SUMMER TRAINING REPORT ON “E-COMMERCE IN INDIA”
Submitted towards partial fulfilment of “Bachelor of Business Administration”(BBA) (International Institute for Special Education, Lucknow)
SUBMITTED TO-
SUBMITTED BY-
Mr. Satyendra Kumar Singh
Ms. Pallavi Srivastava BBA 3rd Semester
Department of Management INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION, LUCKNOW SESSION: 2010-2013
DECLARATION I do hereby declare that the research report titled “E-COMMERCE E-COMMERCE IN INDIA” INDIA submitted by me in partial fulfilment of the requirement of Bachelor of Business Administration, exclusively prepared and conceptualized by me and is not submitted to any other Institution or University or published anywhere before for the reward of any Degree/Diploma/Certificate. It is the Original work of mine and has not been obtained from any other part.
PALLAVI SRIVASTAVA Roll No.: 931 BBA, (3rd Sem.)
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ACKNOWLEDGEMENT Every work constitutes great deal of assistance and guidance from the people concerned and this particular project is of no exception. A project of the nature is surely a result of tremendous support, guidance, encouragement and help. Wish to place on record my sincere gratitude to Mr. Satyendra Kumar Singh and the entire faculty of our department. I thank them for their constructive help and encouragement throughout the project. Without their support and guidance taking this would not have been possible. Also, wish to acknowledge enthusiastic encouragement and support extended to me by my family members. At last, I would like to thank all the faculty of business management to help me completing this project. Im also thankful to my friends who provided me their constant support and assistance.
PALLAVI SRIVASTAVA Roll No.: 931 BBA, (3rd Sem.)
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PREFACE The term Electronic commerce or e-commerce consists of all business activities carried on with the use of electronic media, that is, computer network. It involves conducting business with the help of the electronic media, making use of the information technology such as Electronic Data Interchange (EDI). In simple words, Electronic commerce involves buying and selling of goods and services over the World Wide Web. Customers can purchase anything right from a car or a cake sitting comfortably in his room and gift it to someone sitting miles apart just by click of a mouse. Shipping method is generally used for the delivery of the goods ordered. The low cost of the PC and the growing use of the Internet has shown the tremendous growth of Ecommerce in India, in the recent years. According to the Indian Ecommerce Report released by Internet and Mobile Association of India (IAMAI) and IMRB International, “ The total online transactions in India was Rs. 7080 crores (approx $1.75 billion) in the year 2006-2007 and expected to grow by 30% to touch 9210 crores (approx $2.15 billion) by the year 2007-2008. According to a McKinseyNasscom report the e-commerce transactions in India are expected to reach $100 billion by the 2008. Although, as compared to the western countries, India is still in is its initial stage of development. Home Internet usage in India grew 19% from April 2006 to April 2007. In April 2007 it became 30.32 million and the eMarketer accept that there will be 71 million total Internet users in India by 2011. India is showing tremendous growth in the Ecommerce. Rival tradeindia.com have 700,000 registered buyers and it has the growth rate of 35% every year which is likely to double in the year 2008. Indiamart.com claims revenues of Rs. 38 crores and has a growing rate of 50 every year. It receives around 500,000 enquiries per month. Undoubtedly, with the middle 4
class of 288 million people, online shopping shows unlimited potential in India. The real estate costs are touching the sky. The travel portals' share in the online business contributed to 50% of Rs 4800 crore online market in 2007-08. The travel portal MakeMyTrip.com has attained Rs 1000 crores of turnover which is around around 20% of total e-commerce market in India. Further an annual growth of 65% has been anticipated annually in the travel portals alone.
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TABLE OF CONTENT PREFACE
iii
DECLARATION
2
ACKNOWLEDGEMENT
3
OBJECTIVE
5
INTRODUCTION
7
LITERATURE REVIEW
12
ECOMMERCE IN INDIA
21
SWOT ANALYSIS
39
RESEARCH METHODOLOGY
42
FINDINGS
46
RECOMMENDATION
52
CONCLUSION
56
ANNEXURE
58
o
BIBLIOGRAPHY
59
6
OBJECTIVE
7
STUDY OBJECTIVE •
To learn about the existing trends in e-commerce industry today
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To analyse in depth the benefits and limitations of online transactions of products.
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To examine the online shopping sites prevalent in Lucknow such as the mall.
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To observe the future of the industry and recommend improvement ideas
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INTRODUCTION
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E-Commerce: Business has been looking for ways to increase their profits and market share. The search for more efficient ways of doing business has been driving another revolution in the conduct of business .This revolution is known as electronic commerce which is any purchasing or selling through an electronic communications medium. Business planners in institutions and organizations now see technology not only as a supportive cofactor, but as a key strategic tool. They see electronic commerce as a “wave of future”. Information technology has revolutionized and digitalized economic activity, and made it a truly global phenomenon .One of the most visible icons of the IT Revolution is the internet – the world wise web. Which is a gigantic anarchic network of computers world wide, which is essentially used for communicating, interaction, interactive long distance computing and exchange of information giving rise to a host of applications from military and government to business, education and entertainment? E-commerce exists because of internet. It has been born on the net and is growing with the net. It involves carrying business on and through the net. E-commerce is a product of the digital economy. It is a source of a paradigm shift, in redefining technology, individual and global societies as well as national and global economies. Electronic commerce is a symbolic integration of communications, data management, and security capabilities to allow business applications within different organizations to automatically exchange information related to the sale if goods and services. Communication services support the transfer of information from the originator to the recipient. Data management services define the exchange format of the information. 10
Security mechanisms authenticate the source of information, guarantee the integrity of the information received, prevent disclosure of information to inappropriate users, and document that the information was received by the intended recipient. Prior to the development of e-commerce, the process of marketing and selling goods was a mass-marketing and sales-force driven process. Customers were viewed as passive targets of advertising “campaigns” .Selling was conducted in well-insulated “channels” .Consumers were trapped by geographical and social boundaries, unable to search widely for the best price and quality. E-commerce has challenged much of this traditional business thinking. E-Commerce Defined: “The use of internet and the WEB to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals.” “Electronic commerce is commerce via any electronic media, such as TV, fax, and online networks. Internet-based commerce makes use of any Internet facility and service. Web-based commerce focuses on the opportunity of the World Wide Web apparatus, in particular, its ubiquity and its ease of use.” Benefits/Features of E-Commerce: Electronic commerce increases the speed, accuracy, and efficiency of business and personal transactions. The benefits of E-commerce include the following: •
Ubiquity: E-commerce is ubiquitous, meaning that it is available just about everywhere, at all times. It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop, at home, at work, or even from your car using mobile commerce .From customer point of view, ubiquity reduces transaction costs – the costs of participating in a market. To transact it is no longer necessary to spend time and money 11
traveling to market. At a broader level, the ubiquity of e-commerce lowers the cognitive energy required to transact in a marketplace. Cognitive energy refers to the mental effort required to complete a task. •
Global Reach: E-commerce technology permits commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce. As a result, the potential market size for e-commerce merchants is roughly equal to the size of the world’s online population. The total number of users or customers an ecommerce business can obtain is a measure of its reach.
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Universal Standards: The technical standards for conducting e-commerce are universal standards – they are shared by all nations around the world. The universal technical standards of e-commerce greatly lower the market entry costs - the cost merchants must pay just to bring their goods to market. At the same time, for consumers, universal standards reduce search cost – the effort required to find a suitable products.
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Richness: Information richness refers to the complexity and content of a message.
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Interactivity: E-commerce technologies are interactive, meaning they allow for two-way communication between merchant and consumer .It allows an online merchant to engage a consumer in ways similar to a face-to face experience , but on a much more massive , global scale.
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Information Density: the internet and the Web vastly increase information density –the total amount and quality of information available to all market participants, consumers, and merchants alike. E-commerce technologies reduce information collection, storage, processing, and communication 12
costs .At the sale time; these technologies increase greatly, the accuracy and timeliness of information-making information more useful and important than ever. As a result information becomes more plentiful, cheaper and of higher quality. •
Personalization/Customization:
E-commerce
technologies
permit
personalization – merchants can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases. The technology also permits customization –changing the delivered product or service based on a user’s preference or prior behavior. Given the interactive nature of e-commerce technology, a great deal of information about the consumer can be gathered in the marketplace at the moment of purchase. With the increase in information density, a great deal of information about the consumer’s past purchases and behavior can be stored and used by online merchants. The result is increase in the level of personalization and customization.
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LITERATURE REVIEW
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E-Commerce industry
Need for selecting the ecommerce Industry India, one of the fastest growing economies presents a world of opportunities to entrepreneurs, investors, and researchers with an interest in the global economy. India’s e-Commerce industry is on the growth curve and experiencing a spurt in growth. With this increased interest comes a surge in demand for facts, trends and indicators. Highly concentrated urban areas with very high literacy rates, a vast rural population with fast increasing literacy rate, a rapidly growing internet user base, technology advancement and adoption and such other factors make India a dream destination for ecommerce players. E-commerce combines web technology with business economics. As of the last 10 years, online visibility for such online enterprises now heavily rely on the relationship between the own online sales platform and Search Engines for improved traffic consisting of presumable customers with the intent of acquiring products or services related to the customers’ needs. In 2008 an Internet behavioural analysis showed that over 90% percent of internet users
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make use of search engines at least once a week, stating that online visibility through the use of search engines now is a crucial business marketing aspect.
Logo of e commerce The eCommerce industry continues to grow at a rapid pace translating the rules of traditional retailing and enabling merchants to tap into customer segments, demographics and regions that were difficult to access through the traditional retailing methods. As the rapid Internet Penetration, the widening network of online payment solutions, the progressively wider acceptance of online commerce and the maturity in fulfilment solutions provide a robust backbone for wider and rapid adoption of eCommerce, merchants today are also faced with some of the most unique challenges retailing has ever witnessed. ECommerce business houses small or big, generic or specialized, today need to deal with fierce global competition right at the doorstep. Rapid loss of differentiation, extremely price sensitive fickle customer loyalty, evolving global regulations, short product lifecycles and dropping margins are just some of the significant business challenges that eCommerce business today need to deal with upfront. These challenges require merchants to develop unique strategies to liaison with partners & service providers and adopt radical strategies for eMarketing, 16
Internet Advertisement, Brand identity management, pricing, fulfilment, payments, channel convergence, customer behaviour analysis & personalization and an online as well as offline shopping experience besides core commerce that is beyond the realms of traditional eCommerce. The Five Different Types of E-Commerce E-commerce is the process of buying and selling of various products and services by businesses through the Internet. It deals various kind of business concern, from retail site of the consumer, which includes auction. The main focus is to concentrate on business substitutes involving goods and services between various corporations. E-commerce is the purpose of Internet and the web to Conduct business but when we concentrate on commercial deals among organizations and individuals demanding selective information systems under the guarantee of the firm it accepts the form of ebusiness. Nowadays, the word ‘e’ is hitting momentum. If you’re looking to get into this business, one of the fore most things you have to have is a Virtual Private Cloud Hosting keeping the traffic in mind and respecting customer’s valuable time. There are primarily five types of e-commerce models:
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BUSINESS TO CONSUMER (B2C)
B2C stands for Business to Consumer as the name suggests, it is the model taking businesses and consumers interaction. Online business sells to individuals. The basic concept of this model is to sell the product online to the consumers. B2C is the indirect trade between the company and consumers. It provides direct selling through online. For example: if you want to sell goods and services to customer so that anybody can purchase any products directly from supplier’s website. Directly interact with the customers is the main difference with other business model. As B2B it manages directly relationship with consumers, B2C supply chains normally deal with business that are related to the customer.
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BUSINESS TO BUSINESS (B2B)
B2B stands for Business to Business. It consists of largest form of Ecommerce. This model defines that Buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler. Dell deals computers and other associated accessories online but it is does not make up all those products. So, in govern to deal those products, first step is to purchases them from unlike businesses i.e. the producers of those products. “It is one of the cost effective way to sell out product throughout the world” Benefits: •
Encourage your businesses online
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Products import and export
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Determine buyers and suppliers
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Position trade guides
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CONSUMER TO CONSUMER (C2C)
C2C stands for Consumer to Consumer. It helps the online dealing of goods or services among people. Though there is no major parties needed but the parties will not fulfil the transactions without the program which is supplied by the online market dealer such as eBay.
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PEER TO PEER (P2P)
It is a discipline that deal itself which assists people to instantly shares related computer files and computer sources without having to interact with central web server. If you are going to implement this model, both sides demand to install the expected software so that they could able to convey on the mutual platform. This kind of e-commerce has very low revenue propagation as from the starting it has been tended to the release of use due to which it sometimes caught involved in cyber laws.
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M-COMMERCE
It deals with conducting the transactions with the help of mobile. The mobile device consumers can interact with each other and can lead the business. Mobile Commerce involves the change of ownership or rights to utilize goods and related services.
Fig Overview of e-commerce industry
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E-COMMERCE IN INDIA
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REPORT ON THE INDUSTRY This report provides a brief overview of the ecommerce in India with information on the market characteristics, the various ecommerce models, key players and the future potential of the e-commerce industry.
Fig. e-commerce process
E-Commerce in India: Overview and Reasons for Growth The Online e-commerce Industry is very well developed and is booming largely due to the Internet-savvy urban population. The segments are categorized under travel industry and online non-travel industry, include e-Tailing (online retail), online shopping, online classifieds and Digital Downloads are still in a nascent stage). Though eCommerce took a beating in the dotcom bust, it seems set to grow globally. The global revival of eCommerce is having a ripple effect in India too where the B2B 24
(Business to Business), B2C (Business to Consumer), C2C (Consumer to Consumer), G2B (Government to Business) and G2C (Government to Citizens) segments are showing rapidly increasing activity over the past few years. India has its share of success stories in the B2C segment in the form of Indiatimes.com, Rediff.com, Shaadi.com, Indiamatrimony.com, MagicBricks.com, Monster.com and Makemytrip.com ,ebay.com etc. These and such other portals are generating a lot of interest and increasing transaction traffic. Smaller businesses have jumped onto the bandwagon by offering products and services online and have successfully carved out niches for themselves. The online community is growing by leaps and bounds as an increasing number of consumers have started transacting online because the initial fears and apprehensions are being laid to rest. Research studies have indicated several factors responsible for the sudden spurt in growth of eCommerce in India such as: •
Rapidly increasing Internet user base
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Technology advancements such as VOIP (Voice-over-IP) have bridged the gap between buyers and sellers online
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The emergence of blogs as an avenue for information dissemination and twoway communication for online retailers and eCommerce vendors
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Improved fraud prevention technologies that offer a safe and secure business environment and help prevent credit card frauds, identity thefts and phishing
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Bigger web presence of SME’s and Corporate because of lower marketing and infrastructure costs.
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•
Longer reach - Consumers in the Tier II & Tier III cities are fast realizing the potential of the Internet as a transacting medium
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The young population find online transactions much easier
E-Commerce offers several benefits to businesses •
Easy reach to a fast growing online community
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Unlimited shelf place for products and services
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Fuse the global geographical and time zone boundaries
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Helps reach national and global markets at low operating costs
There is a growing awareness among the business community in India about the opportunities offered by eCommerce. Ease of Internet access and navigation are the critical factors that will result in rapid adoption of Net commerce. Safe and secure payment modes are crucial too along with the need to invent and popularize innovations such as Mobile Commerce.
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POPULAR USES OF ECOMMERCE IN INDIA ECommerce referring to the process of trading goods and services through an electronic medium such as the internet has gained tremendous popularity in the recent years. ECommerce involves paperless transactions and usage of EDI (Electronic Data Interchange), electronic mail, bulletin boards, fax transmissions, and electronic fund transfers.
With advancements in technology, there have been changes in the
methodology for business transactions. India, being a rapid adaptor of technology is apace with the current scenario of electronic data exchanges and has taken to eCommerce. The number of eCommerce transactions have increased manifold. People use credit or debit cards for making purchases in an online store. ECommerce is being used for purchase and sale of multiple products and there are multiple players using various portals and websites for this purpose.
The popular uses of eCommerce in India involve the following:
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A. Online Travel Industry in India Use of eCommerce in India is increasing in the travel segment. Online travel industry is expected to be worth US $6 billion in 2011. It is the most successful eCommerce initiative in India. It has contributed Rs 340 Million to the total eCommerce business of Rs 900 Million. The Indian Travel Ministry has introduced a travel portal called Incredible India. This portal is a big success as tourists can easily contact travel agents, tour operators and hoteliers easily. This portal has also caused a surge in medical tourism to India. By the year 2010, the medical tourism market in India is expected to be around US$ 2 million. Other travel portals include Makemytrip, Yatra, Cleartip, and Travelguru. Makemytrip has targeted revenue of Rs 230 Million for the financial year ending March 2010. B. Online Retailing or eTailing Due to improved broadband connections and increased penetration of credit card facilities to a wider population, eTailing or online retailing is witnessing a substantial growth. Internet retailers provide a wide range of facilities to the consumers, including discounted prices, comparison of product features offered by various vendors, areas where the products can be procured, etc. Currently, the online retail industry in India is estimated to be worth Rs 110 Million. By 2013, India is expected to have the third largest internet user base, which improves the prospects of online purchases. Some of the retail stores offering online retail facilities include: Reliance's Rmoneymall,
Pantaloon's FutureBazaar.com,
Videocon's eDigiworld.com,
Vishalmart's Vishalmegamart.com, and the Tata Group's Westside. C. Online Trading in Stocks and Shares 28
Online stock trading activity is gaining momentum in India. Services offered by the online stock trading companies include online buying and selling of stocks and shares, market analysis and research, details of companies, comparison of companies, and research on equity and mutual funds, customer services through email and chat. Online trading also has an added advantage of real time stock trading without calling or visiting the broker's office. Major online stock trading websites in India include: ICICIDirect.com,
Sherkhan.com,
Indiabulls.com,
5Paisa.com,
Motilal
Oswal
Securities, HDFC Securities, Reliance Money, IDBIPaisaBuilder, Religare, and Kotak Securities. D. Online Advertisements The Indian population accesses the internet from home, office, and cybercafés. There is a large segment of population that is fast adapting to internet. Advertisers have identified the internet as a medium for enhancing the awareness for their business activities. Online advertising in India is expected to cover all organizations and their products. The online advertisement industry grew to Rs 3250 million in India, accounting for 38% growth rate in 2008-2009. The growth rate for the year 20092010 is expected to be 32% which amounts to Rs 4300 million. E. Online Job Sites Another area where eCommerce is widely used is that of employment. Internet has simplified the process of search for 'right people on the right job'. There are a number of web portals and sites that match a prospective employer's requirements with that of candidates applying for that job. Some of the popular job sites in India include:
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Naukri, Monster India, Times Jobs, Careerjet, Naukri Hub, Career India, Bixee, ClickJobs, CareerAge, and Freshersworld. F. Real Estate Portals There are a number of real estate portals and sites that provide information to users regarding the property they wish to buy/sell. This information includes properties available for sale/purchase, the cost, location, etc. Some of the popular real estate portals include: Indiaproperty.com, 99acres.com, Magicbricks.com, and Makaan.com. G. Online Matrimony Websites Matrimony eCommerce portals provide the seekers appropriate information regarding the prospective matches, region of their residence, their religion, caste, etc. Allied services are also provided to the listed members. These services include: astrology, information on customs and rituals, legal issues, health and beauty, fashion, wedding planners, etc. Some of the leading matrimony portals in India include: Shaadi.com, Jeevansathi.com,
Bharatmartimony.com,
Simplymarry.com, and LifepartnerIndia.com.
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Indiamatrimony.com,
and
GOVERNMENT REGULATIONS AND POLICIES The Government of India laid down the Information and Technology Act in 2000 and became the 12th country in the world to have cyber-laws. The IT Act of 2000 covered the following aspects: a. Legal recognition of electronic documents b. Legal recognition of digital signatures c. Offences and Contraventions d. Justice Dispensation Systems for Cybercrimes The IT Act 2000 was substantially modified through the Information and Technology Amendment Act, 2008, which came into effect from October 27, 2009.The IT Act of 2008 covered amendments that provided additional focus on information security. It has added sections on offences, such as Cyber terrorism and Data Protection. This act, however, has been criticized because of lack of legal and procedural safeguards to prevent violation of civil liberties of Indian people. Cyber Laws and Crimes as per the Indian IT Act The IT Act covers cyber laws and crimes, which are subject to the Indian Penal Code. Such cyber crimes include: •
Crimes related to technical aspects, such as unauthorized access and hacking, Trojan attack, virus and worm attack, email related attacks (email spoofing
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and email spamming, email bombing), and denial of service attacks (DOS). DOS include: o
Consumption of limited or non-renewable resources like NW bandwidth and RAM, alteration or destruction of configuration information, destruction or alteration of network components, and pornography.
o
Forgery
IPR violations, which include software piracy, copyright infringement, trademark violations, etc. This also includes cyber terrorism, Banking and credit card related crimes, eCommerce and investment frauds, sale of illegal articles, defamation. o
Cyber stacking, identity theft, data diddling, theft of internet hours.
o
Breach of privacy and confidentiality.
Monitoring of Online Payments by Regulatory Bodies
Fig Payment mode Online payments are generally credited to the intermediaries like PayPal, who transfer these payments to merchants. To address this situation, Reserve Bank of India has 32
issued new norms for facilitating eCommerce transactions. As per the directives, the payment will be credited directly to the merchants and not the intermediaries. With this arrangement, money will be available to the merchant within 3 days of transaction. This will expedite shipping of goods to the customer on time. Online transactions require use of electronic cards – credit or debit. The credit card market is currently not too vast, with less than 25 million credit cards issued in the market. However, debit cum ATM cards are widely used by account holders. Steps by RBI to improve eCommerce Transactions •
Issue appropriate instruments (cards) to facilitate online payments: For example, all debit cards are ATM cards, but all ATM cards are not debit cards. Additionally, there are some co-operative banks offering internet banking facilities. This facility is mostly for checking account balance, and this should be extended to online transactions as well.
•
Take steps to improve debit and credit card penetration. RBI should specify a time frame to banks to issue credit cards, debit cum ATM cards.
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Improving the network connectivity of ATMs: Users can use one bank’s ATM card for holding transactions with another bank because these ATMs are connected to BANKS ATM network. Several banks still need to be connected to this network. RBI should facilitate to expedite this connectivity.
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Improving payment gateway infrastructure: There is a need to improve payment gateway infrastructure in the country. The payment gateways should accept all credit cards, debit cards, and internet banking facilities that all banks are offering. RBI should provide a mandate to the payment gateways to 33
integrate such services of any new bank within some stipulated duration of the new bank operations going live.
ISSUES IN E COMMERCE INDUSTRY E-business provides unique opportunities for enterprises to exchange goods and services with substantial improvements in operational efficiencies, transaction costs, and customer satisfaction. An effective e-business solution enables your entire value chain and can give you a sustainable competitive advantage by improving processes and creating stronger relationships with your business partners and customers. Internet Commerce or E-Commerce (Electronic Commerce) uses online electronic technology connected via the Internet to assist and enhance a variety of business processes, functions and systems. Running an online business can be an overwhelming task. Extending a business to the Web and opening an e-commerce storefront requires merchants to master many tasks not only website development and design, but also maintaining the confidentiality and security of consumer data and accepting and processing payments. The benefits of E-Commerce are not just available to large corporations and government departments and many small to medium businesses are discovering new cost -effective opportunities to use Internet - related technology to help their business operations locally and internationally. E-Commerce will enable companies Shorten procurement cycles through on-line catalogue, ordering and payment. Cut costs on both stock and manufactured parts through efficient JIT and QR systems that reduce the inventory and facilitate automatic replenishment. Shrink product 34
development cycles and accelerate time-to market through collaborative engineering and product customization. E-Commerce Applications •
Supply chain management
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Video on-demand
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Remote Banking
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Procurement and purchasing
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On-line marketing and advertising
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Home shopping
Security issues and Firewalls Today's computer systems, linked by global networks, face a variety of security threats that can result in significant financial and information losses such as credit card numbers, financial data or medical history. To minimize risk, win customer confidence, ultimately, gain a competitive edge. We can arrange with leading Security provider, for Secure Sockets Layer (SSL) technology, which is the industry- standard protocol for secure, Web-based communications and your web server is ready to work with if it's from Apache Freeware, C2Net, IBM, Lotus, Netscape, Microsoft, Open Market, or dozens of other vendors.
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Advantages and Disadvantages of Electronic Commerce: There are several advantages and disadvantages of electronic commerce application for customers, business and non-profit organizations. Different levels of product information can be obtained online globally through the Internet, which makes very easy for customers to compare and evaluate the particular product or service. Electronic commerce can offer wide range of choices to extend markets and opportunities to both consumers and business firms. Customers could save delivery time because of contribution of digital services and product. On other hand, business firms could decrease operating and marketing cost and increase profit. The negative aspect of electronic commerce includes different anticipations of products such as clothes when the customers are purchasing online. Another disadvantage associated with electronic commerce includes issues related to security and privacy of customers’ credit card detail.
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EFFECT OF ELECTRONIC COMMERCE: The invention of electronic commerce has changed the conventional means of online exchanges and transaction. It is generating a novel market place and opportunities for the restructure of economic processes in a more competent way. The world wide structure of the Internet and the very low prize of using it, allows the interconnection of novel and present information and communication technologies. It provides business firms and consumers a pioneering and strong information system and another medium of communication. This changes the way consumer search and purchase goods or services among the highly customized, distributed and exchanged different products or services.
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MARKET SIZE & GROWTH India’s e-commerce market was worth about $2.5 billion in 2009. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. Electronics and Apparel are the biggest categories in terms of sales.
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LIST OF TOP E-COMMERCE COMPANIES OF INDIA: 20North.com: This website offers variety of products like electronics,books,music,movies,car accessories.The site also offers lucrative deals.Log onto the site to shop.Happy Shopping!!!
99labels.com: This site offers many fashion and luxury brands at good prices.Checkk this site for more brands .
Dealsandyou.com: This site offers various kinds of deals be it holidays,shirts etc. Also this site gives heavy discounts on regular basis that cab be profitable for the shoppers.Browse this site for more.
Fashionandyou.com: This site also is a great place to shop and that too sitting at home.Also this site declares sale and heavy discounts almost every day.Sign Up today to get more deals.
Flipkart: This site offers various kinds of products and that too at one place.Mobile,its accesorries,books,camera and laptop accesorries and many more things are available on this site.One can find deals for home appliances also that are available at affordable prices.Check this site.
Indiangiftsportal: This is known for providing gifts for various occasions like birthdays, anniversary, wedding, bhai dooj, diwali and many more. Also flowers, cakes, chocolates and many more things are offered by this site. Browse it today to send gifts to your loved ones. 39
MagazineMall: This company specifically deals in magazines and one can get magazines of different and unique categories like Gardening/Housekeeping, lifestyle, fashion, luxury, current affairs and many more.
Myntra: The site offers fashionable clothes for men,women,kids. Also this site has products of almost all the famous brands.The prices quoted by this site are also affordable.
Naaptol: The site offers products like mobiles,cameras,laptops,jewellery,gifts and what not.check thi s site.
Snapdeal: This site offers lucrative deals that can be beneficial for you all.From Loreal to vacations, the site has the deals.Sign up today to avail the deals.
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SWOT ANALYSIS
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SWOT analysis of the industry Strengths of e-commerce • •
24 hrs a day, 7 days in a week your business in operation. You can do your business globally by sitting at your office, home or in bedroom.
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The products reach to customers directly from the producers at a lower price than the market value.
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It is fast and effective.
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By visiting different websites one can within a short time can compare the price and buy on the best deal.
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Advertising your product is cost effective in compare with conventional offline system.
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Low staff cost.
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Financial transaction through electronic fund transfer is very fast and can be done from any part of the world.
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Can be started with very low investment.
Weaknesses of e- commerce •
There is no direct interaction between the customer and the seller. Therefore, the scope of convincing the customer does not exist.
•
Many times, we prefer to buy the product by reaching personally to the market rather than purchasing through Internet. 42
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Sometimes, transportation cost increases the product cost.
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No. of potential customers who can buy through Internet is still not enough.
Opportunities • Everyday number of Internet users is increasing in a rapid way. • People of tomorrow will feel more comfortable to buy products through Internet only. •
Big companies are already entering in this field so; they are making people habitual and confident about marketing through Internet at the cost of the companies.
Threats •
Dishonest persons entering in this field which damage the confidence and faith of common people on marketing through Internet.
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General trepidation of Internet-based business.
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Increased government regulation for supplements.
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Aggressive competition from other markets.
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INERNET BANKING AT STATE BANK OF INDIA
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Internet banking at State Bank of India Where SBI was? •
In early 1990’s more than 7000 branches were using traditional manual procedures.
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These manual procedures were inherited from the Imperial Bank.
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Traditional procedures were evolved over decades
•
Very few changes were brought in those procedures as per the need of time.
•
In that time, mainframe or mini computers were used for MIS, RECONCILLATION & FUND SETTLEMENT PROCESS, or we can say that for backhand operations purpose.
Changes brought in Information Technology by SBI:•
In the next decade internet facility was provided for individuals •
All SBI branches were connected and ATM’S were launch
•
2001 - KMPG appointed consultant for preparing IT Plan for the Bank.
•
Later on Core banking proposed by the IT consultancy company.
•
2002 – All branches computerized but on decentralized systems, there the initiative of core banking took place
•
2008- more than 6500 branches (95% of business) on Core Banking Solution (CBS)
•
Internet Banking facility for Corporate customers were also launched in early 2008
•
More Interfaces developed with e-Commerce & other sites through alternate channels like ATM & Online Banking
•
All Foreign Offices were brought on Centralized Solution
•
Large network is playing the role of backbone for connectivity across the country
•
Multiple Service Providers are providing the links – BSNL, MTNL, Reliance, Tata & reliance which are making the system errorless and provide high speed.
45
•
Multiple Technologies to support the networking infrastructure – Leased lines, Dial-up, CDMA & VSAT
CBS - Core Banking System Components
Branches
CBS - Core Banking System Components Datacenter Application Developers
Desktops, Branch Servers
Alternative Channels
Core-Banking Application OS, Database
WAN, Internet
Internet-Banking ATM
Branch User/Admins
Network Administrators
System Administrators
ELITEX-2008
SBI internet banking Chapter deals with the information related to various services an products of SBI internet banking
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8
Online SBI (www.onlinesbi.com) State Bank of India is India’s largest bank with a branch network of over 11000 branches and 6 associate banks located even in the remotest parts of India. State Bank of India (SBI) offers a wide range of banking products and services to corporate and retail customers. OnlineSBI is the Internet banking portal for State Bank of India. The portal provides anywhere, anytime, online access to accounts for State Bank’s Retail and Corporate customers. The application is developed using the latest cutting edge technology and tools. The infrastructure supports unified, secure access to banking services for accounts in over 11,000 branches across India.
RETAIL BANKING:The Retail banking application is an integration of several functional areas, and enables customers to:
Issue Demand Drafts online
Transfer funds to own and third party accounts
Credit beneficiary accounts using the VISA Money Transfer, RTGS/NEFT feature
Generate account statements
Setup Standing Instructions
Configure profile settings
Use eTax for online tax payment
Use ePay for automatic bill payments
Interface with merchants for railway and airline reservations
Avail DEMAT and IPO services
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CORPORATE BANKING:The OnlineSBI corporate banking application provides features to administer and manage corporate accounts online. The corporate module provides roles such as Regulator, Admin, Uploader, Transaction Maker, Authorizer, and Auditor. These roles have access to the following functions:
Manage users, define rights and transaction rules on corporate accounts
Access accounts in several branches with a single sign-on mechanism
Upload files to make bulk transactions to third parties, supplier, vendor and tax collection authorities.
Use online transactional features such as fund transfer to own accounts, third party payments, and draft issues
Make bill payments over the Internet.
Authorize, modify, reschedule and cancel transactions, based on rights assigned to the user
Generate account statement
Enquire on transaction details or current balance
Value added services:
Tax payments to central and state governments through site to site integration.
Supply Chain Finance( e-VFS- Electronic Vendor Finance Scheme)
Direct Debit Facility
E Collection Facilities for:
Core Banking Transactions
Internet Bank transactions for incoming RTGS/NEFT Transactions
Internet banking transactions for SBI and associate banks
Debit facility where suppliers can directly debit their customer’s account through internet banking
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PRODUCTS AND SERVICES:•
E-Ticketing
•
SBI E-Tax
•
Bill Payment
•
RTGS/NEFT
•
E-Payment
•
Fund Transfer
•
Third Party Transfer
•
Demand Draft
•
Cheque Book Request
•
Account Opening Request
•
Account Statement
•
Transaction Enquiry
•
Demat Account Statement
•
Donation
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1)
E-TICKETING :-
You can book your railway, air and bus tickets online through OnlineSBI. To book your train ticket, just log on to irctc.co.in and create an ID there at if you do not have one. Submit your travel plan and book the ticket(s)-either •
i-ticket (where the delivery of tickets will be made at your address) or
•
E-tickets (wherein after successful payment transactions, an e-ticket is generated which can be printed any time. For an e-ticket, the details of photo identity card will required to be filled in)
And select State Bank of India in the payment options. You will be redirected to Internet Banking site of SBI (www.onlinesbi.com). After submitting the respective ID and password, you can select your account. After a successful debit, Railways will generate the ticket. E-ticket can be printed by you whereas the i-ticket will be dispatched by IRCTC at the given address. Service charges @ Rs.10/- per transaction shall be levied in addition to the cost of the ticket. Cancellation of E-ticket can be done by logging on to IRCTC's site; refund amount will be credited to your account directly within 2-3 days. For cancellation of i-ticket, you shall be required to submit your ticket at a computerized counter of Railways and on cancellation; the amount shall be credited back to your account. You can also book your Air ticket through the e-ticketing feature. Logon to Indian Airlines website to make a payment for an e-ticket through State Bank of India, you need to select SBI as the payment option. The payment request will be redirected to Internet Banking site. The request may be processed based on values sent from the airlines website. Once a transaction is processed, an appropriate response will be sent to airlines site to update the status of the transaction. You can print the E-ticket immediately. To book bus tickets to destinations in Karnataka, log on to the KSRTC website. Provide details about the start and end points of your journey, date of journey and number of tickets. Verify availability of seats on the selected date and confirm the transaction. Select OnlineSBI to make the payment. Provide your credentials and select the SBI account that will be debited for the payment. You are provided a KSRTC reference number for your e-Ticket.
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2)
SBI E-TAX:-
You can pay your taxes online through SBI E-Tax. This facility enables you to pay TDS, Income tax, Indirect tax, Corporation tax, Wealth tax, Estate Duty and Fringe Benefits tax. Click the e-Tax link in the home page. You are displayed a page with two links Direct Tax and Indirect Tax. Click the Direct Tax link. You will be redirected to the NSDL site where you can select an online challan based on the tax you wish to pay. Provide the PAN, name and address, assessment year, nature of payment and bank name. On selecting the bank name as SBI and submitting the form, you will be redirected to the Internet Banking site. After submitting the respective ID and password, you can select your account for making payment of taxes. After payment is successful you can print the E-Receipt for the payment. The E-receipt can be printed at a later date also and the same can be retrieved from: Enquiries > Find Transactions > Status Enquiries > Click on the respective transaction to print the tax receipt. The Indirect Tax link is used to make Central Excise and Service Tax payments to Central Board of Excise and Customs. The online payment feature facilitates anytime, anywhere payment and an instant E-Receipt is generated once the transaction is complete. The Indirect Tax payment facility is available to Registered Central Excise/Service Tax Assessee who possesses the 15 digit PAN based Assessee Code. You can make CBEC payments using the Indirect Taxes link available in the Payments/Transfers tab. You need to provide your assessee code as registered with CBEC and select the minor heads towards which you intend to pay tax. Select the appropriate tax type and enter the tax amount. Select an account for debiting the total tax amount. You can use any of your transaction accounts to make the payment. If a payment is successful, CBEC provides a link to generate an E-Receipt for the payment. Internet banking customers can pay tax through site to site integration. For government agencies, which are not Internet-enabled, OnlineSBI offers the Government Tax Payment facility. This facility is available as a post login feature in the
retail
and
corporate
banking
sites
of
the
Online
SBI
portal.
Please note that the cut-off time for OLTAS and CBEC payment is 8 P.M. IST. Any transactions created after the cut off time will be processed after 7 A.M. on the following day. 51
Bill Payment :-
3)
A simple and convenient service for viewing and paying your bills online. •
No more late payments
•
No more queues
•
No more hassles of depositing cheques
Using the bill payment you can 'view and Pay various bills online, directly from your SBI account. You can pay telephone, electricity, insurance, credit cards and other bills from the comfort of your house or office, 24 hours a day, 365 days a year. Simply logon to http://www.onlinesbi.com/ with your credentials and register the biller to which you want to pay, with all the bill details. Once the bill is uploaded by the biller, you can make payment online. You can see 'how do i' to learn the steps for using the facility. You can also set up Auto Pay instructions with an upper limit to ensure that your bills are paid automatically whenever they are due. The upper limit ensures that only bills within the specified limit are paid automatically, thereby providing you complete control over these payments. The e-PAY service is available in various cities across the country and you can now make payments to several billers in your region. 4)
RTGS/NEFT :-
You can transfer money from your State Bank account to accounts in other banks using the RTGS/NEFT service. The RTGS system facilitates transfer of funds from accounts in one bank to another on a "real time" and on "gross settlement" basis. This system is the fastest possible interbank money transfer facility available through secure banking channels in India. RTGS transaction requests will be sent to RBI immediately during working hours post working hours requests are registered and sent to RBI on next working day. You can also schedule a transaction for a future date. You can transfer an amount of Rs.1 lac and above using RTGS system. National Electronic Funds Transfer (NEFT) facilitates transfer of funds to the credit account with the other participating bank. RBI acts as the service provider and transfers the credit to the other bank's account. NEFT transactions are settled in batches based on the following timings 52
1.6 settlements on weekdays - at 09:00, 11:00, 12:00, 13:00, 15:00 and 17:00 hrs. 2.3 settlements on Saturdays - at 09:00, 11:00 and 12:00 hrs. Please note that all the above timings are based on Indian Standard Time (IST) only. In order to transfer the funds to an account with other bank, kindly ensure that the bank branch of the beneficiary is covered under the RGTS/NEFT payment system. It is recommended that you choose the Bank/ Branch from the drop down option provided under the link "Add Interbank beneficiary". Please exercise care to provide the correct account number and name of the beneficiary.
5)
E-Payment :-
You can pay your insurance premium, mobile phone bills and also you can purchase mutual fund units by coming from the biller’s website and selecting state bank of India in the payment option. LIC PREMIUM: For paying premium of LIC policy logon to www.licindia.com and register your policy details. When the premium is due select State Bank of India in the make payment option. SBI Mutual FUND: You can invest in the SBI Mutual Fund schemes online. Logon to www.sbimf.com and select the scheme in which you want to make investment in the payment option select State Bank of India. CCAVENUES: Enjoy shopping at the CCAvenue Shopping Mall and purchase from a wide variety of products and services through CCAvenue Certified Vendors. Make payments for your purchases using your Internet enabled SBI accounts.
6)
Fund Transfer :-
The Funds Transfer facility enables you to transfer funds within your accounts in the same branch or other branches. You can transfer aggregating Rs.1 lakh per day to own accounts in the same branch and other branches. To make a funds transfer, you should be an active Internet Banking user with transaction rights. Funds transfer to PPF account is restricted to the same branch. Just log on to retail section of the Internet Banking site with your credentials and select the Funds Transfer link under Payments/Transfers tab. You can see all your 53
online debit and credit accounts. Select the debit account from which you wish to transfer funds and the credit account into which the amount is to be credited. Enter the amount and remarks. The remarks will be displayed in your accounts statement for this transaction. You will be displayed the last five funds transfer operations on your accounts. On confirming the transaction, you will be displayed a confirmation page with the details of the transaction and the option to submit or cancel the funds transfer request. A reference number will be generated for your record.
7)
Third Party Transfer :-
You can transfer funds to your trusted third parties by adding them as third party accounts. The beneficiary account should be any branch SBI. Transfer is instant. You can do any number of Transactions in a day for amount aggregating Rs.1lakh. To transfer funds to third party having account in SBI, you need to add and approve a third party, you need to register your mobile number in personal details link under profile section. You will receive a One Time SMS password on your mobile phone to approve a third party. If you do not have a mobile number, third party approval will be handled by your branch. Only after approval of third party, you will be able to transfer funds to the third party. You can set limits for third party transactions made from your accounts or even set limits for individual third parties.
8)
Demand Draft :-
The Internet Banking application enables you to register demand drafts requests online. You can get a demand draft from any of your Accounts (Savings Bank, Current Account, Cash Credit or Overdraft). You can set limits for demand drafts issued from your accounts or use the bank specified limit for demand drafts. You can opt to collect the draft in person at your branch, quoting a reference to the transaction. A printed advice can also be obtained from the site for your record. Alternatively, you may request the branch to courier it to your registered address, and the courier charges will be recovered from you. If you have any queries, kindly approach your branch, quoting the reference number generated for the request.
9)
Cheque Book Request :54
You can request for a cheque book online. Cheque book can be requested for any of your Savings, Current, Cash Credit, and Over Draft accounts. You can opt for cheque books with 25, 50 or 100 cheque leaves. You can either collect it from branch or request your branch to send it by post or courier. You can opt to get the cheque book delivered at your registered address or you can provide an alternate address. Cheque books will be dispatched within 3 working days from the date of request. Just log on to retail section of the Internet Banking site with your credentials and select the Cheque Book link under Requests tab. You can view all your transaction accounts. Select the account for which you require a cheque book; enter the number of cheque leaves required and the mode of delivery. Then, submit the same.
10) Account Opening Request:OnlineSBI enables you to open a new account online. You can apply for a new account only in branches where you already have accounts. You should have an INBenabled account with transaction right in the branch. Funds in an existing account are used to open the new account. You can open Savings, Current, Term Deposit and Recurring Deposit accounts of Residents, NRO and NRE types. Just log on to retail section of the Internet Banking site with your credentials and select the New Account link under Requests tab. You can see all types of accounts. Select the account and account type you wish to open and submit the same. Then, you need to select the branch and enter the initial amount to open the account. You can select any of your accounts for debiting the initial amount. Then, submit the transaction. Your new account opening request will be processed by the branch.
11) Account Statement :The Internet Banking application can generate an online, downloadable account statement for any of your accounts for any date range and for any account mapped to your username. The statement includes the transaction details, opening, closing and accumulated balance in the account. 55
You can generate the online account statement for any date range or for any month and year. The account statement can be viewed online, printed or downloaded as an Excel or PDF file. You also have the option to select the number of records displayed in each page of the statement. The options are 25, 50, 75, 100 and ALL.
12) Transaction Enquiry :OnlineSBI provides features to enquire status of online transactions. You can view and verify transaction details and the current status of transactions. Your VISA transactions can also be viewed separately. Just log on to retail section of the Internet Banking site with your credentials and select the Status Enquiry link under the Enquiries tab. You will be displayed all online transactions you have performed. To view details of individual transactions, you need to click the Transaction Reference number link. You are displayed the debit and credit account details, transaction amount, narration and transaction status
13) Demat Account Statement :OnlineSBI enables you to view Demat account statement and maintain such accounts. The bank acts as your depository participant. In the third party site, you can mark a lien on your Demat accounts and use the funds to trade on stock using funds in your SBI savings account. You can view Demat account details, and generate the following statements: statement of holding, statement of transactions, statement of billing.
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14) Donation:You can make donation to religious and charitable institution by using Internet Banking of SBI. Simply log on to http://www.onlinesbi.com/ with your credentials and go to Payment and transfer and click on make donation link. After selecting the debit account select the religious/charitable institution whom you want to offer donation. After successful payment you can print an E-receipt for the donation made.
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Chapter 6 SWOC analysis of SBI’s internet banking Strengths:• • • • • • • • •
Greater reach to customers Quicker time to market Ability to introduce new products and services quickly and successfully Ability to understand its customers’ needs Customers are given access to information easily across any location Greater customer loyalty Easy online application for all accounts, including personal loans and mortgage 24 hours account access Quality customer service with personal attention
Weaknesses:-
• Lack of awareness among the existing customers regarding internet banking • Obsolesce of technology take place very soon specially in terms of security on internet. • Procedure for applying for id and password for using services related to internet banking takes time. • Lack of knowledge is found regarding internet banking in employees of SBI • Implementation of newer technology is little bit complicated 58
• Employees needs training to obtain knowledge regarding I-banking
Opportunities:-
• Approximately 95% of customers are not using internet banking. • Core competency can be achieved in terms of banking if focus is made on awareness of internet banking • Can become 1st virtual bank of India. • Concentration of various services should be made using internet banking
Challenges:-
• Maintaining Business Edge over competitors in the context of sameness in IT infrastructure • Multiple vendor support is necessary for working of highly complex technology • Maintaining secured IT infrastructure for business operations • Alternative must be there in case of failure of system
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RESEARCH METHODOLOGY
61
RESEARCH METHODOLOGY RESEARCH METHODOLOGY is a way to systemically solve the research problem. It may be understood as a science of studying how research is done. and it to study the various steps that are generally adopted by a researcher in studying his research problem it is necessary for the researcher to design the methodology form the problem as a method differ from problem- problem.
RESEARCH PROCESS Before embarking on the detail of research methodology and the techniques it seems appropriate to present the brief overview of the research process. Research process consists of series of action or steps necessary to effectively carried out the research and the desired sequencing of these steps one should remember that the desired sequencing of these steps. One should remember that various steps involve in a research process are not mutually exclusive nor they are separate and distinct they do not necessarily follow each other. any specific order and researcher have to be constantly anticipating at each steps in the research process however the following order concerning various steps provide a useful procedural guideline regarding the research process.
DEFINING THE PROBLEM: 62
The objective of the project was to undertake a study on the two major banking systems of Indian and United States of America. Reserve Bank of India & US Federal Reserve System is the leading Banks of their countries.
DEVELOP A RESEARCH DESIGN Research design is a conceptual structure within which research is conducted; it is basically the blue print for a collection of data, measurement and analysis of data. “A research design is the arrangement of conditions for collection and analysis of data in manner that aims to combine relevance to research purpose with economy in procedure”. Data collection I have used secondary data for which I have searched report related topics, articles and columns from different Internet Websites & Books. Secondary data Internet Books Journal Manuals Annual reports DATA COLLECTION The task of data collection begins after research problem has been defined and research design/ plan chalked out while deciding about the data collection to be used for studying one type of data is used and there is no option for Primary Data.
Primary data: Not Used 63
Secondary data: On the other hand are those which have already been collected by someone else and which have been already passed.
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FINDINGS
65
ECOMMERCE IN INDIA The latest report on Ecommerce in India published by the IAMAI (Internet and Mobile Association of India) indicates a healthy growth rate over the previous years. PC users have increased from 72 million in 2009 to 87 million in 2010. This is primarily due to the penetration of PC into the lower Socio Economic Classes (SEC) spread across smaller towns in India. With increasing literacy rates and growing incomes, people from these classes have readily adopted the Internet for Ecommerce and other uses. Claimed Internet Users (those who have used the Internet at least once in the past) have grown by a substantial 20% in 2009 over 2008. This rate is significantly higher than the growth rates in the previous years. The Internet penetration level in small towns of rural India has increased from a mere 5% in year 2000 to 36% in 2009. The Internet usage figures of these smaller towns have even overtaken those of the Top 8 Metros indicating the impact of the Internet on the lives of people residing in rural India. The recent survey conducted by Nielsen, India has emerged as the 3rd biggest nation when it comes to online shopping and using a credit card online. Drawn by the facilities offered by the Web and the diversity of products available on it, Indian netizens have emerged as the third biggest credit card users globally for online purchasing, next only to the Turkey and Ireland. The survey shows more than 85 per cent of Internet users in the world are purchasing goods or services online, with credit cards as the most used method of payment. Despite the improved penetration of Internet usage, both in urban and rural India, the actual figures are far short unlike in the US and Europe. India’s economy is pegged at about Rs.1.2 trillion (by 2008 estimates) and its Ecommerce market is approximately Rs.9000 – 10000 crore (nearly 66
US$ 2 billion). In comparison, the US economy is $14.2 trillion and its Ecommerce market (B2C) is estimated at $ 220 billion in year 2008. Thus India’s ecommerce to GDP ratio is disproportionate considering its economy is 7% of the US economy but the size of its ecommerce market being only 1% that of the US. These figures, though disappointing, indicate the potential for growth of India’s Ecommerce market and that it is getting there – slowly but surely. There is still tremendous scope for investors and entrepreneurs in India’s Ecommerce space.
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ECOMMERCE IN RURAL INDIA With internet reaching a wider base of population, eCommerce transactions happen over a vaster segment of Indian society. According to the survey conducted by Internet and Mobile Association of India (IAMAI), the rural internet users have outgrown the number of urban internet users. According to the eBay Census Guide 2009, India has 2471 eCommerce hubs. These hubs are spread over the entire country and cover cities, towns, villages, and smaller towns. All 28 states and 7 Union Territories have witnessed eCommerce transactions. It was also found that rural Indians are actively involved in online shopping. Online buying and selling trends have been observed in Bundy (Rajasthan), Thevaram (Tamil Nadu), and Tezpur (Assam). Online shopping is underway in 747 rural towns of India. The study reveals that 181 rural towns, including Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra, and Gujarat are active entrepreneurship hubs. These hubs cater to online selling in India and worldwide. Successful eCommerce Ventures in India India is the fourth country in terms of Internet usage. The internet-savvy population has a number of online markets catering to a huge number of products. The eCommerce market in India is expected to be around Rs 950 Million, out of which market for online shopping is at Rs 130 Million. The global growth rate for online shopping is around 8%-10%, but India has a much higher growth rate of 30%. Some of the areas that have observed a successful eCommerce activity include: Travel and tourism: In India, it is the most successful eCommerce initiative. It has contributed Rs 340 Million to the total eCommerce business of Rs 900 Million. Online Shopping: In metro cities, particularly Delhi and Mumbai, online shopping is becoming popular. Some of the stores providing online shopping facilities include: 68
The Bombay Store, Big Bazaar, Pantaloons, and shopping portals on websites such as www.rediff.com. Locations of widespread eCommerce activity: Mumbai is India’s leading eCommerce marketplace. Delhi ranks second in online shopping activity. India’s top 5 eCommerce hubs are: Delhi, Mumbai, Chennai, Jaipur and Bangalore. According to a survey conducted by eBay, India had about 2,471 eCommerce hubs in 2009. In this year, all 28 states and 7 Union Territories of India witnessed eCommerce transactions. Additionally, the survey reveals that most of the eCommerce transactions originate from Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra, and Gujarat. These are the cities where most of the IT hubs are located.
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Future Potential and Growth India realizes the importance of eCommerce, as this is an emerging practice of businesses in today’s world. For adopting eCommerce, two requirements need to be catered to: physical connectivity and technology, and legal framework governing the flow of trade. To ensure a better connectivity, there has been an increase in the number of Internet Service Providers following a growth in the Telecommunication sector. And to address trade related issues in eCommerce, the government has set up National Task Force on Information and Technology.
Issues with eCommerce – Payment and Dispatch of Goods One of the major factors for eCommerce not taking off in India as expected is the dispatch of goods on time and payment issues. Merchants start order processing and shipping only after the receipt of money through Credit Card or online banking payment. Mostly, online payments are credited to the intermediaries like PayPal, who transfer these payments to merchants. To address this situation, Reserve Bank of India has issued new norms for facilitating eCommerce transactions. As per the RBI directives, the payment will be credited directly to the merchants and not the intermediaries. With this arrangement, money will be available to the merchant within 3 days of transaction. This will expedite shipping of goods to the customer on time. However, still there is an underlying problem of fixing responsibility for the goods delivered and the payment. Online retailers do not take full responsibility of a clear etransaction. So, the customer problems still persist. However, India has taken a number of steps to facilitate eCommerce transactions and steadily, the loop-holes are being plugged.
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RECOMMENDATIONS
71
RECOMMENDATIONS FOR THE FUTURE While E-Commerce may not completely replace other forms of Commerce, it is likely to be the dominant mode of the commercial transactions in the future. Colleges and Schools including Business Schools should reflect this trend in the curriculum to train the future generation of Managers. India is increasingly expanding its horizons as a new centre for business idea for global industrialists. Novel promotion and selling ideas are being formulated according to needs of the new age middle class customers. •
E-commerce export prospects outside India: There are many products which can be sold and exported. It could be anything ranging from spices to coffee. It is not essential to set up a warehouse; rather tie-ups with Indian companies or by creating a website of your own would serve the purpose. This gives an opportunity to manage a diverse range of products sans any risk and cost. The step towards starting an e-commerce export business is to find a niche market in India. It could be in any area ranging from healthcare to herbs, etc. Search the net and find out which product can meet the requirements of a certain category of customer. Test your product online before taking any risk. The probable risk in this business is that the good or service may not appeal to the customers or there might not be any sales.
•
E-commerce business prospects within India: With the development in customer market the Indian economy has flourished over the years giving rise to a class of people with disposable income. For budding entrepreneurs it is advisable to get indulged in e-commerce boom. 72
The potential of e-commerce business within India is restricted for another two years. Going by the past records of other countries, China witnessed a massive upsurge in its internet users by 4 million users in the year 1999 from 600,000 Internet users in November 1997. But one major disadvantage of establishing an e-commerce business in India is that only 1 million people have direct access to the internet and out of 36 Indians only 1 have phone access and many of them even do not have credit cards. Export of animations, multimedia, graphics, etc.: The potential of this business is to cater to the massive requirements for quality content that the web creates. To execute this idea an entrepreneur requires expert professionals. The possible risk involved in such kind of business is that the animations or graphics might turn out to be visually unattractive to the Western audience. Hence, to avert any such situation a meticulous supervision is required to ensure that the service appeals to the western audience. •
Online Customer Support: The geographic barriers are fading and with the internet revolution this type of business opportunity has emerged in India. The potential of this type of business undertaking is cost effective. India has the skilled workforce of people who speak quality English as the cost of hiring a call centre employee in India is around US $150-$200 per month. This paved way for setting up a decent online support system in India for the United States.
Indian
entrepreneurs can easily surpass any problem by training the online support staff and educating them about the attitude and lifestyle of the American customer.
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•
Export of data services:
For establishing a successful business in India, outsourcing of data entry is the best option. This business is the most recent in India and is already a hit in big cities like Bangalore.
This business undertaking has a great potential.
Companies in Bangalore are flourishing to a great extent after undertaking data services like medical transcriptions. There is a massive demand for these kinds of services because international companies prefer their documents in an electronic format. This business is promising as well as money spinning. The prospective entrepreneurs can collaborate with Indian companies in order to offer high quality skilled employment. If the quality of work is not sustained then the risk may surface with complaints coming from the clients. Mobile Commerce is also growing rapidly and proving to be a stable and secure supplement to eCommerce due to the record growth in mobile user base in India, in recent years.
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CONCLUSION
75
CONCLUSION In sum, the most successful marketplaces are expected to be those that cater to consumer's loneliness, boredom, education and career. For instance, look at the success of on-line chats and home shopping channels. But debates rage over whether interactive TV or on-line computer services will become pivotal medium for solving consumer loneliness. Nobody would want to get into something that wasn’t secure. So when you are ready for e-business you’ll find that many organizations have developed solutions like Real Time Intrusion Detection and Anti Virus software. These along with personal codes and passwords make sure that any transaction that takes place or any information that is shared is seen only by the people it’s meant for. So ensure that it is real safe to do business online, before opting for one!
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ANNEXURE
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BIBLIOGRAPHY Websites: www.google.com http://en.wikipedia.org/wiki/Ecommerce_in_India www.scribd.com www.commercewiki.com
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