E commerce in india challenges & opportunities
Ecommerce
1. A PROJECT REPORT ON
E-COMMERCE
(GROWTH OF E-COMMERCE IN INDIA)
SUBMITTED BY
SYED MOHD AHMED
T.Y.B.M.S. [Semester V]
S.N
COLLEGE
OF
MANAGEMENT STUDIES
BHAYANDER
(W)
MUMBAI
-
400065
SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR THE
ACADEMIC YEAR
2015 -2016
2. ACKNOWLEDGEMENT
First of all Iwould like totake this opportunity tothank the Mumbai University for having projects as apart ofthe
B.M.S curriculum.I wish toexpress my heartfelt gratitude tothe following individuals who
have played a crucial role in the research for this project. Without their active cooperation the
preparation ofthis project could not have beencompleted within the specified time limit. The first personI would
like toacknowledge is my guide
MR Shantanu pawar(Sir)
Who supported me throughout this project with utmost cooperation and patience. Iam very much thankful to
them for sparing their precious time for me and for helping me in doing this
project. Next I would like to thank my Parents
MR. Syed Shabihul Hasan
and
Mrs. Tanveer zahera
for their strong support and cooperation. Having co-founded aniPhone blog under the OnlyGizmos Network, I
have learnt different metrics ofInternet marketing and online media. Finally I would like tothank MY
CORDINATOR
and all my friends
who have helped in all possible ways in making this
project presentable.Last but not the least Iwould like to thank
the Almighty
for always helping me.
3. DECLARATION
I,
Mr.
Syed Mohd Ahmed
Of
S.N COLLEGE OF MANAGEMENT STUDIES
of TYBMS [Semester V] hereby declare that I have completed my project , titled
E-commerce
(Growth of Ecommerce in India)
in the Academic Year 2015-2016.
The information submitted here in is true and original to the best of my knowledge.
________________________
Signature ofStudent [MohdAhmed]
6. Objective of study
There are many objectives for me to study this project on the topic of Ecommerce (Growth of
ecommerce in India) as everybody today hears the word ecommerce or are related with it some
or the other way.
Everything is going online even the Government has now all its services online and the Prime
Minister of the country says that we are focused on E.Governance.So the Trade , Businesses are
coming online every thing has become just a click away , we feel very excited about it as a
whole as we see we can get from a pin to Branded Clothes , Travel and Hotel booking even
medicines are also available online today now you just need a phone and net that’s it you can
order whatever you want this has really fascinated me .We had grown a keen interest in the
development of ecommerce. We also have a family member working on this to start our oun
business in ecommerce.
As we can see because of the growing demand and trend in the Indian population there will be
a great scope of ecommerce in the country then there would be a need of ecommerce graduates .I
have personal interest in ecommerce so I m looking forward to do masters in ecommerce after
my graduation this is the objectives of me to take this case study as a whole.
7. INDEX
Sr.
No.
Topic
Page
No.
I Chapter
Introduction 1
Defination & types of ecommerce 2
c) M-commerce 3
d) Scope in ecommerce 4
S Career opportunities in ecommerce 5
Ad Advantage of ecommerce 9
10
II Chapter
Review of Literature 11
Market size & growth 12
Key drivers in Indian ecommerce 14
Closures 15
Infrastructure 16
Funding 17
Niche retailers 18
19
3. III Chapter
I.T Act 2000 20
The Great Online Shopping Festival 22
News reports-case study 23
Protest against ecommerce 24
Biggest Milestones achieved last year by Indian ecommerce 25
28
4. IV Chapter
Ecommerce payment system 30
Ecommerce in India
Past, Present & Future
44
Conclusion 50
6. Bibliography 65
7.
8. INTRODUCTION
The cutting edge for business today is Electronic Commerce (E-commerce). Most people think
E-commerce means online shopping. But Web shopping is only a small part of the E-commerce
picture. The term also refers to online stock, bond transactions, buying and downloading
software without ever going to a store. In addition, E-commerce includes business-to-business
connections that make purchasing easier for big corporations. While there is no one correct
definition of E-commerce, it is generally described as a method of buying and selling products
and services electronically. The main vehicles also of E-commerce remain the Internet and the
World Wide Web, but use of email, fax, and telephone orders are prevalent.
E-commerce (also written as e-Commerce, e Commerce or similar variants), short
for electronic commerce, is trading in products or services using computer networks, such as
the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic
funds transfer, supply chain management, Internet marketing, online transaction
processing, electronic data interchange (EDI), inventory management systems, and
automated data collection systems. Modern electronic commerce typically uses the World Wide
Web for at least one part of the transaction's life cycle, although it may also use other
technologies such as e-mail.
E-commerce businesses may employ some or all of the following:
Online shopping web sites for retail sales direct to consumers
Providing or participating in online marketplaces, which process third-party business-to-
consumer or consumer-to-consumer sales
Business-to-business buying and selling
Gathering and using demographic data through web contacts and social media
Business-to-business electronic data interchange
Marketing to prospective and established customers by e-mail or fax (for example, with
newsletters)
Engaging in pretail for launching new products and services
9. Ecommerce definition and types of ecommerce:
Ecommerce (e-commerce) or electronic commerce, a subset of e-business, is the purchasing,
selling, and exchanging of goods and services over computer networks (such as the Internet)
through which transactions or terms of sale are performed electronically. Contrary to popular
belief, ecommerce is not just on the Web. In fact, ecommerce was alive and well in business to
business transactions before the Web back in the 70s via EDI (Electronic Data Interchange)
through VANs (Value-Added Networks). Ecommerce can be broken into four main categories:
B2B, B2C, C2B, and C2C.
There are different types of e-commerce and we need to know what e-commerce is and how
different it is from e-business. E-commerce is used for business transactions through the internet
medium while e-business involves one or more organizations making and individuals making
commercial transactions through a digital medium. So when you want to start anything do with
e-commerce, make sure you have followed the right methods to step up your business.
India's e-commerce market was worth about $3.8 billion in 2009, it went up to $12.6 billion in
2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-commerce
market is travel related. According to Google India, there were 35 million online shoppers in
India in 2014 Q1 and is expected to cross 100 million mark by end of year 2016. CAGR vis-à-vis
a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of
sales.
You can classify e-commerce into five main categories.
·1) B2B (Business-to-Business)
Companies doing business with each other such as manufacturers selling to distributors and
wholesalers selling to retailers. Pricing is based on quantity of order and is often negotiable.
The Internet can connect all businesses to each other, regardless of their location or position in
the supply chain. This ability presents a huge threat to traditional intermediaries like wholesalers
and brokers. Internet connections facilitate businesses’ ability to bargain directly with a range of
suppliers — thereby eliminating the need for such intermediaries.
·2) B2C (Business-to-Consumer)
Businesses selling to the general public typically through catalogs utilizing shopping cart
10. software. By dollar volume, B2B takes the prize, however B2C is really what the average Joe has
in mind with regards to ecommerce as a whole.
Having a hard time finding a book? Need to purchase a custom, high-end computer system? How
about a first class, all-inclusive trip to a tropical island? With the advent ecommerce, all three
things can be purchased literally in minutes without human interaction. Oh how far we’ve come!
One -way marketing. Corporate web sites are still prominent distribution mechanisms for
corporate brochures, the push, one -way marketing strategy.
The B2C model is one of the widely used tools in the e-commerce industry. The pattern is very
simple and easy. The marketers sell their products to the retailers who in turn sell them to the
consumers. The B2C which was started around 15 years back wasn’t looked upon as a very
efficient system for boosting commercial sales, but over a period of time the popularity and
efficiency has been recognized by most business merchants and it has also been looked upon as
time and cost saving factor.
·3) C2B (Consumer-to-Business)
A consumer posts his project with a set budget online and within hours companies review the
consumer’s requirements and bid on the project. The consumer reviews the bids and selects the
company that will complete the project. Glance empowers consumers around the world by
providing the meeting ground and platform for such transactions.
·4) C2C (Consumer-to-Consumer)
There are many sites offering free classifieds, auctions, and forums where individuals can buy
and sell thanks to online payment systems like PayPal where people can send and receive money
online with ease. eBay’s auction service is a great example of where person-to-person
transactions take place everyday since 1995.
The C2C format is a very simple transaction which takes place between two consumers. There
many online sites which have made such transactions easy and possible. Consumers can directly
make a purchase on any online site and have the product shipped directly to another consumer.
Companies using internal networks to offer their employees products and services online–not
necessarily online on the Web–are engaging in B2E (Business-to-Employee) ecommerce.
11. 5)G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-
Business), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G (Citizen-to-
Government) are other forms of ecommerce that involve transactions with the government–from
procurement to filing taxes to business registrations to renewing licenses. There are other
categories of ecommerce out there, but they tend to be superfluous.
6) Peer to Peer (P2P) – This is a very efficient medium of e-commerce which allows to share
vital information. The consumers or businesses can send across different kinds of files and
information which can be downloaded immediately and made use of. This doesn’t generate much
revenue as there is a lot of piracy taking place due to the invention of P2P clients. People
illegally share music files and movies by uploading them on the websites which gets easily
accessible to all clients using the different torrents. The one sharing the file and the one receiving
it, both have to install this torrent and get connected to each other.
M-Commerce – this is a very effective way of transferring information or even
conducting business transactions. Almost every application is available for download on
the mobile phone today. Even banks offer mobile banking facilities, while you can even
do stock trading and booking of airline and railway tickets. M-commerce has become a
major source for revenue generation for many organizations today. The internet is easily
accessible on the mobile phone which makes it all the more easy for the businessmen and
consumers to contact each other even when they are on the move and not gaining any
access to the computer. Mobile generation has revolutionized e-commerce completely to
a whole dimension of trade and commerce.
E-commerce is evolving to new levels everyday as per the needs of the businesses and
consumers. Transcending time and space to reach out to the global audience with just one click is
definitely something commendable and e-commerce experts have done that by making the world
a smaller place. E-commerce has transported the real world into virtual.
12. India has an internet user base of about 354 million as of June 2015. Despite being third largest
userbase in world, the penetration of e-commerce is low compared to markets like the United
States, United Kingdom or France but is growing much faster, adding around 6 million new
entrants every month. The industry consensus is that growth is at an inflection point.
In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-
retail activities. Demand for international consumer products (including longtailitems) is
growing much faster than in-country supply from authorised distributors and e-commerce
offerings.
As of Q1 2015, six Indian e-commerce companies have managed to achieve billion-dollar
valuation. Namely, Flip kart, Snap deal, InMobi , Quikr, OlaCabs, and Paytm (wing of,One97).
The report, 'E-commerce: Says urban Indian consumers are now confident
enough to make online purchases of up to Rs 25,000, from Rs 2,000- 5,000 in the
recent past.
Scope in E-commerce :
Indian e-commerce market may touch $ 260 billion by 2025: Report
MUMBAI:
The domestic e-commerce market has the
potential to grow between $ 125 billion and $
260 billion by 2024-25, according to an
industry report.
The report, 'E-commerce:
Says urban Indian consumers are now
confident enough to make online purchases
of up to Rs 25,000, from Rs 2,000- 5,000 in
the recent past.
It also says that even though there are only under-10 million internet users who
actually buy online in India, there are about 150 million internet users or around
75 million households that are 'ready' for e-commerce.
According to the report, almost 57 per cent of e-commerce sales come from small
towns, while the eight metros account for the remainder.
Current e-commerce market in India is around $ 10 billion, while US e-commerce
market is set to touch $ 200 billion in 2013, growing at 17 per cent.
13. eCommerce Growth In India
As of 213 India has 154 million internet users, which are growing as very fast rate. This has
given birth to eCommerce sector where people can do shopping online without visiting their
nearest shop. The ease, convenience, a variety of products, accessibility of internet on mobile
phone, COD and safety in accepting payment over the internet has tremendously increased the
growth of online shopping. As per Assocham-Pricewaterhouse Coopers study, the Indian
eCommerce sector is growing as a rate of 35% and will touch mark of $100-billion in next five
years. This growth prospect has attracted many new local entrepreneurs and global investor to
come together with startups to create healthy competitions.
Statistical progress of E-commerce over the years
CareerOpportunities in E-commerce
100% Placement assistance in E-commerce companies and many more...
14. As stated previously, the e-commerce industry will continue to grow in the future. Therefore, it is
a great opportunity for college students, recent graduates or any Internet savvy individual to
begin gaining experience. Companies will normally look for candidates with several years of
managerial or project management experience as well as skills using information technology
systems or the Internet in general.
IT companies
E-commerce companies
Online marketing Companies
Social media marketing
Search Engine Optimization
E-commerce Product manager
and many more opportunities
Service sector (Banking, Finance, Product - service selling)
All sectors in these times need a lot of E-commerce support and hence widening the
scope for E-commerce industry. Because every industry, has discovered a great way
towards progress which is "E-commerce"
Advantage of E commerce
1. Cost Effective
2. Higher Margin
3. Better Productivity
4. Quick Comparison
5. Economy Benefit
15. Market size and growth
India's e-commerce market was worth about $3.8 billion in 2009, it went up to $12.6 billion in
2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-commerce
market is travel related. According to Google India, there were 35 million online shoppers in
India in 2014 Q1 and is expected to cross 100 million mark by end of year 2016. CAGR vis-à-vis
a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of
sales.
Key drivers in Indian e-commerce are:
Large percentage of population subscribed to broadband Internet, burgeoning 3G internet
users, and a recent introduction of 4G across the country.
Explosive growth of Smartphone users, soon to be world's second largest smartphone
userbase.
Rising standards of living as result of fast decline in poverty rate.
Availability of much wider product range (including long tail and Direct Imports) compared
to what is available at brick and mortar retailers.
Competitive prices compared to brick and mortar retail driven by disintermediation and
reduced inventory and real estate costs.
Increased usage of online classified sites, with more consumer buying and selling second-
hand goods
Evolution of Million-Dollar startups
like Jabong.com, Saavn, Makemytrip, Bookmyshow, Zomato Flipkart, Snapdeal Etc.
India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by
2016 and $850 Bn by 2020, – estimated CAGR of 10% . According to Forrester, the e-commerce
market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57%
between 2012–16.
As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is estimated
at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion
(87%) of this market today. Online travel market in India is expected to grow at a rate of 22%
over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing
industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000
Crore ($11.8 billion) in 2015.
Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$24 billion) by the year
2015 with both online travel and e-tailing contributing equally. Another big segment in e-
commerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites.
New sector in e-commerce is online medicine. Company like Reckwing-India, Buyonkart,
Healthkart already selling complementary and alternative medicine where as NetMed has started
selling prescription medicine online after raising fund from GIC and Steadview capital
citing[14] there are no dedicated online pharmacy laws in India and it is permissible to sell
prescription medicine online with a legitimate license.
16. Closures
Though the sector has witnessed tremendous growth and is expected to grow, a lot of e-
commerce ventures have faced tremendous pressure to ensure cash flows. But it has not worked
out for all the e-commerce websites. Many of them like Dhingana, Rock.in, Seventy MM
amongst others had to close down or change their business models to survive.
Infrastructure
There are many hosting companies working in India but most of them are not suitable for
eCommerce hosting purpose, because they are providing much less secure and threat protected
shared hosting. eCommerce demand highly secure, stable and protected hosting. Trends are
changing with some of eCommerce companies starting to offer SaaS for hosting webstores with
minimal one time costs.
There could be various methods of ecommerce marketing such as blog, forums, search
engines and some online advertising sites like Google adwords and Adroll.
India has got its own version of Cyber Monday known as Great Online Shopping Festival which
started in December 2012, when Google India partnered with e-commerce companies
including Flipkart, HomeShop18, Snapdeal, Indiatimes shopping and Makemytrip. "Cyber
Monday" is a term coined in the USA for the Monday coming after Black Friday, which is the
Friday after Thanksgiving Day. Most recent GOSF Great Online Shopping Festival was held
during Dec 10 to 12, 2014.
In early June 2013, Amazon.com launched their Amazon India marketplace without any
marketing campaigns.In July, Amazon had said it will invest $2 billion (Rs 12,000 crore) in India
to expand business, after its largest Indian rival Flipkart announced $1 billion in funding.
Amazon has also entered grocery segment with its Kirana now in bangalore and is also planning
to enter in various other cities like delhi Mumbai and chennai and faces stiff competition with
Indian Startups like onedaycart.com, bazaarcart, bigbasket etc.Flipkart is also planning to enter
grocery segment soon.
Funding
As of 2012, most of the e-commerce companies are yet to start making money. However, due to
their growth prospects, many venture capital firms such as Accel Partners have invested
considerably. In one of the biggest fund raising, Flipkart.com, till November 2014, has raised
about USD 2.3 billion. Entertainment ticketing websiteBookMyShow.com raised ₹100 crores
investment by Accel Partners.
On 10 July 2013, Flipkart announced it had received $200 million from existing investors Tiger
Global, Naspers, Accel Partners, and ICONIQ Capital. New investors making up the additional
$160 million include Dragoneer Investment Group, Morgan Stanley Wealth
Management, Sofina, Vulcan Inc. and more from Tiger Global.
Snapdeal - USD 50 million in 13 April.
In February 2014, online fashion retailer Myntra.com raised $50 million from a group of
investors led by Premji Invest, the investment company floated by Azim Premji, Chairman
17. of Wipro. May 2014 also witnessed an acquisition of Myntra by Flipkart reportedly for ₹2,000
crores.
In October 2014, KartRocket, an Indian e-commerce platform, announced granting of a Series A
round led by technology investor Nirvana Venture Advisors and 500 Startups, together with
Tokyo-based Beenos, previously known as Netprice.com.
In July 2015, price comparison service website MySmartPrice raised $10 million from Accel
Partners and Helion Venture Partners.
NicheRetailers
The spread of e-commerce has lead to the rise of several niche players who largely specialize
their products around a specific theme. As many as 1,06,086 websites are registered daily and
more than 25% are for niche businesses. During 2014, Royal Enfield sold 200 Bike's of special
series Online.
Zepo compiled popular online niche brands in their list of Top 100 Quirky Brands in India.
Online apparel is one of the more popular verticals, which along with Computers and consumer
electronics make up 42% of the total retail e-commerce sales. Niche online merchandising
brands like Headbanger's Merch, Redwolf and No Nasties partner with and even help sustain
independent musicians. Some of the bigger online retailer likeVoxPop Clothing have secured
multiple rounds of funding, the last round raising $1 million from Blume Ventures in 2014.
As these niche businesses get popular, they are slowly getting acquired by the big
players. BabyOye was acquired by Mahindra Retail, part of the $17 billion dollar Mahindra
Group. Ekstop was acquired by the Godrej Group to complement their offline chain of Nature's
Basket stores.
18. InformationTechnologyAct, 2000
Information Technology Act, 2000
An Act to provide legal recognition for transactions carried out
by means of electronic data interchange and other means of
electronic communication, commonly referred to as "electronic
commerce", which involve the use of alternatives to paper-
based methods ofcommunication and storage ofinformation,to
facilitate electronic filing of documents with the Government
agencies and further to amend the Indian Penal Code, the
Indian Evidence Act, 1872, the Bankers' Books Evidence Act,
1891 and the Reserve Bank of India Act, 1934 and for matters
connected therewith or incidental thereto.
Citation Act No 21 of 2000
Enacted by ParliamentofIndia
Date enacted 9 June 2000
Date assented to 9 June 2000
19. Date signed 9 May 2000
Date commenced 17 October 2000
Amendments
2008
The Information Technology Act, 2000 (also known as ITA-2000, or the IT Act) is an Act of
the Indian Parliament (No 21 of 2000) notified on 17 October 2000. It is the primary law
in India dealing with cybercrime and electronic commerce. It is based on theUnited Nations
Model Law on Electronic Commerce 1996 (UNCITRAL Model) recommended by the general
assembly of united nations by a resolution dated 30th January 1997.
1996: IndiaMART B2B marketplace established in India.
Conflict of laws in cyberspace is a major hurdle for harmonisation of legal framework for
e-commerce around the world. In order to give a uniformity to e-commerce law around
the world, many countries adopted the UNCITRAL Model Law on Electronic Commerce
(1996) Internationally there is the International Consumer Protection and Enforcement
Network (ICPEN), which was formed in 1991 from an informal network of government
customer fair trade organisations. The purpose was stated as being to find ways of co-
operating on tackling consumer problems connected with cross-border transactions in
both goods and services, and to help ensure exchanges of information among the
participants for mutual benefit and understanding. From this came Econsumer.gov, an
ICPEN initiative since April 2001. It is a portal to report complaints about online and
related transactions with foreign companies.
There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with
the vision of achieving stability, security and prosperity for the region through free and
open trade and investment. APEC has an Electronic Commerce Steering Group as well as
working on common privacy regulations throughout the APEC region.
20. The Great Online Shopping Festival
The Great Online Shopping Festival (GOSF) was created by Google India on 12 December
2012 in collaboration with a number of Indian online shopping portals. The concept of the
GOSF was that the online shopping sites would give heavy discounts for one day, in order to
promote their sales.
History
The concept of a one-day online sale originated in the United States, where many online
shopping sites offer discounts on "Cyber Monday", the first Monday after the so-calledBlack
Friday, the day that follows the U.S. Thanksgiving. Cyber Monday started in 2005 and the
concept has spread to several countries including Canada, Japan, Australia, Colombia, and the
U.K.. In China a similar day of online shopping is observed on November 11, which is known as
"Singles Day".
The first Great Online Shopping Festival in 2012 was advertised on YouTube and via posts
on Google Plus. For the event, Google partnered with a number of ecommerce sites such
as Flipkart, HomeShop18, Snapdeal, Indiatimes shopping, Infibeam and Makemytrip, which
would participate in the GOSF. The ecommerce sites created dedicated landing pages for GOSF.
GOSF site engaged users through games and showing offers and eventually it redirected users to
the dedicated landing pages of ecommerce sites to do the transactions.
According to critics, the first GOSF left some consumers a little disappointed as the discounts
were marginal or nonexistent. In 2013, the Great Online Shopping Festival was held on 11–14
December. Participating companies included Myntra, Jabong.com, and Indiatimes Shopping.
Google claimed that the shopping festival was a success for the companies, and extended the
event, which was planned to end on 13 December, by one day.
The Great Online Shopping Festival 2014
In December 2014, the GOSF took place on Dec 10 - 12, and involved over 450 online retailers.
2014 GOSF included several categories such as lifestyle, electronics, books and media, home
and kitchen, groceries, mobile apps, automobiles, and real estate. Discounts were also given on
career services, health care and insurance policies, travel packages and matrimonial plans.
Apart from discounts, several brands also launched their products at the GOSF. Some of the
launched products included Motorola Nexus 6, Google Chromecast, and Appyappstore (an app
store for children.
21. Indian ecommerce industry to post 35% growth: Study
New Delhi-India s ecommerce industry is likely to clock a compounded annual growth rate
(CAGR) of 35% and cross the$100-billion mark over the next five years, from $17 billion at
present, according to an Assocham-Pricewaterhouse Coopers study.
Riding on the strong growth momentum of 2015, the e-commerce sector is estimated to see a
72% jump in the average annual spend on online purchases per individual in 2016, from the
current level of 65%, the study said.
In contrast, shopping malls are suffering from lesser footfalls leading to around 25% vacancy
rate, along with a 30% drop in rentals in the last one year, according to the study.
It observed that the trend in Indian malls is in line with the declining number of footfalls in retail
space in over 200 shopping malls across the US, the UK and other countries.
In the US, malls are facing a 46% vacancy rate whereas it stands at 32% in the UK, it said.
"Online shopping has shown a handsome growth while brick-and-mortar malls are witnessing a
slowdown. The growth in e-commerce looks impressive because of a low base and rising
penetration of the Internet," Assocham Secretary General D S Rawat said.
Besides, with improvement in infrastructure such as logistics, broadband and Internet-ready
devices, there is likely to be a significant increase in the number of consumers making purchases
online, the study said, predicting around 65 million consumers in India to buy online in 2015, as
against around 40 million in 2014.
Some 45% of malls in India are expected to be converted into non-retail space in the next 15
years, which would be replaced with movie theatres, restaurants, discount retailers and the like,
the study projected.
Source-TimesofIndia / Tech
22. 'E-commerce salesto increase up to 45% this festive season'
HIGHLIGHTS
• Consumers are expected to splurge about $8 billion on online shopping this festive season
• Merchandise being sold aggressively online include mobile phones, electronics, designer furniture, home
decorations, clothes, accessories, jewellery, and footwear • Consumers spent Rs 30,000 crore in last year's
festive season
The upcoming festive season coud
bring some cheer the e-commerce players in India.
NEW DELHI: Consumers are expected to splurge about $8 billion (Rs 52,000 crore) on online
shopping this festive season, translating into 40-45% sales increase for e-commerce players, says
an ASSOCHAM study.
"Wooed by heavy discounts and combo offers, consumers are expected to splurge about $8
billion (Rs 52,000 crore) during this season, beginning with Navratras, Durga Puja, Dussehra,
Diwali and Christmas," the industry chamber said.
The merchandise being sold aggressively through online platforms include mobile phones,
electronics, designer furniture, home decorations, clothes, accessories, jewellery, and footwear.
23. It added that economic slowdown notwithstanding, online shopping marts are going aggressive
about marketing their merchandise, expecting to rake in 40-45% more in sales during this festive
season as compared to last year.
According to the chamber, consumers spent Rs 30,000 crore in last year's festive season.
"The customer is connected 24x7 through smartphones, tablets and other mobile devices which
is leading to a gradual evolution of e-commerce into mobile commerce.
"Also, there is an issue of convenience which also leads to impulsive buying," Assocham
Secretary General D S Rawat said.
The study said there would be increase in revenue generated through e-commerce as compared to
last year with all branded apparel, accessories, jewellery, gifts, footwear being available at a
cheaper rates and delivered at the doorstep.
"As the economy is not in pink of health, the e-commerce sales, at least in big cities, would be at
the cost of brick and mortar bazaars, especially with regard to products like mobile phones,
fashion wears etc," it added.
Assocham said online shopping pattern has been changing in tier-I and tier-II towns, where
broadband Internet connectivity has already penetrated.
"The most popular among e-commerce websites -- Snapdeal, Myntra, Flipkart, Amazon, Jabong
etc -- have been doling out massive price cuts or discounts on purchase of popular brands of
apparels, footwear, electronic goods, coinciding with the upcoming festive month," it said.
One of the driving factors for the online shopping is the age profile of the consumers who are
young (between 15-35 years), it added.
24. Protest against ecommerce
India's drug stores plan protestagainste-pharmacies
NEW DELHI/MUMBAI: As many as 850,000 small chemist shops in India will shut for a day
next week to protest against a burgeoning online pharmacy industry that is attracting big money
backers.
Healthcare provider Apollo Hospitals Enterprise Ltd plans to start online drug sales in India,
while Zigy, and Sequoia Capital-backed 1mg already have e-pharmacies to tap a retail market
IMS Health says is worth about $13 billion.
Varun Gupta, head of medical affairs at 1mg said the company gets up to 60 million hits a year
on its website and its mobile app has been downloaded 3.5 million times since 2012.
Indian law does not regulate e-pharmacies.
The one-day nationwide strike on Oct. 14, called by the All India Organization of Chemists and
Druggists (AIOCD) comes as a government panel started working on regulations for the sector.
Drug retailers say e-pharmacies challenge their businesses and would allow medicines that could
be abused to be sold without verification. They also say the online pharmacies make it easier to
use one prescription to purchase medicines numerous times.
"Our children are savvy to social media. If they put one prescription online, they will take a
picture and send it to other companies to get medicines," AIOCD president J.S. Shinde said.
The group will also organise a street protest in the capital New Delhi. An indefinite strike will be
considered if the government does not stop online sales, Shinde said.
Medical shops in hospitals and 24-hour pharmacies will not be shut.
A drug regulator in the state of Maharashtra who is aware of the deliberations on the issue called
AIOCD's decision "premature" and said draft guidelines were several months away.
Regulators began checks after online retailer Snapdeal was found selling prescription medicines
online without prescriptions in May. Snapdeal was forced to delist some products and sellers.
But drug sales, even at traditional shops in India, are weakly regulated. Pharmacists often sell
medicines without verifying prescriptions.
E-pharmacies said they were not violating drug laws and customers needed to upload
prescriptions before buying regulated drugs.
25. "We expect new regulations to give clarity for online players to exist," said Hemant Bhardwaj,
chief executive at Zigy.
Apollo's Joint Managing Director Sangita Reddy told Reuters they will start online drug sales
once the new regulations are finalised.
Consumers are attracted by the convenience.
"A huge database of medicines makes it a one-stop shop," said Thongsuanmung Vualnam, a
New Delhi health consultant who recently started shopping for drugs online.
26. Bhavnagar, Khambhatemergingastop e-commerce destinations inGujarat
India's e-commerceis growing at higher pace in tier-2 cities than the metros.
AHMEDABAD: Internet penetration, option of cash-on-delivery and high aspirations have
propelled Bhavnagar and Khambhat as one of the top five e-commerce destinations in Gujarat,
says a report by a leading e-commerce website.
According to a census by eBay India, Surat accounts for 4% of 45 million buyers on eBay in
India followed by Ahmedabad (3.5%), Vadodara (1.5%), Bhavnagar (0.5%) and Khambhat
(0.2%).
"The increased usage of mobile devices to access internet in conjunction with the deep
penetration of mobile phones in smaller regions has led to an increase in people shopping
online," said Navin Mistry, head, retail exports and lifestyle category, eBay India.
Electronic items, branded clothing and accessories have fuelled sales through e-commerce
websites in tier-2 and tier-3 cities in recent times. "The cities in tier-2 and tier-3 are growing
faster than metros in sales through e-commerce websites. The rural areas are showing growth of
60%-70% year on year," added Mistry.
The census further reveals that rural hubs of Gujarat like Chorayasi (Surat), Okahmandal
(Devbhumi Dwarka), Songadh (Tapi), Lakhpat and Nakhatrana (Kutch) are actively shopping
online.
"Aspirations is driving sales in rural areas. Like metros, people in rural areas want to wear
branded clothes and eyewear. Also the option of paying after deliver has helped increase the
sales in rural areas," said Mistry.
According to eBay India, the consumer trends witnessed during the 2014 festive season suggests
27. that shoppers in Ahmedabad will indulge in buying television, watches and home decor and
home appliances this festival season.
The e-commerce company also claimed that shoppers from Ahmedabad have also shown keen
interest for fitness equipment and sports shoes. However, electronic items like mobile phones,
laptops and tablets will continue to remain the most bought items during this festive season as
well.
The research also highlights that the young populace (less than 25 years) of Ahmedabad are
spending more on mobiles, cameras, audio and home entertainment while the online shoppers
above 35 years are shopping for products in watches, laptops and jewellery and precious coins
categories.
28. White models rule Indian e-commerce sites
BENGALURU: Maya Rai shops online when she's bored at work. She clips
through the fashion pages of e-commerce portals, between assignments and
accounts, pausing only to focus on an outfit, zooming in on details, carefully
reading descriptions before cross-checking the writing with the accompanying
picture. Until recently, when she added an extra click to her online shopping
sprees.
While buying a kurti, she noticed that the model was Caucasian. She clicked on the
next picture, a different model, but also white. Then she went to another site. Ditto.
Rai was bemused by the experience. An informal survey of more than five online
apparel stores revealed that over 50% of models featured in online outlets, for
women's apparel specifically, were westerners.
Industry experts agree that the online fashion retail market is heavily dependent on
white models, mostly eastern European ones, who are selling everything from
29. lingerie to lehengas. While their bodies lend themselves wonderfully to western wear, the same
cannot be said for ethnic styles, the cuts being such that they almost always appear too thin or
too tall. Irrespective, they're the preferred choice. According to industry experts, they bill almost
the same as Indian models in the field.
If models who showcase clothing on apparel websites charge almost the same at similar grades
of experience, why is the country's e-commerce citadel full of Caucasian models? Is India's
fascination for fair reflecting in the business end of things? It appears so. And it's not just
websites - if you take a look at billboards in the metros, Caucasian models sell everything from
homes to saris to traditional ornaments sold by Indian jewellery brands. But players in the game
insist it has nothing to do with skin colour or race and the reasons are purely professional.
Kartik Jobanputra, whose agency, Urban Model Management, represents more international
models in the business than any other in the country, said the view that models charge more is
incorrect. "When you consider the workload, they're actually cheaper," he said.
Murali Balan, whose company Tenovia Solutions manages e-commerce operations for a number
of brands, says it all comes down to productivity. "They're professional, they're punctual and
they work well with photographers because of which you can get more shots in a day," says
Balan.
Fashion guru Prasad Bidapa, who has worked extensively with both Indian and international
models, points at globalization. The industry expert argued that just as we're seeing a flush of
Indian models on the catwalks that count in fashion hotspots - New York, Milan and Paris -
around the world, in India we're experiencing the influx. The Indian supermodel is unaffordable
for e-commerce ventures, charging thrice the figures international models bill. Most of the
Caucasians in the field are either starting out or are mid-rung, flying out to India on a 30-day
visa. The locals, also at an equivalent stage of their careers, are sometimes less efficient.
30. Bidapa says competition is good for the Indian models. Just working alongside international
models shows the young Indian what to expect and how to prepare. "It's not a colour bias. If you
look at the fashion industry today, just any fashion show, you'll see a range of skin tones. You
could call it the United Colours of Benetton. We're sending the right message globally. More
importantly, people are taking care with the type of models they're hiring. They have to fit.
They're going for Indian (like) looks. You'll notice that almost all the models are dark haired."
Jobanputra, whose company roster has portfolios of models from 11 countries, points out that
modelling for e-commerce sites is a taxing job. "If you're doing a brand catalogue or a print
shoot, you have two or three changes, but for an e-portal there can sometimes be a dozen
changes for a single shot. And all the model has is eight hours in the day to offer."
Bengaluru-based Balan, whose company handles shoots every day for leading brands, says it
comes down to giving apparel the best possible display. He notes that just like in a store these
sites are looking for models who would best highlight their range.
Interestingly, a lot of Indian models aren't willing to sample the e-commerce space for the fear of
being tagged to the market for life. Balan says: "If you look at it closely, it's a great place to
break through. The brand manager handles e-commerce accounts and also the brand catalogue.
It's easy to crossover from catalogue to catwalk. If you ask me, it's a great platform, a great
opportunity which sometimes people aren't tapping enough."
31. E-commerce may dominate marketing trends in 2015
As technology continues to grow
rapidly, e-commerce players are adopting newer techniques to facilitate both s... Read More
MUMBAI: The stage has been set for a while now, and e-commerce organizations today
continue to make an impact in terms of the digital shopping experience. As technology continues
to grow rapidly, e-commerce players are adopting newer techniques to facilitate both sellers and
buyers to sell and buy online more efficiently.
More recently, with the introduction of flash sales and daily deals from various companies, e-
commerce has brought forward technnovation in the retail sector. Nothing has surpassed the
power of innovative e-commerce companies, which have proved to be as successful.
What we are witnessing today is a metamorphosis of e-commerce into a variation of online
commerce that is adaptable and flexible. And, with the ever dropping rates of internet surfing,
both for web and mobile interfaces, which is complimentary to the soaring population of internet
users, the e-commerce industry is shaping both online shopping and selling trends in India.
Consumers are more connected than ever before and have more information and choices at their
fingertips today. They are leaving behind their preferences, behaviour and interests, which create
a knowledge ground for e-commerce companies to analyze behaviour pattern and offer more
interesting and competitive products.
32. "The rise of such digital activities and resulting data is the stimulating factor for formulating e-
commerce strategies, thus affecting the business model and driving growth for e-commerce
players in the Indian market," said Divyan Gupta, dounder and CEO, Artanddecors.com
He further added, "2015 is going to witness an acceleration in the shift towards inbound
techniques rather than outbound. The e-commerce industry and online shopping trends in India
are set to witness greater heights in the coming years, not just owing to the increasing internet
population, but also due to the changing dynamics of the supporting ecosystem."
Some key trends that will amplify branding and customer growth are as follows: Firstly, content
marketing will gain prominence; the focus will be on original and informative content rather than
generic content.
As Google and other search engines throw more weight around original and unique content and
rank them higher in search results, businesses will need to revisit their content strategy.
Customers are also starting to demand more detail when purchasing and along with great
navigation and ease of paying will prefer brands that give them the knowledge of the product that
they seek to acquire.
Secondly, SEO and social signaling will start merging: Search engines like Google will continue
their push to provide the most relevant content to the consumer. This is within their interest as
well as it impacts online ad rates.
For the marketer this will mean paying a very close attention to having great content that is
relevant and is shared by their consumers -- a brand advocacy focus that has not been really
cared for till now. With most brands trying to move away from the discount-led sales model to
developing consumer loyalty, content and social signaling will play an important role in
attracting more customers at a lower acquisition cost.
Lastly, social media marketing will diversify: For now a majority of e-commerce brands use
Facebook to drive a bulk of their potential customers. With changes in how Facebook is going to
33. treat newsfeed pushes, marketers will have to start investing more time in other platforms while
investing more money in Facebook itself to continue driving traffic that they were seeing before
the changes.
This 'PayFor-Exposure' trend is likely to see a higher adoption by other social media platforms
like Twitter, Instagram and Pinterest etc, as they start monetizing their networks. For brands, it
means that they won't be able to depend on just one/limited channel for traffic and will have to
therefore diversify their networks.
Two other key advantages ofe-commerce are:
1. Mobile marketing will increase
As more and more people consume information on the go, mobile moments or mobile marketing
will get bigger. Seamless integration that will allow customers to click on an ad on the mobile
and complete a transaction without any issues will usher in the next level of instant gratification.
We have also seen some of the larger e-commerce players starting official channels on mobile
chat platforms like Line and WeChat to both share promotions and content and this is expected
to grow as well.
2. Re-marketing ads will grow
Everyone jumped on the re-marketing bandwagon and this space is going to see even a higher
uptake in 2015. Visit a product on a website and it's going to follow you everywhere. This ability
of the product and the brand to keep itself right in front of the customer is very effective.
34. With Facebook bringing its Atlas advertising platform into play, this is only going to become
much more effective as it would enable a more accurate cross-device advertising and tracking
opportunity for advertisers. Given Facebook's mobile reach and active user base, this will also
lead to an increase in mobile conversions.
35. E-commerceincreasesbusinessfor SMEs: Study
TNN | Oct 7 , 2015, 03.55AMIST
NEW DELHI: Online marketplaces are fuelling growth for small and medium enterprises
(SMEs) in India, according to a joint report by Snapdeal and KPMG India. SMEs contribute
about 17% to India's GDP (gross domestic product) and the report highlighted that the scale of
businesses and profits have increased after they embraced e-commerce platforms.
The report said 46% of SMEs reported an increase in business through listing on online
marketplaces, while those using internet for business saw 51% higher revenues and 49% more
profit.
About 85% of the SMEs who adapted to the e-commerce model realized that it was a cost-
effective medium to grow sales and a majority of them reported 60-80% reduction in
distribution, marketing and sales spend to get incremental business.
Commenting on the release of the report, Kunal Bahl, co-founder and chief executive, Snapdeal,
said, "With over 200,000 sellers operating on our platform, we felt the need to conduct a
systematic unbiased study to identify opportunities and challenges to further accelerate the
growth of the sector. This study has given us deeper insights into what more we can do to enable
small businesses become more successful online."
36. Indian e-commerce companies on'acquihiring' spree
MUMBAI: About a month ago, Flipkart made an offer to the founders of a Denmark-based
social networking site, which matches travelers going to a destination with those who want to
send goods to that place, people with knowledge of the matter said.
The Indian e-commerce giant was in talks to acquire Sociotransit, the people said. It offered
Niral Desai, an IITian, and Pranav Shah, who has an MBA from India, to buy out their firm and
told them that they could continue to work on the expansion of their startup while drawing a
salary from Flipkart as employees.
While sources said the Sociotransit deal is on hold, experts said this kind of transactions to get
talent and technology together is sure to stay. Flipkart said it had no specific information about
reaching out to Sociotransit, but it did confirm its big focus on acquihiring this year. In fact, the
trend of acquihiring acquiring a company for its cutting-edge technology and hiring its
employees for their expertise is catching up fast in India's hypercompetitive e-commerce sector.
There is a huge section of top young technology talent who have their own startups and who
would not be otherwise willing to give it up for a job with another bigger e-commerce player. It
is this section of tech mavericks that the large players are targeting, experts said. Mostly, they are
37. in technology and e-marketplace that can add to the business model of the big e-commerce
companies.
Rival e-commerce majors Flipkart and Snapdeal are betting big on acquihire, to pick up early-
stage ideas along with entrepreneurs who could bring fresh energy and technology bandwidth to
their companies. Others such as Jabong are warming up to the idea. "We embrace the fact that
not all innovation can happen internally, and want to join hands with disruptive companies for
technology and talent," said a Flipkart spokesperson.
Their aim is to identify teams working on "out of the box" ideas and new-age technology and get
them on board by acquiring their companies. Snapdeal's latest acquihires include mobility
solutions firm Letsgomo and Bengaluru-based Grabbon. Its recent product Shopo, an app-only
zero-commission marketplace, is engineered by the MartMobi team acquired earlier this year.
"Now that we are a very large company in terms of number and people, (acquiring) smaller
groups of companies doing cutting-edge work and bringing their team on board give impetus to
the project and adds entrepreneurship zeal," said Abhishek Kumar, vice-president, corporate
development, at Snapdeal. "Acquihires have given us good result and will be our focus in
future."
At Flipkart, acquihiring is one of the key focus areas this year and the company said it is open to
good ideas which can either help it fill a market gap or add to existing talent pool. Flipkart also
sees it as a great opportunity to interact with new talent, which will give it competitive edge in
the market. Two of such startups it acquired recently are Appiterate and AdIquity.
"It is a win-win for both the company and the candidate they are hiring along with his startup,
which is mostly at an early stage," said GC Jayaprakash, executive director at RGF Executive
Search.
Online fashion retailer Jabong said it is open to the idea. "If the startup is going to give our
organization organic growth, add value, at the same time if the person too can add value and has
38. a great idea at a nascent stage, we are open to taking them on board and taking over the startup,"
said Ashu Malhotra, head of HR at Jabong.
Consumer internet companies raised over $4 billion this year amid an unprecedented appetite for
India’s digital pie. Over 1,250 new ventures sprouted, with the number of mobile-first startups
growing fastest.
39. Here are the 5 biggestmilestones achievedby India’s e-commerce industry in
2014.
Flipkart, led by Sachin Bansal, became the first Indian e-commerce player to hit
$1bn in sales (GMV); Snapdeal and Amazon followed suit.
40. Flipkart raised $1bn at a $7-billion valuation; the e-commerce major raised another
$700m at $11bn valuation, becoming the third most valued privately held tech venture.
Jeff Bezos said Amazon intended to pump $2bn into the company's India operations.
41. Ratan Tata invested in Snapdeal, his first e-commerce bet in India; later picked up stakes
in Bluestone and Urban Ladder.
Masayoshi Son's Softbank commited to invest $10 billion in Indian internet,
42. Flipkart, Snapdeal mull new discountstrategy this Diwali
HIGHLIGHTS
• The festival season sales for leading e-tailers such as Flipkart, Snapdeal will be about establishing their
dominance
• They are set to rely more on category-specific discounts, exclusive launches and cashback schemes
• The moderation is expected to help online retailers wean consumers away from heavy discounts
The country's leading electronic
marketplaces are set to rely more on category-specific discounts, exclusive l... Read More
MUMBAI | HYDERABAD: For Flipkart and Snapdeal, their annual sales bonanzas this festival
season will be about establishing their dominance, but they are unlikely to draw on margin-
eroding discounts as their weapons of choice.
Instead, the country's leading electronic marketplaces are set to rely more on category-specific
discounts, exclusive launches and cashback schemes as they strive for record sales this festive
season, according to companies executives and industry experts ET spoke with. In high-margin
43. but relatively low-demand categories such as home decor and kitchen, online retailers are still
likely to offer heavy discounts to boost sales, experts said.
But in established segments such as electronics, it will be up to the manufacturers and sellers to
decide how steep the discounts should be, a marked change in strategy for online marketplaces in
response to the red flags being raised around their business models.
Snapdeal's preview Diwali sale on Monday served as an indicator: Some of the steepest
discounts were in categories such as home and fashion; cashback schemes were on offer through
its recently acquired digital payments platform Freecharge, and the home page had exclusive
offers on specific brands. On average, discounts offered by online retailers have dropped to 15-
20% this year from 25% in 2014, and is expected to fall further to 10-15% next year, India
Infoline said in a recent report.
The moderation is expected to help online retailers wean consumers away from heavy discounts
in their search for profitable unit economics.
"E-tailers believe that there is a high degree of demand elasticity. We believe they will be wary
of moderating the discounting aggressively," analysts Sandeep Muthangi and Nandhish Dalal
said in the report, adding that Indian online marketplaces are expected to spend a total of $7.5
billion on discounts by 2020.
Srinivas Murthy, senior vice president-marketing, at Snapdeal, said customers can expect
discounts of up to 70% in the fashion, home and electronics categories. "We are developing a
host of solutions for our 150,000 sellers to help them to preempt demand, basis on data analysis
of consumer purchase behaviour and stock-up on their inventory," he said. Flipkart announced
on Monday that it will hold its annual 'Big Billion Day' sale from October 13 to 17, with
discounts available only on its mobile application.
According to multiple reports, India's e-tailing market is expected to grow to around $50 billion
44. by 2020 from $4 billion at the end of 2014, as companies aggressively chase gross merchandise
value, or the total price of all the goods sold on a platform.
This growth has attracted global investors such as DST Global and SoftBank, besides overseas e-
tailing giants like China's Alibaba Group and US-based Amazon, to aggressively pump capital in
India to acquire customers at any cost.
But increasingly investors have started asking companies to show a path to profitability, delaying
new financing rounds for leading e-tailers like Flipkart and Snapdeal.
According to India Infoline, marketing costs for e-tailers in India are as high as 30% of the gross
merchandise value, as compared to 2.2% for China's Alibaba and 5.5% for Argentina's
MercadoLibre. "My hope and prediction is that this Diwali will be the last one where e-tailers
offer heavy discounts," said Alok Goel, managing director at SAIF Partners and former CEO of
online recharge player Freecharge.
45. Attrition at top level hurting e-commercecompanies in India
HIGHLIGHTS
• E-commerce companies are facing high levels of attritions at senior ranks
• These companies are growing rapidly but don't have fundamental concept of retaining people
• Companies hire top-notch people from the Valley, after being pushed by investors
Consumer internet companies in
India are growing so rapidly that they haven't built the fundamental concept of retaining people, especially
at the top-level. Less
NEW DELHI: The latest big problem staring at India's top internet companies is attrition,
especially in their senior ranks.
Flipkart, Zomato and Ola, which have been aggressively recruiting top talent with the millions of
dollars they have raised, are grappling with an exodus of management-level executives.
Consumer internet companies in India "are growing so rapidly that they haven't built the
fundamental concept of retaining people, especially at the top-level," said Sunit Mehra,
managing partner at Hunt Partners India, an executive recruitment company.
At Flipkart, Srivals Kumar recently resigned as general counsel and head legal, the latest in a
series of top-level exits at India's largest e-commerce company this year.
While Flipkart was quick to replace him with Rajinder Sharma, former director and general
46. counsel -- South and West Asia, at Samsung, Kumar's decision to quit Flipkart comes amid an
organisational restructuring. At least four other senior executives have quit Flipkart this year,
including Mekin Maheshwari as chief people officer; Ravi Vora as chief executive of strategic
brands group; Amod Malviya as chief technology officer; and Sameer Nigam as engineering
head.
But Flipkart, which is valued at over $15 billion, has also been hiring a number of high-profile
senior executives, such as former Google executive Punit Soni whom it appointed as its chief
product officer.
At Zomato, which has raised $225 million from a slew of investors, Durga Raghunath recently
resigned as senior vice president-growth after a six-month stint to found an online publishing
company, joining a list of senior executives who have quit the venture this year.
Namita Gupta, former chief product officer, and Rameet Arora, former chief marketing officer,
also quit recently, all having spent less than a year at the Gurgaon-based company.
"A lot of the hiring (at Indian internet companies) is pushed by the investors, and while the
companies have hired top-notch people from the Valley, the culture here is very different," said
Prateek Srivastava, founder and CEO of talent acquisition firm Basil Advisors.
At Ola, which counts Falcon Edge Capital, Tiger Global and SoftBank among investors, Arvind
Singhal recently quit as CEO of the company's TaxiForSure unit, and Swaminathan Seetharaman
resigned as vice-president for engineering.
"(The resignations have) less to do with compensation. You can attract the best talent with
money, but you're not going to always retain them with money," Srivastava said.
ET could not immediately reach the companies or the executives for comment over the weekend.
47. E-commerce payment system
An e-commerce payment systemfacilitates the acceptance of electronic payment for online
transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce
payment systems have become increasingly popular due to the widespread use of the internet-
based shopping and banking.
Over the years, credit cards have become one of the most common forms of payment for e-
commerce transactions. In North America almost 90% of online B2C transactions were made
with this payment type. Turban et al. goes on to explain that it would be difficult for an online
retailer to operate without supporting credit and debit cards due to their widespread use.
Increased security measures include use of the card verification number (CVN) which detects
fraud by comparing the verification number printed on the signature strip on the back of the card
with the information on file with the cardholder's issuing bank. Also online merchants have to
comply with stringent rules stipulated by the credit and debit card issuers (Visa and MasterCard)
his means that merchants must have security protocol and procedures in place to ensure
transactions are more secure. This can also include having a certificate from an
authorized certification authority (CA) who provides PKI(Public-Key infrastructure) for securing
credit and debit card transactions.
Despite widespread use in North America, there are still a large number of countries such as
China, India and Pakistan that have some problems to overcome in regard to credit card security.
In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to
a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash
which transfers from the consumers’ card to the sellers’ device. A popular smartcard initiative is
the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card
from your bank account, and you can then use your card at various retailers and on the internet.
There are companies that enable financial transactions to transpire over the internet, such
as PayPal. Many of the mediaries permit consumers to establish an account quickly, and to
transfer funds into their on-line accounts from a traditional bank account (typically
via ACH transactions), and vice versa, after verification of the consumer's identity and authority
to access such bank accounts. Also, the larger mediaries further allow transactions to and
from credit card accounts, although such credit card transactions are usually assessed a fee
(either to the recipient or the sender) to recoup the transaction fees charged to the mediary.
The speed and simplicity with which cyber-mediary accounts can be established and used have
contributed to their widespread use, although the risk of abuse, theft and other problems—with
disgruntled users frequently accusing the mediaries themselves of wrongful behavior—is
associated with them.
Methods of Online Payment
Credit cards constitute a popular method of online payment but can be expensive for the
merchant to accept because of transaction fees primarily. Debit cards constitute an excellent
alternative with similar security but usually much cheaper charges. Besides card-based
payments, other forms of payment have emerged and sometimes even claimed market leadership.
Wallets like PayPal and Alipay are playing major roles in the ecosystem. Bitcoin payment
48. processors are a cheaper alternative for accepting payments online which also offer better
protection from fraud.
Net Banking
This is a system, well known in India, that does not involve any sort of physical card. It is used
by customers who have accounts enabled with Internet Banking. Instead of entering card details
on the purchaser's site, in this system the payment gateway allows one to specify which bank
they wish to pay from. Then the user is redirected to the bank's website, where one can
authenticate oneself and then approve the payment. Typically there will also be some form
of two-factor authentication.
It is typically seen as being safer than using credit cards, with the result that nearly all merchant
accounts in India offer it as an option.
A very similar system, known as iDEAL, is popular in the Netherlands.
PayPal
PayPal is a global e-commerce business allowing payments and money transfers to be made
through the Internet. Online money transfers serve as electronic alternatives to paying with
traditional paper methods, such as cheque's and money orders. It is subject to the US economic
sanction list and other rules and interventions required by US laws or government. PayPal is an
acquirer, a performing payment processing for online vendors, auction sites, and other
commercial users, for which it charges a fee. It may also charge a fee for receiving money,
proportional to the amount received. The fees depend on the currency used, the payment option
used, the country of the sender, the country of the recipient, the amount sent and the recipient's
account type. In addition, eBay purchases made by credit card through PayPal may incur extra
fees if the buyer and seller use different currencies. On October 3, 2002, PayPal became a wholly
owned subsidiary of eBay. Its corporate headquarters are in San Jose, California, United States at
eBay's North First Street satellite office campus. The company also has significant operations in
Omaha, Scottsdale, Charlotte and Austin in the United States; Chennai in India; Dublin in
Ireland; Berlin in Germany; and Tel Aviv in Israel. From July 2007, PayPal has operated across
the European Union as a Luxembourg-based bank
Google Wallet
Google Wallet was launched in 2011, serving a similar function as PayPal to facilitate payments
and transfer money online. It also features a security that has not been cracked to date, and the
ability to send payments as attachments via email.
Mobile Money Wallets
In undeveloped countries the banked population is very less, especially in tier II and tier III
cities. Taking the example of India, there are more mobile phone users than there are people with
active bank accounts. Telecom operators, in such geographies, have started offering mobile
49. money wallets which allows adding funds easily through their existing mobile subscription
number, by visiting physical recharge points close to their homes and offices and converting
their cash into mobile wallet currency. This can be used for online transaction and eCommerce
purchases. Many payment options such as Airtel Money and M-Pesa are being accepted as
alternate payment options on various eCommerce websites.
Bitcoin
Bitcoin is a decentralized virtual currency.
51. India's Top e-Commerce Firms with Billion Dollar Valuation
The logo of India's largestonline marketplace Flipkartis seen on a building in Bengaluru,India,April 22, 2015.
The e-Commerce sector has witnessed an exponential growth in the country in the past few
years, and more and more companies continue to foray into the market seeing the vast potential it
holds.
With the technology advancements, some companies have already carved a niche for themselves,
by penetrating fast into the market.
Investors are pumping a lot of money into the e-tailers, as they see promising prospects for their
growth. The valuations of the internet companies have skyrocketed, owing to a drastic increase
in their gross merchandise value (GMV) and opportunity for significant growth in the vast
untapped market.
Swiss bank UBS expects the online retailing market to grow 10 times to a maximum of $60
billion by 2020, based on internet penetration, per capita gross domesict product (GDP) and total
retail market size of the country, according to NDTV Profit.
52. Here is the List of Top 4 Most Valuable Online Retailers:
1. Flipkart
Backed by big investors, Flipkart is currently the most valued start-up in e-commerce space, with
its valuation skyrocketing to $15 billion from $1.5 billion in October 2013. In 2014 alone, the
company raised a capital of around $2 billion.
However, Flipkart has never booked profits since its beginning in 2007, despite its GMV
growing to $4 billion recently. The company plans to double its GMV to $8 billion by the end of
this year, Business Standard said.
2. Snapdeal
New Delhi based Snapdeal is the second most valued online retailer, after receiving $627 million
from Japanese Softbank in October last year. Apart from Softbank, eBay and BlackRock are the
other major stakeholders in Snapdeal. The valuation of Snapdeal stands at $2 billion.
A worker of Indian e-commerce companySnapdeal.com scans barcode on a box after it was packed at the
company's warehouse in New Delhi April 20, 2015.Reuters
3. OlaCabs
After raising funds worth ₹2,500 crore in April, online cab aggregator Ola emerged as the third-
most valuable venture-backed company in India after Flipkart and Snapdeal. The Bengaluru-
based company's valuation rose to ₹15,600 crore with that round of funding. Founded in 2011,
the taxi firm operates in more than 65 cities as of now.
53. Bhavish Aggarwal, CEO and co-founder of Ola, an app-based cab service provider, poses in
front of an Ola cab in Mumbai March 3, 2015.Reuters
4. Paytm
Paytm, a mobile payment services firm, is the fourth most valuable internet firm with a valuation
of $1.83 billion, Live Mint said.
Paytm, which has recently forayed into e-commerce space, estimates its revenue run rate to more
than $4 billion (Rs 25,417 crore) by year-end. Alibaba, the Chinese e-commerce giant, has 25%
stake in One97 Communications, the parent company of Paytm.
Paytm is planning to bring in 1,00,000 sellers from Chinese e-tailer Alibaba's online arm
AliExpress to its platform from August, The Economic Times said.
Vijay Shekhar Sharma,the CEO of Paytm
54. 8 Challenges for Ecommerce in India
The growth of ecommerce volumes in India is attracting the attention of players around the
globe. India, the second most populous country in the world, is home to 1.2 billion people.
To put that number into perspective, consider this: the combined populations of Germany, UK,
France, Italy, Netherlands, Belgium, and Greece equal one-fourth the population of India alone!
Despite lower per-capita purchasing power, this still makes India one of the most attractive
emerging markets for ecommerce. But India is far from being a bed of roses. Here are the top 8
challenges that ecommerce businesses face in India.
1. Indian customers return much of the merchandise they purchase online.
Ecommerce in India has many first time buyers. This means that they have not yet made up their
mind about what to expect from ecommerce websites. As a result, buyers sometimes fall prey to
hard sell. But by the time the product is delivered, they demonstrate remorse and return the
goods. Though consumer remorse is a global problem, it is all the more prevalent in a country
like India, where much of the growth comes from new buyers.
Returns are expensive for ecommerce players, as reverse logistics presents unique challenges.
This becomes all the more complex in cross-border ecommerce.
2. Cash on delivery is the preferred payment mode.
Low credit card penetration and low trust in online transactions has led to cash on delivery being
the preferred payment option in India. Unlike electronic payments, manual cash collection is
laborious, risky, and expensive.
3. Payment gateways have a high failure rate.
As if the preference for cash on delivery was not bad enough, Indian payment gateways have an
unusually high failure rate by global standards. Ecommerce companies using Indian payment
gateways are losing out on business, as several customers do not reattempt payment after a
transaction fails.
4. Internet penetration is low.
Internet penetration in India is still a small fraction of what you would find in several western
countries. On top of that, the quality of connectivity is poor in several regions. But both these
55. problems are fast disappearing. The day is not far when connectivity issues would not feature in
a list of challenges to ecommerce in India.
5. Feature phones still rule the roost.
Though the total number of mobile phone users in India is very high, a significant majority still
use feature phones, not smartphones. So, for all practical purposes this consumer group is unable
to make ecommerce purchases on the move. Though we are still a couple of years away from the
scales tipping in favor of smartphones, the rapid downward spiral in the price of entry-level
smartphones is an encouraging sign. I expect that the next few quarters will witness
announcements of new smartphones in India at the $30-40 price point. That should spur growth
in smartphone ownership.
6. Postal addresses are not standardized.
If you place an online order in India, you will quite likely get a call from the logistics company
to ask you about your exact location. Clearly your address is not enough. This is because there is
little standardization in the way postal addresses are written. Last mile issues add to ecommerce
logistics problems.
7. Logistics is a problem in thousands of Indian towns.
The logistics challenge in India is not just about the lack of standardization in postal addresses.
Given the large size of the country, there are thousands of towns that are not easily accessible.
Metropolitan cities and other major urban centers have a fairly robust logistics infrastructure. But
since the real charm of the Indian market lies in its large population, absence of seamless access
to a significant proportion of prospective customers is a dampener. The problem with logistics is
compounded by the fact that cash on delivery is the preferred payment option in India.
International logistics providers, private Indian companies, and the government-owned postal
services are making a valiant effort to solve the logistics problem. If someone could convert the
sheer size of the problem into an opportunity, we might soon hear of a great success story
coming out of the Indian logistics industry.
8. Overfunded competitors are driving up cost of customer acquisition.
The vibrancy in the Indian startup ecosystem over the past couple of years has channeled a lot of
investment into the ecommerce sector. The long-term prospects for ecommerce companies are so
exciting that some investors are willing to spend irrationally high amounts of money to acquire
market share today. Naturally the Indian consumer is spoiled for choice. However, this trend has
reversed as investors are getting worried about slipping further down a slippery slope, and I
expect more rational behavior in 2014.
While this article focuses on ecommerce challenges in India, an intrinsically one-sided topic, it is
important to note that ecommerce giants are increasingly attracted to India. Cross-border
ecommerce to India is growing, and many large international players are also making a
significant investment in setting up shop in India.
56. Key Trends revealed in the eBay India Census 2012:
Massification: Online Shopping is mainstream & a nationwide phenomenon: India has
over 4,306 eCommerce Hubs from all 28 States and 7 Union Territories, a 30% increase
from eBay Census 2011. Consumers from over 3,281 Bharat Hubs & 1,015 Rural
Hubs shopped online.
Top Cities: India’s Top 5 eCommerce Hubs are Delhi, followed
by Mumbai, Jaipur, Bengaluru & Chennai.
Top States: The Top 5 States with the most transactions
were Maharashtra, Delhi, Rajasthan, Tamil Nadu & Karnataka.
Most Wired States: The Most Wired States with the maximum eCommerce Hubs
are Andhra Pradesh, Tamil Nadu, Maharashtra, Uttar Pradesh &West Bengal.
Top Rural Hubs: India’s Top 5 Rural Hubs are Guntur (AP), Choryasi (GJ), Kartikapally
(KL), Villupuram (TN) & Dindori (MH).
Top Countries: India’s Top Trading Partners are United States, United
Kingdom, Australia, China & Canada.
Zones: The West Zone of India dominate eCommerce (38%), followed by the North
Zone(30%), South Zone (26%) & East Zone (6%).
Vertical Categories: Electronics continue to dominate & hold share at 48% of Domestic
Transactions with Lifestyle Categories (41%) gain traction with the advent of an
increased number of women consumers.
Global Shopper: Indian shoppers from 2,638 Indian cities are opening up their wallets to
import buying from eBay entrepreneurs in 141 countries.
Retail Exports continue to thrive with consumers from 201 countries buying Indian
handcrafted Products from Indian entrepreneurs from 523 Export Hubs across India.
Top Brands: Samsung, Apple, Sony, Nokia & Sandisk are the most transacted brands on
eBay India.
57.
58.
59.
60. E-Commerce in India – Past, Present & Future
There is no denying the fact that e-commerce has re-entered India and is here to stay. Even the
small and medium retailers of the country want to ride the wave and are ready to make a fortune
out of the market place concept. It may be now that online shopping has become popular but the
concept of e-Commerce was introduced long back in the 20th century.
Circa 1991: Introduction of E-Commerce
The year 1991 noted a new chapter in the history of the online world where e-commerce became
a hot choice amongst the commercial use of the internet. At that time nobody would have even
thought that the buying and selling online or say the online trading will become a trend in the
world and India will also share a good proportion of this success.
Circa 2002: IRCTC teaches India to Book ticket online
India first came into interaction with the online E-Commerce via the IRCTC. The government of
India experimented this online strategy to make it convenient for its public to book the train
tickets. Hence, the government came forward with the IRCTC Online Passenger Reservation
System, which for the first time encountered the onliticket booking from anywhere at any time.
This was a boon to the common man as now they don’t have to wait for long in line, no issues
for wastage of time during unavailability of the trains, no burden on the ticket bookers and many
more. The advancements in the technology as the years passed on have been also seen in the
IRCTC Online system as now one can book tickets (tatkal, normal, etc.) on one go, easy
payments, can check the status of the ticket and availability of the train as well. This is a big
achievement in the history of India in the field of online E-Commerce.
IRCTC Website in August 2002
Circa 2003: Introduction of Low Cost Airline with AirDeccan
After the unpredicted success of the IRCTC, the online ticket booking system was followed by the
airlines (like AirDeccan, Indian Airlines, Spicejet, etc.). Airline agency encouraged, web
booking to save the commission given to agents and thus in a way made a major population of
the country to try E-Commerce for the first time. Today, the booking system is not just limited to
61. the transportation rather hotel bookings, bus booking etc. are being done using the websites like
Makemytrip and Yatra.
Circa 2007: The DeepDiscounted model of Flipkart
The acceptance of the ecommerce on a large scale by the Indian people influenced other business
players also to try this technique for their E-businesses and gain high profits. Though online
shopping has been present since the 2000 but it gained popularity only with deep discount model
of Flipkart. In a way it re-launched online shopping in India. Soon other portals like Amazon,
Flipkart, Jabong, etc. started hunting India for their businesses.
Circa 2014: Current Scenario
Online shopping in its early stage was a simple medium for shopping with fewer options. The
users can just place an order and pay cash on delivery. But, in last few years this field has been
renovated to a high extent and hence fascinated many customers. Today, the online shopping has
become a trend in India and the reason behinadoption of this technique lies in the attractive
online websites, user friendly interface, bulky online stores with new fashion, easy payment
methods (i.e. secure pay online via gateways like paypal or cash-on-delivery), no bound on
quantity & quality, one can choose the items based on size, color, price, etc.
Despite being a developing country, India has shown a commendable increase in the ecommerce
industry in the last couple of years, thereby hitting the market with a boom. Though the Indian
online market is far behind the US and the UK, it has been growing at a fast page.
Further, the addition of discounts, coupons, offers, referral systems, 30days return guarantee, 1-7
days delivery time, etc. to the online shopping and the E-Market have added new flavors to the
industry.
The Key drivers of in Indian ecommerce have been:
Increasing broadband Internet and 3G penetration.
Growing Living standards
Availability of much wider product range
Busy lifestyles and lack of time for offline shopping
Increased usage of online categorized sites
Evolution of the online marketplace model with websites like eBay, Flipkart, Snapdeal, etc.
The Way Forward:
SocialMedia as a Lead Generationtool
Social media has now become the hub for the merchants which enables them to analyze the
customer choice based on their purchase activities. Social network like LinkedIn, Twitter,
Google+, Facebook and others have become a medium for easy log-in and purchase. Moreover,
the clients can stay updated via the posts published on this media. Further, the advertising &
promotions on these social sites has increased the chances of success of generating transactions
to many folds.
62. Mobile Commerce:
The latest trend in e-commerce it to focus on mobile based shopping. Snapdeal now getting half
of its traffic from mobile, up from 5% around a year back and flipkart gets 40% traffic from
mobile up from 15%. As price of smart phone reduce, these figures will only increase. For this
reason, the larger ecommerce firm has started focusing on mobile commerce. It is speculated that
the next wave of digital commerce consumer will come thru the mobile.
Price comparison engine:
In the race to acquire customer, e-commerce sites offer deep discount and these discount vary
from site to site depending upon its capacity to negotiate with the supplier. To get the best
discounts, buyer need to search a plethora of sites. Here, Price comparison sites come in like
mysmartprice.com, Pricedekho.com, freekamal.com and Junglee, etc. . The website compare
prices over the entire web and provide users with the best available price. E-Commerce sale
through these website are increasing and will further increase as consumers get more and more
discount savvy
.
Online Grocery Store:
Online grocery stores are gaining popularity in India due to absolute convenience, ease of
shopping and a fast-growing market. Punexpress.com, Milestore.com, Atadaal.com have already
entered the market and are gaining popularity. They provide discounted product and free home
delivery. All of these stores are targeting the Indian housewife, who are yet to move to e-
commerce way of shopping.
Innovation in logistics:
The addition of the new concept in the ecommerce industry had been recently observed when
Amazon patented its new delivery model called the Prime Air which is expected to be launched
in the upcoming years. This model will use the highly technically embedded drones or
helicopters for the instant delivery of the items. These will be programmed in such a way that
using a GPS system they will identify the exact address for delivery and drop the item right in
front of the doors of the customers. These aerial vehicles will prioritize the public safety and are
designed as per the commercial aviation standards.
63. Conclusion
The research method contains two phases. In the first phases, it has been described how
information was gathered about e-commerce, usability, and trust. Two textbooks provide
economical theories and are used as a theoretical background. A model has been shown how all
concepts, described in this thesis, relate to each other. In the second phase, a description has been
given how the research is conducted. In order to arrive at statistical results, a comparative
research is made between more trusted and less trusted e-commerce Web sites. The statistical
results are achieved by mainly using ANOVA statistics. Finally, a critical description of the
research's four limitations has been provided.
he Internet is one of the fastest growing mediums the world have ever known. It contains
several features, among which e-mail, HTML, World Wide Web, and Web browsers. Originally
dominated by academic content, the Internet has gradually evolved into a true economy. The
statistics have shown that rich and developed countries account for 82% of the online population.
The success of the Internet make it indispensable for companies to have an online presence.
E-commerce is an integral part of e-business, which involves buying and selling goods and
services electronically. The shopping cart system is the most advanced and efficient type of e-
commerce Web site, although it is subject to high expenses. Only 3.2% of visitors to an e-
commerce Web site actually make a purchase. Therefore, e-commerce companies have
substantial interest in designing trustful Web sites as many customers use them for cross
shoppingA model to understand e-commerce trust has been provided, consisting of four phases,
namely unawareness, building trust, confirming trust, and maintaining trust. The last phase has
been called lock-in. The second phase, building trust, has been argued to be the most important
one and is optimised by pursuing a good Web design strategy. Four extraneous factors have been
discussed that increase the level of trust: increased experience with the Internet, increased
numbers of hours online at home, using the Web for financial services, and significantly relying
on e-mail..
64. Bibliography
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