Opportunity & Challenges of E-Commerce Business in India

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A PROJECT REPORT ON
“Opportunities & Challenges of E-Commerce Business in
India”
With case studies of Amazon, Flipkart, Snapdeal
& Practical Life example – Sapno Ka Toffa
A Project report submitted in partial fulfillment for the Award
of the
6th
Semester
In Bachelor of Commerce (B.COM)
Submitted By
PARV PODDAR
Roll No. S03616COM026
Under the Guidance of:-
MR. SHAIK AZHAR IQBAL
(Lecturer in Commerce)
DEPARTMENT OF COMMERCE (2018-19)
LAXMI NARAYAN COLLEGE,
JHARSUGUDA
(Affiliated to SAMBALPUR UNIVERSITY)

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DECLARATION
I here by declare that this project report entitled
““OPPORTUNITIES & CHALLENGES OF E-COMMERCE BUSINESS IN
INDIA”” has been prepared by me is an original work
submitted to LAXMI NARAYAN COLLEGE,
Jharsuguda towards partial fulfillment of the
requirement for the award of Bachelor of Commerce. I
Also here by declare that this project report has not been
submitted at any time to any other university or institute
for the award of any Degree or Diploma.
PARV PODDAR
S03616COM026

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CERTIFICATE
This is to certify that the project work entitled ““OPPORTUNITIES &
CHALLENGES OF E-COMMERCE BUSINESS IN INDIA”” Has been done by
PARV PODDAR - S03616COM026 .In the partial fulfillment of the
requirements for the award of the degree of Bachelor of Commerce
from Laxmi Narayan College, affiliated to Sambalpur University is a
record of bonafide work carried out by them under my guidance and
supervision. The result embodied in this has not been submitted to
any other university or institute for the award of any degree.
Date: Mr. Shaik Azhar Iqbal
(Lecturer in Commerce)
Laxmi Narayan College, Jharsuguda

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ACKNOWLEDGEMENT
First of all I am very much grateful to god, who has made me a
human being. Now I am going to get the degree of Bachelor in
Commerce subject . I take this opportunity to thank all those,
who hunted my heart by giving warm co-operation in every
aspect. I shall never forget kind approach towards me, because in
absence of them the present study would not have been
completed.
I am fortunate enough that I was allowed to do my
research work in a subject in which I was keenly interested. First
of all my tribute goes to Mr.N.K Panda, H.O.D, Department Of
Commerce, Laxmi Narayan College , Jharsuguda for suggesting
topic under study & encouraging me to do research on the same.
The real credit goes to Mr. Shaik Azhar Iqbal,
Lecturer in Commerce Department, Laxmi Narayan College ,
Jharsuguda. She encouraged me to study & made my path very
easy by giving valuable . I am highly indebted to her suggestion.
I wish to express my gratitude to the almighty God , my
parents, my friends who generously helped me to complete this
project with their blessings.
DATE: (PARV PODDAR)
(S03616COM026)

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TABLE OF CONTENT
SL. NO. CONTENT PAGE NO.
CHAPTER :-1
INTRODUCTION 7-18
7
8-9
10-11
12
13
14
15
16
17-18
1.1 Introduction to the Topic
1.2 Objective of the Study
1.3 Relevance of the Study
1.4 Limitation of the Study
1.5 Methodology of the Study
1.6 Sources of Data
1.7 Scope of the Study
1.8 Period of he Study
1.9 Review of Literature
CHAPTER :-2
Profile of the Company
2.1 Industry Profile
2.1.1 Financial Market
2.1.2 Money Market
2.1.3 Capital Market
2.1.4 Primary Market
2.1.5 Secondary Market
2.2 About Sharekhan Ltd.
19-33
19-22
20
20
21
21
21-22
22-33

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2.2.1 Profile of the Sharekhan Ltd. 24-33
CHAPTER:-3
Theoretical Overview 34-46
34-35
34
34-35
35
36-40
37-40
39-40
40-41
41-42
42
42
3.1 Stock Market In India
3.1.1 Definition of a stock exchange
3.1.2History of Stock Exchanges
3.1.3 Functions of Stock Exchanges
3.2 Various Stock Exchanges in
India
3.2.1 NSE (National Stock Exchange)
3.2.2 BSE (Bombay Stock Exchange)
3.3 Regulatory Frame Work of
Stock Exchange.
3.4 Securities And Exchange
Board of India (SEBI)
3.4.1 Objective And Functions of SEBI
3.4.2 SEBI Guidelines to Secondary
Markets:
(STOCK EXCHANGES)
3.5 Types of Order
3.6 Rolling Settlement system

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43-44
44-46
CHAPTER:-4
COMPARAITIVE ANALYSIS 47-67
47-65
48-49
50-51
52-53
54-55
56-59
60-65
66-67
4.1 The Major Players In Online
Trading
4.1.1 HDFC Securities
4.1.2 ICICI Direct
4.1.3 Indiabulls
4.1.4 Kotak Street
4.1.5 5Paisa
4.1.6 Sharekhan Ltd
4.2 SWOT Analysis
CHAPTER:-5 FINDING & OBSERVATION
CONCLUSION AND
RECOMMENDATIONS
68-70
BIBLIOGRAPHY

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CHAPTER:- 1 INTRODUCTION
1.1:- INTRODUCTION OF THE STUDY:
Electronic commerce or ecommerce is a term for any type of business, or
commercial transaction, which involves the transfer of information across the
Internet. It covers a range of different types of businesses, from consumer
based retail sites, through auction or music sites, to business exchanges
trading goods and services between corporations. It is currently one of the
most important aspects of the Internet to emerge. Examples like : Amazon,
Flipkart and many more.
Ecommerce allows consumers to electronically exchange goods and
services with no barriers of time or distance. Electronic commerce has
expanded rapidly over the past five years and is predicted to continue at this
rate, or even accelerate. In the near future the boundaries between
"conventional" and "electronic" commerce will become increasingly blurred
as more and more businesses move sections of their operations onto the
Internet.
The road to creating a successful online store can be a difficult if unaware of
ecommerce principles and what ecommerce is supposed to do for your
online business. Researching and understanding the guidelines required to
properly implement an e-business plan is a crucial part to becoming
successful with online store building.
Online Business or e-business is any kind of business or commercial
transaction that includes sharing information across the internet. Commerce
constitutes the exchange of products and services between businesses,
groups and individuals and can be seen as one of the essential activities of
any business.
Let’s have a detail view about its challenges and oppurtunities with some
practical life based examples….

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1.2:- OBJECTIVES OF THE STUDY:
At present, E-Commerce is the most vast and popular business sector. Its
an online buying and selling process so its needs are as simple as the
business means. Customer reaching, High sales, Products quality and on
time delivery are some of the needs of any E-commerce business. And
when we talk about its objectives so basically its objectives are for fulfilling
its needs.
Objectives are:
> High reachability - The main objective and at the same time need is
traction on your web store. Of, course if you are selling products online what
you require are customers. If you are getting good reachability then your
business will definitely grow. Therefore one of the objective is high
reachability.
>High Conversions- if people are coming on your web store and
purchasing something then it will calculate as conversions and from the
number of people who are buying stuff from your web store we can calculate
the conversion rate.
>Customer satisfaction - Customer is the main part of any E-commerce
business so its very important to make your customer happy and satisfied.
By providing quality and desirable products, on time delivery, 24*7 customer
support, and timely sale & best deal offers you can make your customer
happy. It is one of the main objectives of E-commerce.
>Social popularity - Unless and until you are not famous and popular
among people you cannot establish your brand. Social presence with Omni
channel & Digital marketing is essential for any E-commerce business.
>Increase sales to increase profit - The primary objective to increase the
volume of sales in order to earn more profit. Fixing less margins in a
product and making it cheapest in market attract more customers which
result to more sales thus the margin money increases.
So above are the few objectives for any E-commerce business.

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1.3:- RELEVANCE / IMPORTANCE OF THE STUDY:
In the digital age, it is absolutely essential for your business to have an
online presence. Whether it’s a website, an e-commerce platform, a social
media page or a combination of all three, getting your company online will
reap major importance. Even if your company does not conduct business
online, customers and potential customers are expecting to see you online.
If they don’t see you there, you could be losing out on the opportunity to
increase your customer base and get the word out about your business.
Here are just a few of the many reasons why your business needs to
establish its online presence:
1. Make it Easier for Potential Customers Come to You
Today, if someone wants more information about a company, they’re most
likely to do their research online. Whether they’re specifically looking for
your company, or they just want to find any company that offers the
products or services that your company offers, having an online presence
will give you a competitive edge. Potential customers will not put a lot of
effort into finding you, and they should not have to. A simple Google
search should provide them with all the information they seek.
Real life example: My business distributes Gifts Items, Trophies and
other Items. A potential customer is having farewell and needs gift for
all. She uses her smartphone to search for “Gift shop in Jharsuguda”. My
company’s website is listed in the search results. After browsing my
website, she’s satisfied that I can provide her with what she needs. I’ve just
earned another customer!
2. Make it Easier to Showcase Your Products and Services
The Internet gives businesses an effective platform for showcasing what
they have to offer. Whether it’s a portfolio and testimonials from clients on
a website, or an album on a Facebook page with photos of your newest
products, it has never been easier to let the world know what you have to
offer. With a few simple clicks, your customers can see what you’re all
about. They can even do this outside of business hours! An online
presence is an extension of your brand that never sleeps.
3, Make it Easier to Build Relationships with Customers and Potential
Customers
Social media is all about building relationships. This is true for both
individuals and businesses. Social media gives your brand a voice – it

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makes your company more “human” and relatable. Customers and
potential customers can interact with your brand on a more personal level.
It also gives you the opportunity to truly get to know your customers. If
everyone is on social media except you, you are missing out on an
invaluable opportunity to connect and communicate with your target
audience. Social media is one of the simplest, yet most effective ways to
get persons interested in your company and to form real relationships with
real people.
4. Make it Easier to Market Your Brand
Websites and social media platforms are excellent marketing tools. They
are also some of the most cost effective methods of sending out
information to thousands of people. Online marketing is extremely
important for all businesses because it has a huge influence on the way
consumers make purchasing decisions. Modern’s consumers have even
indicated that they look at companies in a negative light if they cannot find
them online. Using the internet for marketing purposes allows you to
overcome distance barriers. Persons thousands of miles away can be
learning all about your business with just a few keystrokes. The “share
ability” of social media allows your customers to easily spread the word
about your business to all their friends. Ultimately, online marketing gives
you the opportunity to market your brand in creative and exciting ways.
5. Easy Marketing and Advertising
Creating a website benefits businesses because people can market their
products and services without using traditional marketing techniques such
as fliers, mailings and newspaper ads. Online marketing saves the
company money that would otherwise be spent on traditional means of
advertising.
6. Larger Customer Base
A key benefit of the Internet for business is the potential for customer
growth. A small business without a website may be able to compete only
with other local businesses. However, people conducting business on the
Internet have the potential to gain customers from around the world
because Internet companies are open 24 hours a day.
7. Increased Sales –
The biggest reason why online reviews are important to businesses is that
ultimately it increases sales by giving consumers the information they need
to make the decision to purchase a product or service from a business.

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People are always much more likely to purchase a product or service that
has already been recommended by others.
8. Understand and Better Serve Your Consumers –
Online reviews can tell you whether you are doing a good job or what you
are doing wrong and how to improve your service. This allows you to better
serve your consumers by quickly and efficiently resolving any issues
consumers have, thereby creating a positive experience for the consumer
that will only help your business in the future.
9. Improve Rankings –
Online reviews do more than just create a better relationship between your
business and your consumers; they work towards improving your websites
ranking on search engines like Google, Bing, Yahoo! and more. The more
that is written about your business online, the more important a search
engine considers you to be!
10. Higher Keyword Content –
Online reviews help your business website to have a steady influx of SEO
keywords that help your business have a more prominent online presence
for consumers due to the fact that many of the keywords included in online
reviews will help to bring up your website in search results for consumers
looking for the type of product or service you provide.
11. Allow Consumers to Have a Voice and Create Consumer Loyalty –
Consumers who take the time to leave an online review for a business are
far more likely to feel a certain loyalty to your business and keep coming
back year after year. Through the act of leaving an online review and
establishing a relationship with the business, it allows your consumers to
feel like they have a voice and are able to provide feedback in a positive
and meaningful way.
12. Create Consumer Engagement –
Many times online review pages can become active social communities
where consumers leave reviews and keep coming back to see if others
have made comments on their reviews or to simply see what other
consumers have to say about your product or service in general. This
creates a social community of consumer engagement that allows
consumers to form an attachment to both the business and the other
consumers as well.
13. Let Consumers Do Your Marketing for You –

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A handful of positive online business reviews are worth a great deal and
can offer your business benefits that a simple marketing campaign can’t.
They are like micro marketing campaigns that keep working long after the
online review has been posted, giving a constant positive image to
potential consumers and creating a continual brand awareness that
benefits the business for the short term and for the long term.
14. Reviews Breed More Reviews –
When a business, product or service has already received reviews online it
seems to encourage other visitors to leave their own feedback. Just the
appearance of a number of reviews appears to be enough to give new
visitors the confidence to add their own views on that particular product or
service. It is a new form of online ‘crowd behavior’ that psychologists are
still working on figuring out!
Modern businesses must ensure that they are not left behind. An online
presence is one of the most important investments that a business can
make. The importance are endless!

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1.4:- METHODOLOGY:
The data collection here includes both primary and secondary collecting
methods:-
Primary Methods includes: The data collected from the authorized
government and international websites as well as from my own business
Like: Indian statistics org., world internet statistics org. .
Secondary Method includes: The data collected from the non authorized
websites Like: Quora.com

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1.5:- SOURCES OF DATA:
To give a detail analysis and complete this study, data were collected from
various websites which are:
• www.wikipedia.com
• https://ir.aboutamazon.com/annual-reports/
• https://www.myonlineca.in/startup-blog/flipkart-companies-financial-
report
• https://www.instagram.com/sapno.ka.tofaa/
• www.quora.com
• www.indiastat.com
• www.internetworlstat.com
And many more…..

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1.6:- SCOPE OF STUDY:
Another significant contributor to the growth of E-Commerce in India in the
future is the e-tailing industry which largely deals in providing jewelry,
apparel and kitchen appliances online.
Websites like Flipkart, Myntra, Amazon, Snapdeal, Jabong, etc. are all
examples of the enormous success of E-Commerce in India. Due to these
firms, India is one of the fastest growing E-Commerce markets in
Asia/Pacific with China investing as much.
Many analysts believe that the advent of 3G/4G speed in net connectivity
has been a major cog in the wheel for such a growth in this market.
As India has been the heart of the e-commerce market in 2016 with the
tremendous growth of 70%. The consumer base is expected to hit 100
million in 2017, and this ensures that any e-commerce venture would soon
be the best business in India, as far as profits and growth are concerned.

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1.7:- PERIOD OF STUDY:
Here in this project the data are of various timeline. i.e. for Amazon and
Flipkart its include data of past 1-2 years and for Sapno ka Tofaa its data
are of past 6 months. And study period time line is of 10 years.

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1.8:- LIMITATION OF STUDY:
Here in this study I have to face many limitations regarding..
1) Data collect by me as not check by anyone
2) In practical lile iits not possible to record each and every transactions
company do thus comparison cannot be done in fair manner
3) Here the opportunities and challenges as per the persons point of
view who had deal with it.
4) There is no official confirmation regarding the data by Amazon or
Flipkart etc.

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1.9:- CHAPTERISATION:
Chapter 2 :- Profile of Amazon, Flipkart and Newly started
business – Sapno Ka Tofaa
Chapter 3 :- All About E-commerce and Online Business
Chapter 4 :- Opportunities & Challenges associated with it.
Chapter 5 :- My Findings

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CHAPTER:- 2 PROFILE OF
COMPANIES
Flipkart Pvt Ltd. is an e-commerce company based in Bengaluru, India.
Founded by Sachin Bansal and Binny Bansal in 2007, the company initially
focused on book sales, before expanding into other product categories
such as consumer electronics, fashion, and lifestyle products.
The service competes primarily with Amazon's Indian subsidiary, and the
domestic rival Snapdeal. as of March 2017, Flipkart held a 39.5% market
share of India's e-commerce industry. Flipkart is significantly dominant in
the sale of apparel (a position that was bolstered by its acquisitions
of Myntra and Jabong.com), and was described as being "neck and neck"
with Amazon in the sale of electronics and mobile phones. Flipkart also
owns PhonePe, a mobile payments service based on the Unified Payments
Interface(UPI).
In August 2018, U.S.-based retail chain Walmart acquired a 77%
controlling stake in Flipkart for US$16 billion, valuing it at $22 billion.
Type of site E-commerce
Available in English
Founded 2007; 12 years ago
Headquarters Bengaluru, India
Area served India

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Owner Walmart (81.3%)
Founder(s) Sachin Bansal
Binny Bansal
Key people Kalyan Krishnamurthy
(CEO)
Services Online shopping
Revenue ₹199
billion (US$2.8 billion)
(2017)
Employees 30,000 (2016)
Subsidiaries• Myntra
• Jabong.com
• PhonePe
• Ekart
• Jeeves
• 2GUD
Website Flipkart
Alexa rank 156 (Global, (June
2018)
9 (India, June 2018)
Commercial Yes
Registration Required
Current status Online
History
Flipkart logo used from 2007 to 2015
Flipkart was founded in October 2007 by Sachin Bansal and Binny Bansal,
who were both alumni of the Indian Institute of Technology Delhi and

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formerly worked for Amazon.The company initially focused on online book
sales with country-wide shipping. Following its launch, Flipkart slowly grew
in prominence; by 2008, it was receiving 100 orders per day.In 2010,
Flipkart acquired the Bangalore-based social book discovery
service weRead from Lulu.com.In late 2011, Flipkart made several
acquisitions relating to digital distribution, including Mime360.com and the
digital content library of Bollywood portal Chakpak.
In February 2012, the company unveiled its DRM-free online music
store Flyte. However, the service was unsuccessful due to competition
from free streaming sites, and shut down in June 2013.In May 2012,
Flipkart acquired Letsbuy, an online electronics retailer.In May 2014,
Flipkart acquired Myntra, an online fashion retailer, for ₹20
billion (US$280 million).Myntra continues to operate alongside Flipkart as a
standalone subsidiary; the site focuses on an upscale, "fashion-conscious"
market, while Flipkart itself focuses on the mainstream market and major
international brands.
In February 2014, Flipkart partnered with Motorola Mobility to be the
exclusive Indian retailer of its Moto G smartphone. Motorola also partnered
with Flipkart on the Moto E—a phone targeted primarily towards emerging
markets such as India. High demand for the phone caused the Flipkart
website to crash following its midnight launch on 14 May.Flipkart
subsequently held exclusive Indian launches for other smartphones,
including the Xiaomi Mi3in July 2014 (whose initial release of 10,000
devices sold out in around 5 seconds), the Redmi 1S and Redmi Note in
late-2014 (which saw similarly accelerated
sellouts),and Micromax's Yu Yunique 2 in 2017.
On 6 October 2014, in honour of the company's anniversary and
the Diwali season, Flipkart held a major sale across the service that it
promoted as "Big Billion Day". The event generated a surge of traffic,
selling US$100 million worth of goods in 10 hours. The event received
criticism via social media over technical issues the site experienced during
the event, as well as stock shortages.
In March 2015, Flipkart blocked access to its website on mobile devices,
and began requiring that users download the site's mobile app instead. The
following month, Myntra went further and discontinued its website on all
platforms, in favour of operating exclusively through its app. The "app-only"
model, however, proved to be unsuccessful for Myntra (reducing sales by
10%), and its main website was reinstated in February 2016. The
experiment with Myntra led to suggestions that Flipkart itself would perform
a similar move, but this did not occur. In November 2015, Flipkart launched
a new mobile website branded as "Flipkart Lite", which provides an

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experience inspired by Flipkart's app that runs within smartphone web
browsers.
In April 2015, Flipkart acquired Appiterate, a Delhi-based mobile
marketing automation firm. Flipkart stated that it would use its technology
to enhance its mobile services.In October 2015, Flipkart reprised its Big
Billion Day event, except as a multi-day event that would be exclusive to
the Flipkart app. Flipkart also stated that it had bolstered its supply chain
and introduced more fulfilment centres in order to meet customer
demand.Flipkart achieved a gross merchandise volume of US$300 million
during the event, with the largest volumes coming from fashion sales, and
the largest value coming from mobiles.
In December 2015, Flipkart purchased a minority stake in the digital
mapping provider MapmyIndia. The company stated that it would licence
its data to help improve delivery logistics.In 2016, Flipkart acquired the
online fashion retailer Jabong.com from Rocket Internet for US$70 million,
as well as the UPI mobile payments startup PhonePe.In January 2017,
Flipkart made a US$2 million investment in Tinystep, a parenting
information startup.
In April 2017, eBay announced that it would sell its Indian subsidiary
eBay.in to Flipkart and make a US$500 million cash investment in the
company. eBay promoted that the partnership would eventually allow
Flipkart to access eBay's network of international vendors, and vice versa,
but these plans never actually came to fruition.In July 2017, Flipkart made
an offer to acquire its main domestic competitor, Snapdeal, for around
US$700–800 million. It was rejected by the company, which was seeking at
least US$1 billion.
Flipkart held a 51% share of all Indian smartphone shipments in 2017,
overtaking Amazon India (33%). Flipkart sold 1.3 million phones in 20
hours on 21 September alone for its Big Billion Days promotion, doubling
the number sold on the first day of the event in 2016 (where it sold a total
of 2.5 million phones in five days).
Acquisition by Walmart
On 4 May 2018, it was reported that the US retail chain Walmart had won a
bidding war with Amazon to acquire a majority stake in Flipkart for
US$15 billion. On 9 May 2018, Walmart officially announced its intent to
acquire a 77% controlling stake in Flipkart for US$16 billion, subject to
regulatory approval. Following the proposed purchase, Flipkart co-founder
Sachin Bansal left the company, while the remaining management now
report to Marc Lore, CEO of Walmart eCommerce US. Walmart
president Doug McMillon cited the "attractiveness" of the market,
explaining that their purchase "is an opportunity to partner with the

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company that is leading transformation of eCommerce in the
market". Indian traders protested against the deal, considering the deal a
threat to domestic business.
In a filing with the U.S. Securities and Exchange Commission on 11 May
2018, Walmart stated that a condition of the deal prescribed the possibility
that Flipkart's current minority shareholders "may require Flipkart to effect
an initial public offering following the fourth anniversary of closing of the
Transactions at a valuation no less than that paid by Walmart".
Following the announcement of Walmart's deal, eBay announced that it
would sell its stake in Flipkart back to the company for approximately
US$1.1 billion, and re-launch its own Indian operations. The company
stated that "there is huge growth potential for e-commerce in India and
significant opportunity for multiple players to succeed in India's diverse,
domestic market." Softbank Group also sold its entire 20% stake to
Walmart, without disclosing terms of the sale.
The acquisition was completed on 18 August 2018. Walmart also provided
US$2 billion in equity funding to the company.
On 13 November 2018, Flipkart CEO Binny Bansal resigned, after facing
an allegation of "serious personal misconduct". Walmart stated that "while
the investigation did not find evidence to corroborate the complainant's
assertions against Binny, it did reveal other lapses in judgment, particularly
a lack of transparency, related to how Binny responded to the situation."

25
Amazon.com, Inc. is an American multinational technology company
based in Seattle, Washington that focuses in e-commerce, cloud
computing, and artificial intelligence.
Amazon is the largest e-commerce marketplace and cloud computing
platform in the world as measured by revenue and market
capitalization.[7]
Amazon.com was founded by Jeff Bezos on July 5, 1994,
and started as an online bookstore but later diversified to
sell video downloads/streaming, MP3 downloads/streaming, audiobook do
wnloads/streaming, software, video games, electronics, apparel, furniture,
food, toys, and jewelry. The company also owns a publishing arm, Amazon
Publishing, a film and television studio, Amazon Studios,
produces consumer electronics lines including Kindle e-

26
readers, Fire tablets, Fire TV, and Echo devices, and is the world's largest
provider of cloud infrastructure services (IaaS and PaaS) through
its AWS subsidiary. Amazon has separate retail websites for some
countries and also offers international shipping of some of its products to
certain other countries. 100 million people subscribe to Amazon Prime.
Amazon is the largest Internet company by revenue in the world and
the second largest employer in the United States. In 2015, Amazon
surpassed Walmart as the most valuable retailer in the United States
by market capitalization. In 2017, Amazon acquired Whole Foods
Market for $13.4 billion, which vastly increased Amazon's presence as a
brick-and-mortar retailer. The acquisition was interpreted by some as a
direct attempt to challenge Walmart's traditional retail stores.
Trading
name
Amazon
Formerly Cadabra, Inc. (1994–95)
Type Public
Traded as
• NASDAQ: AMZN
• NASDAQ-100 component
• S&P 100 component
• S&P 500 component
ISIN US0231351067
Industry • Cloud computing
• Consumer electronics
• Digital distribution
• E-commerce
Founded July 5, 1994; 24 years
ago in Bellevue,
Washington
Founder Jeff Bezos
Headquarters Seattle, Washington
,
U.S.
Area served Worldwide
Key people • Jeff Bezos
(chairman, president and C
EO)

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• Werner Vogels (CTO)
Products • Amazon Echo
• Amazon Fire
• Amazon Fire TV
• Amazon Fire OS
• Amazon Kindle
Services • Amazon.com
• Amazon Alexa
• Amazon Appstore
• Amazon Music
• Amazon Prime
• Amazon Video
Revenue US$232.887 billion (2018)
Operating
income
US$12.421 billion (2018)
Net income US$10.073 billion (2018)
Total assets US$162.648 billion (2018)
Total equity US$43.549 billion (2018)
Number of
employees
647,500 (2018)
Subsidiaries• A9.com
• AbeBooks
• Amazon Air
• Alexa Internet
• Amazon Books
• Amazon Game Studios
• Amazon Lab126
• Amazon Logistics, Inc.
• Amazon Publishing
• Amazon Robotics
• Amazon.com Services
• Amazon Studios
• Audible
• Body Labs
• AWS
• Book Depository
• ComiXology
• Goodreads
• Graphiq

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• IMDb
• Ring
• Souq.com
• Twitch Interactive
• Whole Foods Market
• Woot
• Zappos
Website www.amazon.com
History
Amazon founder Jeff Bezos
Main article: History of Amazon
In 1994, Jeff Bezos incorporated Amazon. In May 1997, the organization
went public. The company began selling music and videos in 1998, at
which time it began operations internationally by acquiring online sellers of
books in United Kingdom and Germany. The following year, the
organization also sold video games, consumer electronics, home-
improvement items, software, games, and toys in addition to other items.
In 2002, the corporation started Amazon Web Services (AWS), which
provided data on Web site popularity, Internet traffic patterns and other
statistics for marketers and developers. In 2006, the organization grew its
AWS portfolio when Elastic Compute Cloud (EC2), which rents computer
processing power as well as Simple Storage Service (S3), that rents data
storage via the Internet, were made available. That same year, the
company started Fulfillment by Amazon which managed the inventory of
individuals and small companies selling their belongings through the
company internet site. In 2012, Amazon bought Kiva Systems to automate
its inventory-management business, purchasing Whole Foods
Marketsupermarket chain five years later in 2017.
Merchant partnerships
In 2000, U.S. toy retailer Toys "R" Us entered into a 10-year agreement
with Amazon, valued at $50 million per year plus a cut of sales, under
which Toys "R" Us would be the exclusive supplier of toys and baby
products on the service, and the chain's website would redirect to
Amazon's Toys & Games category. In 2004, Toys "R" Us sued Amazon,
claiming that because of a perceived lack of variety in Toys "R" Us stock,
Amazon had knowingly allowed third-party sellers to offer items on the
service in categories that Toys "R" Us had been granted exclusivity. In
2006, a court ruled in favor of Toys "R" Us, giving it the right to unwind its

29
agreement with Amazon and establish its own independent e-commerce
website. The company was later awarded $51 million in damages.
In 2001, Amazon entered into a similar agreement with Borders Group,
under which Amazon would co-manage Borders.com as a co-branded
service,[22]
Borders pulled out of the arrangement in 2007, with plans to
also launch its own online store.[23]
On October 18, 2011, Amazon.com announced a partnership with DC
Comics for the exclusive digital rights to many popular comics,
including Superman, Batman, Green Lantern, The
Sandman, and Watchmen. The partnership has caused well-known
bookstores like Barnes & Noble to remove these titles from their shelves.
In November 2013, Amazon announced a partnership with the United
States Postal Service to begin delivering orders on Sundays. The service,
included in Amazon's standard shipping rates, initiated in metropolitan
areas of Los Angeles and New York because of the high-volume and
inability to deliver in a timely way, with plans to expand
into Dallas, Houston, New Orleans and Phoenix by 2014.
In June 2017, Nike confirmed a "pilot" partnership with Amazon to sell
goods directly on the platform. As of October 11, 2017, AmazonFresh sells
a range of Booths branded products for home delivery in selected areas.
In September 2017, Amazon ventured with one of its sellers JV Appario
Retail owned by Patni Group which has recorded a total income of
US$ 104.44 million (₹ 759 crore) in financial year 2017–18.
In November 2018, Amazon reached an agreement with Apple Inc. to sell
selected products through the service, via the company and selected Apple
Authorized Resellers. As a result of this partnership, only Apple Authorized
Resellers may sell Apple products on Amazon effective January 4, 2019.
Products and services
Main article: List of Amazon products and services
Amazon.com's product lines available at its website include several media
(books, DVDs, music CDs, videotapes and software), apparel, baby
products, consumer electronics, beauty products, gourmet food, groceries,
health and personal-care items, industrial & scientific supplies, kitchen
items, jewelry, watches, lawn and garden items, musical
instruments, sporting goods, tools, automotive items and toys & games.
Amazon.com has a number of products and services available, including:
• AmazonFresh
• Amazon Prime
• Amazon Web Services

30
• Alexa
• Appstore
• Amazon Drive
• Echo
• Kindle
• Fire tablets
• Fire TV
• Video
• Kindle Store
• Music
• Music Unlimited
• Amazon Digital Game Store
• Amazon Studios
• AmazonWireless
Subsidiaries
Amazon owns over 40 subsidiaries, including Zappos, Shopbop,
Diapers.com, Kiva Systems (now Amazon Robotics), Audible, Goodreads,
Teachstreet, Twitch and IMDb.

32
Snapdeal is an Indian e-commerce company based in New Delhi, India.
The company was started by Kunal Bahl and Rohit Bansal in February
2010. As of 2014, Snapdeal had 3,00,000 sellers, over 3 crore products
across 800+ diverse categories from over 1,25,000 regional, national, and
international brands and retailers and a reach of 6,000 towns and cities
across the country.[3]
Investors in the company include SoftBank Corp, Ru-Net Holdings,
Tybourne Capital, PremjiInvest, Alibaba Group, Temasek
Holdings, Bessemer Venture Partners, IndoUS Ventures, Kalaari Capital,
Saama Capital, Foxconn Technology Group, Blackrock, eBay, Nexus
Ventures, Intel Capital, Ontario Teachers' Pension Plan, Singapore-based
investment entity Brother Fortune Apparel and Ratan Tata.[4]
In April 2015,
Snapdeal acquired FreeCharge for $400 million, but resold the mobile-
payments company in 2017.
Type of
business
Private
Type of site E-commerce
Available in English
Founded 2010; 9 years ago [1]
Headquarters New Delhi, India
Area served India
Founder(s) Kunal Bahl
Rohit Bansal

33
Industry Internet
Services Online shopping
Revenue ₹903
crore(US$130 million)
(2017)
Website Snapdeal
Alexa rank 1,025 (Jan 2019)[2]
Registration Required
Current status Active
Native
client(s) on
iOS, Android, Windows
In the year 2012-13, Snapdeal had said that it expected revenues of
about ₹600 crore (US$83 million). Betting big on the growth of mobile
commerce, Kunal Bahl, the CEO, said at the time that 15-20 per cent of the
sales on Snapdeal came through m-commerce. Snapdeal.com expected
the total sale of products traded on its platform to cross ₹2,000
crore(US$280 million) in the fiscal year 2013-14 helped by its robust
growth in the past two years and the growing popularity of e-commerce in
India. In June 2014, Snapdeal announced that it had achieved the
milestone of 1000 sellers its platform getting sales of over ₹1 crore. Jasper
Infotech Pvt. Ltd led Snapdeal registered a revenue growth of 56% to
₹1,457 crore from ₹933 crore, but incurred 150% increase in loss from
₹1,328 crore in the year ended 31 March 2016The year-to-March 2016
numbers includes the financials of digital payments platform Free charge,
which was acquired by Snapdeal in April 2015 There was a 40% drop in
revenue to ₹903 crore in the fiscal year ending in 2017.
Aamir Khan controversy[edit]

34
Snapdeal was criticized for Aamir Khan's statementduring a conversation
with Anant Goenka, Wholetime Director & Head — New Media, The Indian
Express, at the eighth edition of the Ramnath Goenka Excellence in
Journalism Awards. Snapdeal terminated Aamir Khan as a brand
ambassador in February 2016 after an official statement released in
response to the controversy. Aamir Khan had been hired as Snapdeal's
brand ambassador in February 2015 for its "Diwali Dil Ki Deal-wali"
campaign.
Merger
In August 2016, rumors surfaced through a VCCircle exclusive article that
Snapdeal was considering possibilities of mergers with its bigger
rivals Flipkart and Amazon. The speculations about a possible merger
became more concrete in April 2017 when a number of media houses
reported that Softbank, one of the major investors in Snapdeal, wanted the
company to merge with Flipkart. The discussions on merger
with Flipkart went on for a number of months and ended in July 2017 when
the deal failed to get approved by 100% of investors as required by the
terms put forth by Flipkart. Founders' opposition to the deal, several
indemnity clauses related to Snapdeal's financials and minority
stakeholders' discontentment over special payouts to Kalaari Capital and
Nexus Venture Partners, Snapdeal's early investors, were among the
many reasons that lead to the breakdown of the deal.[41]
This was followed
by Snapdeal's founders taking a decision to continue operating Snapdeal
as an independent company with Snapdeal 2.0 as their new vision.
However, amid the merger discussions, Freecharge, a mobile payments
company bought by Snapdeal in April 2015, was sold to Axis Bank for $60
million. Freecharge was originally acquired by Snapdeal for $400 million.

36
Sapno Ka Toffa is an online shop started by me. It started in November
2018.
Due to some reason old website is closed. And now we have more than
1300 followers from all India . And top in regional region. We deal in
trophies, personalized as well as customized gifts along with we are soon
going to deal in e- books which is an initiate for the poor children who
cannot afford costly semesters books. We have many branches all over
Odisha for gifts items.
We are top rated shop in Jharsuguda, having 30+ reviews recommend by
Google, even in back 1 quarter we have 2k + views on Google maps. Till
now we have completed 500+ successful orders.We have added some
images from Google business analysis..

38
CHAPTER:- 3 All About
E-commerce and Online
Business
E-commerce is buying and selling goods and services over the Internet. E-
commerce is part of e-business as specified in Chapter 1. E-business is a
structure that includes not only those transactions that center on
buying and selling goods and services to generate revenue, but also
those transactions that support revenue generation. These activities
include generating demand for goods and services, offering sales
support and customer service, or facilitating communications between
business partners.
By the help of the flexibility offered by computer networks and the availability of
the Internet , E-commerce develops on traditional commerce . E-commerce creates
new opportunities for performing profitable activities online. It promotes easier
cooperation between different groups: businesses sharing information to improve
customer relations; companies working together to design and build new
products/services; or multinational company sharing information for a major
marketing campaign.
The followings are the business uses of the Internet. These
services and capabilities are a core part of a successful e-
commerce program. They are either parts of a value chain or are
included as supporting activities:
• Buying and selling products and services
• Providing customer service
• Communicating within organizations
• Collaborating with others
• Gathering information (on competitors, and so forth)
• Providing seller support
• Publishing and distributing information
• Providing software update and patches

39
Airline and travel tickets, banking services, books, clothing,
computer hardware, software, and other electronics, flowers and
gifts are some popular products and services that can be purchased
online. Several successful e-businesses have established their
business models around selling these products and services. E-
commerce has the potential to generate revenue and reduce costs
for businesses and entities. Marketing, retailers, banks, insurance,
government, training, online publishing, travel industries are some
of the main recipients of e-commerce. For instance, banks use the
Web for diverse business practices and customer service.
Appendix I lists companies using e-commerce, stressing the
products andservices
that are most suitable for web transactions.
3.2 Comparing Traditional Commerce and E-Commerce
In e-commerce there may be no physical store, and in most cases
the buyer and seller do not see each other. The Web and
telecommunications technologies play a major role, in e-
commerce. Although the goals and objectives of both e-
commerce and traditional commerce are the same—selling
products and services to generate profits—they do it quite
differently. Traditional commerce presents product information
by using magazines, flyers. On the other hand, e- commerce
presents by using web sites and online catalogs. Traditional
commerce communicates by regular mail, phone yet e-commerce
by e-mail.
Traditional commerce checks product availability by phone, fax
and letter. However, e-commerce checks by e-mail, web sites,
and internal networks. Traditional commerce generates orders
and invoices by printed forms but e- commerce by e-mail, and
web sites. Traditional commerce gets product acknowledgments
by phone and fax. On the other hand, e-commerce gets by e-
mail, web sites, and EDI.
It is important to notice that currently many companies operate
with a mix of traditional and e-commerce. Just about all medium
and large organizations have some kind of e-commerce presence.
The followings are some examples, Toys-R-Us, Wal-Mart Stores,
GoldPC, and Vatan Computer.
E-Commerce and Value Chain
Typical business organizations (or parts within a business

40
organization) design , produce , market , deliver , and support its
product(s)/service(s). Each of these activities adds cost and value
to the product/service that is eventually distributed to the
customer. The value-chain consists of a series of activities
designed to satisfy a business need by adding value (or cost) in
each phase of the process. In addition to these primary activities
that result in a final product/service, supporting activities in this
process also should be included:
• Managing company infrastructure
• Managing human resources
• Obtaining various inputs for each primary activity
• Developing technology to keep the business competitive
For instance, in a furniture manufacturing company, the company
buys wood (raw materials) from a logging company and then
converts the wood into chair (finished product); chairs are
shipped to retailers, distributors, or customers. The company
markets and services these chairs products. Those are the primary
activities (value-chain) that adds value and result in a final
product/service for the company. Value-chain analysis may
highlight the opportunity for the company to manufacture
products directly . This means, for furniture manufacturer, it may
enter in the logging business directly or through partnership with
others. The value chain may continue after delivering chairs to
the furniture store. The store, by offering other products/services
and mixing and matching
The Internet can increase the speed and accuracy of
communications between suppliers , distributors , and customers
. Furthermore, the Internet's low cost allows companies of any
size to be able to take advantage of value-chain integration. E-
commerce may improve value chain by identifying new
opportunities for cost reduction . For instance, using e-mail to
notify customers instead of using regular mail helps for reducing
cost . Selling to distant customers using the company web site
may allow revenue improvement or generation . These sales may
not have been materialized otherwise or selling digital products
such as songs or computer software or distributing software
through the Web. Offering online customer service or new sales
channel identification helps for product/service improvement.
Dell Computer generates a large portion of its revenue through
the Web by eliminating the middleman. Cisco Systems sells much

41
of its networking hardware and software over the Web, improving
revenue and reducing cost. United Parcel Service (UPS) and
Federal Express use the Internet to track packages that result in
enhanced customer service
3.4 E-COMMERCE BUSİNESS MODELS
As it is mentioned in Chapter1, the ultimate goal of an e-business is to generate re
and make a profit, similar to traditional businesses. It is factual that the Interne
improved productivity for almost all the organizations that are using it. Nevertheles
bottom line is that productivity must be converted to profitability. To ac
profitability as the final goal, different e-businesses or e-commerce sites po
themselves in different parts of the value-chain. To generate revenue, an e-bu
either sells products/services or shortens the link between the suppliers and consu
Many business-to-business models try to eliminate the middleman by using the W
deliver products/services directly to their customers. By doing this they may be ab
offer cheaper products and better customer service to their customers. The end
would be a differentiation between them and their competitors, increased market s
and increased customer loyalty. Products sold by e-businesses could be either tradi
products, such as books and clothing, or digital products, such as songs, com
software, or electronic books.
E-commerce models are either an extension or revision of traditional
business models, such as advertising model, or a new type of business
model that is suitable for the Web implementation, such as info-
mediary. Merchant, brokerage, advertising, mixed, info-mediary,
subscription are the most popular e-commerce models: [2]
• Merchant model: This model b asically transfers the old retail model
to the e-commerce world by using the Internet. There are different
types of merchant models. The most common type of merchant
model is similar to a traditional business model that sells goods and
services over the Web. Amazon.com is a good example of this type.
An e-business similar to Amazon.com utilizes the services and
technologies offered by the Web to sell products and services directly
to the consumers. By offering good customer service and reasonable
prices, these companies establish a brand on the Web. The merchant
model is also used by many traditional businesses to sell goods and
services over the Internet. Dell, Cisco Systems, and Compaq are
popular examples. These companies eliminate the middleman by
generating a portion of their total sale over the Web and by accessing

42
difficult-to-reach customers. An example that uses this model is
Amazon.com Corporation. [ Appendix II ]
• Brokerage model: T he e-business brings the sellers and buyers
together on the Web and collects a commission on the transactions
by using this model. The best example of this type is an online
auction site such as eBay, gittigidiyor.com which can generate
additional revenue by selling banner advertisement on their sites.
• Advertising model: This model is an extension of traditional
advertising media, such as television and radio. Search engines and
directories such as Google and Yahoo provide contents (similar to
radio and TV) and allow the users to access this content for free. By
creating significant traffic, these e-businesses are able to charge
advertisers for putting banner ads or leasing spots on their sites.
• Mixed model: This model generates revenue both from advertising
and subscriptions. Internet service providers (ISPs) such as America
On-line (AOL), and SuperOnline generate revenue from advertising
and their customers' subscription fees for Internet access.
Info-mediary model: E-businesses that use this model collect information
on consumers and businesses and then sell this information to interested
parties for marketing purposes. For instance, bizrate.com collect
information related to the performance of other sites and sells this
information to advertisers. Netzero.com provides free Internet access; in
behavior of customers. This information is later sold to advertisers for
direct marketing. eMachines.com offers free PCs to its customers for the
same purpose.
• Subscription model: An e-business might sell digital products to its
customers, by using this model. The Wall Street Journal and Consumer
Reports are two examples. Sreeet.com, AjansPress.com is another
example of this model that sells business news and analysis based on
subscription.
The several types of e-commerce in use today are classified based on the
nature of the transactions: business-to-consumer (B2C), business-to-
business (B2B), consumer-to-consumer (C2C), consumer-to-business
(C2B), and non-business and government, and organizational (intra-
business).
3.4.1 BUSINESS-TO-CONSUMER E-COMMERCE

43
In B2C e-commerce, businesses sell directly a diverse group of products and
services to customers . In addition to pure B2C e-commerce players such as
Amazon.com, and hepsiburada.com other traditional businesses have
entered the virtual marketplace by establishing comprehensive web sites and
virtual storefronts. In these cases, e-commerce supplements the traditional
commerce by offering products and services through electronic channels.
Wal-Mart Stores, and the Gap are examples of companies that are very
active in B2C e-commerce. Some of the advantages of these e-commerce
sites and companies include availability of physical space (customers can
physically visit the store), availability of returns (customers can return a
purchased item to the physical store), and availability of customer service in
these physical stores. Figure 3.1 illustrates a B2C relationship. In the figure
ISP, means Internet service provider.
A Business-to-Consumer e-Commerce Cycle
There are five major activities involved in conducting B2C e-commerce.
The B2B e- commerce model uses a similar cycle,
Major activities for B2C e-commerce.
1. Info sharing: A B2C e-commerce may use some or all of the
following applications and technologies to share information with
customers: Online advertisements, e-mail, newsgroups/discussion
groups, company web site, online catalogs, message board
systems, bulletin board systems,multiparty conferencing.
2. Ordering: A customer may use electronic e-mail or forms available
on the company's web site to order a product from a B2C site. A
mouse click sends the essential information relating to the
requested piece(s) to the B2Csite.
3. Payment: Credit cards, electronic checks, and digital cash are
among the popular options that the customer has as options for
paying for the goods or services.
4. Fulfillment. F ulfillment that is responsible for physically
delivering the product or service from the merchant to the
customer. In case of physical products(books, videos, CDs), the
filled order can be sent to the customer using regular mail, MNG,
Yurtiçi Cargo, FedEx, or UPS. As expected for faster delivery, the
customer has to pay additional money. In case ofdigital products
(software, music, electronic documents), the e-business uses
digital documentations to assure security, integrity, and privacy of
the product. It may also include delivery address verification and

44
digital warehousing that stores digital products on a computer
until they are delivered. The e-business can handle its own
fulfillment operations or outsource this function to third parties
with moderate costs.
Service and support: It is much cheaper to maintain current
customers than to attract new customers. For this reason, e-
businesses should do whatever that they can in order to provide
timely, high-quality serviceand support to their customers. As e-
commerce companies lack a traditional physical presence and
need other ways to maintain current customers, service and
support are even more important in e-commerce than traditional
businesses. The following are some examples of technologies and
applications used for providing service and support: (E-mail
confirmation, periodic news flash, and online surveys may also be
used as marketing tools.)
o E-mail confirmation: In most cases, the e-mail confirmation
provides the customer with a confirmation number that the
customer can use to trace the product or service. E-mail
confirmation promises the customer that a particular order
has been processed and that the customer should receive the
product/ service by a certain date.
o Periodic news flash: They used to give customers with the
latest information on the company or on a particular
product oroffering.
o Online Surveys: Their results can assist the e-commerce
site to provide better services and support to its customers
based onwhat has been collected in the survey, even
though online surveys are mostly used as a marketing tool.
o Help desks: They provide answers to common problems or
provide advice for using products or services. They are
used for the same purpose as in traditional businesses.
Assured secure transactions & assured online auctions: They
guarantee customers that the e-commerce site covers all the security
and privacy issues. As many customers still do not feel comfortable
conducting online business, the security and privacy services are
especially important. Business-to-Business e-Commerce
Business-to-Business e-commerce holds electronic transactions among
and between businesses. The Internet and reliance of all businesses upon
other companies for supplies, utilities, and services has enhanced the
popularity of B2B e-commerce and made B2B the fastest growing
segment within the e-commerce environment. In recent years extranets
(more than one intranet) have been effectively used for B2B operations.

45
B2B e-commerce creates dynamic interaction among the business
partners; this represents a fundamental shift in how business will be
conducted in the 21st century.
Oracle, PeopleSoft, SAP, Broadvision, Commerce One,
Heatheon/Webmd, 12 Technologies, Inc., Ariba , Aspect Development,
Baan, BEA Systems, Internet Capital Group, VerticalNet, Vignette are
some of the major vendors of e-commerce and B2B solutions [1].
Companies using B2B e-commerce relationship observe cost savings by increasing
the speed, reducing errors, and eliminating many manual activities. Wal-Mart
Stores is an example for B2B e-commerce. Wal-Mart's major suppliers (e.g.,
Proctor & Gamble, Johnson and Johnson, and others) sell to Wal-Mart Stores
electronically; all the paperwork is handled electronically. These suppliers can
access online the inventory status in each store and refill needed products in a
timely manner. In a B2B environment, purchase orders, invoices, inventory
status, shipping logistics, and business contracts handled directly through the
network result in increased speed, reduced errors, and cost savings.[4] B2B e-
commerce reduces cycle time, inventory, and prices and enables business
partners to share relevant, accurate, and timely information. The end result is
improved supply-chain management among business partners [5]. The following
figure illustrates a generic B2B relationship.
The following paragraphs provide brief descriptions of the advantages of
B2B e- commerce:
• A B2B e-commerce lowers production cost by eliminating
manylabor- intensive tasks.
• More timely information is achieved by the formation of a
direct online connection in the supply chain.
• Accuracy is increased because fewer manual steps are involved.
• Cycle time improves because flow of information and products
between business partners is made simpler. Since, raw materials
are received faster and information related to customer demands
is more quicklytransferred. Naturally this close communication
between the business partners improves overall communication .
Increased communications results in improved inventory management and
control. Major Models of Business-to-Business e-Commerce
The three major B2B e-commerce models are determined by seller,
buyer,or intermediary (third party) who controls the marketplace.

46
Consequently, the following four marketplaces have been created. Each
model has specific characteristics and is suitable for a specific business:
• Seller-controlled marketplace: This is t he most popular type of
B2B model for both consumers and businesses. In this model the
sellers who provide to fragmented markets such as chemicals,
electronics, and auto components come together to generate a
common trading place for the buyers. While the sellers aggregate
their market power, it simplifies the buyers search for alternative
sources. Businesses and some time consumers use the seller's
product catalog to order products and services online.
One popular application of this model is e-procurement , which
significantly streamlines the traditional procurement process by using
the Internet and web technologies. E-procurement is radically changing
the buying process by allowing employees throughout the organization
to order and receive supplies/services from their desktop with just a
few mouse clicks. This results in major cost savings and improves the
timeliness of procurement processes and the strategic alliances between
suppliers and participating organizations. E-procurement may qualify
customers for volume discounts or special offers. E-procurement
software may make it possible to automate some buying and selling,
resulting in reduced costs and improved processing speeds. The
participating companies expect to be able to control inventories more
effectively, reduce purchasing-agent overhead, and improve
manufacturing cycles. E-procurement is expected to be integrated into
standard business systems with the trend toward computerized supply-
chain management.
• Buyer-controlled marketplace: This model is used by large
companies with significant buying power or a consortium of several
large companies. The consortium among Ford, General Motors and
Daimler Chrysler is a good example of this model. In this model a
buyer or a group of buyers opens an electronic marketplace and
invites sellers to bid on the announced products or RFQs (request
for quotation). Using this model the buyers are looking to
efficiently manage the procurement process, lower administrative
cost, and exercise uniform pricing. Companies are making
investments in a buyer- controlled marketplace with the goal of
establishing new sales channels that increase market presence and
lower the cost of each sale. By participating in a buyer-controlled
marketplace a seller could perform the following:
o Get better understanding of buying behaviors

47
o Carry out pre-sales marketingCarry out sales transactions
o Carry out post-sales analysis
o Reduce order placement and delivery cycle time
o Offer an alternative sales channel
o Automate the order management process
o Automate the fulfillment process
• Third-party exchanges marketplace: A third-party-controlled
marketplace model is controlled by a third party not by sellers or
buyers. A third-party- controlled marketplace model offers
suppliers a direct channel of communication to buyers through
online storefronts. The interactive procedures within the
marketplace contain features like product catalogs, request for
information (RFI), rebates and promotions, broker contacts, and
product sample requests. The marketplace makes revenue from
the fees generated by matching buyers and sellers. These
marketplaces are usually active either in a vertical or horizontal
market .
A vertical market focuses on a specific industry or market. The following
are some examples of this type: PaperExchange.com (supplies for
publishers), PlasticsNet.com (raw materials and equipment),
SciQuest.com (laboratory products), VerticalNet.com (Provide end-to-
end e-commerce solutions that arc targeted at distinct business
segments)
A horizontal market concentrates on a specific function or business
process. They provide the same function or automate the same business
process across different industries. The following are some examples:
Employee.com (employee benefits administration), CtSpace.com ( web-
based collaboration, business process management and document
management solutions)
• Trading partner agreements: The main objectives of the trading
partner agreements B2B e-commerce model are to automate the
processes for negotiating and enforcing contracts between
participating businesses. This relatively new model is gaining
popularity. This model is expected to become more common as
extensible markup language (XML) and the e- business XML
initiative (ebXML) become more accepted. This worldwide project
is attempting to standardize the exchange of e-business data via
XML, including electronic contracts and trading partner
agreements. Using this model enables customers to submit
electronic documents that previously required hard-copy
signatures via the Internet. As soon as act passed by the Turkish

48
Governmet that gives digital signatures the same legal validity as
handwritten signatures, this model will also be very popular in
Turkey too.
The main advantage of XML (extensible markup language) over hypertext markup
language (HTML) is that it can assign data type definitions to all the data included
in a page. This allows the Internet browser to select only the data requested in
any given search, leading to ease of data transfer and readability because only the
suitable data are transferred. This may be particularly useful in m-commerce
(mobile commerce); XML loads only needed data to the browser, resulting in
more efficient and effective searches. This would significantly lower traffic on the
Internet and speed up delay times during peak hours. XML-based B2B trading
partner agreements configurations can be business contracts, shipping logistics,
inventory status or purchase order , for example.
3.4.2 BUSİNESS-TO-BUSİNESS E- COMMERCE
ABusiness-to-Business e-commerce holds electronic transactions among
and between businesses. The Internet and reliance of all businesses
upon other companies for supplies, utilities, and services has enhanced
the popularity of B2B e-commerce and made B2B the fastest growing
segment within the e-commerce environment. In recent years extranets
(more than one intranet) have been effectively used for B2B
operations. B2B e-commerce creates dynamic interaction among the
business partners; this represents a fundamental shift in how business
will be conducted in the 21st century.
Oracle, PeopleSoft, SAP, Broadvision, Commerce One, Heatheon/Webmd,
12 Technologies, Inc., Ariba , Aspect Development, Baan, BEA Systems,
Internet Capital Group, VerticalNet, Vignette are some of the major
vendors of e-commerce and B2B solutions [1].
Companies using B2B e-commerce relationship observe cost savings by increasing
the speed, reducing errors, and eliminating many manual activities. Wal-Mart
Stores is an example for B2B e-commerce. Wal-Mart's major suppliers (e.g.,
Proctor & Gamble, Johnson and Johnson, and others) sell to Wal-Mart Stores
electronically; all the paperwork is handled electronically. These suppliers can
access online the inventory status in each store and refill needed products in a
timely manner. In a B2B environment, purchase orders, invoices, inventory

49
status, shipping logistics, and business contracts handled directly through the
network result in increased speed, reduced errors, and cost savings.[4] B2B e-
commerce reduces cycle time, inventory, and prices and enables business
partners to share relevant, accurate, and timely information. The end result is
improved supply-chain management among business partners [5]. The following
figure illustrates a generic B2B relationship.
The following paragraphs provide brief descriptions of the advantages of B2B e-
commerce:
• A B2B e-commerce lowers production cost by eliminating
manylabor- intensive tasks.
• More timely information is achieved by the formation of a
direct online connection in the supply chain.
• Accuracy is increased because fewer manual steps are involved.
• Cycle time improves because flow of information and products
between business partners is made simpler. Since, raw materials
are received faster and information related to customer demands
is more quicklytransferred.
• Naturally this close communication between the business partners
improves overall communication .
Increased communications results in improved inventory management and
control.
Major Models of Business-to-Business e-Commerce
The three major B2B e-commerce models are determined by seller, buyer,or
intermediary (third party) who controls the marketplace. Consequently, the
following four marketplaces have been created. Each model has specific
characteristics and is suitable for a specific business:
• Seller-controlled marketplace: This is t he most popular type of
B2B model for both consumers and businesses. In this model the
sellers who provide to fragmented markets such as chemicals,
electronics, and auto components come together to generate a
common trading place for the buyers. While the sellers aggregate
their market power, it simplifies the buyers search for alternative
sources. Businesses and some time consumers use the seller's
product catalog to order products and services online.

50
One popular application of this model is e-procurement , which significantly
streamlines the traditional procurement process by using the Internet and web
technologies. E-procurement is radically changing the buying process by allowing
employees throughout the organization to order and receive supplies/services
from their desktop with just a few mouse clicks. This results in major cost savings
and improves the timeliness of procurement processes and the strategic alliances
between suppliers and participating organizations. E-procurement may qualify
customers for volume discounts or special offers. E-procurement software may
make it possible to automate some buying and selling, resulting in reduced costs
and improved processing speeds. The participating companies expect to be able
to control inventories more effectively, reduce purchasing-agent overhead, and
improve manufacturing cycles. E-procurement is expected to be integrated into
standard business systems with the trend toward computerized supply-chain
management.
• Buyer-controlled marketplace: This model is used by large
companies with significant buying power or a consortium of several
large companies. The consortium among Ford, General Motors and
Daimler Chrysler is a good example of this model. In this model a
buyer or a group of buyers opens an electronic marketplace and
invites sellers to bid on the announced products or RFQs (request
for quotation). Using this model the buyers are looking to
efficiently manage the procurement process, lower administrative
cost, and exercise uniform pricing. Companies are making
investments in a buyer- controlled marketplace with the goal of
establishing new sales channels that increase market presence and
lower the cost of each sale. By participating in a buyer-controlled
marketplace a seller could perform the following:
o Get better understanding of buying behaviors
o Carry out pre-sales marketing
o Carry out sales transactions
o Carry out post-sales analysis
o Reduce order placement and delivery cycle time
o Offer an alternative sales channel
o Automate the order management process
o Automate the fulfillment process
Third-party exchanges marketplace: A third-party-controlled
marketplace model is controlled by a third party not by sellers or
buyers. A third-party- controlled marketplace model offers
suppliers a direct channel of communication to buyers through
online storefronts. The interactive procedures within the
marketplace contain features like product catalogs, request for

51
information (RFI), rebates and promotions, broker contacts, and
product sample requests. The marketplace makes revenue from the
fees generated by matching buyers and sellers. These marketplaces
are usually active either in a vertical or horizontal market .
A vertical market focuses on a specific industry or market. The following
are some examples of this type: PaperExchange.com (supplies for
publishers), PlasticsNet.com (raw materials and equipment),
SciQuest.com (laboratory products), VerticalNet.com (Provide end-to-
end e-commerce solutions that arc targeted at distinct business
segments)
• A horizontal market concentrates on a specific function or business
process. They provide the same function or automate the same
business process across different industries. The following are
some examples: Employee.com (employee benefits
administration), CtSpace.com ( web-based collaboration, business
process management and document management solutions)
Trading partner agreements: The main objectives of the trading
partner agreements B2B e-commerce model are to automate the
processes for negotiating and enforcing contracts between
participating businesses. This relatively new model is gaining
popularity. This model is expected to become more common as
extensible markup language (XML) and the e- business XML
initiative (ebXML) become more accepted. This worldwide project
is attempting to standardize the exchange of e-business data via
XML, including electronic contracts and trading partner
agreements. Using this model enables customers to submit
electronic documents that previously required hard-copy
signatures via the Internet. As soon as act passed by the Turkish
Governmet that gives digital signatures the same legal validity as
handwritten signatures, this model will also be very popular in
Turkey too.
The main advantage of XML (extensible markup language) over
hypertext markup language (HTML) is that it can assign data type
definitions to all the data included in a page. This allows the
Internet browser to select only the data requested in any given
search, leading to ease of data transfer and readability because only
the suitable data are transferred. This may be particularly useful in
m-commerce (mobile commerce); XML loads only needed data to
the browser, resulting in more efficient and effective searches. This
would significantly lower traffic on the Internet and speed up delay

52
times during peak hours. XML-based B2B trading partner agreements
configurations can be business contracts, shipping logistics,
inventory status or purchase order , for example. Using C2C e-
commerce, consumers sell directly to other consumers using the Internet and
web technologies. Individuals sell a wide variety of services/products on the
Web or through auction sites such as eBay.com, and gittigidiyor.com through
classified ads or by advertising. Figure 3.3 illustrates a general C2C e-
commerce relationship. Consumers are also able to advertise their products
and services in organizational intranets and sell them to other employees.
3.4.4 CONSUMER-TO-BUSINESS E-COMMERCE
Consumer-to-business (C2B) e-commerce that involves individuals
selling to businesses may include a service/product that a consumer
is willing to sell. Individuals offer certain prices for specific
products/services. Companies such as pazaryerim.com and
mobshop.com are examples of C2B. Figure 2-4 shows a C2B e-
commerce relationship.
3.4.4 NON-BUSINESS AND GOVERNMENT E-COMMERCE
Political, social and not-for-profit organizations also use e-commerce
applications for various activities, such as fundraising and political
forums. These organizations also use e-commerce for customer
service and for purchasing to decrease cost and get better speed.
Universities are using e-commerce applications extensively for
delivering their educational products and services on a global scale.
The e-commerce applications in government and many non- business
organizations are on the rise.
3.4.5 INTRA-BUSINESS E-COMMERCE
The organization intranets provide the right platform for intra-
business e- commerce. Intra-business e-commerce involves all the e-
commerce-related activities that take place within the organization.
These activities may include exchange of information, goods, or
services among the employees of an organization. This may include
selling organization products/services to the employees, offering
human resources services, conducting training programs, and much
more.

53
Now days, just picking up a phone and accessing a web site you can
order a product. At the core of these new services are voice
recognition and text-to- speech technologies that have improved
significantly during the past decades. Customers will be able to speak
the name of the web site or service they want to access and the
system will recognize the command and respond with spoken words.
By using voice commands, consumers soon will be able to search a
database by product name and locate the merchant with the most
competitive prices.
One method to conduct voice-based e-commerce is to use digital
wallets (e- wallets) online. In addition to financial information these
wallets include other related information, such as the customer's
address, billing information, driver's license, and so forth. This
information can be conveniently transferred online. Digital wallets
are created through the customers' PCs and used for voice-based e-
commerce transactions. Security features for voice-based e-
commerce are expected to include the following: Voice recognition,
so that authorizations have to match a specific voice, call
recognition, so that calls have to be placed from
specific mobile devices. Voice-based e-commerce will be suitable for
applications such as the following: Receiving sports scores, finding
directions to a new restaurant, reserving tickets for local movies,
buying a book.
There are already several voice portals on the market. The
following are among the popular ones: InternetSpeech.com (Figure
3.5), BeVocal.com, Tellme.com.
Appendix I
Some Companies Using e-Commerce [1]
Amazon.com provides access to books music CDs, electronics, software, toys,
video games, prescription drugs, and much more electronically.
www.amazon.com
American Express successfully uses e-commerce for credit card
transactions. www. americanexpress .com

54
Apple Computer sells computers online. www.apple.com
Auto-by-Tel sells cars over the Web. www.autobytel.com
Cisco Systems sells data communications components over the Web. www. cisco
.com
Dell Computer and Gateway sell computers through their web sites and allow
customers to configure their systems on the Web and then purchase them. www.
dell .com , www. gateway
.com
Drugstore.com and CVS.com refill and sell new drugs and vitamins and
other health and beauty products online. www. drugstore . com ,
www.cvs.com
Epicurious sells exotic foods over the Web. www. epicurious .com
Peapod sells groceries over the Web. www. peapod .com
Proctor & Gamble and IBM conduct order placements electronically.
www.pg.com , www. ibm .com
Appendix II
Industry Connection: Amazon.Com Corporation [1]
Amazon.com is one of the leaders in B2C e-commerce. Amazon.com opened its
virtual stores in July 1995 with a mission to use the Internet to transform book
buying into the fastest and easiest shopping experience possible. Amazon.com
offers numerous products and services including books, CDs, videos, DVDs.
toys, games, electronics, free electronic greeting cards, online auctions, and
much more. In addition to an extensive catalog of products, Amazon.com offers
a wide variety of other shopping services and partnership opportunities.

55
Amazon.com's business model is based on the merchant model . By creating
customer accounts, using shopping carts, and using the 1-click technology,
Amazon.com makes the shopping experience fast and convenient. E-mail is
used for order confirmation and customer notification when new products that
suit a particular customer become available. Allowing customers to post their
own book reviews, creates an open forum between the storefront and its
customers. Using Amazon.com a prospective shopper can do the following:
• Search for books, music, and many other products and services
• Browse virtual aisles in hundreds of product categories from audio
books, jazz, and video documentaries to coins and stamps available for
auction.
• Get instant personalized recommendations based on the shopper's prior
purchases as soon as the shopper logs on.
• Sign up for the Amazon.com e-mail subscription service to receive the
latest reviews of new titles in categories that interest the customer.
• Amazon.com offers a safe and secure shopping experience by
guaranteeing its shopping and auction services. It also offers 24-hour-a-
day, 7-days-a-week help desk services to assist shoppers who
experience difficulties.
How to Start a Small Business Online
There is a proven sequence of steps you can follow to guarantee your success
when you're starting a small business online. I've seen thousands of people start
and grow successful businesses by doing the following:
1. Find a need and fill it.
2. Write copy that sells.
3. Design and build an easy-to-use website.
4. Use search engines to drive traffic to your site.
5. Establish an expert reputation for yourself.
6. Follow up with your customers and subscribers with email.
7. Increase your income through back-end sales and upselling.
Anyone, from newbie to seasoned online entrepreneur, can benefit from this
process in learning how to start a business online.
Step 1: Find a need and fill it.

56
Most people who are just starting out make the mistake of looking for a product
first, and a market second.
To boost your chances of success, start with a market. The trick is to find a group
of people who are searching for a solution to a problem, but not finding many
results. The internet makes this kind of market research easy:
• Visit online forums to see what questions people ask and what problems
they're trying to solve.
• Do keyword research to find keywords that a lot of people are searching, but
for which not many sites are competing.
• Check out your potential competitors by visiting their sites and taking note
of what they're doing to fill the demand. Then you can use what you've
learned and create a product for a market that already exists -- and do it
better than the competition.
Step 2: Write copy that sells.
There's a proven sales copy formula that takes visitors through the selling process
from the moment they arrive to the moment they make a purchase:
1. Arouse interest with a compelling headline.
2. Describe the problem your product solves.
3. Establish your credibility as a solver of this problem.
4. Add testimonials from people who have used your product.
5. Talk about the product and how it benefits the user.
6. Make an offer.
7. Make a strong guarantee.
8. Create urgency.
9. Ask for the sale.
Throughout your copy, you need to focus on how your product or service is
uniquely able solve people's problems or make their lives better. Think like a
customer and ask "What's in it for me?"
Step 3: Design and build your website.
Once you've got your market and product, and you've nailed down your selling
process, now you're ready for your small-business web design. Remember to keep
it simple. You have fewer than five seconds to grab someone's attention --
otherwise they're gone, never to be seen again. Some important tips to keep in
mind:

57
• Choose one or two plain fonts on a white background.
• Make your navigation clear and simple, and the same on every page.
• Only use graphics, audio or video if they enhance your message.
• Include an opt-in offer so you can collect e-mail addresses.
• Make it easy to buy -- no more than two clicks between potential customer
and checkout.
• Your website is your online storefront, so make it customer-friendly.
Step 4: Use search engines to drive targeted buyers to your site.
Pay-per-click advertising is the easiest way to get traffic to a brand-new site. It has
two advantages over waiting for the traffic to come to you organically. First, PPC
ads show up on the search pages immediately, and second, PPC ads allow you to
test different keywords, as well as headlines, prices and selling approaches. Not
only do you get immediate traffic, but you can also use PPC ads to discover your
best, highest-converting keywords. Then you can distribute the keywords
throughout your site in your copy and code, which will help your rankings in the
organic search results.
Step 5: Establish an expert reputation for yourself.
People use the internet to find information. Provide that information for free to
other sites, and you'll see more traffic and better search engine rankings. The secret
is to always include a link to your site with each tidbit of information.
• Give away free, expert content. Create articles, videos or any other content
that people will find useful. Distribute that content through online article
directories or social media sites.
• Include "send to a friend" links on valuable content on your website.
• Become an active expert in industry forums and social networking sites
where your target market hangs out.
You'll reach new readers. But even better, every site that posts your content will
link back to yours. Search engines love links from relevant sites and will reward
you in the rankings.
Step 6: Use the power of email marketing to turn visitors into buyers.

58
When you build an opt-in list, you're creating one of the most valuable assets of
your online business. Your customers and subscribers have given you permission
to send them email. That means:
• You're giving them something they've asked for.
• You're developing lifetime relationships with them.
• The response is 100 percent measurable.
• Email marketing is cheaper and more effective than print, TV or radio
because it's highly targeted.
Anyone who visits your site and opts in to your list is a very hot lead. And there's
no better tool than email for following up with those leads.
Step 7: Increase your income through back-end sales and upselling.
One of the most important internet marketing strategies is to develop every
customer's lifetime value. At least 36 percent of people who have purchased from
you once will buy from you again if you follow up with them. Closing that first
sale is by far the most difficult part -- not to mention the most expensive. So use
back-end selling and upselling to get them to buy again:
• Offer products that complement their original purchase.
• Send out electronic loyalty coupons they can redeem on their next visit.
• Offer related products on your "Thank You" page after they purchase.
Reward your customers for their loyalty and they'll become even more loyal.
The internet changes so fast that one year online equals about five years in the real
world. But the principles of how to start and grow a successful online business
haven't changed at all. If you're just starting a small business online, stick to this
sequence. If you've been online awhile, do a quick review and see if there's a step
you're neglecting, or never got around to doing in the first place. You can't go
wrong with the basics.
9 Reasons Your Offline Business Must Have an
Online Presence
Why You Should Start Doing Business Online

59
Though less and less common these days, a common question that
traditional "brick and mortar" business owners ask is: Why should I take my
traditional company online?
First of all, let's clarify something. In the sense of this article a “traditional
company” is one with a physical location and sells either in person, by
phone, or mail; essentially a traditional "bricks-and-mortar" business. They
may or may not have walk-in customers. Essentially, a business that is not
selling physical products exclusively online, like an e-commerce company.
While in many cases, the steps for setting up an online presence for a
bricks and mortar business are very similar to those if you wanted to start
an online business, there are some things that make an online presence
for a bricks and mortar business unique.
There is much said about doing business on the internet or “putting your
business online”. To many it may just sound too complicated or too risky.
But there are many good reasons to begin selling (and running your
business) online. Here are the top nine reasons you should establish and
online presence for your offline business:
9 Reasons You Should Start Doing Business Online
1. Improving Your Company Image
This alone should be enough reason to start a new website and begin
selling online. It's an extremely important factor considering that without a
website, blog, or online presence prospective clients could begin to wonder
how serious you are about business. Today, companies of all sizes and
industries are establishing a successful online presence.
If you don't have an online presence (and a professional one to boot) then
you can't expect your prospects to take you seriously and you will lose
business to competitors that do have an effective online presence.
2. 24/7 365 Hour Availability

60
While some fast food restaurants, grocery stores, and gas stations manage
24-hour service, it is impossible for most businesses. That is, without the
internet. A key benefit to having an e-commerce website, is that your
clients and prospects can read about your products and place orders at
anytime— day or night. On regular business days or holidays. Imagine
what being open 3-4 times longer could do for your business.
Even if you have a traditional offline services type business you can
generate leads and inquiries while you are closed and followup with those
prospects and customers once you open the next day.
3. Better Customer Support
The internet allows you to answer questions, give sales webinars, and
solve customer problems—all without taking any of your time. Create a
video, a product spec sheet or a FAQ (frequently asked question) section
once, and you can direct clients to that information for years. Not only does
it save you time, but you’ll be providing better service. Your clients and
prospects are looking for specific information, such as:
• Before they make a buying decision
• To solve a problem with an existing purchase
• Researching alternatives before making a buying decision
With an online presence you can give them just the information that they
are looking for, and just when they are looking for it. This means less
phone calls with technical questions and more sales.
Email marketing is one of the most effective ways to develop a relationship
and increase sales.
4. Very Low Start-up Costs
Starting out online means very low startup costs. You have no buildings to
construct, no vehicles to buy and few (if any) staff to hire. Simply build your
site and start selling. If you are already selling offline then the transition can
be very smooth. You continue selling the same products that you know and
have a good supply of. Putting your company online simply gives you a
new source of customers.
The reality is you can outsource a lot of the technical stuff and even things
such as social media marketing.

61
While you could spend tens of thousands of dollars developing the best
website and e-commerce solution many of your competitors will be doing it
on a shoestring. A good website can be designed simply and for very little
money.
Using a free platform like a self-hosted WordPress blog and a professional
quality premium theme ($70 - $200) you can build a professional site by
yourself. Some web hosting companies offer free site building tools.
With a good WordPress theme, it is possible for you to design your own
site and do it with (almost) no coding.
To get started on a shoestring budget, expect to pay anywhere from a few
hundred dollars to a few thousand. The basic expenses include web
hosting, WordPress theme, domain name, and email marketing
autoresponder service. Once its all set up it can run on virtual autopilot.
5. The Internet Was Made for Business
The beauty of the internet is that your prospective client(s) can literally be
just one click away from your online store. Through the internet you can
now educate, instruct and solve clients problems. You can accept orders
and payments and receive them directly to your inbox.
You'll wan to learn about new effective and inexpensive ways to drive
traffic to your website; the more people who find you online the more leads
and sales you'll make.
6. Live / Work from Anywhere
Are the long cold winters starting to get you down? Are you tired of the
constant heat and humidity where you live? Taking your business online
gives you the ability to have location freedom so you can live and work
from anywhere you want; you're not stuck to a physical location.
As long as you have a solid internet connection you can live virtually
anywhere while you conduct your online business. Many people live in one
continent, have their hosting on another and their warehouse on yet
another. The world has gotten very small and you can take advantage of
this. You could even move to the Caribbean or South America, enjoying a
low cost of living, while doing business online.

62
With few exceptions the internet reduces your need to “be” somewhere.
Live where you want to, and let your business adapt to your lifestyle
instead of the other way around. There are some notable exceptions, like
landscapers, surgeons and home painters who must be in a specific
location to perform their work.
Of course, as appealing as this all sounds, having an online business is not
for everyone. There are many reasons you should not start an online
business and keep your day job or traditional business.
7. Reduce Operation Costs
Just one single task can make a significant difference in cost savings. For
example, receiving orders online reduces the need for customer service
staff. With comprehensive sales and product information online, you’ll
simply receive purchase orders and payments via email or into your
database. Staff numbers can be reduced, thus office space and related
office expenses.
A really good sales video, sales letter, or online webinar presentation can
replace a full-time sales person.
Making use of various online service providers you can now take all
aspects of your business online, such as purchasing, billing, order
fulfillment and shipping. Other functions can include pre-emptive customer
service—such as answering client questions via a FAQ section or a
customer forum.
8. Target the Global Market
With your brick and mortar business, you are limited to the amount of
individuals who can visit you at any given time, let alone find you. With a
good website, you can literally have thousands, even tens of thousands
(even millions) of people visiting your online store at once. Imagine the
potential for your company, if you could expose your products and services
to a potentially unlimited number of interested people.
Being able to have thousands of visitors and actually having them are two
different things. The success of an online business depends on the same
thing as any off-line business: marketing. Learn how to increase blog
traffic. Content marketing is a great way to increase traffic to your site /
online store. Social media can be a powerful and inexpensive (free) way to

63
drive qualified prospects to your site. I'd be remiss is I didn't mention that
mastering the art of copywriting is one of the most valuable skills you can
learn to increase sales.
9. Increase Company Responsiveness
The internet allows you to deliver your proposal, purchase order, order
confirmation quickly—in many cases instantly—to your clients. Online
stores will process orders and confirm them to the client. In the olden days,
purchase orders were called in, mailed or dropped off. Depending on the
workload of the sales staff, it could have taken hours, or even days to
process the order. With a competent online store application, you can
automatically track inventory, sales numbers, outstanding orders -
everything.
Faster response time means happier clients and less administrative work
for you.
These are some of the most powerful reasons you should take your offline
business online. With all the benefits of having an online business many
people are selling their traditional businesses and launching online
businesses for the time, location, and financial freedom it offers.
3.8

64
CHAPTER:- 4 Opportunities &
Challenges associated with it.
Opportunities and Comparison
The current business environment in India have the potential to
enhance the growth of the online retail in India. Some of the key factors
that can contribute to the growth of online retail in India include a)
Increase in the number of Internet users and online buyers According to
Google, India now have around 200 million internet users which is
expected to reach 500 million by 2018. Every year there is an estimated
increase of 5 million internet users every month. One of the key factors
contributed to the increase in internet users is the spread of broad band
connectivity across the country. In 2013, the broad band connectivity is
around 15.13 million. Government is talking initiatives to increase it by
214 million broad band connections by 2014. This will enhance the
accessibility of internet for common people. Forrester’s Asia pacific retail
forecast predicts that online buyer population will reach 39 million by
2014 and 128 million by 2018 which can stimulate the growth of online
retailing in India. b) Smart phone revolution and Mobile Internet India is
one of the markets which is witnessing growth in smart phone
customers. In 2013, there were 51 million smart phone users in India
which is expected to reach 104 million by 2014. But this forms about 10
per cent of the total mobile users currently. The availability of cheap
smart phone can enhance the growth rate in future. Access to 3G and
2G mobile data networks and availability of cheap smart phones can
enhance the customer transaction using mobiles. Most of the online
retailers are developing their mobile applications to enhance the
shopping experience. Amazon came up with their own 3D smart phone-
“Fire phone” to enhance the mobile shopping experience of their
customers. If we compare the mobile internet users we can observe
increasing trend with respect to mobile internet users. According to 2015
projection, out of 300 million internet users 200 million users will be
accessing internet using mobile phones which can enhance e-retailing

65
opportunities in India. c) Increase in transaction by Debit cards, Credit
cards, Net and mobile banking Retail electronic payments was around
INR 33.8 lakh crore in 2013 compared with INR 50,000 crore in 2004.
Credit card payments has grown seven times during this period and
reached INR 1.2 lakh crore in 2013. In the case of Debit card transaction
there was an increase in 15 times which is valued around INR 74,300
crore in 2013. If we analyse the trend electronic transaction has
increased during 2013 which forms 57 % of banking transaction
compared with 43% of paper transaction. There was an increase in
registered internet banking users in India during 2013 which was around
35 % for public sector banks 25 % for private sector banks and 5% for
foreign banks compared with 2012. But still Internet banking transaction
forms 2-8% of total banking transactions for all Indian banks. Mobile
banking is emerging in India which witnessed a growth with 30 million
users in 2013 compared 22.51 million users in 2012. From these trends
we can conclude that Indian customers are gradually changing with
respect to the way they do financial transactions. Credit, Debit cards and
Net banking can facilitate quick and convenient transaction for
customers which can augment the growth of e-retailing in India. With the
emergence of secure transaction methods like two factor authentication,
One Time Passwords(OTP) and payment gateways, consumer’s
preference to shop and do financial transactions online has increased.
This can enhance online retailing because of enhanced security and
easiness in doing the transaction. Some of the retailers are providing the
facility of cash on delivery options (COD) to customers those who are
sceptical about the secure transactions in online platforms. This forms
more than 60% of the total ecommerce transaction in India. Banks and
ecommerce sites are taking proactive steps in enhancing on-line
transactions by addressing security and other issues with respect to
online transactions. d) Rising disposable Income and Rapid
urbanization. Annual disposable income in India is expected to increase
at CAGR of 5.1% and expected to be USD 3823 by 2015.According to
2011 Census, the urbanization showed an exponential growth rate of
2.76% . We have around 337 million people who live in urban areas in
2011. The census data shows that the no of statutory towns increased at
the rate of 6.37% during 2001-2011. There is steady increase of urban

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