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Ecommerce in India
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. Ecommerce in India 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 McKinsey-Nasscom 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. Scope of Ecommerce 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 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. B2B Transactions According to Outlook Business magazine (May 20, 2008), the total B2B transactions in India in the year 2008 are likely to be US$100 billion and B2B marketplaces could account for $15 to $20 billion out of that. India’s largest B2B portal Tradeindia, maintained by Infocom Network Ltd, also stated that e-commerce transactions in India show a growth rate of 30 percent to 40 percent and will soon reach the $100 billion mark. In near future, e-commerce is going to play a major role in multimedia, entertainment and fashion industry. The foreign branded companies are eager to take full advantage of the growing Indian market and are trying to create market for their products over the net. Gucci Co. an Italian iconic fashion and leather goods label is eager to make its hold in India with Business to business transactions. Some of the key B2B exchanges in India are tradeindia.com, matexnet.com, Alibaba.com, AuctionIndia.com, Indiamart.com, TeaAuction.com, MetalJunction.com, etc. B2C Transactions Although business-to-business transactions play an important part in e-commerce market, a share of e-commerce revenues in developed countries is generated from business to consumer transactions. Railway and Airlines have played a vital role in e-commerce transactions in India. Travel portals are exploding in India. Recently MakeMyTrip.com has shown Rs 1000 crores of turnover. Travel alone constituted 50% of Rs 4800 crore online market in 2007-08. In India, online services like ticketing, banking, tax payment, bill payment, hotel room booking, entertainment, online games, matrimonial sites, job sites, etc. are showing signs of development in business-to-customer transactions. There has been tremendous boost in the online business with the stock exchange coming online. Online valentine gifts and Diwali gifts are also becoming popular along with the birthday cakes. No doubt, the total value of the B2B transactions is much larger than that of the B2C transactions, because typically B2B transactions are of much greater value than B2C transactions. It seems that the B2C market in India will take time to grow as compared to the B2B market. Ecommerce and the Government of India The government is aware of the increasing misuse of the electronic media and online frauds. Therefore, the government of India has passed the Information and Technology Act to keep a check on the transactions carried on via the electronic media and to make the process of Ecommerce safe and reliable. The Act imposes heavy penalties and punishment on those who try to misuse this channel for personal benefit or to defraud others. The law has also established the authentication of the electronic records. Increase in the Cyber crimes in Ecommerce is causing concern among the credit card users in India. Now, the government has opened Cyber Crime Police Station. Online complaints can be filed for both cyber and Non Cyber crimes, through an online form which is available at http://www.bcp.gov.in/english/complaints/newcomplaint.asp to accept complaints filed with digital signatures. The Government of India has decided to impose service tax on E-Commerce transaction and that will result in making the net shopping expensive. How to attract Indian “Online Customers”?
Ecommerce in India: Pitfalls in the way of Ecommerce The scope for Ecommerce in India is no doubt tremendous in the years to come, but still there are some pitfalls in its way of success that should be taken care of. They are:
Ways to remove the pitfalls
E-marketplace in India can push Ecommerce Electronic marketplace is an online platform or website to facilitate transctions between the buyers and the sellers at organizational level. After a seller registers himself with a particular e-marketplace he can display information regarding his product or services on that portal. Once a buyer registers itself with the e-marketplace he can have access to all the information he wants. It is also known as B2B exchanges. The first e-marketplace in India was established by New Delhi-based SteelNext for trading "mild" or commodity steel in the year 2001. The E-marketplace can:
Vertical E-marketplace The vertical e-marketplace is consistent buyer and seller of only one specific industry such as leather, textile, steel, to display information regarding their goods or services. Horizontal E-marketplace The horizontal e-marketplace connects buyers and sellers of various industries to display information regarding their goods and services. Mcommerce in India Mcommerce is the use of mobile services to interact and transact. Mcommerce is frequently referred as ‘subset of all Ecommerce’; hence while talking about Ecommerce, we cannot ignore the importance of mcommerce in India. In India, there are total 12.45% of mobile subscribers, as compared to the Broadband subscriber penetration of 0.2% and the Internet user penetration of 2.6%. Mobile subscribers can get access to Internet immediately without any plug in. Mcommerce is rapidly becoming an easy and affordable channel for reaching and attracting the customers. Conclusion The entrepreneurs in India cannot rely on the online sales only, as it is only in initial stages of development. They will have to plan an alternative channel to keep up with the pace. Multi-channel sales will be most beneficial for the Indian scenario. Indian middle class is equal to the entire customer base in the US. Therefore, the future of Ecommerce in India is quite promising and the growing Internet Service Providers (ISPs) have aided the process even more. References
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