E COMMERCE :ACTIVITIES,GOALS and TECHNICAL ASPECTS AN OVERVIEW

ARIJEET BOSEDPGD/JL12/0238 SPECIALISATION :E BUSINESS

WELINGKAR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH Year of submission - JULY2014

APPENDIX

This is to certify that the project work titled E commerce Activities, goals and Technical aspects is a bonafide work carried out by Mr. Arijeet Bose(Admission no. Dpgd/jl12/0238) under my supervision and guidance.

Sign of the guide Mr Prashant Choudhary Sr. Vice president(J M financial)

Date : May 2014Place : Mumbai

Acknowledgements

FIRST AND FOREMOST I WOULD LIKE TO THANK MR PRASHANT CHOUDHARY MY MENTOR AND GUIDE WHO HAS SPENT A LOT OF TIME REVIEWING AND HELPING ME DRAFT MY PROJECT.

THIS PROJECT HAS BEEN ACCOMPLISHED ONLY BECAUSE OF THE SUPPORT OF SOME HELPFUL PEOPLE AND I WOULD SINCERELY LIKE TO THANK THEM .

I WOULD ALSO LIKE TO THANK MY LECTURERS AT WELINGKAR INSTITUTE OF MANAGEMENT STUDIES WHO HELPED ME IN COMPLETING THE DISTANCE LEARNING PROGRAM.

TABLE OF CONTENTS

Chp NO. TITLE PAGE NO.

Executive summary 1 Introduction 7 2 Activities of e commerce 12 3 Goals of e commerce 16 4 Technical aspects of e commerce 20 5 Research Methodology 23 6 Data analysis 26 7 Research findings 34 8 Limitations of e commerce 38 9 Recommendations and conclusions 40 Bibliography

If you define the problem correctly you almost have the solution.

Steve Jobs

EXECUTIVE SUMMARY

Even today, some considerable time after the so called dot com/Internet revolution, electronic commerce (e-commerce) remains a relatively new, emerging and constantly changing area of business management and information technology. There has been and continues to be much publicity and discussion about e-commerce. Library catalogues and shelves are filled with books and articles on the subject. However, there is still some amount of confusion, suspicion and misunderstanding surrounding the area, which has been covered by the different contexts in which electronic commerce is used. This project aims to consolidate the major themes that have arisen from the new area of electronic commerce and to provide an understanding of its application and importance to management. In order to understand electronic commerce it is important to identify the different terms that are used, and to assess their origin and usage.

E-commerce, or electronic commerce, is playing an increasingly integral role in facilitating international trade across a variety of sectors, and as such constitutes a core element of current free trade agreements (FTA) / economic partnership agreements (EPA). This paper offers an overview of the position, form, and dynamics that e-commerce constitutes in a prospective Canada-Japan FTA / EPA. It does so by first outlining the scope of e-commerce within an FTA / EPA, and then delving into the respective lenses of Japan and Canada, through the dimensions of agreement objectives, negotiation positions, current regulatory environment, and framing reference agreements for e-commerce.

The future of e-commerce and the logistics to support it will be driven by a number of key factors, namely ongoing and ever-increasing convergence in technologies, and the continued drive to respond to changing consumer demand. While the demise of pure-player brick-and-mortar is not foreseen, roundtable participants did predict a greater convergence of brick-and-mortar and online/mobile, going beyond evolutions in click-and-mortars to the emergence of retail experiences that combine the physical and virtual aspects of shopping seamlessly

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Chapter 1

INTRODUCTION

1.1 What is e commerce?Electronic commerce, commonly known asE-commerceoreCommerce, is trading in products or services conducted via computer networks such as the Internet. Electronic commerce draws on technologies such asmobile commerce,electronic funds transfer,supply chain management,Internet marketing,online transaction processing,electronic data interchange(EDI),inventory management systems, and automateddata collectionsystems. Modern electronic commerce typically uses theWorld Wide Webat least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail,mobile devices, social media, and telephones as well. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. While discussing about Electronic Data Exchange Technology, we have seen that, these emerging networks of firms are more flexible and can respond to changes in the economic environment much more quickly than hierarchically structured businesses ever could. Electronic Data Interchange (EDI) EDI is a computer-to-computer transfer of business information between two businesses that uses a standard format.

1.2 E-commerce can be divided into 7 subsections:

E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall"

Buying or selling on websites and/oronline marketplaces

The gathering and use of demographic data through web contacts and social media

Electronic data interchange, the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospective and established customers .

Business-to-businessbuying and selling

The security of business transactions

1.3 Key drivers of e commerce In India

Technological factors The degree of advancement of the telecommunications infrastructure which provides access to the new technology for business and consumers.

Political factors including the role of government in creating government

legislation, initiatives and funding to support the use and development of e-

commerce and information technology.

Social factors incorporating the level and advancement in IT education and

training which will enable both potential buyers and the workforce to understand

and use the new technology.

Economic factors including the general wealth and commercial health of the nation and the elements that contribute to it.

Digital convergence - Digital devices can now communicate with one another.

The Internet made it all possible.

Anytime, anywhere, anyone - This means that anyone can communicate with the

e-merchant or shop online 24 hours a day from anywhere in the world.

Changes in organizations - Knowledge workers at the lower level in the

organization can now take on responsibilities were once were relegated to lower

or junior managers. The focus is on empowerment.

Widespread access to IT - Globalization and surge in the demand for information and communication for business and pleasure placed IT in the frontline.

Increasing pressure on operating costs and profit margins - E-Commerce

addresses these concerns quickly (efficiently), effectively and at low cost.

Demand for customized products and services - Todays customers are

expecting higher quality and better pperformance regarding products and services.

For eg.Increasingbroadband Internet(growing at 20%) and3Gpenetration.

Risingstandards of livingand a burgeoning, upwardly mobile middle class with high disposable income.

Busy lifestyles, urban traffic congestion and lack of time for offline shopping.

Lower prices compared to brick and mortar retail driven bydisintermediationand reduced inventory and real estate costs

Increased usage of online classified sites, with more consumer buying and selling second-hand goods

Evolution of the online marketplace model with sites like eBay, Flipkart, Snapdeal, Infibeam, qnetindia.in Dealkyahai.com and Tradus. The evolution of ecommerce has come a full circle with marketplace models taking center stage again.

1.4 Scope of e commerce In India

In one of the biggest fund raising,Flipkart.com in August 2012, about822crore(US$140million). They announced that they had received $200 million from existing investors Tiger Global, Naspers, Accel Partners, and ICONIQ Capital. Entertainment ticketing website BookMySho.com raised100crore(US$17million) investment By Accel Partners.

In Feb 2014, online fashion retailer Myntra raised $50 million from a group of investors led by Premji Invest, the investment company floated byAzim Premji, Chairman ofWipro.

Audio systems major Bose Corporation plans to reach out to its clients in India through the ecommerce route whereby buyers can place orders for its products through the Internet.

Reliance Retail, retail arm of Mukesh Ambani-led Reliance Indper centtries, plans to foray into unexplored markets and tap the potential of e-commerce channel this year.

Online eyewear retailer Lenskart is in talks with India's largest e-commerce companies to sell its products on their platforms.

The department of industrial policy and promotion (DIPP) will push for foreign direct investment (FDI) in e-commerce with the new government as part of its strategy to give an impetus to manufacturing.

Snapdealraised USD 50 million in April 13.

Chapter 2

Activities of e commerce

Buying and selling of different types of products.

E-commerce refers to the process of buying or selling products or services over the Internet. Online shopping is becoming increasingly popular because of speed and ease of use for customers. Selling online can help reach new markets and increase sales and revenue gains. People can use the Internet to find sales leads, announce calls for tender, and to offer products for sale (either through your own website or through an e-marketplace site

Searching for products and services online can save time and money by allowing to find the best prices in the market.

Internet can be used to find new suppliers, post buying requests or search for products and services. The benefits of e-commerce include lower costs associated with selecting suppliers, establishing prices, ordering, and finalizing transactions. Online trading networks can also be used to support efficient information exchange between buyers and sellers. Shipping and Order and Fulfillment Services

Fast Order Processing

With e Fulfillment Service, the orders go out the door quickly, and accurately.

Ship Confirmations

Once an order leaves the fulfilment center a confirmation for the order is sent through email or a mobile phone to the customer.

Information

In addition to email ship confirmations it is also made easy for the customers to check tracking information on the website.

Delivery

Once the order is confirmed the product is delivered to the customer.

Web activities of e commerce

Customer Reviews

Reviews attract customers toa particular site (and keep them coming back customers prefer sites with reviews).

Reviews educate customers, positive reviews can motivate people to buy

Reviews build consumer trust and confidence about purchases and can reduce returns

Consumers are willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category .

Question and Answer Better than user forums, ask and answer tools bring the conversation right onto the product page, and open up questions to the shopping community to answer. People get a better answer from someone who owns the product than from a customer service rep who hasnt seen or used the product.

TwitterAnother way to ask and answer questions is through Twitter, the latest Web 2.0 hype machine. Users can get nearly instant answers to questions (provided theyre under 140 characters) directed at a retailer or the general Twitter universe.

Twitter penetration across BRIC countries

Retail Blogging

Blogs can be a great way to connect with customers, talk about new products, share interviews, videos, podcasts, news, photos and jokes. They can be a branding/loyalty vehicle. They can attract links and search engine traffic. They can put a human face on the business.Retail blogs also take a lot of work. They require a lot of love and nurturing to stay fresh and popular. Online Security Internet security is a branch of computer security specifically related to the Internet,

often involving browser security but also network security on a more general level as it applies to other applications or operating systems on a whole. Its objective is to establish rules and measures to use against attacks over the Internet.

Network Security Using Firewall

Firewall is a security device deployed at the boundary of an organization' s network to protect it from unauthorised external access. It links an organization's intranet to the internet and restricts the type of traffic that it will pass, thus providing security. Simple firewalls may be implemented in some routers, called packet filtering firewalls, they pass only some packetsbased on simple specified criteria such as :

Direction of traffic

Source or destination IP address

Time of day

Proxy Application Gateway

Proxy application program running on a firewall machine is the one whichacts on behalf of all members of an organization wanting to use the internet.This program monitors all requests - allows access to only designatedaddresses outside, limits use of certain browsers and disallows use of someprotocols with known security holes. Proxy application program may also beallowed to run on some user's machine who have authorization for internetuse.

Data Encryption With Secret Keys

Data sent via a public network may be accessed and used by unauthorizedpersons. Thus it is necessary to scramble it so that even if one accesses it, itcannot be understood. Similarly data stored in data bases accessible viainternet should be scrambled. Method of scrambling is known as encryption.

Method of unscrambling is known as decryption.

Plain Text And Ciphertext

Plain text is data in its natural form. Encryption is taking data in any form(Text, Audio,Video etc.) and transforming it to another form which cannot be understood transformed data is known as cryptogram or cipher text.

Chapter 3

GOALS OF E COMMERCE:

Quantity

When offline stores calculate transaction costs, they have to factor in countless business expenditures along with the actual number of transactions. When there are fewer transactions, the cost of per transaction is higher. On the flipside, transactions arriving in high quantity can overwhelm your personnel and distributors. In an eCommerce business, the transaction cost is the same across the board, whether one order or thousands come in.Accuracy

Electronic selling nearly eliminates processing errors that run rampant with human processors. This translates into less wasted time solving order and invoice problems. Although inaccuracies do not incur fees or penalties, they do take up considerable employee time and energy. ECommerce frees up staff members to focus on profit-generating activities.InventoryWith a brick and mortar store, we will have to maintain an inventory. This will entail purchasing, receiving, unpacking, displaying, storing extras and selling as quickly as possible. In the eCommerce world, you can opt to own or rent warehouse space to store inventory, or you can create a working relationship with wholesalers or manufacturers that ship directly from their facility, which is often called drop shipping. If purchasing in bulk, your cost per item will be lower, but you will not have to process and house the inventory.Other Reduced CostsAn eCommerce business is able to reduce labor and other costs in many areas, including: document preparation, reconciliation, mail preparation, telephone calling, data entry, overtime and supervision expenses. EBusiness can help manage operating costs in many areas, thereby reducing the cost of individual transactions. The use of email and electronic invoicing are a tremendous savings over the traditional methods. Service quality Service qualityis a comparison of expectations with performance.A business with high service quality will meet customer needs while remaining economically competitive.Improved service quality may increase economic competitiveness and result in customer satisfaction

Product life cycle management

Product Life Cycle (PLC) management are to reduce time to market, improve product quality, reduce prototyping costs, identify potential sales opportunities and revenue contributions, and reduce environmental impacts at end-of-life. To create successful new products the company must understand its customers, markets and competitors.

Good customer response Improved service quality and reduced costs and the best management of the product will result in better customer response and their satisfaction will result in recurring business oppurtunities.

Achieving web presence goalsOn the web businesses and organisations have the advantage of creating a space of their own choice their designs, choices good enough to make certain good impressions and thus customer feel and enjoy its presence. Good wesites attract a large no of customers and frequent purchases are made through them.

Just-in-Time (JIT) Manufacturing

It is viewed as an integrated management system consisting of a number of different

management practices dependent on the characteristics of specific plants.The first principle is

elimination of all waste (time,materials,labour & equipment) The following management

practices are focused factory, reduced set-up times, group technology, total productive

maintenance, multifunction employees, uniform workloads, IT purchasing,kanban total

quality control & quality circles.

Quick Response Retailing (QR)

It is a version of JIT purchasing tailored for retailing. To reduce the risk of being of out of

stock, retailers are implementing QR systems. It provides for a flexible response to product

ordering and lowers costly inventory levels QR retailing focuses on market responsiveness while maintaining low levels of stocks It creates a closed loop consisting of retailer, vendor,

& consumer chain,& as consumers make purchases the vendor orders new deliveries from

the retailer through its compute network

Supply Chain Management

Supply Chain Management (SCM) is also called extending, which means integrating

the internal and external partners on the supply and process chains to get raw materials to

the manufacturer and finished products to the consumer.It includes following functions

Supplier management: The goal is to reduce the number of suppliers and get them toPartners

Inventory management: The goal is to shorten the order-ship-bill cycle. When a majority

of partners are electronically linked, information faxed or mailed.

Distribution management: The goal is to move documents (accurate data) related to

Shipping

Channel management: The goal is to quickly disseminate information about changing

operational conditions ( technical, product, and pricing information) to trading partners

Payment management: The goal is to link company and the suppliers and distributors so

that payments can be sent and received electronically

Financial management: The goal is to enable global companies to manage their money in

various foreign exchange accounts

In sum, the supply chain management process increasingly depends on electronic markets

Work group Collaboration Applications:

A internetwork that enables easy and inexpensive connection of various organization

Segments. It is to improve communications and information sharing and to gather and analyze

competitive data in real-time .Videoconferencing, document sharing and multimedia e-mail,

are expected to reduce travel and encourage telecommuting improving the distribution

channel for documents and records to suppliers, collaborators and distributors

Chapter 4

TECHNICAL ASPECTS OF E COMMERCE

Scalability The ability of a product to work well as it or its environment is changed in size or power. An e-commerce Website is only as good as its ability to handle its peak traffic. As your Website popularity increases, it needs to scale with minimal effort so you can avoid incurring disproportionate infrastructure management costs. Business User Control Business users like to take control, and every task that they can safely do themselves means one less task that IT will have to do. When evaluating e-commerce applications, it should be made sure that the application you choose will be technically and architecturally sound with proven capabilities.AgilityHow easily can a person implement business requests to monitor and respond to an individual Web visitors behavior.IntegrationThe e-commerce Website,is a highly integrated application that touches many other systems and processes. The team that develops and supports it contains a mix of technical and business professionals who drive an important part of the corporate strategy.Search How easily can customers find what they want, and how easily can I promote the products I want to push based on customer searches.Standards E-commerce is no longer a renegade outpost of IT. Its a fundamental, mission-critical organization within a business systems portfolio. It must run on a standards-based platform that can be supported by standard skill sets across the organization and in the wider marketplace. Youll want the flexibility to go to a broad selection of agencies and systems integrators for development. In todays enterprise applications, the technology playing field has narrowed to either a Java/J2EE or Microsoft .NET architecture.The Product Catalog The product catalog is the online repository for every item you sell. It has to effectively promote the items you most want to push, and simultaneously help your customers find the items they are looking for. But poorly constructed product catalogs can be rigid and uncompromising, especially if the product attributes you want to store dont naturally align with the definitions set in ther e-commerce applicationManageability - The ease with which a product can be maintained. Also, the degree of control allowed by the vendor.User Friendliness - The ease with which an untrained person can use a product.

Choosing an Internet Service Provider (ISP)The most common way to launch an online business is to sign up with a business Internet Service Provider (ISP). These will provide people with a business connection to the Internet and will usually host your website on their server for public access. The ISP people choose will depend on the nature of the site.Downtime The time during which the website cannot be accessed - results in loss of sales or advertising revenue and can deter potential customers. Downtime could be due to net congestion, perhaps during a promotion at an e-commerce site, or server shutdown. When choosing your ISP, ensure that they have the facilities to cope with a large number of users at once and that they have a reliable server.Designing a particular sitePerhaps the most important aspect of a website design is usability - can users find information quickly and easily? Beware of "attractive" extras such as Java Applets, multimedia video or fanciful graphics as these increase the time it takes for the site to download. In addition, video and audio may require separate programs to run which many people may not have.An example of a simple yet effective e-commerce site is www.amazon.co.ukTransactionsMost sales between company and consumer over the Internet take place by credit card transactions. However, banks have been unwilling to grant dot-coms the merchant status needed to handle credit cards without two years of trading records - simply unrealistic for a e-commerce start-up.Instead, you can sign up with Payment Service Providers (PSPs), such as Secpay, NetBanx or Secure Trading, which operate on commission. When a customer chooses to "Proceed to Check Out", they are redirected to the PSP's secure server. The transactions are processed by the PSP using high levels of encryption.A recent trend has been the availability of e-commerce packages. Some ISPs, such as ClaraNet combine website hosting with internet connection and a secure server for sales. Web designers may also offer hosting and maintenance.SecurityEven the world's largest sites, such as Amazon and eBay, have fallen victim to concerted hacking attacks. However, hacking is not usually a major issue for lower profile companies; a study by the Department of Trade and Industry found that most security problems were caused by employee error rather than hacking.In general, you should ensure that information is never stored in an unprotected directory accessible from the web. Encryption software is widely available on the internet.

Chapter 5 RESEARCH METHODOLOGYINTRODUCTIONWith the rise of small and medium enterprises, foreign direct investment, powerful multinational corporations creating millions of new jobs, a new generation of globally-minded consumers has been created. These consumers are spread across the country. Furthermore, access to many global and domestic brands is limited to major metropolitan regions, such as Delhi, Mumbai, and Bangalore. This study on E commerce focuses mainly on the basic goals that have to be achieved, the activities performed by the e commerce websites, and the technical aspects of e commerce.OBJECTIVEThis study is a research on what E commerce is and the various elements affecting the e commerce websites their goals for profit making, good customer service and being one of the growing economic sectors in the world. This study helps in understanding the core beliefs, the methods of engagement of e commerce, the various functions performed for improvement in the field of e commerce. The primary driver for e- commerce anywhere is the user experience. Customers prefer a trusted relationship with an e-commerce brand, and the conveniences and reliability of e-commerce businesses have to outweigh the benefits of traditional retail outlets. Research strategyQuestionnairesQuestionnaires refer to forms filled in by respondents alone. Questionnaires can be handed out or sent by mail and later collected or returned by stamped addressed envelope. This method can be adopted for theentire population or sampled sectors. Questionnaires may be used to collect regular or infrequent routine data, and data for specialised studies. While the information in this section applies to questionnaires for all these uses, examples will concern only routine data, whether regular or infrequent. Some of the data often obtained through questionnaires include demographic characteristics, fishing practices, opinions of stakeholders on fisheries issues or management, general information on fishers and household food budgets. A questionnaire requires respondents to fill out the form themselves, and so requires a high level of literacy. Where multiple languages are common, questionnaires should be prepared using the major languages of the target group. Special care needs to betaken in these cases to ensure accurate translations.In order to maximise return rates, questionnaires should be designed to be as simple and clear as possible, with targeted sections and questions. Most importantly, questionnaires should also be as short as possible. If the questionnaire is being given to a sample population, then it may be preferable to prepare several smaller, more targeted questionnaires, each provided to a sub-sample. If the questionnaire is used for a complete enumeration, then special care needs to be taken to avoid overburdening the respondent. If, for instance, several agencies require the same data, attempts should be made to co-ordinate its collection to avoid duplication..Questionnaires, like interviews, can contain either structured questions with blanks to be filled in, multiple choice questions, or they can contain open-ended questions where the respondent is encouraged to reply at length and choose their own focus to some extent. The objective of the questionnaire in this studyis to what people think about e commerce platforms in general. The questionnaires can alter public perception, thus entrepreneurs willing to start a project in e commerce can use a number of questionnaires to extract the facts for optimal online growth and development of online websites. InterviewsIn interviews information is obtained through inquiry and recorded by enumerators. Structured interviews are performed by using survey forms, whereas open interviews are notes taken while talking with respondents. The notes are subsequently structured (interpreted) for further analysis. Open-ended interviews, which need to be interpreted and analysed even during the interview, have to be carried out by well-trained observers and/or enumerators. As in preparing a questionnaire, it is important to pilot test forms designed for the interviews. The best attempt to clarify and focus by the designer cannot anticipate all possible respondent interpretations. A small-scale test prior to actual use for data collection will assure better data and avoid wasting time and money.6.3.3.1 Open-ended interviewsOpen-ended interviews cover a variety of data-gathering activities, including a number of social science research methods.Focus groupsare small (5-15 individuals) and composed of representative members of a group whose beliefs, practises or opinions are sought. By asking initial questions and structuring the subsequent discussion, the facilitator/interviewer can obtain, for example, information on common gear use practices, responses to management regulations or opinions about fishing.Panel surveysinvolve the random selection of a small number of representative individuals from a group, who agree to be available over an extended period - often one to three years. During that period, they serve as a stratified random sample of people from whom data can be elicited on a variety of topics.Chapter 6Data analysisThe worldwide expansion of the internet has considerably contributed to the transformation of trade and store transactions. E-commerce, or electronic commerce, largely means buying and/or selling products through the internet and is commonly associated with online shopping. E-commerce also makes use of regular technological maintenance to ensure the smooth functioning of online store sites, monetary transactions, as well as everything to do with providing and delivering products. E-commerce statistics confirm the explosive pace at which this industry has developed asworldwide B2C e-commerce sales amounted to more than 1.2 trillion US dollars in 2013.There are several different types of e-commerce, the most prevalent being B2B (business-to-business), B2C (business-to-consumer) and C2C (consumer-to-consumer) e-commerce. Furthermore, mobile commerce in the shape of buying and selling goods and content via mobile devices such as smartphones is also on the rise.Current e-commerce statistics state that40 percent of worldwide internetusers have bought products or goods online via desktop, mobile, tablet or other online devices. This amounts tomore than 1 billion online buyersand is projected to continuously grow.According to popular e-commerce market data, US-founded Amazon is one of the leading e commerce platforms worldwide. Asian competitors such as Rakuten or Alibaba are also constantly expanding their share within the B2C e-commerce market. Online auction website eBay is the most popular example for C2C e-commerce whilst also providing aplatform for merchants to sell their goods.Mobile commerce growth is another exciting trend to watch in terms of e-commerce statistics, considering the popularity and widespread use of smartphones and growing usage of tablets. In 2013,mobile commerce revenueamounted to more than 38 billion US dollars. This type of e-commerce includes mobile media and content, retail services, travel purchases and various other services.Digital payments are also closely connected to e-commerce. Alternative payment methods such as digital wallets or online payment providers have seen increased adoption rates and rapid growth in the past few years. Ebay-owned PayPal is one of the current market leaders with more than 14 billion US dollars inmobile payment volumealone. Digital payments are not only convenient for the mobile shopping experience but also for the increasingly available paid digital content like streaming music, online video subscriptions and apps. For example,global mobile app revenuesare projected to surpass 30 billion US dollars in the coming year.The dawn of the Internet era opened up amazing new possibilities and e-commerce has emerged as a perfect amalgamation of technology and marketing.The latest statistics reveal that India has been reported to have 70 million active Internet users, the count rising more and more by the minute. However, markets involve intricate interactions involving a variety of business/organisational factors, general economic and social trends..online retailing or e-tailing, which accounts for about 6 per cent of the Rs 46,000 crore industry, has taken the forefront of this rapid growth.Such strong current indications to massive changes, occurring across the entire business spectrum, have already wiped out doubts about the scope of e-commerce in India. The expanse of the tremendous ambit for the growth of Internet marketing in India being clear now, it can conveniently be stated that marketing through the Internet can be an extremely potent ball game.The basic explanation to such a boom lies in the fact that e-tail has surfaced as a boon to both the sellers and the consumers. It has garnered significant attention from consumers due to the convenience of shopping. The need to physically visit stores has, in some cases, been eliminated. Instead, you can just sit at home and order, easily browse through a host of products, conveniently compare prices and avail the best deal. Its all about saving on precious time, energy, money and get what you desire. On the flip side, it has succeeded in pleasing the sellers by providing a faster buying/selling procedure, resulting in saving a lot of time. Now, products can be made available for purchase and sold around the clock. This also provides a wider reach, defying all theoretical geographic limitations in reaching out to customers. Sellers have shown remarkable enthusiasm for this system as their need to continuously augment and keep abreast of customer expectations and desires is aptly catered to.Exponential growth of ecommerce in india

4.1 Market size and trends

46% of parents whose children shop online allow their child to use their credit/debit card. [Source: Symantec, November 2011]

30% of parents who let their children shop with their credit/debit card online say their child has used it without permission. [Source: Symantec, November 2011]

23% of parents who let their children shop with their credit/debit card online say their child has overspent on it. [Source: Symantec, November 2011]

39% of college students buy more online than in person. [Source: Cisco, September 2011]

4.2 The top reasons for lost online travel purchases

Price disparities and poor presentation

Site functionality issues such as lack of time-saving features

Poor on-site search

Poorly displayed product descriptions

Presentation of additional charges

Navigation issues such as poor sorting and filtering functionality.

4.3 Internet Advertising

Global display ads are growing by 18.9% per year

The advantages of e commerce are:-

Easier to Compare Prices

There are several shopping search engines and comparison shopping websites that help consumers locate the best prices. While buyers love this, sellers find it too restrictive as many of them get filtered out of the consumer's consideration set.

No Need for a Physical Store

Since there is no need for a physical store, ecommerce businesses save on one of the biggest cost overheads that retailers have to bear.

Ability to Buy and Sell to Other Consumers

Auction sites and listing sites allow individuals to buy and sell from each other. This opens a whole new paradigm of ecommerce. The most famous enabler of consumer to consumer (C2C) ecommerce is eBay.com

No Need to Handle Currency Notes

In physical stores, many customers pay with currency notes. For a large multi-store retailer, this creates the need for careful cash management. For the tax authority, it creates a problem in being able to accurately evaluate a retailer's earnings. Electronic payments leave a stronger trail, and this helps the retailer as well as the tax authority.Ability to Track Logistics

Since effective logistics is the key to a successful ecommerce business, the ability to trigger and monitor logistics online is a valuable tool for the ecommerce business.

Reduced costsE-Commerce helps reducing cost of products so less affluent people can also afford the products.

Reach of e commerceE-Commerce has enabled access to services and products to rural areas as well which are otherwise not available to them.Social welfareE-Commerce helps government to deliver public services like health care, education, social services at reduced cost and in improved way.

Time saving

It is the reason number one for using electronic commerce. People now have access to their

money and what they need to buy from home and work all from a desktop computer.

Consumers have an access to a wider range of products

Company now can use internet sites as shop fronts, so consumers can browse, buy from

many different sellers and making it easier to find exactly what they are looking for.

Allows small businesses to mix with the big business online

With a relatively small cost, a new business can set its self up to conduct transactions online.

Provide benefits to suppliers of goods and services Company now can target a wider variety of consumers even take the product or service international, allowing them a means of supplying their goods to places that were before unreachable.

The disadvantages of e commerce are:-

Need for an Internet Access Device

Ecommerce can only be transacted with the help of an Internet access device such as a computer or a smartphone.

Security Issues

Consumers run the risk of identity fraud and other hazards as their personal details are captured by ecommerce businesses. Businesses run the risk ofphishing attacksand other forms of security fraud.

Inability to Identify Scams

Consumers are often taken in by fly-by-night ecommerce websites that look good, but are up to no good. Scam artists often accept orders and then disappear.

Extraordinarily High Reliance on the Website

For anecommerce business, its website is everything. Even a few minute of downtime can lead to a substantial loss of money, not to mention customer dissatisfaction.

Delay in Receiving Goods

If shopping is about instant gratification, then consumers are left empty-handed for some time after making a purchase on an ecommerce website.

Initial cost The cost of creating / building E-Commerce application in-house may be very high. There could be delay in launching the E-Commerce application due to mistakes, lack of experience.

AccessibilityInternet access is still not cheaper and is inconvenient to use for many potential customers like one living in remote villages.

IntegrationSometimes, it becomes difficult to integrate E-Commerce software or website with the existing application or databasesInability to Feel the PhysicalIt is nearly impossible to sell things like furniture and tires online. Furniture is somethingpeople like to siton and know the feel. Tires need to be installed once purchased. The old tires also need to be disposed of. In both instances, there is a need for real actions to fulfill the reason for the purchase. Thats why things like food, jewelry, antiques etc. can never turn to E-commerce.

Trouble recruiting and retaining employees The company needs well-expert and skilled staff to keep up and create the ecommerce facilities of the company. Many companies favour to outsource their improvement and programming tasks to decrease labour costs.

Consumers feel less confident with their credit card numbers Most of the consumers are still not confident in providing their credit card numbers for making payments on the website while shopping on the Internet.

Not every company can take the benefit Some of the small companies may not be able to take the benefit of E-commerce for example the lack of expertise and lack of technology. The legal environment in which E-commerce is conducted is full of unclear and conflicting laws. It should be noted that mostly these disadvantages stem from the newness and rapidly growth of the technology.

Chapter 7

RESEARCH FINDINGS

A sampling of topics as they relate to the internet and electronic commerce include intelligent agents technologies and their impact; economics of electronic commerce; virtual electronic commerce systems; service creation and provisioning; supply chain management through the internet; collaborative learning, gaming, and work; and workflow for electronic commerce applications. E-commerce is a multi-disciplinary area, which should be developed in co-operation with existing fields such as Information Systems and Technology; Marketing, Finance and Supply Chain Management; Business Strategy and Management; Public Policy; Computer Science and Telecommunications; and Legal Studies. We will solicit papers on current technologies from these areas, as well as publish papers on completely new topics. We also seek proposals for special issues on new topics in e-commerce that will create new directions for research.

E-COMMERCE A PROVEN HAVEN FOR INDIAS ECONOMICGROWTH

From a buzzword to a current-day reality, e-commerce in India has been experiencing remarkable growth, successfully changing the way people transact. People today can shop literally everywhere within minutes, be it their workstations or homes, and most importantly, at any time of the day at their leisure. The online market space in the country is burgeoning in terms of offerings ranging from travel, movies, hotel reservations and books to the likes of matrimonial services, electronic gadgets, fashion accessories and even groceries. India is home to 3,311 e-commerce hubs, 1,267 rural hubs, 391 export hubs and 2,217 import hubs1. To capitalise on the anticipated growth potential, a host of investors, including venture capital (VC) and private equity (PE) firms, are closely eyeing opportunities in e-commerce start-ups. At the same time the sector is witnessing a number of consolidation owing to various mergers and acquisitions

THE E-COMMERCE SECTOR HAS BEEN GROWING AT ABREAKNECK PACE

The sector is classified into four major types, based on the parties involved in the transactions Business-to-business (B2B), business-to-customer (B2C),customer-to-business (C2B) and customer-to-customer (C2C).

According to an Internet and Mobile Association of India (IAMAI) report, the overall e-commerce market in India has recorded a robust CAGR of 54.6 per cent and crossed USD10.0 billion during 200711. It is estimated to add another USD4 billion and reach USD14 billion by end-2012.

ONLINE TRAVEL, THE CURRENT MAJOR CONTRIBUTOR TOTHE B2C SEGMENTS SALES

In India, online travel accounts for majority of the sales of the largest segment B2C. Indian customers are less sceptical in purchasing services such as train and airline tickets online. This enables e-sellers to avoid logistics and delivery issues linked with physical goods. As per 2011 statistics, the online travel sales division captured the biggest pie and accounted for 81.4 per cent of the entire market online travel sites such as Indian Railway Catering and Tourism Corporation (IRCTC) and makemytrip.com have been the most influential and successful in this regard, as these portals save buyers from the travails of waiting in queues. Today, almost 40.0 per cent of the total IRCTC bookings are done online.

ONLINE RETAIL DIVISION TO CONTINUE TO OFFERIMMENSE SCOPE

Currently, the retail division, which includes online sales of physical and digital goods, enjoys only a nominal share. Notably, in this division, e-tailing and financial services are the fastest growing segments with each capturing 5.8 per cent of the market as per 2011 statistics. E-commerce has expanded its foothold in the finance-based segments such as mutual funds and insurance. The Indian online retailing market is still evolving and certainly has room for growth.

ANTICIPATED GROWTH IN INTERNET ACCESSIBILITYBACKBONE FOR THE INDIAN E-COMMERCE LANDSCAPE

One of the major catalysts for e-commerce is the breadth of Internet penetration in a country. The current penetration rate in India is at 10.1 per cent penetrationrate, India has a huge Internet consumer base of around 125.0 million (as of 2011), the third largest in the world after US and China. By end-2012, the number ofInternet users is expected to increase to 150.0 million. A study conducted by IMRB and IAMAI observed that of the total 99.0 million urban Internet users, 80.0 million were active compared to 31.0 million active users out of the total 38.0 million in rural areas as of June 2012. At its current pace, this number could multiply three-fold to nearly 380.0 million by 2015, surpassing the US and China. activities, thus reflecting a huge untapped opportunity. This number is expected to touch 39.0 million users by 2015 as Internet penetration increases and ecommerce becomes more secured.

ON-THE-GO SHOPPING FORMULA NEED OF THE DAY

Mobile phones are proving to be an important factor in the e-commerce ecosystem owing to its easy compatibility with the Internet. India has more than 900.0 million mobile users, of which around 300.0 million use data services. This number is expected to touch 1200.0 million by 2015. Also, more than 100.0 million mobile users are expected to use 3G and 4G connectivity in the coming few years. Of the total 900.0 million mobile users, a meager 27.0 million are active on the Internet. Moreover, only 4.0 per cent of the active mobile internet users buy products through mobiles. However, mobile shopping is on a upward trend and is expected to increase fivefold to 20.0 per cent in the medium term.

E-COMMERCE MARKET WOULD CONTINUE ITS GROWTHSTORY

The changing consumer lifestyles, supported by the younger population base of India, have given a boost to the e-commerce business. More than half of the total 1.2 billion population of India falls under the below 25 years of age bracket. Also,65.0 per cent of Indias population, representing the working age group of 15 to 64 years, would aid the further growth of e-commerce, driven by their rising disposable income. Notably, discretionary spending in India is expected to jump to 70.0 per cent by 2025from 52.0 per cent in 2005. Also, the growing inclination towards purchasing online is reflected in a trend for higher value online transactions.

NUMEROUS CUSTOMISED FEATURES HAVE BEEN ADDEDTO THE E-COMMERCE SECTOR

To capitalise on the benefits offered by the unique Indian consumer base, ecommerce companies have been innovating with policies traditionally not available in a brick-and-mortar store. Companies have introduced return policies ranging from 730 days, free home delivery and the most recent cash on delivery

model. The last innovation has led to a lot of momentum in Internet sales and changed peoples perception towards online shopping as shoppers can now purchase without disclosing their credit/debit card details.

SECTOR HAS BEEN CONSTANTLY ATTRACTING HUGEINVESTMENT

With the underlying opportunities, the industry is set to benefit, driven by strong fundamentals and provision of continuous assistance by various PE and VC firms to fund their expansion plans. Notably, on the investment front, the sector enjoyed inflow of around USD800 million in 2011, up from USD110 million in 2010. Investments made in e-commerce businesses by firms alone more than quadrupled to USD467 million in 2011 compared to USD99 million in 2010. The number of deals increased to 78 compared to just 22 in 2010. The robust deal activity continued in 2012, with USD242 million invested during the January-April period. The trend over the period reflects that the average deal size has more than doubled due to increasing traction in e-commerce activities, which requires larger investments for growth

Chapter 8Limitations of e commerceThere can be lack of system security, reliability or standards owing to poor implementation of e-Commerce.Software development industry is still evolving and keeps changing rapidly.In many countries, network bandwidth might cause an issue as there is insufficient telecommunication bandwidth available.Special types of web server or other software might be required by the vendor setting the e-commerce environment apart from network servers.Sometimes, it becomes difficult to integrate E-Commerce software or website with the existing application or databases.There could be software/hardware compatibility issue as some E-Commerce software may be incompatible with some operating system or any other component.

Initial cost - The cost of creating / building E-Commerce application in-house may be very high. There could be delay in launching the E-Commerce application due to mistakes, lack of experience.User resistance - User may not trust the site being unknown faceless seller. Such mistrust makes it difficult to make user switch from physical stores to online/virtual stores.Security/ Privacy - Difficult to ensure security or privacy on online transactions.Lack of touch or feel of products during online shopping.E-Commerce applications are still evolving and changing rapidly.Internet access is still not cheaper and is inconvenient to use for many potential customers like one living in remote villages.

Technological and inherent limitations The technological limitations of e-commerce have restricted a large number of people from

using this revolutionizing technique. The major disadvantage of e-commerce is the limitation

of the Internet, as it still has not touched the lives of every individual. Lack of knowledge

restricts large number of people from using the internet and understanding online

transactions. Some people refuse to trust the legitimacy of online business and some are not

comfortable about disclosing their personal and confidential information online. Authenticity

of e-commerce businesses has always remained in question.

Not suitable for perishable commodities The biggest limitation of e-commerce is that it is not suitable for perishable goods and food

items. For purchasing such items people prefer the conventional way of shopping. Along with

that, the time period also plays a significant role in delivering goods to the customers.

Customers may need to make lot of phone calls and e-mails for getting the products within the

desired timeframe. Moreover, it becomes really troublesome to return the product or get

refund in case if you are not satisfied with the product.After evaluating the pros and cons of e-commerce, we can clearly state that the benefits of e-commerce are sufficient enough for overpowering the limitations. If apt strategies are followed and technical issues are addressed properly, you can easily build up the customers trust in your system. The present scenario of e-commerce can also be changed for good, so that it can easily adapt to the ever changing needs of the customers as well as of the world.

Chapter 9

Recommendations and conclusion:Innovative Ways To Improve E-Commerce

1.Share the Voice of the Customer Simple product information is no longer enough. Size, shape, color, widththose are expected. However, offering your customers the chance to review purchased items is an easy add-on to a bare-bones e-tail site.Companies can take it a step further by having a representative from your company respond and react to reviews, right on the product page itself. Thanking a customer for a glowing review or offering to resolve a negative one are great ways to build credibility and put a human face on a small brand.2.Include Honest and Helpful DetailsThis one is a corollary to the previous item, but so few e-tailers do it well that it warrants its own mention. If your sizes come in S,M, and L, youre guaranteed to leave customers wondering, What if Im smaller than an S?Help them with the decisionmaking process by providing details like,This product may fit awkwardly if youre over six feet tall, or This item works best in dry environments. Your customers will be grateful that youve anticipated their questions, and youll have removed a significant barrier between your customers and a purchase.

3.Offering CustomizationOptionsIf your operation supports it, provide options like specially designed gift wrapping (anyone whos ever had something wrapped by the big boys knows that it often leaves something to be desired), customizable monograms or engravings, or handwritten notes.

4.Being Social

Just having aFacebookor Twitter presence isnt enough.To do it right, you need to do more than just post dull updates about products or services. Instead, think about what kind of lifestyle your customer leads. What are they interested in? Where else do they shop? If, for example, you sell high-end camping gear, cultivate a social presence that shares news and personal interest stories about camping, hiking, and the outdoors. Your social outreach should be more than just another advertising channel. It should be a source of lifestyle content for your target audience.

5.Be Reachable

Your customers shouldnt have to struggle to contact a human being at your company. Many of the biggest e-commerce players make it all but impossible to reach a helpful customer service rep. Small and emerging e-tailers should take advantage of this flaw by making themselves accessible.Display your contact info and if at all possible, include a phone number that allows a customer to reach a live human who can help them. At the end of the day, your business probably wont be able to compete with the giants for sheer volume, and thats just fine. By providing stellar and accessible customer service, unexpected product assistance, and a high degree of product customization, your business can build a community of loyal, engaged, and enthusiastic customers.

Increasing Revenues by Create Personalized Customer Experience

The main goal of any ecommerce website is to generate revenue and, ultimately, profit. Very

similar to a conventional store, the owner of an ecommerce site has to find ways to draw user

traffic to the website, entice a visitor to become a (repeat) customer, to raise average order

values and, ultimately, increase store revenue. In order to achieve these objectives,

ecommerce websites have to provide a virtual storefront, engage visitors with relevant

product offerings, provide an enjoyable, hasslefree and highly personalized shopping

experience, and create a warm, friendly and trustworthy atmosphere that makes clients feel

welcome and motivates them to come back.

Selecting the Right Recommender for the Right Page of your Ecommerce Store

Landing Page

The landing page is the main storefront and entry point of an ecommerce site. It needs to

create a goodfirst impression, an image, a feeling, make the visitor welcome and draw

him/her into the store.

Department / Category / Subcategory page

The Category page allows users to browse the ecommerce store by sections or departments

(e.g. mens shirts pages have to be designed so that they provide enough product diversity and

do not become boring, provide a good overview of the product palette and, at the same time,

allow customers to find products in the store in an easy and enjoyable manner.

Shopping Cart

The shopping cart page displays information about the products the customer is interested in buying.

The page needs to keep the customer engaged. The goal is to motivate the customer to

complete the purchase or to continue shopping. Since the customer has already made up

his/her mind about specific products, displaying alternatives to these would be

counterproductive.

Recommendations on order confirmation Mail

Targeted email newsletter

The targeted email newsletter provides personalized updates to clients of the store. The goal is

to motivate the customer to return to the store by giving incentives and pointing out products

of potential interest Highlighting new and updated products, ways to enhance or complement

the clients existing products or, for consumables, reminders to replenish supplies are some

ways to entice clients to return to the store.

Rating email

Rating emails are similar in nature to order confirmation emails. They are sent out a specific

time after a customer has purchased the product and ask them to provide feedback. They are

a good location to provide recommendations for related products as well as generic, featured

items. The feedback process can be linked to an incentive program to motivate customers to

return to the store.

Evaluate market demand for new product idea

There is usually a market demand for the new product ideas that are venturing into the market the government should also help the startup companies to grow through lower tax and helping the companies raise capital.Write copy that sells

There's a proven sales copy formula that takes visitors through the selling process from the moment they arrive to the moment they make a purchase:Arouse interest with a compelling headline.

Describe the problem your product solves.

Establish your credibility as a solver of this problem.

Add testimonials from people who have used your product.

Talk about the product and how it benefits the user.

Make an offer.

Make a strong guarantee.

Design and build your websiteOnce you've got your market and product, and you've nailed down your selling process, now you're ready for your small-business web design. Remember to keep it simple. You have fewer than five seconds to grab someone's attention--otherwise they're gone, never to be seen again. Some important tips to keep in mind:

Choose one or two plain fonts on a white background.

Make your navigation clear and simple, and the same on every page.

Only use graphics, audio or video if they enhance your message.

Include an opt-in offer so you can collect e-mail addresses.

Make it easy to buy--no more than two clicks between potential customer and checkout.

Your website is your online storefront, so make it customer-friendly.

Use search engines to drive targeted buyers to your site

Pay-per-click advertising is the easiest way to get traffic to a brand-new site. It has two advantages over waiting for the traffic to come to you organically. First, PPC ads show up on the search pages immediately, and second, PPC ads allow you to test different keywords, as well as headlines, prices and selling approaches. Not only do you get immediate traffic, but you can also use PPC ads to discover your best, highest-converting keywords. Then you can distribute the keywords throughout your site in your copy and code, which will help your rankings in the organic search results.

Establish an expert reputation for yourself

People use the internet to find information. Provide that information for free to other sites, and you'll see more traffic and better search engine rankings. The secret is to always include a link to your site with each tidbit of information.Give away free, expert content. Create articles, videos or any other content that people will find useful. Distribute that content through online article directories or social media sites.Include "send to a friend" links on valuable content on your website. Become an active expert in industry forums and social networking sites where your target market hangs out.

Conclusion

New E-commerce is still in its formative stage. The business-to-business and intra-organizational segments currently dominate e-commerce. Many major digital retailers are as yet in the investment and brand-building mode and show no profits; yet many established retailers realize profits from the new selling channel. Buoyant growth is apparent throughout.The hierarchical framework presented above offers an opportunity to separate concerns and analyze the specific aspects of this enterprise. The technological infrastructure currently imposes several limitations on the development of a global market-space and on the personal convenience of the participants. An integrated consumer-oriented transaction space is yet to emerge. The consumer marketplace is being developed by a large number of entrepreneurial initiatives, many of them experimenting on the frontiers. Moving the links of supply chains and products into market-space offers a major promise in raising economic efficiency of both manufacturing and service industries. As these moves take place and as the supply chains are reconfigured, many new firms may be expected to emerge and specialize around newly redefined core capabilities. The business models of many existing firms will be threatened. Although several intermediary roles are threatened by E-commerce, others are not, and new intermediary opportunities emerge.The capabilities of the new marketplace that combines the properties of a medium with that of a global location will be exploited to redefine many products and marketplaces. Notable are the possibilities to provide customized products, in the process moving ever larger segments of the supply chains to the Internet, branding through bonding to a Web site and thus to its sponsor, the advantages of virtual auctions, and the possibility to create large reverse markets.

New E-commerce will present over time countless opportunities and challenges to our economies and societies. Expansion of commerce and technological innovations are two of the levers of economic growth. These forces are combined in the progress of E-commerce. The macroeconomics effects of E-commerce on the national and regional economies, and on the international trade and its terms will need to be assessed and analyzed. The prevailing judgment at this stage of E-commerce development is to allow free-market forces to assert themselves unhampered by excessive government regulation. The traditional institutions, such as banks of issue, commercial banks, universities, established business intermediaries, media and publishing companies, would find a need to redefine their roles in the new environment. The taxability of products traded globally over the Internet is as yet an open issue. Intellectual property that can be converted to on-line content may find itself reevaluate in the global marketplace.The tension between the transactional efficiency of spot purchasing facilitated by electronic markets and the need for long-term relationships of trust and forbearance, enabled by electronic hierarchies, will persist and call for much study. The geographical limitations that have bound the place of residence to the place of work, and that have already been eroded by the growth of telework, may be expected to be even less binding. Indeed, the possibilities of the loss of rural space to the new ex-urbanites are already causing environmental alarms. A number of countries that had been marginalized by their geographical position take extremely active interest in E-commerce as the means to move to the center of the virtual geography. The redistribution work has to be studied from multiple perspectives. E-commerce has entered a stage of rapid and sustained development. A large number of business models have been enabled by it. A number of questions have been posed here. All of these and many others will require further experimentation, experience, observation, analysis, and research.

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