Emergence of E-commerce In Indian Scenario

AKHIL S. VINERKAR

DPGD / JAN 12 / 11 !

SPE"IALISA#I$N% &ARKE#ING

'ELINGKAR INS#I#(#E $) &ANAGE&EN# DEVL$P&EN# * RESEAR"H +EAR $) S(,&ISSI$N% DE" 2-1.

Ac/no01edgmen2

Several people have contributed to the accomplishment of this dissertation and my sincere Gratitude goes to all of them. First of all I am truly grateful to Mr. AMIT TIWARI my guide and supervisor !ho had dedicated his vast deal of his time to e"amine the draft of my !or# and also for his disciplined Guidance and continuous encouragement throughout the progression of this dissertation. My gratitude is e"tended to all my lecturers at Weling#ar Institute of Management for having helped me to achieve a higher education. A special than# also goes to for their precious help in correcting my $nglish. I could never forget the precious help received from all the member of staff at Weling#ar Institute of Management. Finally of course I am particularly grateful to my family for having believed in me and for their constant support.

A%%$&'I( ) I *$RTIFI*AT$ FR+M T,$ G-I'$ This is to certify that the %ro.ect !or# titled /Emergence of E- commerce is a confide !or# carried out by &r. A/3i1 S Viner/ar 0Admission no1 DPGD/JA12/11 ! candidate for the %ost Graduate 'iploma e"amination of the Weling#ar Institute of management under my guidance and direction

SIGNA#(RE $) G(IDE% NA&E% &r. A&I# #I'ARI DESIGNA#I$N% Senior officer ADDRESS% ,H(SHAN S#EEL L#D Sa4gaon -#a1-/3a1a56r di728 Raig3ad K3o5o1i-91-2-.8 &a3ara732ra8 India

%2A*$3 4,+%+2I

INDE: Sr. No Par2ic61ar7 Page No

"HAP#ER -I $volution +f $)*ommerce Status +f $)*ommerce $)*ommerce India Today

5 To 67

II

"HAP#ER -II 2iterature Revie!

65 To 88

III

"HAP#ER -III Research Methodology

89 To 85

IV

"HAP#ER -IV 'ata Analysis ; Interpretation

8: To 98

"HAP#ER -V Research Finding

99 To 79

VI

"HAP#ER -VI Suggestions ; *onclusions

77 To 5<

VII

"HAP#ER -VII =ibliography

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E:E"(#IVE S(&&AR+ A developing country can become industriali>ed and moderni>ed if it can e"tensively apply IT to enhance productivity and international competitiveness develop e)commerce and e) governance applications. An information)based society or #no!ledge based society is composed of IT products IT applications in society and economy as a !hole. Many countries in Asia are ta#ing advantage of e)commerce through opening of economies !hich is essential for promoting competition and diffusion of Internet technologies. The Internet is boosting efficiency and enhancing mar#et integration in developing countries. The developed !orld has had a long lead over the developing countries in the telecom infrastructure. The !orld average of tale ) density is 67 per cent compared to the developed !orld average of 77 to 5< percent. Same is true of %*s Internet connections and the number of Internet hosts. All these traditional indicators for India as seen above are still small. =ut the total numbers of Internet connections are large in absolute numbers. 2arge enough to have critical masses of 6< to ?< million ma#e an impact on e)commerce and e)governance. In the ne"t 8 to 7 years India !ill have 8< to :< million Internet users !hich !ill e@ual if not surpass many of the developed countries. Internet economy !ill then become more meaningful in India. The number of e)transactions !ill be large enough to sustain the Internet economy.

"3a52er 1 In2rod6c2ion The past t!o years have seen a rise in the number of companiesA embracing e) commerce technologies and the Internet in India. Most e)commerce sites have been targeted to!ards &RIAs !ith gift delivery services boo#s audio and videocassettes etc. Ma.or Indian portal sites have also shifted to!ards e)commerce instead of depending on advertising revenue. The !eb communities built around these portal sites !ith content have been effectively targeted to sell everything from event and movie tic#ets to groceries and computers. The leader in these services being Rediff on the net 0!!!.rediff.com1 and India pla>a !hich started a shopping section after their highly successful content site generated W$= visitors. In spite of R=I regulation lo! Internet usage e)commerce sites have popped up every!here ha!#ing things li#e groceries ba#ery items gifts boo#s audio ; videocassettes computer etc. &one of the ma.or players have been deterred by the lo! %* penetration credit card usage in India have also tried to close the success !orld!ide of online commerce. =%= publication !ent online selling its complete range of computer boo#s about ? years ago it might not have the success of an Ama>on.com of =arnes and &oble but they definitely have promised the cause of e)commerce in India !ith at least 6 to 7 !eb sites li#e India boo#shop coming online. This is not to say that the e)commerce scenario has been bad in India as highly successful e)businesses li#e =aba =a>aar and India mart have proved themselves. Indian =an#s too have been very successful in adapting $* and $'I Technologies to provide customers !ith real time account status transfer of funds bet!een current and chec#ing accounts stop payment facilities etc. I*I*I =an# Global Trust =an# and -TI)=an# also have put e ban#ing over the internet facilities in place for the up coming e)commerce mar#et speed post also plain to clone the Fed$" story !ith online pac#age status at any moment in time . The future does loo# very bright for e)commerce in India !ith even the stoc# e"changes coming online providing an online stoc# portfolio and status !ith a fifteen minute delay in prices. The day cannot be far !hen !ith R=I regulations !e !ill able to see stoc# transfer and sale over the &et !ith speciali>ed services li#e Sch!ab and e)trade. Though !ith security and encryption being proven technology for the transfer of funds over the Internet the Indian Government still has problems !ith A'igital signaturesA and verification processes over the Internet. This combined !ith R=I norms and regulations has proved a ma.or huddle for e)commerce even though BS&2 IndiaAs monopolistic IS% does !ant to .ump on to the electronic transaction band!agon !ith the advent of private IS%As and IndiaCs ne! and positive attitude to!ards IT and the prime ministers ne! AIT policy /the future is very positive in India for doing commerce.D 1.1 E<o162ion of "ommerce *ommerce has evolved over the centuries. %rior to the evolution of money it !as the simple =>ar2er 5roce77D !here things could be e"changed say mil# for grains. The evolution of money brought !ith it the concept of a =mar/e251ace?. In a mar#etplace *ommerce is function of 9 %Cs E %roduct %rice %lace and %romotions. All these four components play a vital role in a transaction to ta#e place. 'ifferent combinations of 9%s determine different t forms of *ommerce. +nce the mar#etplace came into e"istence a fe! pioneers reali>ed that people

!ould be ready to pay e"tra if they could deliver products at the customerCs doorstep. A slight modification on %rice and %lace led to the convenience of getting products at their homes. This concept delighted the customers and thus the concept of =S2ree2 Vendor7? !as born. When the %ostal System came into being the sellers decided to cash in on the ne! opportunity and started using mailers giving description of their products. It led to the concept of =&ai1 $rder "a2a1og6ing?. From here the evolution of the =#e1e 73o55ing? net!or#s !as thus inevitable !ith the development of media vehicles. The latest generation of commerce is one that can be done over the internet. Internet provides a virtual platform !here sellers and buyers can come in contact for sale and purchase of goods and services. They can be thousands of miles apart may belong to different parts of the !orld might spea# different languages =E-"ommerceD emerged as the boundary)less trade medium in the era of globali>ation.

)ig 1.1 E<o162ion of "ommerce Since Internet has the ability to reach the customerCs homeF the 'istribution *hannel has started to assume ne! meaning to the =?* and *?* e)Mar#eter. The %hysical delivery got converted to electronic deliveryF physical products !ere no! electronic products displayed on a !ebsite. With options of paying online through debit and credit cards even the Transaction !as purely electronic.

)ig 1.2% #3e Dimen7ion7 of E-"ommerce

Another important % for the e mar#eter %romotion assumed importance especially because there is no face to face interaction bet!een the buyer and seller. The focus of online promotions is the Ggreat dealsC GdiscountsC GconvenienceC offered by the Mar#eters .1.2 #3e S2a267 of E-"ommerce in India and i27 Po2en2ia1 $commerce stands for electronic commerce and pertains to trading in goods and services through the electronic medium i.e. the Internet or phone. +n the Internet it pertains to a !eb site !hich sells products or services directly from the site using a shopping cart or shopping bas#et system and allo!s credit card payments. Back in 2005, the 100 million mark would have seemed impossible. With a small number of 25 million internet users in India (2.5 penetration! in 2005, we have seen a sur"e in the

followin" #ears as the number $umped to %& million in 200' and 100 million in 2010 which is more than a 100 "rowth.

The following table shows the YoY growth: Year Internet Users (millions) 2006 2007 2008 2009 2010 32.2 46.0 51.8 61.3 100.0 ((ource) *oo"le! 1.. E-"ommerce in India 2odaA Today $)commerce is a by!ord in Indian society and it has become an integral part of our daily life. There are !ebsites providing any number of goods and services. Then there are those !hich provide a specific product along !ith its allied services. 1...1 &612i-Prod6c2 E-"ommerce Some Internet portals provide almost all categories of goods and services in a single site henceF they are targeting buyers of every possible product and service. The most popular e"amples are !!!.indiapla>a.com !!!.india.com !!!.#ho..com !!!.sify.com !!!.rediff.com !!!.indiatimes.com and so on. These Indian $)commerce portals provide goods and services in a variety of categories. To name a fe!3

H H H H H H H H H H H H H H H H H H .

Apparel and Accessories for men and !omen ,ealth and beauty products =oo#s and maga>ines *omputers and peripherals Behicles *ollectibles Soft!are *onsumer electronics ,ousehold appliances Ie!elry AudioJBideo entertainment goods Gift articles Real estate and services =usiness opportunities $mployment Travel tic#ets Matrimony %ets and more

1...2 Sing1e-Prod6c2 E-"ommerce Some Indian portalsJ!ebsites deal in a speciali>ed field for e"ample3 A62omo>i1e7% $"amples are3 http3JJ!!!.indiacar.comJ and http3JJ!!!.automartindia.comJ. +n these sites !e can buy and sell four)!heelers and t!o)!heelers ne! as !ell as used vehicles online. Some of the services they provide are3 H *ar research and revie!s H +nline evaluation H Technical specifications H Behicle Insurance H Behicle Finance H 'ealer 2ocator H Regional Transport +ffice regulations H $"pert spea# H Message boardKand more. S2oc/7 and 73are7 and e-commerce In India today !e can even deal in stoc#s and shares through e)commerce. Some of the sites are3 http3JJ!!!.e@uitymaster.comF http3JJ!!!.7paisa.com.Some of the services offered to registered members are3 H +nline buyingJdealing of stoc#s and sharesF H Mar#et analysis and research

1-

H H H H H H

*ompany information *omparison of companies Research on $@uity and Mutual Funds Trac#ing Mar#et Trends ,otline for advice on Ris# Management ?9),our helpdes#K.and more.

Rea1 e72a2e and E-commerce3 %ortals li#e http3JJ!!!.indiaproperties.comJ facilitate online dealing in real estate. They offer either outright purchase or lease of a property through their portal. They provide information on ne! properties as !ell as properties for resale .+ne can deal directly !ith developers or builders or through consultants and bro#ers .Allied services3 H ,ousing Finance H Insurance companies H Architects ; Interior 'esigners H &RI services H %roperty Management *onsultants H %ac#ers ; Movers H Security ; Maintenance Services H Baastu or Feng Shui *onsultantsKand more.

#ra<e1 * #o6ri7m and E-commerce3 India has a rich history !ith cultural heritage and e)commerce is instrumental to a large $"tent in selling India as a product encouraging Indians as !ell as foreigners to see its Multi faced culture and beauty. A ma.or Government of India portal http3JJ!!!.tourisminindia.comJ has a vast variety of information for a potential tourist. The tourist destination sites are categori>ed according to themes li#e3 H Adventure ) tre##ing mountain climbing etc H $co)Themes pertains to .ungles flora and fauna H =eaches of India H Architectural attractions H Forts and %alaces H =uddhist attractions H ,ill resorts H 'esert tre#s H %ilgrimage sites A11ied 7er<ice7 offered are% 6. %assport ; visa ?. Travel ; accommodation information 8. Weather information

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9. Festival ; fair dates 7. Shopping 5. Tour +perators :. Information on *uisine ; Restaurants L. *ar rental servicesKand more. There are also sites that highlight the tourist destinations of a specific region in India li#e http3JJ !!!.incredibleindia.org !hich covers &orth $ast India. Gif27 and E-commerce3 In the bygone days one had to plan !hat to gift a loved one trudge across to your favorite Shop and bro!se for hours before purchasing a gift. Today there are specific Indian !ebsites ma#ing the act of gifting @uic# and easy to suit ones lifestyle. +ne such site is http3JJ!!!.indiangiftsportal.comJ. The gifts are categori>ed as3 6. *ollectibles li#e paintings and sculptures ?. 2u"ury items li#e leather goods perfumes .e!elry bo"es etc 8. ,ousehold curios and carpets etc 9. Toys ; games 7. *hocolates 5. Flo!ers :. Wood)craft ; metal)craft L. Idols for !orshipKand more. Also the items can be searched by different regions of India as every region has a special style in ma#ing handicrafts. Ho>>ie7 and E-"ommerce% The most popular hobbies from time immemorial are reading music and films. +n the Indian !ebsite http3JJ!!!.firstandsecond.comJ one can buy more than 8<< <<< titles of boo#s cassettes B*'s and 'B's. The boo#s cover a !ide range of topics li#e =usiness Art *oo#ery $ngineering *hildrenCs Stories ,ealth Medicine =iographies ,orror ,ome ; Garden etc. As for music and videos they are available in $nglish as !ell as in Indian languages to cater to the varied tastes and the topics range from devotional songs old)time favorites and retro and .a>> to the latest pop rap etc. &a2rimonA and E-commerce% It is said that marriages are made in heaven but in the !orld of $) commerce they are made on marriage portals li#e http3JJ!!!..eevansathi.comJ 0meaning life)partner.com in ,indi1and http3JJ!!!.shaadi.comJ 0meaning marriage.com in ,indi1.+ne can search for a suitable match on their !ebsites by region of residence 0India or abroad1 religion or caste. +nce registered !ith them they have email facility and chat rooms too so that the couple gets to #no! more about each other before ma#ing the biggest decision of their lives. Allied services for registered members3

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6. Astrological services ?. Information on *ustoms and Rituals 8. 2egal issues 9. ,ealth ; =eauty 7. Fashion ; Style 5. Wedding %lanners :. ,oneymoon 'estinationsKand more. Em51oAmen2 and e-commerce3 T!o ma.or portals li#e !!!.monsterindia.com and !!!.nau#ri.com 0meaning .ob.com in ,indi1 are instrumental in providing .ob see#ers !ith suitable employment at the clic# of ammo use. They have directories categori>ed under the headings $mployers and Iob See#ers. The service for .ob see#ers is free and for $mployers they charge a nominal fee. Iobs are available online in fields ranging from secretarial to soft!are development and from real estate to education. The opportunities offered are unlimited.

1.9 )aci1i2a2or7 of E-"ommerce in India 1.9.1 Informa2ion direc2orie7 %ortals li#e http3JJ!!!.trade)india.comJ and http3JJtrade.indiamart.comJ maintain directories giving trade details on almost any topic !hether it is from apparel to toys from gems to heavy machinery or from food to employment. The products and services are listed !ith appropriate sub)headings to ma#e it easy for a serious information)see#er to find !hat he !ants. Some other similar sites are http3JJ!!!.indiagrid.comJ http3JJindiainfo.comJ and http3JJin.indiatimes.comJ. Allied services provided by them3 Message boards chat rooms forums etc. 1.9.2 ,an/7% Ne2 >an/ing / 53one >an/ing3 This is an online ban#ing facility available for savings account holders as !ell as current Account holders. Some of the special &et ban#ing services are3 H 'emat accounts for saleJpurchase of stoc#s and shares H Foreign $"change services H 'irectJInstant payment of bills on the account)holderCs behalf H Financial %lanning ; advice H $lectronics Funds Transfer H 2oans to account)holders H &RI servicesKand more.

"redi2/De>i2 "ard7%

1.

=an#s facilitate $)commerce by providing the most vital trade instrument namely the *reditor 'ebit *ard !ithout !hich $)commerce !ould be impossible. Some of the ma.or Indian players in this field are3 http3JJ!!!.hdfcban#.comJ http3JJ!!!.iciciban#.comJand http3JJ!!!.stateban#ofindia.comJ.

1.; Po2en2ia1 of E-"ommerce in India Microsoft Research India !as inaugurated in Ianuary ?<<7 in =angalore as the si"th MSR laboratory in the !orld. The arrival of a giant li#e Microsoft itself spea#s of IndiaCs potentials a !orld)player in the field of Information Technology and e)commerceF and others !ill soon follo!. Indian researchers and technicians can further the fast emerging !orld of $)commerce in India and ta#e it to greater heights. What does the future hold for e)commerceM Many !ould say it is difficult to predict. The forces that determine the !ebAs !inners and losers are .ust ta#ing shape and technological advances could add even more uncertainty. +n the do!nside some e"perts predict that it !ill be increasingly difficult for smaller companies to establish their presence. %ublic companies and traditional brand name retailers have deep poc#ets and a name recognition that !ill ma#e it difficult for smaller sites and mom)and)pop shops to attract customers thereby forcing them to compete !ith the big boys. +n the &et itAs one big neighborhood. +n the upside nearly all e"perts believe that overall e)commerce !ill increase e"ponentially in coming years. =usiness to =usiness transactions !ill represent the largest revenue. +nline retailing !ill also en.oy a drastic gro!th. Areas e"pected to gro! include financial services travel entertainment and groceries. And for those considering opening a virtual store front forthcoming technology and standards agreements !ill ma#e it easier to create a site to protect it against payment fraud and to share information !ith suppliers and business partners. +ccordin" to a ,euters, *oo"le e-pects India.s Internet users to triple (a whoppin" /00 million! b# 201%. 0ow, what is it that will propel this hu"e "rowth1 ,a$an +nandan, who heads *oo"le.s India operations shared with 2he W(3 that 452he ne-t 200 million new users will lar"el# be mobile4 first users and out of those, 100 million will be mobile4onl# users5. 2his is mainl# because telecom carriers have invested in hi"h4speed wireless infrastructure and smart phones will become cheaper. 6et.s see how that "oes. (o what does this user "rowth mean for 74commerce in India1 8nline travel and movie ticket sales "enerate about 95 billion in revenue in India compared to a massive 9:0 billion in nei"hborin" ;hina. It remains to be seen whether this "rowth in Internet penetration will translate into more number of users who will indul"e in online purchasin". +nandan had also mentioned that, <=akin" mone# off that "rowin" audience, thou"h, is provin" difficult thus far for *oo"le and other Internet companies,5 +lso, Indian online ad spendin" is onl# about 9200 million per #ear > a small

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fraction of the 9:0 billion "lobal di"ital advertisin" industr#

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"3a52er 2 Li2era26re Re<ie0 $lectronic commerce or e)commerce consists primarily of the distributing buying selling mar#eting and servicing of products or services over electronic systems such as the Internet and other computer net!or#s. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve $lectronic funds transfer supply chain management e)mar#eting online mar#eting online transaction processing electronic data interchange 0$'I1 automated inventory management systems and automated data collection systems. It typically uses electronic communications technology such as the Internet e"tranets e)mail e)boo#s databases and mobile phones.

)ig 2.1% &eaning of E-"ommerce 2.1 )6nc2ion7 of E1ec2ronic "ommerce The four functions of e)commerce are3 *ommunication %rocess management Service management Transaction capabilities

)ig 2.2% )6nc2ion7 of E1ec2ronic "ommerce 2.2 Di72inc2 "a2egorie7 of E-"ommerce Four distinct categories of electronic commerce can be identified as follo!s3 ,67ine77-2o->67ine77 C,2,D% =usiness)to)=usiness refers to the full spectrum of e)commerce that can occur bet!een t!o organi>ations. Among other activities =?= e)commerce includes purchasing and procurement supplier management inventory management channel management sales activities payment management and service and support. While !e may be familiar !ith a fe! =?= pioneers) e.g. *hemde" 0!!!.chemde".com1 Fast parts 0!!!.fastparts.com1 and Free Mar#ets 0!!!.freemar#ets.com1 ) some other e"citing ne! consortia are emerging.
1!

,67ine77-2o-"on76mer C,2"D% =usiness)to)*onsumer e)commerce refers to e"changes bet!een businesses and consumers e.g. Ama>on.com Nahoo.com and Sch!ab.com. Similar transactions that occur in business)to business e)commerce also ta#e place in the business)to)consumer conte"t. For instance as !ith smaller business)to)business transactions that relate to the bac# office of the customer 0i.e. inventory management at the home1 are often not trac#ed electronically. ,o!ever all customer)facing or front office activities are typically trac#ed. These include sales activities consumer search fre@uently as#ed @uestions and service and support. "on76mer-2o-"on76mer C"2"D% *onsumer)to)*onsumer e"changes involve transactions bet!een and among consumers. These e"changes may or may not include third)Oarty involvement as in the case of the auction)e"change e=ay. +ther activities include classified ads 0e.g. !!!.numberoneclassifieds.com1 games 0!!!.heat.net1 .obs 0!!!.monster.com1 Web) based communication 0!!!.ic@.com1 and personal services 0e.g. NahooP %ersonals !ebpersonals.com1.

"on76mer-2o-,67ine77 C"2,D% *onsumers can band together to form and present themselves as a buyer group to businesses in a consumer)to)business relationship. These groups may be economically motivated as !ith the demand aggregator Mercata.com or socially oriented as !ith cause)related advocacy at vo"cap.com. In ?<6? =?* ecommerce sales gre! ?6.6Q to top R6 trillion for the first time according to ne! global estimates by e Mar#eter. This year sales !ill gro! 6L.8Q to R6.?SL trillion !orld!ide e Mar#eter estimates as Asia)%acific surpasses &orth America to become the !orldAs &o. 6 mar#et for =?* ecommerce sales.

1@

Sales in &orth America gre! 68.SQ to a !orld)leading R859.55 billion in ?<6?Ta figure e"pected to increase 6?.?Q to R9<S.<7 billion this yearTas more consumers shifted spending from physical stores to retail and travel !ebsites than#s to lo!er prices greater convenience broader selection and richer product information. =ut despite strong gro!th &orth AmericaCs share of global sales !ill drop from 88.7Q last year to 86.7Q in ?<68 as Asia)%acific surges ahead. =?* ecommerce sales in Asia)%acific gre! more than 88Q to R88?.95 billion in ?<6?. This year the region !ill see sales increase by more than 8<Q to over R988 billionTor more than one)third of all global =?* ecommerce sales.

1B

The rapid gro!th in Asia)%acific sales is a result of several factors. Three Asia)%acific mar#ets *hina India and IndonesiaT!ill see faster =?* ecommerce sales gro!th than all other mar#ets !orld!ide this year !hile Iapan !ill continue to ta#e a large share of global sales. *hina unsurprisingly is the primary driver of gro!th in the region. The country !ill surpass Iapan as the !orldCs second)largest =?* ecommerce mar#et this year ta#ing an estimated 69Q share of global sales as its total reaches R6L6.5? billion up 57Q from R66<.<9 billion in ?<6?. The -S !ill remain the single country !ith the largest share of !orld!ide =?* ecommerce spending at ?S.5Q in ?<68Tdo!n from 86.7Q in ?<6? despite relatively strong gro!th. This !ill continue throughout the forecast period though *hina is closing the gap fast. In ?<65 *hina !ill have ??.5Q of the !orld!ide mar#et vs. ?5.7Q in the -S. *hina also boasts the highest number of people !ho buy goods online in the !orldTnearly ??< million in ?<6? according to e Mar#eterTa result of increasing internet penetrationF a burgeoning middle class !ith gro!ing trust in online shoppingF government)driven campaigns to promote consumerismF as !ell as improved infrastructure product selection and services offered by online sellers and retailers.

2-

According to e Mar#eter =?* ecommerce sales in the -S !ill gro! 6?Q to R8L9.L< billion in ?<68Tafter gro!ing 68.LQ to R898.98 billion last yearTas average =?* ecommerce sales per user reach R? 955 this year among those !ho buy goods online in the -S. Average spending per user is lo!er in *hinaTset to reach .ust R5:< this year e Mar#eter estimates but the sheer gro!th in *hinaCs digital buyers is staggering. The country !ill nearly double the number of people !ho buy goods online bet!een ?<6? and ?<65 e Mar#eter estimates resulting in considerable upside for =?* ecommerce sales in *hina through the forecast period.

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A =ottom)-p Approach to $valuating the Global $commerce Mar#et $ Mar#eter is relatively distinct in its methodology for global =?* ecommerce sales. The company forms its figures through an analysis of various elements related to ecommerce salesT including macro)level economic conditions population figures internet and broadband adoption consumer attitudes historical trends in online sales survey data from third parties and estimates from other research firms investment ban#s and other forecasters at a country and regional level before building its !orld!ide model.

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For e"ample !hen evaluating overall =?* ecommerce sales in *hina e Mar#eter considered data points from do>ens of sources on top)line sales gro!th online buyers online buyer penetration internet usage and other trendsTincluding but not limited to those included on the charts above and belo!Tbefore forming its o!n forecast.

2.

In all e Mar#eter analy>ed more than 6 6<< data sets from over 68< research sources !hose ecommerce figures are each trac#ed and evaluated by e Mar#eter based on their respective methodologies definitions and historical accuracy loo#ing at more than ?? mar#ets and si" ma.or regions before forming its !orld!ide figures. $ Mar#eter trac#s and re)evaluates many of its estimates more than once per year. When an estimate is re)evaluated and found to be unchanged from the previous estimate it is mar#ed as /confirmed and republished/ as of the later date. 'efinitions3 e Mar#eterCs figures for =?* commerce sales include retail sales travel salesF digital do!nloads purchased via any digital channel 0including online mobile and tablet1 and sales from businesses that occur over primarily *?* platforms such as e=ay. These figures e"clude gambling and event tic#ets. 'igital buyers are internet users ages 69 and older !ho have made at least one purchase via any digital channel !ithin the past year including purchases made on des#top laptop mobile and tablet devices. $ Mar#eter converts currency based on the average ?<6? e"change rate as reported by the $conomist Intelligence -nit. No2e% e Mar#eter benchmar#s its Argentina =?* ecommerce sales pro.ections against *Umara Argentina de *omercio $lectrVnico 0*A*$1 data for !hich the last full year measured !as ?<66. $ Mar#eter benchmar#s its Germany =?* ecommerce sales numbers against the =undesverband des 'eutschen Bersandhandels data for !hich the last full year measured !as ?<66. e Mar#eter benchmar#s its India =?* ecommerce sales pro.ections against the Internet ; Mobile Association of India 0IAMAI1 data for !hich the last full year measured !as ?<66. e Mar#eter benchmar#s its Iapan =?* ecommerce sales pro.ections against the Ministry of $conomy Trade and Industry 0M$TI1 data for !hich the last full year measured !as ?<6<. -S =?* ecommerce is comprised of retail ecommerce and digital travel sales. -S retail ecommerce is benchmar#ed against the 'epartment of *ommerce data for !hich the last full year measured !as ?<66F -S digital travel sales !hich includes online leisure and unmanaged business travel is benchmar#ed against %ho*usWright data for !hich the last full year measured !as ?<6<. Asia)%acific includes American Samoa Armenia Australia A>erbai.an =angladesh =hutan =runei =urma *ambodia *hina *oo# Islands Fi.i French %olynesia Guam ,ong 4ong India Indonesia Iapan 4iribati 4yrgy>stan 2aos Macau Malaysia Maldives Marshall Islands Micronesia Mongolia &auru &epal &e! *aledonia &e! Wealand &orthern Mariana Islands &orth 4orea %a#istan %alau %apua &e! Guinea %hilippines Samoa Singapore Solomon Islands South 4orea Sri 2an#a Tai!an Thailand Ta.i#istan Timor)2este Tonga Tur#menistan Tuvalu ->be#istan Banuatu Bietnam Wallis and Futuna. $astern $urope includes Albania =elarus =osnia and ,er>egovina =ulgaria *roatia *yprus *>ech Republic $stonia Georgia ,ungary 4a>a#hstan 4osovo 2atvia 2ithuania Moldova Montenegro Republic of Macedonia Romania Russia Serbia Slova#ia Slovenia Tur#ey -#raine %oland. 2atin America includes Anguilla Antigua and =arbuda Argentina Aruba =ahamas =arbados =eli>e =olivia =ra>il *ayman Islands *hile *olombia *osta Rica *uba 'ominica 'ominican Republic $cuador $l Salvador Grenada Guatemala Guyana ,aiti ,onduras Iamaica Me"ico Montserrat &etherlands Antilles &icaragua %anama %araguay %eru Saint =arthelemy Saint 4itts and &evis Saint 2ucia Saint Martin Saint Bincent and the Grenadines Suriname Trinidad and Tobago Tur#s and *aicos Islands -ruguay Bene>uela Birgin Islands
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0=ritish1 Birgin Islands 0-S1. Middle $ast ; Africa includes Afghanistan Algeria Angola =ahrain =enin =ots!ana =ur#ina Faso =urundi *ameroon *ape Berde *entral African Republic *had *omoros *ongo 0=ra>>aville1 *ongo 04inshasa1 *ote dAIvoire '.ibouti $gypt $@uatorial Guinea $ritrea $thiopia Gabon Gambia Ga>a Strip Ghana Guinea Guinea)=issau Iran Ira@ Israel Iordan 4enya 4u!ait 2ebanon 2esotho 2iberia 2ibya Madagascar Mala!i Mali Mauritania Mauritius Mayotte Morocco Mo>ambi@ue &amibia &iger &igeria +man Xatar R!anda Saint ,elena Sao Tome and %rincipe Saudi Arabia Senegal Seychelles Sierra 2eone Somalia South Africa Sudan S!a>iland Syria Tan>ania Togo Tunisia -ganda -nited Arab $mirates West =an#J%alestine Western Sahara Nemen Wambia Wimbab!e. &orth America includes *anada -S. Western $urope includes Andorra Austria =elgium 'enmar# Faroe Islands Finland France Germany Gibraltar Greece Greenland Guernsey Iceland Ireland Isle of Man Italy Iersey 2iechtenstein 2u"embourg Malta Monaco &etherlands &or!ay %ortugal San Marino Spain S!eden S!it>erland and -4. A>o62 e &ar/e2er $ Mar#eter is the authority on digital mar#eting media and commerce offering insights essential to navigating the changing competitive and comple" digital environment. =y !eighing and analy>ing information from different sources e Mar#eter provides businesspeople mar#eters and advertisers !ith the most complete vie! of digital mar#eting available. 2.. Significance of E-"ommerce The electronic mar#et place participants are not limited only to digital product companiesC e.g. publishing soft!are and information industries. The digital age and the digital revolution affect all by virtue of their process innovations3 Web)TB and digital television are going to affect TB ne!s and entertainment programs. *hanges in telecommunication !ill affect the !ay the information is received product announcements orders etc. %hones Fa" machines *opiers %*s and %rinters have become essential ingredients in doing business so are $)mail !ebsites and integrated digital communication TodayCs office business machines are not integrated 0e.g. Fa"ed orders have to be typed in on computers1 the much tal#ed about convergence !ill drive all these e@uipment into one digital platform !hether it be a computer connected to the Internet and intranet a ne! #ind of device capable of interacting !ith other devices because that device !ill prove to be more efficient and productive.

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(7er eE5erience of e-commerce

$)commerce gives customers the freedom to purchase items from any!here. According to a February ?<<6 =usiness ?.< report 77 percent of users en.oy online shopping because there are no salespeople involved. In a 'ecember ?<<< study it is also indicated that /anyone !ith access to a credit card !ould buy over the &et./ =ased on such phenomena it is safe to say that interactivity !hich is more secure than ever and saves the need of a middleman during an online transaction has played a ma.or role in boosting the gro!th of e)commerce. *ompared to traditional retailing users also cited the follo!ing reasons as to !hy they prefer online shopping3 *onvenience Saves time Avoids cro!ds Allo!s more time to research 2o!er prices L9Q :?Q 59Q 56Q 5<Q

Among these top five reasons at least t!o of them cannot be provided by traditional retailing and they can only be enhanced by the interactivities offered by the Internet. Therefore interactivity is a significant revenue partner for sites that have adopted e)commerce. The do!nside is that e)commerce sites are inundated !ith traffic during ma.or holidays. In 6SSS AMR Research a mar#et analysis firm speciali>ing in logistics reported that the pea# in online orders during the holiday season came around 'ec. 66 !hereas the shipping activity pea#ed the !ee# of 'ec.?< indicating there !as a delay in preparing orders. /T!o years ago it !as acceptable even impressive to send an e)mail confirming the order had
2

been received AA said Ashley 'eaton manager of logistics services for the $uropean division of 4urt Salmon Associates a consulting firm. /&o! the customer !ants to #no! !here that order is in real time.AA *ustomers also !ant more information about the status of their Internet orders than they e"pect !ith catalog orders. This sheds light on the fact that e)commerce re@uires a different outloo# on building a logistics net!or#. %roducts ship from the company to the customer. The store no longer plays the intermediary according to a Ianuary ?<<< article in the Iournal of *ommerce.

2.9 S26die7 on E-"ommerce Ind672rA in India To understand the situation in India &asscom conducted a survey on IndiaAs potential for e *ommerce industry !ith the follo!ing points of reference3 0a1 -nderstand and evaluate the present state of $)commerce industry and mar#et in India. 0b1 Anticipate future potential of $)commerce industry and mar#et in India. 0c1 Identify present and potential global trends that are e"pected to define ne! paradigms of $) commerce scenario. 0d1 Analy>e current internet access and penetration in India and evaluate potential threats. 0e1 Suggest suitable strategies to enable Indian IT companies to address and capture a significant share of $)commerce mar#et. 0f1 Increased proliferation of Internet. 0g1 Achieving a leadership position in $)commerce technologies and infrastructure mar#et. 0h1 'eveloping state)of)the)art $)commerce enabling and access infrastructure in India. Going by even the preliminary findings it can be easily summari>ed that $)=usiness can indeed emerge as a ma.or opportunity for India. This ac@uires t!in connotations of $)commerce and $) =usiness transactions from local businesses and the huge opportunity for soft!are e"ports to other countries by @uic#ly .oining the $)=usiness opportunities. This survey is the first of its #ind !hich has ta#en into consideration IndiaAs t!in assets E soft!are industry and rapidly restructuring industry sector. The scope of the study also included finding a level of a!areness among corporate e"ecutives about $)commerce and its benefitsF perceived importance of $)commerce as being integral to their corporate strategy frame!or#F prospective volume of transactions e"pected to be carried out through $)commerceF opportunity for e"ports of $)commerce solutions and
2!

services .%enetration analysis of online services based on the &ASS*+M 06SSS1 study indicated that penetration rates of internet and $)commerce transactions in India are e"pected as follo!s3 For =usiness)to)=usiness transactions Indian industries are e"pected to reach online penetration of ?Q by ?<<8 and LQ by ?<<L. This !ould be about one tenth of $)commerce penetration in Iapanese industries during similar periods. It further e"pects that IndiaAs active internet population !ould spend close to 6.9Q of its total regular household spending through internet purchases by ?<<8. Revenue streams !ould increasingly be aligned !ith emerging global model. Most of the revenue !ould come from commercial transactions and a small amount !ould come from advertisement revenues. It is e"pected that by ?<<8 Internet =usiness)to)*onsumer transaction !ould constitute L< percent of the revenue. The advertisement revenues !ould amount to about 7Q of total advertisement money spent. It is predicted that 8)9 percent of $) commerce could be the result of a gro!ing group of affluent Indians living overseas !ho are li#ely to ma#e some form of purchase from Indian based Web sites either for their o!n personal consumption or as gifts for their #in in India. Some of the preliminary findings on $)commerce and $)=usiness soft!are e"ports potential are as follo!s3 In the year 6SSS)?<<< Internet and $)commerce related soft!are and services e"ports from India brought -S R 89< million out of an estimated -S R 8.S billion soft!are and services e"ports. Supply *hain Management optimi>ation is one of the strongest drivers of global $)commerce solutions mar#et as it spurs =usiness)to)=usiness transactions. More than 5LQ of Indian soft!are houses have informed of strong e"pertise in Supply *hain and 'istribution Management solutions. Almost 8?Q of IT company respondents have identified !eb based consumer businesses as a ma.or opportunity area !ith e"pected paybac#s beginning in 8)9 years. Some of the promising areas of $)commerce services are3 legacy application integrationF Internet application integrationF $'I Migration to !eb based modelsF ne! IT frame!or#s integration !ith business strategy and strategic IT consulting 0+$*' 6SSS1. With corporate planning to revive IT spending after N?4 problem $)commerce solutions have emerged as a ma.or technological and business opportunity for Indian soft!are houses. ,o!ever there is a concern over present state of affairs !ith regard to facilitating and supporting $)commerce in India because of the poor infrastructure. ,o!ever the soft!are industries in India as !ell as user industries are putting together their resources for adopting $) =usiness strategies. In spite of passing of the I.T. bill the frame!or# and infrastructure in India still is not conducive enough for proliferation of $)=usiness. More than LLQ corporate e"ecutives e"pressed #een a!areness of increasing adoption of $)commerce and its potential benefits. More than 96Q of corporate e"ecutive said that $)commerce transactions are integral to their corporate plans. Among the e"ecutives responding nearly L7Q !ere industries !hich did not have direct or fre@uent contact !ith end)consumers but they can see that in the future they may have to. About 6LQ of corporations already have some form of $)commerce infrastructure in place. These have been facilitated through upgrade of e"isting IT systems or fresh installations configured for $) commerce transactions. The most commonly found business practice is to establish e"tranets or $'I 0=usiness)to)=usiness1 infrastructure for initial or learning period. This is subse@uently upgraded to internet based access mechanisms for customers. More thanS<Q of the e"ecutives cited perceived efficiency in Supply *hain Management as motive for =usiness)to)=usiness $) commerce and enhanced *ustomer Services 0*ustomer Relationship Management1 for =usiness)to)*onsumer transactions. The other reported benefits included moving to!ards Iustin)
2@

Time management. Almost :LQ of respondents concurred that for them technology is not a ma.or concern nor is the re@uired budgetary resources. ,o!ever the high cost of effecting such transactions and inade@uate services !ith regards to telecommunication in India along !ith band!idth !ere cited as ma.or impediments. About9LQ of respondents said that given the right frame!or# and cost)effective infrastructure they !ould li#e to move to!ards adopting $) commerce at the earliest. Some of the #ey industries that have high potential for early adoption of $)commerce are3 Financial 0Stoc# $"changes and =an#s1 Automobiles Retail Travel IT and Manufacturing. ,o!ever in India presently there are only t!o hubs of $'I based transactions !hich are in %une and Gurgaon.

2.; E-,67ine77 Ini2ia2i<e7 There is a clear need of government action and international agreements on $)commerce issues. It is generally recogni>ed that there is a need for simple transparent and predictable legal environment for $)commerce on a national and international level and that Governments should avoid undue restrictions on $)commerce in order to avoid competitive distortion. To develop such global frame!or# for $)commerce a large number of international and regional bodies have been !or#ing notably amongst them being +$*' WT+ WI%+ &*ITRA2 and IT-. A comprehensive document reporting on international and regional =odies and their activities and initiatives in $)commerce !as prepared 0Ian.6SSS1 by +$*' Secretariat for +$*' Ministerial *onference !hich !as held in +tta!a in6SSL. /A =orderless World3 Releasing the %otential of Global $lectronic *ommerce/0+$*' 6SSS1 indicated the potential for global business for many countries. Second half of 6SSS sa! commitments of some of the big companies to move their multi)billion dollar purchasing operations on to the Internet. With many Fortune 7<< *ompanies moving their supply)chain transactions involving purchase and sales of goods and services on to the Internet has created a real necessity among those !ho do not have $)commerce presence to move in @uic#ly or be left behind. &o! ma.or multinationals such as Intel I=M *isco 8 *om 'ell and many others have had $)commerce models for 8)7 years. $)commerce bet!een business and consumers 0=?*1 !hich means direct purchase of products on the Internet for e"ample boo#s automobiles music entertainment soft!are %*s and many other products has also pic#ed)up significantly. $)commerce is one area !here mar#et forecasts made in 6SS5)S: turned out to be much less than actual performance. %ro.ections have been revised subse@uently by most of the consultancy firms Forrester 0I$$$ 6SSS1 forecasts that !orld!ide Internet *ommerce !ill reach bet!een R 6.9 and R 8.? trillion in?<<8 up from a range of R 77 billion to R L< billion in 6SSL. This gro!th !ill happens as the !orldCs largest economies of India and *hina !ould completely come online by ?<<9

2. $55or26ni2ie7 for India At macro level if one loo#s at the opportunities for India outsourcing soft!are and IT services from -SA and other advanced countries have emerged as one of the means to reduce the cost of $)commerce today. In this regard India has emerged as a preferred destination. Therefore Indian Soft!are $"port Industry could target for a significant share of global e)=usinessJ$)
2B

commerce mar#et in the years to come. In the emerging global digital economy it !ould be necessary for Indian firms to follo! the same online =?= practices as done by others in the !orld to be a sta#eholder. $)commerce !ould give opportunity to small and medium Indian enterprises to pro.ect their capability globally and thus participate more proactively in such ventures. Many traditional sectors such as handicrafts te"tiles art and herbal medicines !hich have failed in the past to tap the global mar#ets due to lac# of mar#eting resources should find an ideal medium in internet. Indian cultural heritage monuments temples and classical music could be made #no!n !idely to the !orld at a very lo! cost of mar#eting and could be further leveraged in enhancing global tourism of !hich India gets only ? percent. $)*ommerce is one IT tool that could do !onders to the Indian economy in many fields. In &ASS*+M study India has the potential to create $)business !orth R6.7 billion by ?<<9and around R6< billion by ?<<L. $) commerce is a fast moving area internationally in terms of opportunities and the technologies. It is predominantly led by industry and user sector !ith government playing a catalytic role. Government by providing proactive policies and environment and facilitating support and critical inputs for gro!th can do !onders for $)commerce in and beyond India. In the last one year significant progress has been made in the country in this regard. &e! Telecom %olicy 6SSS ne! IS% policy and certain specific policies have emerged out of acceptance of %art I of the Report of &ational Tas# Force on IT and Soft!are 'evelopment. They need to be implemented aggressively and !ithout delay. The drive to set)up !orld class information infrastructure at most competitive price has to be accelerated. The follo!ing noticeable programs have been made in India as of Iuly ?<<6. 0i1 Since announcement of Internet %olicy in &ovember SL 867 licenses have been issued to IS%s by 'ot. With the availability of a large number of IS%s it is e"pected that mar#et forces !ill govern the pricing and prices !ill come do!n further.0ii1 &ational Internet bac#bone is being established !hich !ould provide connectivity to Government as !ell as private IS%s. TRAI has fi"ed the upper limit for Internet tariff IS%s are revising tariffs periodically at a very economic competitive and attractive prices to mobili>e the customers.0iii1 BS&2 ST%I and others are providing international band!idth from multiple locations .ST%I !ith the single !indo! facilities including high speed data com services at 6: locations country!ide has multiple sites and are enabling more than 6?<< companies to set up Internet operations.0iv1 &T%)SS has given significant importance to online $)commerce. It is e"pected that information for $)commerce and =)commerce !ill be passed seamlessly. The re@uirement to develop ade@uate band!idth of the order of 6<Gb on national routes and even terabits on certain congested important national routes !ill be immediately addressed to so that gro!th of IT as !ell as $)*ommerce !ill not be hampered

2.! De<e1o5men2 of S6i2a>1e Lega1 )rame0or/ for E-commerce Information Technology =ill 0Government of India 6SSS1 has been passed by both ,ouses of %arliament. The =ill provides legal recognition of electronic records and purposes including its authentication through digital signature. This =ill has enabled the conclusion of contracts and the creation of rights and obligations through the electronic media. It has proposed to provide a legal implementation structure. It has also proposed to amend Indian %enal code and Indian $vidence Act to provide for necessary changes in the various provisions !hich deals !ith offences relating to documents and paper based transactionsF amendments to Section ? of the =an#erAs =oo#
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$vidence Act and R=I Act 6S89 !ill include safeguards for $)commerce transactions. The IT =ill is also aimed at prevention of computer crimes. As the =ill comes into effect corporate and individuals !ill be able to rightfully carry on trade through electronic medium !ithout the fear of losing rights and obligations. This !ill give $)commerce in India a much)needed boost. As the communication net!or# e"pands and computeri>ation gathers momentum the scope of $)commerce !ill e"pand. The need for the ban#ing and financial system to ad.ust to the changing circumstances has become urgent. In India $)commerce in the financial sector is catching up. The pre) re@uisites for the $)commerce in the financial sector are3 total branch computeri>ationF inter branch connectivity inter ban# connectivityF safeguards to ensure accountability of the transactions put through computers and appropriate legal frame!or#. In the advanced countries o!ing to the e"istence of a !ell developed telecommunications infrastructure the accessibility of the internet connection is e"peditious even !hen a large number of customers !ant to bro!se or access a particular site. =ut in India the lines get very often cho#ed and it is not uncommon that one may be compelled to !ait for a long time to get access to a particular !ebsite. So to get $)commerce to be !idely accepted as a reliable means of conducting business a state)of)the)art communications net!or# is needed. The I&FI&$T commissioned by R=I recently is ma.or step in reducing delays and increasing faster communications in the financial sector. The I&FI&$T plays a #ey role in inter) city $lectronic *learing Service 0$*S1 $lectronic Funds Transfer 0$FT1 *entrali>ed Funds Management 0*FMS1 *entrali>ed Funds $n@uiry System 0*F$S1 and the proposed Real time Gross Settlement 0RTGS1 system. The practice of payment through Internet is e"pected to pic# up in the near future. =esides *redit *ard $lectronic *hec#s !ill be in use !ith multiple vendors and ban#sJfinancial institutions. With WT+ *ommitments to encourage $)commerce in the Third World countries Indian *opyright Act 6S7: 0amended in 6SS91 has been broadly in conformity. 2i#e!ise certain amendment to Indian %atent Act in the form of the %atents Amendment =ill has also been introduced in the %arliament. For protection of intellectual property rights a =ill has also been introduced in the %arliament. These are under the consideration of the %arliament. A #no!ledge base in I%R has been created and I%R *ell set up in MIT provides facilitating support. World!ide ne! developments on I%R in the conte"t of emerging digital economy are follo!ed and proactive actions are ta#en. In line !ith WI%+ Treaties 0W*T W%%T 'igital Agenda1 a pro.ect is under!ay on $lectronic *opyright Management System to develop Image Watermar#ing Technology. To accelerate $)commerce in Internet It may be necessary to ta#e follo!)up action on WI%+ *opyright Treaty Technology 'evelopment and %ilot %ro.ects on $)commerce. 2.@ Promo2e E-"ommerce En2er5ri7e7 %romoting innovations supporting entrepreneurs !ith brilliant ; commercial ideas providing business support create incubation centers are some of the areas !here government !ith the participation of industry and other sectors have been playing a catalytic and facilitating role. This may need to be further intensified. Some of the recent initiatives ta#en include3 0i1 MIT in association !ith SI'=I I'=I and soft!are industry has set up a corpus of Rs 6<<crore recently named as &ational Benture Fund for Soft!are and Information Technology
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Industry 0&FSIT1. &FSIT is targeted to provide venture capital to start up soft!are professional and IT units in small scale sector. 0ii1 To provide help to small enterprises ST%I has recently set up business support centre at San Iose -SA. 0iii1 In various soft!are technology par#s as !ell as other par#s promoted by State Government Incubation *enters and plug and play facilities are being set up. 0iv1To release the Indian venture creation and incubation engines procedures and policies are being simplified.

2.B Sec6ri2A for E-"ommerce Follo!ing phenomenal e"pansion of Internet and its application in $)*ommerce there is a tremendous rise in economic transactions using this medium. ,o!ever since Internet is evolving as a means to provide easy interconnectivity of net!or#s for information e"changes freely as possible the systems are not designed #eeping the re@uirements of information security. Aspects li#e privacy integrity authenticity and non)repudiation !hich are essential elements for a commercial transaction are not ta#en care of in its elemental form. There are fre@uent reports of hac#ing and other #inds of abuse of the net!or# o!ing to such deficiencies. To ma#e this medium suitable for $)commerce significant !or# on a continuous basis needs to be ta#en up and government is e"pected to ta#e #een interest in this area of !or# $ncryption being the #ey element to ensure security in a net!or# communication the government could consider e"tending the present restriction of 9< bit encryption level. This !ill necessitate an up gradation of facilities !ith the national security agencies. Specific net!or# security products li#e Intruder 'etection System and Fire!all are being developed in the country. Though many such products are available internationally national capability in this area is re@uired to ensure that no trap)doors are available giving rise to the lac# of confidence on the part of business houses. There !ould be in addition indigenous products similar to Secure $lectronic Transaction 0S$T1 and Secure Soc#et 2ayer 0SS21. =esides e"pertise and capability building efforts are needed to promote $)commerce as a !ealth building enterprise !hich !ould increase G&%. The government is ensuring setting up of %ublic 4ey Infrastructure and *ertification Authority 0*A1 by the end of the year ?<<6follo!ing the passage of IT =ill so that interested $)commerce players can have secure transactions as re@uired.

2.1- E-"ommerce and S2andard7 With a vie! to ensure global seamless connectivity for $)commerce as the demand pic#s up the need for such standards have been felt more in ?<<6 than in any other year. The general perception is that it should be private sector mar#et led approach to open standards supported by Government. In this regard Wiff 'avis Global Information Infrastructure 0GII1 Group have been !or#ing for a standard for Internet based e)commerce involving a broad alliance of leading global corporations institutions and individuals. &IST -SA is providing effective support for industry led standards 0through alliance !ith Internet $ngineering Tas# Force1.These efforts
.2

include 0i1 building standards road)maps !ith private sector sta#eholdersF 0ii1 providing technical assistance to industry in the development and harmoni>ation of open standardsF 0iii1 establishing neutral test beds and developing reference implementations !ith technical e"perts from the private sectorF 0iv1 developing test methods and infrastructures for measurement and demonstration and 0v1 contributing to implementation guidelines set by IT- IS+ I$* -& *$FA*T !ho have been !or#ing in this area. It is necessary to set up a dedicated team in the country !hich !ould follo! these international trends and actively participate in these international standards so that capabilities and interest of India are ta#en care of. If India is to become a ma.or sta#e holder in $)commerce Indian Industry needs full commitment from the government in this area. Real benefits of $)commerce !ill come to India if Indian industry leap) frogs in using these tools to re)engineer its operations aiming at gaining competitive advantage. -SA and $urope through support of their respective governments have ta#en such initiatives. Specifically under the Fifth Frame!or# %rogram of $uropean *ommission one of the #ey actions is related to &e! Methods of Wor# and $lectronic *ommerce. In -SA industry government and Small =usiness $lectronic *ommerce Wor#ing Group has been created to serve SM$ s. *ollaborative programs are being developed to help SM$s benefit from electronic commerce through increased training and education. To ta#e lead in $)commerce it is necessary to develop such programs. Barious organi>ations of MIT could !or# !ith different leading industry associations to develop such a!areness building and education programs. A special group could be set)up to develop this. A proactive role by WT+ WI%+ and other multilateral organi>ations !ould put pressure on all countries to @uic#ly gear)up for $)commerce culture. ,o!ever a ma.or concern is the proposed >ero)duty issue on $)commerce if it is considered under GATT. 'eveloping countries need to e"amine the conse@uences carefully and evaluate possible option of its classification under GATT. For certain international $)commerce one needs to #no! if $)commerce transactions should be classified as cross)border trade or *onsumption abroad. 2i#e!ise a considered vie! on domestic ta"ation issues needs to beta#en.

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"3a52er . Re7earc3 &e23odo1ogA ..1 In2rod6c2ion In the era of economic liberali>ation and increased competition Indian industry is attempting to harness technology to succeed in achieving its business ob.ectives. In doing so it has focused on balancing the benefits provided by ne! technologies !ith the associated ris#s inhaling oneCs business depends on it. This has resulted in a race to be the first to be second in implementing ne! technologies !ith most organi>ations !aiting for their peers to e"plore ne! areas before venturing into them. The basic elements re@uired for successful business engagement are changing rapidly. %ressures to economies speed up operations and supply superior service are constant. +ne of the most visible challenging e"citing and ill)understood means of responding to these pressures is the use of a number of electronic channels particularly the Internet and its offshoots. G ..2 $>4ec2i<e This is study is a research into the use of e)commerce by companies. This study is conducted to evaluate the perceptions status and triggers on the use of e)commerce in Indian companies. This survey has been conducted simultaneously in a number of countries in the Asia)%acific region. The results are e"pected to contribute significantly to!ards the current thin#ing regarding e) commerce in this region. The results presented in this report pertain to the Indian survey. The survey sample consisted of more than 66< Indian companies 5S of !hich had a minimum turnover of I&R l billion and 6: !ith an annual turnover above I&R 6< billion. We chose the largest companies in the country because they !ere most li#ely to have the greatest resources to commit to e)commerce and potentially the largest benefits to reap. They are also the ones !ith arguably the greatest cultural and organi>ational obstacles to overcome in order to do so. The research carried out by 4%MG India and that too# place during late)6SSL !as referred to !hile carrying out this study. Respondents included *$+s *F+s *I+Cs and ,eads of Mar#eting at the companies surveyed.

... S6r<eA &e23odo1ogA The research study !as conducted both %rimary as !ell e"tensive 'es# Research for this report. Secondary data sources !ere used to gain a comprehensive and in)depth understanding of the $) *ommerce mar#et in India. Inputs related to the internet users in India and segment)!ise users of Internet in India etc. have been ta#en from I *ube ?<<5 syndicated research product of the e technology group at IMR= International. These annual syndicated set of reports on the Internet mar#et in India are based on a large scale primary survey covering 57 <<< individuals across ?5
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cities in India. Information from various published resources and other research bodies !ere also used to perform a data validation chec# and also to reach at the final numbers. %rimary Research !as conducted using in)depth intervie!s !ith large and medium)si>ed =?* and *?* $)*ommerce players. A detailed @uestionnaire !as administered to the players from various verticals of the $) *ommerce Industry Respondents !ere re@uired to classify their organi>ations as belonging to3 Y Manufacturing 0MFG1 Y Financial Services 0FS1 Y *omputers ; *ommunications 0*;*1 and Y +ther Industries. ....1 Defini2ion7 A very common @uestion in this conte"t is3 ZWhat e"actly is e)commerce and !hat is the impact of the InternetMD The Internet and its related technologies 0Intranet and $"tranet1 are fast gaining popularity !orld!ide as li#e other technologies for electronic communication bet!een organi>ations 0li#e $'I and Group!are1. $)commerce is a generic term to describe the !ay organi>ations trade electronically. It uses a group of technologies to communicate !ith customers or other companies to carry out information gathering or to conduct business transactions. Although the Internet is the best #no!n of these others include Intranet $'I and smart cards. For the purposes of this survey e)commerce !as defined as computer)to)computer individual)to)computer or computer)to)individual business relationships enabling an e"change of information or value. ,ence the survey also sought to e"plore the use of e)commerce through channels other than the Internet. The main ob.ective involved an attempt to determine the current a!areness of usage levels and initiatives underta#en in the area of e)commerce. Identification of perceived barriers to adopting e)commerce by respondents !as also a ma.or ob.ective. This yields a starting point to address issues related to its adoption. The respondents consisted of people from diverse sectors of industry. The survey also aimed to identify the benefits accrued by those organi>ations that have already implemented such technology in one form of the other. This along !ith the top potential benefits e"pected by the respondents gives an indication of the thrust areas for those aiming to promote e)commerce in the country. ..9 E-"ommerce * #aEa2ion KeA "on7idera2ion7 The gro!th of e)commerce has resulted in e"citing opportunities becoming available for people to adopt this medium as an avenue to mar#et products and services globally. The potential uses of e)commerce have created implication for governments and the sovereign of their ta" systems. Some of the organi>ations that have ta#en note of this development and constituted study groups
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and guidelines to tac#le transactions underta#en include3 Y The -S treasury has released a guideline on Selected Ta" %olicy Implications of Global $lectronic *ommerce. Y The +$*' has produced a report on $lectronic *ommerce +pportunities and *hallenges For Government. Y The $uropean *ommission has also released a report constituted by a high)level group of e"perts on e)commerce. There is an unprecedented level of international co)operation over such a short span of time on the challenges posed by e)commerce and this in fact has brought in seriousness !ithin governments and ta" authorities to tac#le the ta" implications of e)commerce transactions. &ational governments have a disadvantage of not being able to dictate domestic policies in relation to e)commerce. &evertheless this issue !ill be addressed in the near future as e) commerce is gaining momentum and !ill pose tremendous challenges to the e"isting systems of ta"ation. Some of the ta" issues that could arise because of e)commerce !ould be as follo!s3 Per7ona1 #aE% Individuals could escape the ta" net by not declaring the income generated by providing services via the Internet. Re7idence% %eople using the Internet can effectively live and !or# in a number of .urisdictions. A similar situation is possible in the case of corporate. E-"ommerce% *ompanies can transfer profits from high ta" .urisdictions to lo! ta" .urisdictions or ad.ust their income and e"penses !ith branches or subsidiaries in the lo! ta" .urisdictions via Internet transactions. #aE on Good7 * Ser<ice73 =y routing transactions through the Internet it !ould be difficult to sub.ect goods and services to ta". The .urisdiction !here the sale or service has happened could become a matter of interpretation. Permanen2 E72a>1i73men2 CPED% The concept of %$ is important in determining a companyCs business profits and ta" liability in a particular country. ,o!ever business via Internet challenges the !hole concept of a %$ and therefore the @uestion of ho! the business income of an enterprise is determined could become a debatable issue. $lectronic)commerce is undoubtedly going to pose challenges to countries as their present ta" system is based on tangible information reporting and paper trials. *ountries !ill be forced to re)thin# the method of ta"ation and adopt means to recogni>e transactions in ine@uitable manner #eeping in mind the e"isting guidelines issued by some Western countries for ta"ing e)commerce transactions.

"3a52er 9 Da2a Ana1A7i7 9.1 (7age of E-"ommerce in India F a Demand Side 5er75ec2i<e Since the introduction of $)*ommerce there have been debates on future of its prospects in India. Would it be as successful as it is in -S or is it a mirage that attracts many but offers nothing !orth!hileM True enoughF the players in the online mar#etplace are still struggling to settle !ith a successful business model. Most of them are settling for Advertising Model hoping it !ould help them brea#even. ,o!ever to gro! beyond the ma.ority of the revenue needs to be generated from customers. *ustomers on the other hand have become choice)spoilt. There is no dearth of offerings for them. They s#ip from one seller to other in search of best deals in the standardi>ed products mar#et. In this section !e !ould H Focus on the usage of $)*ommerce in India and H -nderstand the triggers and barriers for the online mar#etplace

9.2 (7age of E-"ommerce According to the survey conducted among the Industry players the $)*ommerce Industry in India !as !orth INR !-@- crore7 at the end of ?<<5)<:. Is it big enoughM ,o! much is it e"pected to gro!M Indian e)commerce mar#et hosted -SR8 billion of transactions in ?<66 0Source3 IAMAI1 It is forecast that more than -SR?< billion !orth of transactions !ill be carried out online over ne"t five to seven years in India and 6?)67Q of the countryCs shopping activities !ill move online. 0Source3 IAMAI1 A total of S million Indian internet users carried out online transactions in ?<66. This number is predicted to reach 8L million by ?<67. 0Source3 Avendus1 IndiaCs =?* mar#et is e"pected to gro! at a *AGR of 89.?Q bet!een no! and ?<670Source3 $ mar#eter1 +nline retail sales !ill reach -SR?.9 billion 0e"cluding online travel1 in ?<6? !ith the number of online buyers in the country e"panding to ?6.7 million 0Source3 $ mar#eter1 In &ovember ?<66 appro"imately 5<Q on Indian online users visited retail sites !ith :.5 million and :.6 million users visiting coupon and consumer electronics sites respectively0Source3 *omscore1

The adoption and usage of $)*ommerce in the country is a function of the overall environment for Internet usage in a country. To correctly understand the li#ely gro!th path for $)*ommerce in India it is imperative to understand the internet ecosystem in the country. Some of the #ey variables that need to be understood are the proportion of computer literates internet penetration fre@uency of access to the internet purpose of internet access etc. A correct mapping of these !ould help in understanding the overall frame!or# of $)*ommerce in the
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country.

So6rce% I-"6>e 2-- SAndica2ed Re7earc3 of e-#ec3no1ogA Gro65 GI&R,8 &arc3 2-)ig6re 9.1% )rame-0or/ of E-"ommerce in 23e "o6n2rA

,e %* literate population is on a fast gro!th curve having gro!n 6<<Q in ?<<5 over ?<<9.Though in India overall penetration is still lo! the important factor is that a critical mass of users is shaping up !hich !ill fuel rapid gro!th over the ne"t 8)9 years. A *laimed or $ver Internet -ser is defined as one !ho has ever accessed Internet. A subset of *laimed Internet users Active Internet -sers are defined as those !ho have accessed Internet at least once in the last one month. They are the regular users of Internet and are a!are of the recent trends and applications emerging on the Internet. The population of Active Internet -sers !as ?6 million in March ?<<5.As these Internet -sers mature !ith respect to e"posure and a!areness of internet they tend to spend more time onlineF access internet more fre@uently and surf non) communication based applications and advanced online Applications li#e gaming $)*ommerce etc ,o!ever as it is evident from the charts belo! $) *ommerce is still not the #ey driver of the internet. Internet usage in the country is still driven by email and information search

E-&ai1 "3a2 Informa2ion En2er2ainmen2 E-"ommerce In2erne2 (7er7% KeA Ac2i<i2ie7 ,o!ever the interesting part is that out of the 68.? million internet users across ?5 cities covered in I)*ube ?<<5 0Syndicated Research of e technology group [IMR= International1 69.?Q use the internet to buy travel tic#etsF 7.7Q people do online shopping especially products li#e =oo#s Flo!ers Gifts etc. and 7Q people deal in stoc#s and shares through the internet. Though the percentage contribution of $)*ommerce is almost same over the years ho!ever the number of Internet users using $)*ommerce is gro!ing rapidly. Thus $)*ommerce is surely being adopted by the Internet users as a !ay to shop. They are buying a variety of products online and visiting various !ebsites to buy products from. Given the rate of gro!th in $)*ommerce users si>e of the $)commerce industry is e"pected to reach I&R S?6< crores at the end of ?<<:)<L a big .ump of 8<Q over the current industry si>e. 9.2 #rigger7 and ,arrier7 for 23e E-"ommerce mar/e2 in India In addition to the industry si>e it is imperative to understand the reasons behind the gro!th and reasons hampering the gro!th $)*ommerce industry in the country. This section elaborates the triggers and barriers that impact the adoption of $)*ommerce by the Internet users !e !ould start by enlisting the triggers !hich motivate the online shoppers to buy %roducts online.

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#a>1e 9.1% #rigger7 in >6Aing 23ro6g3 in2erne2 As evident from the table above time saving is the ma.or reason that drives Internet users to shop online. It is follo!ed by convenience of anyplace anytime shopping online. +nline stores do not have space constraints thus a !ide variety of products can be put for display. *ompanies can display !hole range of products being offered by them. This further enables the buyers to choose from a variety of models after comparing the loo#s features prices of the products on display. To attract customers to shop online e Mar#eters are offering great deals and discounts to the customers. This is facilitated by elimination of maintenance real)estate cost of the seller selling its products online. An insight into some of the problems stated by customers !hile buying through Internet !ill help us to have a closer loo# at the issues !hich need to be addressed by the online community.

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#a>1e 9.2% ,arrier7 in >6Aing 23ro6g3 In2erne2 Absence of touch)feel)try creates concerns over the @uality of the product on offer. Another roadbloc# in the !ay of $)*ommerce is lac# of interactivity so as to allo! for negotiations bet!een the buyer and sellers. In addition to above the security of online payments is a ma.or issue re@uiring immediate attention of the e Mar#eters. Increasing rate of cyber crimes has made customer apprehensive of revealing their credit card details and ban# details online. Moreover the duration of selecting buying and paying for an online product may not ta#e more than 67 minutesF ho!ever delivery of the product to customerCs doorstep may ta#e about 6)8 !ee#s. Further more our past observation has been that in India shopping is an e"perience itself. *onsumers loo# for!ard to it as an opportunity to get out of their homes and interact !ith other people. The recent gro!th in the malls and the hypermar#ets only corroborate this fact. Thus $commerce has to ban# on the convenience and discount platform as there is no !ay that they can compete !ith the offline platforms on the e"perience that they provide. There is no doubt that Internet shopping has a number of benefits to offer. With changing lifestyles $)*ommerce is surely the most appealing and convenient means of shopping. ,o!ever the grave issues surrounding the mar#et do not ma#e it the ZchoiceD of most of the Internet users. Addressing the above specified issues thus has become critical to e"pand beyond the current user base.

9.. "a2egoriHa2ion of In2erne2 (7er7 In I)*ube ?<<5 a survey done among Internet -sers details of products they loo#ed information for and the products bought by them online in last 5 months !ere captured along !ith the details of products they are li#ely to loo# information for and the products they are li#ely to purchase. +n analysis of the data follo!ing trends !ere observed3

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#a>1e 9..% "a2egorA of In2erne2 (7er7

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According to the data of total ?6 Million Active Internet -sers in March ?<<5 0Source3 I)*ube ?<<51 around 78Q have had loo#ed for information on travel !hile ?:Q are li#ely to loo# for information on travel services online. Though only 6<Q of the Internet -sers have boo#ed Air tic#ets rail tic#ets or hotel rooms in last si" months only ??Q are li#ely to avail these services in the near future. $"cept for Travel percentage users loo#ing for information and buying online is pretty lo!. For instance only 68Q of the total Internet users have had loo#ed for information on online classifieds ho!ever only ?Q of the total Internet -sers have paid for availing any of the services online. In future only 8.9Q of the total Internet -sers intervie!ed is e"pected to avail paid classifieds service online. =ased on their behavior to!ards buying online Internet users can be classified into the follo!ing four categories3

#a>1e 9.9 "1a77ifica2ion of In2erne2 (7er7 Though ma.ority of Internet -sers loo# for information on various product categories online a relatively smaller portion of them actually buy online. Some of the reasons to e"plain this behavior are3 61 Apprehensions !ith paying online ?1 2ac# of touch)feel)try 81 *oncern !ith authenticity of seller and products sold online 91 Time lag bet!een placing order and delivery of the product The se@uence in !hich the above)mentioned category of Internet -sers can be targeted by the online players3

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)ig 9..% Segmen2a2ion of In2erne2 (7er7 >a7ed on 5ro>a>i1i2A of con<er2ing on1ine It has been observed that most of the +nline Shoppers start their e)Shopping .ourney !ith buying AirJ Rail!ay Tic#ets. This might be because the service provided in case of Travel especially tic#eting is undifferentiated !ith the place of buying the tic#ets. The buyer is ensured that he !ould get the same service as his co)passenger !ho has bought his tic#ets from the physical counters. ,o!ever the need for Gtouch)feel)tryC might be important for product categories li#e Apparels Ie!elry. %roduct categories li#e $lectronics Mobile phones fall in the >one ofC high) ris#C products for !hich there are many G2FIsC and very fe! G$nthusiastsC. The above) mentioned factors ma#e GTravelC more attractive to the $nthusiasts than other product categories. As a result the +nline Travel Industry is gro!ing at a faster pace than other online categories !e are therefore dividing the rest of the report into t!o segments3 1. $n1ine #ra<e1 Ind672rA comprising Air Rail ,otel ReservationsF *ar Rentals Tour %ac#ages 2. $n1ine Non-#ra<e1 Ind672rA comprising e Tailing 'igital 'o!nloads *lassifieds and %aid *ontent Subscription

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"3a52er ; Re7earc3 )inding7 ;.1 E-"$&&ER"E IN INDIA Statistics for Ecommerce in India Indian e)commerce mar#et hosted -SR8 billion of transactions in ?<66 0Source3 IAMAI1 It is forecast that more than -SR?< billion !orth of transactions !ill be carried out online over ne"t five to seven years in India and 6?)67Q of the countryCs shopping activities !ill move online. 0Source3 IAMAI1 A total of S million Indian internet users carried out online transactions in ?<66. This number is predicted to reach 8L million by ?<67. 0Source3 Avendus1 IndiaCs =?* mar#et is e"pected to gro! at a *AGR of 89.?Q bet!een no! and ?<670Source3 $ mar#eter1 +nline retail sales !ill reach -SR?.9 billion 0e"cluding online travel1 in ?<6? !ith the number of online buyers in the country e"panding to ?6.7 million 0Source3 $ mar#eter1 In &ovember ?<66 appro"imately 5<Q on Indian online users visited retail sites !ith :.5 million and :.6 million users visiting coupon and consumer electronics sites respectively0Source3 *omscore1

Table 2: Top Retail Sites (Source Comscore Media Matrix, March 2012; Total Audience)

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Table 3: Purchase (Source: Global WebIndex) Some Trends in Mobile, Digital Advertising & Social Media +f the IndiaCs general internet population SQ of go online via mobile. 0Source3 IMR=1 At the beginning of X9 ?<66 the number of mobile internet users reached 98 million. 0Source3 IMR=1 =y ?<67 IndiaCs 9G service is pro.ected to account for ?L million connections. 0Source3 Avendus1 India could become one of the top five countries for smart phones by ?<65 representing almost 6<Q of the entire !orld supply. In ?<66 it represented ?.?Q of it. 0Source3 I'*J*ampaign Asia %acific1 +nline Advertising in India is currently generating R96< million a year and represents :Q of total advertising spent. =y ?<67 it is e"pected to generate R6.5 billion and comprise 6<)67Q of IndiaCs overall Ad spent. 0Source3 $conomic Times1 Mobile Advertising spent came to -SR75.7 million in ?<66. It is forecast to reach R?9: million by ?<67. 0Source3 $ mar#eter1 IndiaCs total social net!or#ing audience no! totals 98.7 million according to one survey. 0Source3 *omscore1 There are more than 88 million users !ho on more than one social net!or#ing sites in India. These sites are attracting more than 97 <<< ne!s users every day. 0Source3 ScribbleJ Techon>o1 $very so often there is a shift in the prosperity of a mar#et based on region. Right no! the focus is on the ecommerce mar#et of India in particular focusing on the apparel industry. According to statistics the Indian apparel mar#et is gro!ing faster than any other industry in the country in regards to ecommerce.

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=y the end of ?<68 the countryCs top ecommerce retailers are e"pecting for their sales to double. A study conducted by ,omeShop6L.com further breathes truth into their claims as their study revealed that in IndiaF a piece of clothing is purchased appro"imately every 9< seconds. There is .ust a high demand for clothing on the ecommerce mar#et right no! and many e)shops are springing up as a result. %art of the gro!th is due to the gro!ing development of the country !here more citi>ens have access to the internet each dayF and not to mention the gro!th of population in India. The mi" has bred a !hole ne! consumer base !hose preference is to purchase clothing online !here they can find the brands they li#e from various retailers !ithout having to leave their homes. As the gro!th in population and in ecommerce preference is so rapid there is a high demand for apparel online !hich #eeps the retailers stoc#ing the shelves and offering ne! styles on a more than regular basis also prompting more sales. The Indian ecommerce mar#et can also o!e its gro!th to an e"panded payment method circle that allo!s customers to pay for their purchases !hen they get the items delivered. This is called *+' or *ash on 'elivery. Since the electronic card option is not ta#ing off as fast as the ecommerce mar#et is here this offers an alternative for customers !ho other!ise !ould not be able to purchase anything online. In India !omen are progressively becoming more in charge of their o!n lives. This freedom of empo!erment has been part of the gro!th cycle as they are no! becoming more active shopping onlineF !hereas before !omen did not really have that choiceF so !hile the consumer mar#et !as there half of it could not parta#e in the industry. According to 'eepa Thomas an e=ay specialist of IndiaCs e=ay commerce 96Q of sales are ta#en by the lifestyle category !hile clothing ran#ed above it. It is evident that this industry is currently very lucrative and that entrepreneurs !ould be smart to ta#e advantage of the gro!th in India. With retailers e"pecting their sales to double by the end of ?<68 if all processes remain the same there is not telling ho! much the increase !ill be by the end of ?<69.

P6rc3a7e 3i72orA3 5? per cent of shoppers having shopped for more than a year. 8: percent of online shoppers have started shopping online in the last 6? months. 5: per cent of online shoppers have shopped online as recently as three months sho!casing the gro!ing acceptance of ecommerce )reI6encA of 56rc3a7e3 5: per cent of online shoppers have shopped online as recently as three months sho!casing the gro!ing acceptance of ecommerce. 78 per cent of online shoppers have shopped online more than five times ?: per cent of online shoppers have shopped online more than 6< times. 6. A 2o5 72a2e/ci2A re5re7en2a2ion3 Maharashtra3 ?S per cent 0Mumbai3 ?9 per cent1 'elhi &*R3 6S per cent Tamil &adu3 66 per cent 0*hennai3 : per cent1 4arnata#a3 6< per cent 0=angalore3 5 per cent1 -ttar %radesh3 : per cent 02uc#no!3 ? per cent1 West =engal3 5
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per cent 04ol#atta3 7 per cent1 Andhra%radesh3 7 per cent 0,yderabad3 9 per cent1 Ra.asthan3 7 per cent Gu.arat3 9 percent 0Ahmedabad3 ? per cent1 and 4erala3 8 per cent. ?. #o5 "i2A/Prod6c2 Preference3 Mumbai 0?9 per cent1 holds the Top Slot for $very *ategory e"cept .e!elry. 'elhi 06S per cent1 fast competing !ith Mumbai in accessories apparel gifts home appliances categories and has piped Mumbai to ran# first in .e!elry. *hennai 0: per cent1 is at ran# three for rail!ay tic#ets airline tic#ets maga>ines home tools toys .e!elry beauty products and sporting goods categories. =angalore 05 per cent1 is at ran# three for boo#s electronic gadgets accessories apparel gifts computer peripherals movies hotel boo#ing home appliances movie tic#ets health and fitness products and apparel gift certificates. 4ol#ata 07 per cent1 .umps to ran# three in online music sales online and is at ran# four for the movies and the music categories. 8. 2- Prod6c27 ,o6g32 $n1ine3 =oo#s 096 per cent1 $lectronic Gadgets 09< percent1 Rail!ay Tic#ets 08S per cent1 Accessories Apparel 085 per cent1 Apparel085 per cent1 Gifts 087 per cent1 *omputer and %eripherals 088 per cent1 Airline Tic#ets 0?S per cent1 Music 0?9 per cent1 Movies 0?6 per cent1 ,otel Rooms 0?<per cent1 Maga>ine 06S per cent1 ,ome Tools and %roducts 065 per cent1 ,ome Appliances 065 per cent1 Toys 065 per cent1 Ie!elry 067 per cent1 Movie Tic#ets 067 per cent1 =eauty %roducts 06? per cent1 ,ealth and Fitness %roducts06? per cent1 Apparel Gift *ertificates 06< per cent1 and Sporting Goods 0: percent1. 9. Sa2i7fac2ion IndeE3 6L per cent of online shoppers are A,ighly SatisfiedA !ith online shopping and 5? per cent are ASatisfiedA !ith their online shopping e"perience ma#ing a case for repeat purchases and peer to peer recommendations on this interactive medium. 6: per cent are A&either Satisfied or 'issatisfiedA ) An opportunity to convert them to!ards this increasingly high satisfying inde". 8 percent of online shoppers are A'issatisfiedA !ith online shopping. 7. #o5 ; Rea7on7 2o S3o5 $n1ine% :< per cent of online shoppers li#e A,ome deliveryA about online shopping 5? per cent li#e ATime savingA 5< per cent of online shoppers li#e the A?9":A 97 per cent li#e the A$ase of useA and 8S per cent of online shoppers li#e product comparisons.

;.2 IN#ERNE# GR$'#H IN INDIA E-commerce fig6re7 in ad<er2i7emen2 are 1i/e1A 2o record 23e maEim6m gro023 >e20een 23e Aear7 2--- 2o 2--.8 >eca67e of 23e 76>72an2ia1 addi2ion 2o 23e 67er >a7e eE5ec2ed in 23i7 5eriod. #3e emergence of >road >and and 23e con<ergence of media are 1i/e1A 2o 5ro<ide 23e 23r672 2o 23e on1ine ad-75end >6dge27 of com5anie7. India 2o >ecome 7econd-1arge72 in2erne2 mar/e2 in 2-19
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The number of Internet users in India has reached ?<7 million in +ctober this year registering a year)over)year gro!th of 9< percent according to a report by the Internet and Mobile Association of India 0IAMAI1 and IMR= International. =y 'ecember the number is e"pected to reach ?68 million. The report also estimates that by Iune ?<69 India !ill have ?98 million internet users at !hich point of time it is e"pected to overta#e the -S as the second largest Internet base in the !orld. *hina currently leads !ith more than 8<< million internet users !hile the -S has an estimated ?<: million internet users. According to the report the number of internet users in urban India !as 68: million in +ctober and is estimated to touch 696 million by 'ecember. Rural India has !itnessed year)over)year gro!th of 7L percent in active internet users since Iune ?<6?. In rural India there !ere 5L million internet users in +ctober and this is estimated to reach :? million by 'ecember. According to the report the number of mobile internet users has also !itnessed a steady rise !ith 66< million mobile internet users in +ctober. This is estimated to reach 68< million by the end of 'ecember. In Iune there !ere S6 million users accessing the internet on mobile devices !ith :<.? million users in urban India. This number rose to L7 million in +ctober and is estimated gro! by 9: percent and reach 6<8 million by 'ecember. Rural India is not that far behind in this regard !ith a base of ?6 million mobile internet users in Iune. It reached ?7 million in +ctober and !ill touch ?: million by 'ecember. Mobile usage and hence mobile internet usage has seen a huge .ump from the ?<6? penetration levels. *ompared to the <.9 percent mobile internet users in ?<6? the penetration has gro!n to ?.9 percent. The report further finds that more than 7< percent of the urban internet users access internet daily. ,o!ever this high fre@uency usage is not restricted to only the youth and !or#ing menF this habit of accessing the internet daily is seen among other demographic segments as !ell including older men and non)!or#ing !omen. In rural India :< percent of the active internet users also access internet using mobile phones !hile 8? percent use internet only through mobile. The *ommunity Service *enters and *yber *afes are the main point of access for 9< percent of them.

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7 to 6<Q of e"isting 7< <<< dotcoms !hich are of Indian origin or are India oriented !ere li#ely to survive in the ne"t 7 years. +nline advertising in India is poised for a stupendous leap. A sha#e)out in the content providers segment follo!ing large)scale redundancy as e)commerce and online advertising sin# their roots deeper. Intense competition in the Internet Service %rovider 0IS%1 segment is li#ely to focus on generating alternative streams. In the case of Internet enablers and soft!are service providers a significant increase in mar#et si>e !as e"pected in the long term. +n the structural front a spate of mergers ac@uisitions and alliances in the Indian Internet business in the medium to long to long terms paving the path for greater consolidation is e"pected. Most large companies in the Internet business categories !ere e"pected to follo! the merger and ac@uisition 0M;A1 route to !iden the portfolio of products and services increase geographical coverage and reduce the mar#eting costs and gestation period. Internet penetration !as lo! in India. IndiaCs subscriber base reach L.8 million users in ?<<7 !ith the highest gro!th rate being !itnesses by 'S2 0digital subscriber line1 and cable connections. 'ial)up connections ho!ever !ould still account for the largest share of internet connectivity options &et subscriber base of up to 97 lacs.

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;.. Re7earc3 Hig31ig327 ;...1 Re75onden27 2o 23e 76r<eA Responses !ere received from 665 organi>ations. The organi>ations !ere as#ed to classify themselves under one of the follo!ing sectors of industry3 Y Manufacturing ; distribution. Y *omputers and communications. Y Financial services. Y Retail and !holesale trade. Y +ther industries. Some of the @uestions !ere analy>ed by industry to highlight variations peculiar to those industries. A significant ma.ority of the responding organi>ations had global reach and mar#eted their goodsJservices to both end)consumers and other businesses. (7e of e-commerce can >e c1a77ified in2o 2 >road area7% J In2erfacing and 7e11ing 2o 23e end-con76mer or ,2" C,67ine77-#o-"on76merD. J In2erfacing and 2rading 0i23 o23er >67ine77e7 or ,2, C,67ine77-#o-,67ine77D. The follo!ing charts sho! that the main target mar#et of the organi>ations that responded to the survey included an even mi" of both areas. The responding organi>ations !ere @uite varied in terms of si>e !ith the number of employees ranging from less than 6<< to more than 6< <<< and
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the turnover ranging from less than Rs 6< million to more than Rs 6< billion. The annual InfoTech spending of the organi>ations also varied over a !ide range. While some organi>ations spent less than Rs 6<< <<< on InfoTech per annum there are others !ho spend more than Rs 6<< million. ;...2 S2ra2egic Im5or2ance of E-"ommerce +ver half of all respondents said that e)commerce constituted either a substantial part of or !as crucial to their organi>ationCs strategy. +nly 9 per cent felt that it !as of no importance to the organi>ationCs strategy. It is clear that e)commerce is increasingly being seen as a strategic tool to gain business advantage and competitive edge.

;.... Po2en2ia1 ,enefi27 This section sho!s that companies are identifying the real benefits of e)commerce in terms of opening up ne! mar#ets improving productivity and automating their supply chains. Respondents !ere as#ed to rate the potential benefits as relevant to their organi>ations. The respondents rated Improved *ustomer Service and Improved %roductivity as the Top T!o potential benefits e)commerce might provide to their organi>ations. ;...9 Rea1iHed ,enefi27 The chart sho!s the benefits reali>ed by organi>ations using e)commerce. Improved %roductivity and Improved %roduct Xuality have been rated as the Top T!o reali>ed benefits. Improved *ustomer Service rated as one of the Top T!o potential benefits is a close third.

;...; Po2en2ia1 ,arrier7 The respondents rated 2ac# of Standard %ayment Infrastructure and Trading %artners Technology as the Top T!o potential barriers to effective adoption of e)commerce in their organi>ations .Infrastructure *ost and Security Issues figured as ma.or concerns although they !ere not as important as the first t!o. We found that organi>ations are !illing to ma#e the
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necessary investments in the technology as long as they could manage it efficiently and get satisfactory return on investment. +ur research in the $uropean mar#et indicated that security is an over hyped concern. The tools for overcoming security ris#s are available but it remains sub.ect to media hype. Those companies that are most advanced in their use of e)commerce recogni>e this and so are li#ely to regard it as a less significant barrier than those that have not. ;... In2egra2ion +ver half of all respondent companies had support at the board level and had allocated a budget for e)commerce integration. Forty per cent of the organi>ations are ta#ing measures to integrate e)commerce technologies !ith their current operating processes and technologies. ,o!ever adapting to e)commerce !ill not simply mean redesigning internal processes and customer interfaces. Instead companies !ill have to thin# of e)commerce as a ne! channel and not .ust a replacement for e"isting channels !hich in turn means that they may have to start offering ne! services in order to maintain their mar#et image and position. +thers !ill find that e)commerce provides them !ith the opportunity to offer ne! services. ;...! Im51emen2a2ion of E-"ommerce #ec3no1ogie7 The charts sho! the status of implementation of e)commerce technologies in different industry sectors. Internal and Internet e)mail Websites and Internet access are popular in all ma.or industry segments. Almost everyone uses internal e)mail and most organi>ations allo! their employeeCs access to the Web. In ? years respondents from Manufacturing ; 'istribution companies favored implementation of $"tranet Intranet and $'I technologies !hile Financial Services companies e"pected to have installed $'I $"tranet and IBR systems and *omputers ; *ommunications !ere planning $'I implementations. The follo!ing table summaries the most predominant e)commerce technologies that are *urrently being implemented and that !ill be implemented over a period of time in different industrial segments. ;...@ )6nc2ion7 Performed E1ec2ronica11A The Internet !as favored far more than all the other electronic channels !ith almost half the respondents using it for ne!s and information)based uses. The table ran#s the functions on the basis of percentage of respondents performing them electronically. ;...B #ran7ac2ion Vo16me7 2ess than half of the respondents !ere able to provide details of the volume of transactions done electronically. +f these nearly half said that the volume of transactions in their organi>ations is >ero. ,ence most organi>ations surveyed are not able to determine the number of transactions completed through electronic channels and many are yet to use these channels. Respondents !ere as#ed for the appro"imate value of transactions currently completed through electronic channels. =ased on the table the !eighted average annual monetary value of e)commerce transactions is appro"imately Rs 6?8 million for the respondents surveyed. ;...1- Go<ernance The sponsors !ithin a company determine the scope and success of an e)commerce pro.ect. This section reveals that InfoTech departments are ta#ing the lead on e)commerce pro.ects !ithin
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their organi>ations. $"ecutive committee support in the for m of board approvals and intervention to ensure that the necessary business reengineering ta#es place to ensure that e) commerce is integrated !ith business processes is critical to ensure that these pro.ects deliver on promises. Respondents !ere as#ed !hich part of the company !as the principal sponsor of current or future e)commerce pro.ects. In nearly t!o)thirds of the companies it !as the $"ecutive *ommittee. It !as observed that the InfoTech department champions develops and maintains these pro.ects in a ma.ority of the organi>ations. ;...11 im5or2an2 fea26re7 of main2aining Sec6ri2A of E-"ommerce #ran7ac2ion7 The respondents !ere as#ed to rate the importance of features in establishing and maintaining the level of trust re@uired for employing e)commerce technologies effectively. It is interesting to note that all the features have received very high ratings 0a minimum of 5: per cent of respondents say that a particular feature is ImportantJBery ImportantJ*ritical1. The highest ratings have been given to &et!or# Access *ontrols and Through)The)System Tests ;Audits. ;...12 #rading 5ar2ner7 About 8< per cent of respondents had more than 7 per cent of their trading partners trading electronically and about half of these had more e than 7< per cent of their trading partners trading electronically. ;...1. "3arac2eri72ic7 of #rading Par2ner7 The respondents !ere as#ed !hether they agreedJdisagreed !ith certain characteristics of their trading partners. The charts sho! the cumulative responses of all the organi>ations. More than half the respondents felt that trading partners !ere not a driving force behind their adoption of e) commerce !hile interestingly trading partners\ technology !as named as a significant barrier to their adoption of e)commerce 0Section 7.71. This implies that although the driving force behind e)commerce !as internal its adoption !as inhibited by lac# of appropriate technology !ith the trading partner0s1.Trading partners !ere vie!ed favorably by more than half the organi>ations surveyed in terms of considering concerns having e"plicit role)based agreements @uality of communications long associations and levels of trust !hile about a @uarter of the respondents vie!ed them as competitors in some areas. It is evident that most organi>ations !or# closely !ith their business partners creating an environment !ith a large unutili>ed potential for =usiness)To)=usiness implementation of e)commerce. ;...19 Proced6re7 (7ed ,A $rganiHa2ion7 2o En76re Sec6ri2A and Pro5er (7e of "om562e Re7o6rce7 The chart details the procedures used by organi>ations to ensure confidentiality security and appropriate use of computer resources. ;.9 "onc167ion From the survey it is evident that the potential benefits offered by e)commerce are far from reali>ed. The perception that trading on electronic channels cannot ma#e money is challenged as incorrect at least in the =usiness)To)=usiness sector. There is also some e"pectation that although trading on electronic channels may ta#e longer in the consumer sector due to the
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trading barriers on the Internet this too !ill soon follo!. $lectronic channels are forcing companies to re)thin# ma.or aspects of the !ay they are organi>ed and do business. $)commerce raises ma.or strategic issues and is accelerating developments in areas such as globali>ation branding customer service and supply chain. Mar#ets are being transformed as barriers to entry are torn do!n. This survey sho!s that the application of e)commerce and the Internet in particular e"tend beyond mar#eting to all aspects of the supply chain. It also sho!s that the technical aspects are no longer as important as the integration of business processes and the resulting need to re)engineer them across the organi>ation. =ut companies are approaching these developments piecemeal. If companies are to ma#e profitable use of e)commerce then its champions must ma#e their cases heard at the highest levels. This is an opportunity for the InfoTech and mar#eting departments to ma#e their =oard a!are of the effect of e)commerce not .ust from the technical point of vie! but also in terms of its impact on the bottom line. In our opinion only those companies !ith an organi>ation)!ide initiative funded from the centre or at least on a .oint venture basis bet!een functions !ith =oard approval !ill emerge as leaders in !hat is a rapidly changing environment. Senior management members !ho have earlier been responsible for the e) commerce initiative in their organi>ations need to prepare a compelling business case detailing the li#ely returns on investment and submit it to the =oard. The re!ards both for the company and for the individual involved in shaping its adaptation to the information age promise to be !ell !orth the effort.

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"3a52er

Recommenda2ion7 and "onc167ion .1 )626re Pro75ec27 on E-"ommerce The report of the -nited &ations *onference on Trade and 'evelopment 0-&*TA'1 on $) commerce and 'evelopment ma#es the point that although !orld economic gro!th has slo!ed and in spite of the difficulties in !hich the information technology and telecommunications sectors are mired the rapid gro!th of internet use and electronic commerce continues. $stimates sho! that internet use is increasing by around 8< per cent annually and although the rate of gro!th of transactions through the internet is much slo!er e)commerce could represent up to 6L per cent of !orld!ide business)to)business 0=?=1 and retail transactions in ?<<5. Segments such as =?= have sho!n rapid gro!th. And in certain sectors such as finance travel services soft!are information and other e) services online transactions have been gro!ing at a much faster pace. For instance in the developed countries online ban#ing already represents bet!een 7 and 6< per cent of total retail ban#ing transactions. Much of the gro!th has occurred in Asia. The Report classifies India as a rising star in this regard pointing out that IndiaCs IT services e"ports have almost doubled in t!o years and no! account for more than 65 percent of total e"ports and L per cent of all foreign e"change earnings. Given the e"traordinary gro!th rates of e)services e"ports the latter figure is e"pected to reach 8< per cent by ?<<L. %olicy measures to support e"porters of e)services should focus on increasing mar#et access in eservices for e"porters from the developing countries as !ell as addressing domestic obstacles related to technology payments infrastructure 0telecommunications1 and standards .=ut the overall message of the Report is a very positive one despite the current slo!do!n the internet and online services are poised to gro! and India !ill be one of the main =eneficiaries. The e)commerce is one of the biggest things that has ta#en the business by a storm. It is creating an entire ne! economy !hich has a huge potential and is fundamentally changing the !ay businesses are done. It has advantages for both buyers as !ell as sellers and this !in)!in situation is at the core of its phenomenal rise. Though there are some !ea# lin#s !ith improvements in technology they !ill be ironed out ma#ing the e)commerce easy convenient and secure. The e)commerce is certainly here to stay.

.2 Recommenda2ion7 The most important factor that is necessary in gro!ing e*ommerce in India E Trust. If !e loo# at the Indian conte"t I feel that there is a general lac# of trust bet!een retailers and customers. *onsumers donCt trust the retailers because they feel that they are either being over charged or that they !ouldnCt be able to get appropriate level of customer service once the sale is complete. Retailers donCt trust the customers because they feel that the customers !ill ta#e every opportunity to misuse the return or e"change policies. It is my opinion that this general lac# of trust is the primary barrier that is impeding the gro!th of e*ommerce !ithin India. ,ere are some of the practical techni@ues that online retailers can employ to improve this level of trust
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and build an environment !here customers feel safe in clic#ing that Z%roceed to *hec#outD button. 1. "672omer Re<ie07 TodayCs customers are putting less trust on !ebsite mar#eting messages and becoming more influenced by recommendations from other people. *ustomerCs trust for an online retailer !ill increase if the retailer offers an ability to let customers share their positive as !ell as negative revie!s about products or vendors. The #ey is to not ZmoderateD the negative revie!s because by allo!ing customers to post negative revie!s it !ill actually enhance the credibility of the retailer as !ell as other revie!s. +bviously any foul language needs to be moderated but any genuine issues !ith the products or vendors must be posted along !ith the positive revie!s. 2. "1ear 73i55ing and de1i<erA commi2men2 At the time of setting up products for sale clear shipping and handling time must be associated !ith the product. This information should be displayed consistently on all product pages so that customerCs e"pectations around shipping timeline can be clearly set.

.. Ana1A2ic7 * Per7ona1iHa2ion Although personali>ed product recommendations and content do not directly increase customerCs trust they do demonstrate to the customer that the online retailer is ma#ing a good effort in understanding the customerCs individual needs and is acting upon them. This implicitly improves the comfort level that the retailer is not .ust loo#ing to sell products but is ma#ing an honest attempt in building relationship !ith the customer. 9. $5era2iona1 Re5or2ing * Da73>oard7 +nline retailers must invest in strong operational reports that provide alerts and metrics on orders that have a ris# of missing the service level that !as promised to the customers. If you have recently implemented an e*ommerce platform chances are that at times orders !ill getD stuc#D in various states. Therefore it is important to establish thresholds around ho! long should orders stay in various states 0such as Z%rocessing for %aymentD Z%reparing for ShipmentD etc.1 and then build automated alerts !hen orders e"ceed these thresholds. ;. Vendor Pena12ie7 In the Indian conte"t ma.ority of the e*ommerce sites !or# in a Zdrop)shipD model. This implies that the online retailer doesnCt physically stoc# the goods and instead relies on e"ternal vendors to directly ship the merchandise to customerCs home. In this case it is e"tremely critical to set clear S2ACs on ho! long !ill it ta#e the vendors to ship the orders. There should be financial penalties built into the contracts if the vendors miss the service levels. Also there should be penalties if the vendors receive e"cessive negative revie!s from customers. . Price &a2c3 G6aran2ee A %rice Match Guarantee 0%MG1 is a store policy !hich entitles a customer to a refund of the difference bet!een the storeCs as#ing price and a competitorCs price. It can not only help build trust !ith the customer it can also help reduce price competition across online retailers. This
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may sound counter intuitive but it is one of the most discussed e"amples in ZGame TheoryD and it has actually helped retailers in -S to avoid direct price !ars. Ta#e for e"ample a firm li#e *ircuit *ity that has a price match guarantee !hich loo#s good to a consumer. =ut that guarantee really allo!s *ircuit *ity to charge higher prices since competitors !ill be discouraged from setting a lo!er price that *ircuit *ity only !ill match !hen it must.

!. 'e11 2rained ca11 cen2re I recently called Airtel customer service to add =lac#berry service to my cell phone. There !as an issue !ith their automated messaging system that !as directing me to a !rong group !ithin Airtel. After calling S times I gave up because every agent that I spo#e to had the same scripted response that I should call bac# again and press option ?. The point I am ma#ing is that although it is important to train the call centre agents around specific customer service issues !hat is even more important is that the call centre agents be trained to have good problem solving s#ills and they should be empo!ered to o!n the problem resolution from end to end. @. )ra6d Pro2ec2ion &ot only should an online retailer ensure that the appropriate security certificates are setup to handle chec#out related transactions the sensitive customer and payment information should be stored in an encrypted format. The messaging on the site should clearly indicate that the chec#out process is completely secure. In addition there are third party Fraud detection services available that help flag potentially fraudulent transaction based upon credit card usage velocity and other parameters. These services !ould not only help reduce the credit card charge)bac#s for the retailers but !ill also improve the sense of security and trust !ith customers. B. Proac2i<e8 2ime1A comm6nica2ion Are !e there yetM If you have gone on a long drive !ith #ids chances are that you have been as#ed this @uestion. It is human nature to e"pect timely communication especially !hen they are !aiting for something that they have already paid for. The retailers should ensure that every single status update on the order generates an alert for the customer. Also if the order !aits in a specific state for a timeframe longer than !hat !as promised to the customer an $mail should be automatically sent to the customers to ma#e them a!are of the delay. If the delay is longer than a fe! days customer should be contacted via phone and as#ed for approval for the delay or given an option to cancel the order.

1-. "3arge on1A af2er order 73i5men2 *ustomers feel much more comfortable if they #no! that they !ill only get charged once the order ships. *urrently a lot of retailers charge the customerCs credit card immediately !hen customer places the order. ,o!ever they should consider authori>ing the amount at the time of order and only charge the card once the order ships. This !ill also minimi>e any need to refund the amount bac# to the customer in case the order needs to be cancelled for any reason. 11. Se1f Ser<ice "a5a>i1i2ie7
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The more online self service capabilities 0e.g. order cancellation modifications1 retailers can provide to the customers it !ill not only help reduce the call centre e"pense but !ill also build more confidence !ith the customers. *ustomers !ill feel more in control because they !ouldnCt have to spend 6< minutes !ith a call centre agent to e"plain the issue E instead they can directly resolve the issue online.

12. Rea1 2ime in<en2orA 65da2e7 * 7afe2A 72oc/ Retailers must invest in building automated capabilities that #eep an up to date record of ho! much inventory is available for all their products. %roducts must immediately become unavailable for purchase from the site as soon as the inventory reaches belo! the safety stoc#. *anceling customer orders due to lac# of inventory is a situation that all retailers must avoid because this not only frustrates the customers it drops their confidence in the retailerCs ability to #eep their promise. $)*ommerce !ill see a significant gro!th in India. ,o!ever the chasm bet!een the early adopters of e*ommerce and the ones !ho are !aiting can only be crossed by building a strong level of trust !ith our customers E and !inning them one customer at a time. .. S6mmariHing% SiHe of ,2" and "2" E-"ommerce &ar/e2 in India The total mar#et si>e of =?* and *?* $)*ommerce industry in India is around Rs. :<L<crores at the end of ?<<5)<:. It is e"pected to rise to Rs. S?6< crores by the end of ?<<:)<L.Follo!ing is the brea# up for =?* and *?* $*ommerce Industry in India for the year ?<<5)<: and ?<<:) <L3

The +nline Travel Industry has been driving the gro!th in the =?* $)*ommerce industry o!ing to entry of lo!)cost airlines and increase in online boo#ings for rail!ays and hotels. With an increase in mobile subscribers across the country the digital do!nloads segment is e"pected to be one of the main contributors to the +nline &on)Travel Industry in future. .9 #3e )626re of E-"ommerce E-"ommerce i7 23e f626re of 73o55ing.
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Thus is !ould be apt to @uote ZThe future is here. ItCs .ust not !idely distributed yetD) William Gibson The Internet economy !ill continue to gro! robustlyF Internet users !ould buy more product and buy more fre@uently online F both ne! and established companies !ill reap profits onlineF andK H Safer $n1ine PaAmen2 SA72em73 As the Internet becomes a safer place to transact the amount spent by the Internet -sers online is bound to increase. Those apprehensive of divulging their credit card and ban# details !ould be active online shoppers. The Internet users are e"pected to buy high)end products li#e automobile property home durables online. K "672omiHa2ion of con2en2 and offering73 As the internet users mature the demand for customi>ation !ill increase. The content !ould adopt the regional flavors. More niches !ill be formed see#ing for offerings made for them and content that meets their re@uirements. H &ore n6m>er of 73o55er7 from Non-&e2ro73 *urrently follo!ing the spread of users coming from Metros and &on)Metros. =y the end of year ?<<:)<L the contribution from the &on)Metros is e"pected to increase. This change !ould be bought by higher penetration of Internet in the small to!ns and limited reach of physical distribution channels of the established sellers to these to!ns. These factors coupled !ith higher disposable income !ould compel the Internet users in these to!ns to buy online. H EE5anding (7er ,a7e% Going at the current rate of gro!th in the Internet users transacting online the user base for $)*ommerce is e"pected to rise e"pand e"ponentially. A large portion of the Internet population is under the age of 87 years and is increasingly moving north!ards as far as the purchasing po!er is concerned. The uncanny nature of this segmentD to use no! and pay laterD is going to play an important part in the future gro!th of Way of doing things !ill gain precedence. H & "ommerce3 *urrently $)*ommerce is synonymous !ith %* and bro!ser)based interaction. ,o!ever in the near future G%RS)enabled mobile phones !ill rule the online transactions. Today online do!nloads to mobile phones is limited to lo! value services li#e music do!nloads picture message do!nloads and ring tone do!nloads. ,o!ever as the mobile users get more familiar !ith buying online the purchase of high)involvement products is e"pected to rise. *ertain verticals li#e =an#ing and Finance Travel $ntertainment and Retail are li#ely to drive the gro!th of m)*ommerce in the country. In the recent past $)*ommerce and it variants li#e the m)*ommerce have yearned for the position of being the most important drivers of the Internet. They are continuously evolving and upgrading to ma#e a consumerCs e)Spending e"perience hassle free and memorable. ,o!ever to attain that position it needs to a!a#en its inner beauty E simplicity and security of transaction. .; E-commerce So162ion7 India With the gro!th of e)commerce over the past fe! years the number of e)business solution providers in the industry has also gro!n drastically especially in India. $)commerce can be compared to a ?9J: open shop or a sho!room catering to its clients and buyers. Therefore a lot
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of maintenance has to go into it. This is !here the e)commerce solution providers step in ta#e things in their hands spend time and further enhance your business. *onducting business online may sound very easy as you avoid a lot of un!anted hassles but a lot of s#ills and innovation is re@uired to #eep it going. $)commerce involves doing mar#et research getting @ualified traffic converting hits to business advantages and using information to generate ne! e)commerce from e"isting clients. $)commerce solution providers in India !ith their in)depth research and s#ills !ill provide you !ith tactics and strategies to ma#e your business profitable. The first step for them !ould ideally be to understand your business and re@uirements. A research !ill follo! to find out the predicted mar#et potential the best #ey!ords and phrases competition for #ey!ords search engine relevancy etc. The ne"t step for an e)business service provider !ould be to find a !ay to get the visitor on your !ebsite to ta#e steps to benefit your business. This is done by understanding the psyche of the visitor and creating an automated !ebsite attractive and user)friendly for the visitor. $fficient e)commerce solution providers !ill definitely opt for internet mar#eting to get more visitors to visit your !ebsite. 2aunching a monthly ne!sletter for your customers is also a good idea. Nou can send them updates about the ne! and the latest that has been added to the portfolio of products on your !ebsite. The launch of your !ebsite if re@uired is also ta#en care of by the e)commerce service providers. Site)management and promotion is also very important. The content images and the layout of a !ebsite has to be continuously improved and !or#ed upon #eeping up to date !ith the mar#et. +verall your !ebsite should be designed to attract the first time visitors. The usability and utility factor should also be #ept in mind. This !ill bring them bac# to your !ebsite !henever they plan to buy anything. The !eb of e)commerce solution providers in India is vast. They offer a host of e) commerce solution and consulting services to support guide and help you at each step. +utsourcing e)commerce solutions !ill help you save time and resources !hile you can focus on other important business ob.ectives. Some e)commerce solution providers also offer =%+ services !hich can be used for telemar#eting and cross)selling to ma"imi>e profits. $)commerce solutions are a big support for businesses today. The demands and the e"pectations of the end) users are high and so is the level of competition in the industry. $)commerce solution providers help you streamline your process and cover all the gaps that might have gone unseen.

"3a52er ! ,I,LI$GRAPH+ $) *ommerce *.S.B. Murthy) ,imalaya %ublishing ,ouse &e! 'elhi ?<<?. $lectronic *ommerce from Wi#ipedia) the free encyclopedia http3JJen.!i#ipedia.orgJ!i#iJ$lectronic]commerce $)*ommerce) The *utting $dge of =usiness =a.a. ; &ag) &e! 'elhi ?<<< $)*ommerce)induced *hange in 2ogistics and Transport Systems George $rber %eter4laus und -lrich Boigt in3 $conomic =ulletin 6< Bol. 8L ?<<6 p. 868)8?<. 'epartment of $lectronics 6SSS Information Technology =ill along !ith *yber 2a!s Government of India %ublished in $lectronic Information ; %lanning &e! 'elhi. 'igital $conomy 6SSS -.S. 'epartment of *ommerce Reports prepared by the Washington '.*. GI** Report on Internet and $)commerce ?<<< Government of India &e! 'elhi. I$$$ 6SSS A$)commerce %erspective from 'ifferent %arts of the WorldA published in Information Technology Special Issue &ovember &e! 'elhi. Information ; Technology 0IT1 6SS: IndiaAs Advantage in Information Technology Bol. 6 Issue 8 pp. 66:)6?9 'ecember &e! 'elhi. I%AG 6SSS A$lectronic *ommerce Technologies and ApplicationsA I%AG Iournal &ov) 'ec pp. ?68)??6 &e! 'elhi India. &asscom Mc4insey 6SSS AIndian Information Technology StrategyA Special Issue commissioned by Government of India &e! 'elhi. +$*' 6SSL A =orderless World3 Reali>ing the %otential of Global $lectronic *ommerce +$*' +tta!a. -.S. Government To!ard 'igital Xuality3 Wor#ing Group on $lectronic *ommerce Second Annual Report 6SSS Washington '*. WT+ 6SSS $)commerce WT+ and 'eveloping *ountries $dited by Arvind %anagariya &e! Nor#. WT+ Wor# %rogram on $lectronic *ommerceA 6SSS %roceedings of the Ministerial *onference held in &e! Nor# &N 6SSS.