consumer
 Malware Attacks- Networks and servers of service
providers
 Payments (60-70% cash on delivery)
cont’d

 Denial-of-Services(DOS) Attacks (Attack on a network to
disable the network by flooding it with useless traffic
or activity)
 Insufficient steps to protect the security
 Complications in transactions across the boarder
 Complex to manage supply chain and logistics

Who Can Face the Challenge?
“m” is increasingly replacing the “e” in E-commerce, as
more Indians get on to their smart phones to buy stuff
online. From a technology perspective, on the small
screen, discovery of the right products as well as
payments present 2 key challenges as well as
opportunities. Whoever can solve these challenges
faster and in a sustainable manner, can challenge the
status quo in e-commerce markets.

Future of E-commerce In India
 Internet penetration 34.8 crore (in 2016)
 Low priced smart phones
 Good internet coverage even in rural areas with
2G/3G/4G networks
 Growth of Tier II and Tier III cities
 Rise of the middle class people
 Increased usage of technology to shop
Cont’d

 No. of internet users in India is only 46.3 crore (2017)
(34.8 %)(Users per year change=30.5%)
 Smart phones with different apps replace PCs for online
shopping.
 Social shopping
 Emergence of non banking players in the payment
industry
 Favourable demographics
 Busy lifestyles and lack of time for offline shopping
 Innovative vertical specific start ups
Cont’d

 Growing acceptability of online payments
 Increasing mobile and internet penetration
 Merger and acquisitions (Flipkart acquired Myntra for
370 million USD, Ola Cabs acquired Taxi ForSure for 200
million USD)
 Presence of global players like Amazon, Alibaba etc.
 Newer technologies like analytics, social commerce, 3
D printing etc.
 High private equity investment (Soft bank advanced 627
million USD to Snapdeal)

Conclusion
 Customer is king for the brick-and-mortar stores
and the digital age e-retailers.
 Shopping online is getting easier and the
customer expectations are changing quickly.
 The e-tailers need to differentiate themselves
to not only attract customers but also to build
trust and loyalty.

Thank you

E commerce in India-Present and Future

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