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PREPARED BY: JIGAR GAJJAR

RAVEENA RATHI
AABHA PANDEY




E-Commerce in India

Table of content
Sr No. Topics Page no.
1 Introduction
2-4
2 History
5
3 Current situation
6
4 Impact on retail stores
7
5 Future Trends & Forecast
8-9
6 Bibliography
10











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AABHA PANDEY





INTRODUCTION:
What is E-commerce?
Commercial transactions conducted electronically on the Internet.
By definition, ecommerce or electronic commerce, is the buying and selling of products or services
via the Internet.
For example, flipkart.com online retail store for buying electronic items.
Jabong.com Online shopping in India for men, women & kids for shoes, clothing, watches,
sunglasses.
Ecommerce in India:
India has an internet user base of about 137 million as of June 2012. The penetration of e-
commerce is low compared to markets like the United States and the United Kingdom but is
growing at a much faster rate with a large number of new entrants. The industry consensus is that
growth is at an inflection point.
Unique to India (and potentially to other developing countries), cash on delivery is a preferred
payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce
tends to be Cash on Delivery. Similarly, direct imports constitute a large component of online sales.
Demand for international consumer products (including long-tail items) is growing much faster than
in-country supply from authorised distributors and e-commerce offerings.
The e-Commerce market in India has enjoyed phenomenal growth of almost 50% in the last 5 years.
Although the trend of e-Commerce has been making rounds in India for 15 years the appropriate eco
system has now started to fall in place. The considerable rise in the number of internet users,
growing acceptability of online payments, the proliferation of story of e-commerce in the country.
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The number of users making online transaction has been on a rapid growth trajectory, and it is
expected to grow from 11million in 2011 to 38 million in 2015.
The online retail segment has evolved and grown significantly over the past few years. Cash on
delivery has been one of the key growth driver and is touted to have accounted for 50% to 80% of
online retail sales.


Services provided under various modes of e-Commerce:



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Business-to-Consumer (B2C): The B2C market in India generates the bulk of revenues across the
consumer facing modes of e-Commerce. Furthermore, through online travel has typically held a
major share of the B2C market, online retail is also growing rapidly and is expected to significantly
increase its share.

Consumer-to-Consumer (C2C): Indias C2C market, through currently small, is set to grow with the
entry of several players. These entrants are attracting VC investment. Their online portals are also
garnering significantly traffic. We expect the C2C segment to show rapid growth in coming years.


Business-to-Business (B2B): The most common users of B2B online classifieds are micro, small and
medium enterprises. These small business lack the requisite financial resources and, therefore, find
it difficult to market their products and sevices to potential clients through online B2B portals
increases the visibility of MSMEs in the marketplace and helps them overcome barriers of time,
communication and geography.
To ensure e-Commerece maintains the steam that it has gained in recent years, the government
need to focus on the regulatory front. Classifieds, the earliest entrant in e-Commerce space in India,
is undergoing a shift in operational model from vertical to horizontal offering. Players now offer a
variety of services ranging from buying/ selling cars to finding domestic health/ baby sitter.
E-Commerce is said to continue on its growth path on the back of the stabilization of eco system and
interest demonstrated by several players, combined with support from the government of India.
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HISTORY:
Electronic commerce, or e-commerce actually began in the 1995. It became a global phenomenon in
the mid-2000 when companies saw this as a way to significantly cut costs and increase profit
margins.

The introduction of internet in India in 1995 marked the beginning of the first wave of ecommerce in
the country. Moreover, economic liberalization after the launch of reforms in 1991 attracted MNCs
n brought about the growth of the IT industries. The IT industries and SMEs were the earlier adopter
of internet. This lead to the emergence of B2B, job searcher and matrimonial portals.

Indias first online B2B directory was launched in 1996 it enable Indian buyers and sellers to easily
connect with their global counter parts. The first online matrimonial portal was launched in India in
1996. Indias online recruitment industry took shape in 1997 due to growth of service sector after
the launch of economic reforms in 1991. The Indian aviation sector in 2005 marked the beginning of
the second wave of e-Commerce in India. The growth of online retail was developed in the second
wave in 2007 with the launch of online multiple online retail websites. The group buying and daily
deal models became a sought after space for entrepreneurs in India, emulating the global trend in
2010.





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CURRENT SITUATIONS:
Today, the market place is flooded with several e-commerce options for shoppers to choose from. A
variety of innovative products and services are being offered spoiling customers for choice. Online
shopping is no more a privilege enjoyed by your friends and family living in the US or UK. Today, it is
a reality in India. In the last couple of years, the growth of e-commerce industry in India has been
phenomenal as more shoppers have started discovering the benefits of using this platform. There is
enough scope for online businesses in the future if they understand the Indian shoppers psyche and
cater to their needs.
Indian e-commerce industry has evolved over a period of time with innovations that have changed
the rules of the game globally. Cash on delivery (COD) is one such example. In a country where credit
card penetration is much lower than other developed markets and where e-commerce companies
are still working hard to build trust among shoppers, introducing cash on delivery has been one of
the key factors for the success of the segment. At present, COD is the preferred payment mode for
close to 55-60% of all online transactions in the fashion and lifestyle segment in India.
COD is here to stay owing to its convenience and its cultural affinity and will be a major part of
payment mechanisms for at least the next four to five years. Executing COD efficiently and painlessly
for the customer is critical to the success of any e-commerce player in the country.
As of 2012, most of the e-commerce companies are yet to start making money. However, due to
their growth prospects, many venture capital firms such as Accel Partners have invested
considerably. In one of the biggest fund raising, Flipkart.com, in August 2012, raised about 8.22
billion (US$130 million). Entertainment ticketing website BookMyShow.com raised 1
billion (US$16 million) investment by Accel Partners.
On July 10, Flipkart announced it had received $200 million from existing investors Tiger Global,
Naspers, Accel Partners, and ICONIQ Capital. New investors making up the additional $160 million
include Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan
Capital, and more from Tiger Global.
Snapdeal - USD 50 million in April 13.


India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011
and to $14 billion in 2012. 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--
vis a global growth rate of 810%. Electronics and Apparel are the biggest categories in terms of
sales.

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IMPACT ON RETAIL STORES:
It is time for Indian retailers to transform the store shopping experience to include Web access. E-
Commerce sales are growing rapidly. Consumers have heightened expectations for self-service,
especially as their time and budgets are increasingly constrained. In addition to shopping online,
more people are using their mobile phones and tablets while on the path to purchase. And finally,
the availability of pervasive, web-based analytical capabilities makes it an ideal time for smart
retailers to take advantage of what technology has to offer them.
Even though ecommerce activitites are growing at high speed still, Indians are believing in touch
and feel approach, so most of the consumers are preferring the retail shopping rather than online
shopping. But still there are many products which they prefer to buy online i.e electronics, books,
footwear, mobile phones etc. So, retailers started giving attractive schemes in order to attract their
customers and retain them. Unlike other countries, in India most of the people still do not have
internet facility and even they dnt have the computers to access and the major problem is about
the usage of online websites due to the language barrier and education problem. Its hard to get the
loyal customers, when it comes to online shopping, whereas retailers can communicate and create
loyalty by giving guarantee to customer, and creating relations with the customer.
Though all the problems mentioned above, still India is developing in e-commerce as compared to
retail shops. India have significant growth in the e-commerce business and attracted more
customers through efficient advertising and word of mouth, leading to increase in sales and a
significant boost in the economy. Comparison shopping is now able to provide customers with the
best deals.
ONLINE SHOPPING VS RETAIL SHOPPING


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FUTURE TRENDS AND FORECAST




E-commerce has unleashed a revolution and this thriving business is poised for robust growth in the
years ahead. With 150 million Internet users, India now boasts of the 3rd largest Internet population
in the world, only after China at 575m and the US at 275m. A large section of this population is
logging in to discounted fashion brand retailers and specialised online stores to satiate their lifestyle
shopping needs. Although the transition from traditional purchasing to online purchasing took a long
time, e-commerce has now turned into the second largest website category (according to an analysis
of 200 domains for the 2012 Opera Software State of the Mobile Web report). An aggressive
marketing campaign by these portals and ease of transacting online seems to have provided the
much-needed impetus to these e-commerce companies. The same report reveals the top e-
commerce sites in India are Quikr, Amazon, Flipkart, Alibaba and Snapdeal. Multi-product e-
commerce portals that provide goods and services in a variety of categories including Books and
magazines, computers and peripherals, vehicles, software, consumer electronics, household
appliances, jewellery, audio/video, entertainment, goods, gift articles are the most popular.

Metros are E-commerce Hubs

According to a study of 100,000 transactions on Shopclues.com (another player in the ecommerce
segment) during October-November 2012, Delhi-NCR, Bangalore, Chennai, Hyderabad, and Mumbai
topped the list of top 10 cities for e-commerce in India. Patiala, Bhatinda, Faizabad and Panipat were
ranked among the top 10 emerging cities for e-commerce.
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Investors Not Wary of Investing in E-commerce

According to estimates, investors pumped in over $450 m into Indian e-commerce in 2011.
Shopclues has also estimated that e-Commerce will touch $900 million in gross revenue by the end
of 2013. With Ambareesh Murty, erstwhile E-bay executive using a seed fund of $5 m to launch
lifestyle-products website,Pepperfry.com, Myntra tapping investors for $40 m since 2007,
Snapdeals backers ushering in $52 m, and Amazon debuted in India through product-comparison
site, Junglee.com - it looks like e-commerce has truly come of its age in India.

Future of E-commerce in India

The number of new entrants into the e-commerce arena is rising and it wont be long before
retailers begin switching to the online medium. A recent pan India report released by Com Score Inc
revealed that online shopping in India has touched a growth rate of 18 per cent in 2011 and is
looking at higher rates in the years ahead. Forrester, a leading global research and advisory firm in
its report titled Asia Pacific Online Retail Forecast, 2011 To 2016, has stated that the e-commerce
market in India is set to grow the fastest within the Asia-Pacific Region. At a Compound Annual
Growth Rate (CAGR) of over 57% between 2012-16, this industry seems to be flourishing on the back
of growing disposable incomes and an internet-savvy population. The future of e-commerce industry
in India is promising, fuelled by the rising number of Internet users especially among bargain-hunting
middle class. It is only going to witness an upward trajectory and technological advancements
including 3G and 4G wireless communication would be a catalyst in its growth leading more and
more users to buy products online, frequently. It has also been observed that social media is
accelerating e-commerce adoption, allowing users a chance to engage with brands.

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BIBLIOGRAPHY:
Wikipedia.com
Google.com
Slideshare.com
Imwire.com
Scribd.com