Anjuman-I-Islam’s

M. H. Saboo Siddik College of Engineering

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 PREFACE:

The Indian e-commerce and consumer internet sector has had multiple waves of
entrepreneurship but it was in the last decade when the inflow of large amounts of capital
from marquee global investors made its way to Indian shores and cemented itself as one
of the most exciting destination and area for innovation and disruption. The factors
fuelling this digital economy over the last decade are manifold such as sustained growth
in disposable income, the rise of internet penetration, availability of affordable
smartphone, low mobile data tariffs, improved digital literacy, creation of digital payment
acceptance infrastructure, continued support and stimulus provided by the Government
through programmes

Growing Internet penetration, entry of global majors, rise in smartphone adoption,

innovation in mobile technologies, access to funding, millennial consumers and digital
payments is fuelling the growth of the ecommerce market in the country.

The report presents a detailed overview of the Indian e-commerce space, its market size,
growth, trends, drivers, and market outlook.

It also delves into the various business segments, with highlights on growth, presence of
start-ups, and future prospects. The report also showcases startups that are emerging in
niche segments of ecommerce and expanding the business opportunity.
 ABSTRACT:

The study focuses on role of electronic business and its success in India. Though the
internet users in India are very less compared to other countries and the E-business has
not yet become practice in India. Many Organizations in India trying to transform their
traditional business in to e-business. Where the organizations serve an individual
customer and this study also explains the importance of internet for any organization to
reach the customer. The usage of internet is increased constantly over the years and the
population of using internet has been increased to 81% in 2009[1] The percentage of
people shopping online has increased to 20 million in 2008 and there has been subsequent
growth in the online booking in India, which is considered to be the biggest activities of
e-commerce. In India most of the people use internet for emails, online booking, online
shopping, matrimonial services and blogs.
 1.E-COMMERCE

1.1-Definition:

E-commerce is the exchange of information across electronic networks, at any stage in

the supply chain, whether within an organization, between businesses, between
businesses and consumers, or between the public and private sector, whether paid or
unpaid.

The name is self-explanatory, it is the meeting of buyers and sellers on the internet. This
involves the transaction of goods and services, the transfer of funds and the exchange of
data.

Electronic commerce (e-commerce) is often thought simply to refer to buying and selling
using the Internet from companies such as Amazon, Flipkart, Shopify , Myntra , Ebay ,
Quikr, Olx, Jabong,etc. But e-commerce involves much more than electronically
mediated financial transactions between organizations and customers.
E-Commerce is a growing sector in India. Just like the growth of IT industry in India
through the 1990s, the 2010s will be remembered for the growth in the E-Commerce
industry. In its present state the contribution of E-Commerce to GDP is around 0.2%
which is expected to grow 15 times to around 2.5% by 2030.
The impact is so huge that the present wave of de-monetisation could have not been
thought if E-Commerce did not exist. E-Commerce to a large extent helped absorb its
shock as well as gained the maximum out of it as well.

1.2-Objectives:
 Complete online solution for SEO and SMO techniques for making website popular
and get higher ranking on search engines.

 Tailor-made design with value-added features for gaining and retaining customers on
the site.

 Unlimited changes without functional difficulties for addressing ever-changing

business requirements.

 Safe and secure payment options and mechanism for generating trust among
customers and building up their confidence for the particular site.
 Technical assistance for any difficulty for seamless operation of the site.

1.3-Examples of E-Commerce:
i. Amazon
ii. Flipkart
iii. eBay
iv. Jabong
v. Upwork
vi. Olx
vii. Quikr

1.4-Types of E-commerce:
There are 6 basic types of e-commerce:
1. Business-to-Business (B2B)
2. Business-to-Consumer (B2C)
3. Consumer-to-Consumer (C2C)
4. Consumer-to-Business (C2B).
5. Business-to-Administration (B2A)
6. Consumer-to-Administration (C2A)

They are further explained as:

1. Business-to-Business (B2B)-
Business-to-Business (B2B) e-commerce encompasses all electronic transactions of
goods or services conducted between companies. Producers and traditional commerce
wholesalers typically operate with this type of electronic commerce.
2. Business-to-Consumer (B2C)-
The Business-to-Consumer type of e-commerce is distinguished by the establishment of
electronic business relationships between businesses and final consumers. It corresponds
to the retail section of e-commerce, where traditional retail trade normally operates.
These types of relationships can be easier and more dynamic, but also more sporadic or
discontinued. This type of commerce has developed greatly, due to the advent of the web,
and there are already many virtual stores and malls on the Internet, which sell all kinds of
consumer goods, such as computers, software, books, shoes, cars, food, financial
products, digital publications.
When compared to buying retail in traditional commerce, the consumer usually has more
information available in terms of informative content and there is also a widespread idea
that you’ll be buying cheaper, without jeopardizing an equally personalized customer
service, as well as ensuring quick processing and delivery of your order.
3. Consumer-to-Consumer (C2C)-
Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions
of goods or services conducted between consumers. Generally, these transactions are
conducted through a third party, which provides the online platform where the
transactions are actually carried out.
4. Consumer-to-Business (C2B)-
In C2B there is a complete reversal of the traditional sense of exchanging goods. This
type of e-commerce is very common in crowdsourcing based projects. A large number of
individuals make their services or products available for purchase for companies seeking
precisely these types of services or products.
Examples of such practices are the sites where designers present several proposals for a
company logo and where only one of them is selected and effectively purchased. Another
platform that is very common in this type of commerce are the markets that sell royalty-
free photographs, images, media and design elements, such as iStockphoto.
5. Business-to-Administration (B2A)-
This part of e-commerce encompasses all transactions conducted online between
companies and public administration. This is an area that involves a large amount and a
variety of services, particularly in areas such as fiscal, social security, employment, legal
documents and registers, etc. These types of services have increased considerably in
recent years with investments made in e-government.
6. Consumer-to-Administration (C2A)-
The Consumer-to-Administration model encompasses all electronic transactions
conducted between individuals and public administration.

1.5-Business Model:
A business model is mandatory in e-commerce. A business model is an architecture for
product, service and information flows, including a description of the various business
actors and their roles; and a description of the potential benefits for the various business
actors; and a description of the sources of revenue.
It is a summery of how a company will generate revenue identifying its product offering,
value added services, revenue sources and targets the customer.
All organizations operate within an environment that influences the way in which they
conduct business. Strategy development should be strongly influenced by considering the
environment the business operates in.
Organizations that monitor, understand and respond appropriately to changes in their
online marketplace have the greatest opportunities to use digital technologies to compete
effectively.

An e-commerce transaction between organization can be considered from two

perspectives -
1.) Buy-side e-commerce refers to transaction to procure resources needed by an
organization from its suppliers.
2.) Sell-side e-commerce refers to transaction involved with selling products to an
organization’s customers.
Companies need to know which sites are effective in harnessing search traffic and either
partner with them or try to obtain a share of the search traffic using the search engine
marketing and affiliate marketing techniques. Well-known, trusted brands which have
developed customer loyalty are in a good position to succeed online since a common
consumer behaviour is to go straight to the site through entering a URL or from a
bookmark or e-mail.
Alternatively they may search for the brand or URL. Through evaluating the type and
volume of phrases used to search for products in a given market it is possible to calculate
the total potential opportunity and the current share of search terms for a company.
‘Share of search’ can be determined from web analytics reports from the company site
which indicate the precise key phrases used by visitors to actually reach a site from
different search engines.

1.6-Online marketplace analysis:

Analysis of the online marketplace or ‘marketspace’ is a key part of developing a long-
term e-business plan or creating a shorter-term digital marketing campaign. Completing a
marketplace analysis helps to define the main types of online presence that are part of a
‘click ecosystem’ which describes the consumer behaviour or flow of online visitors
between search engines, media sites and other intermediaries to an organization and its
competitors. Prospects and customers in an online marketplace will naturally turn to
search engines to find products, services, brands and entertainment. Search engines act as
a distribution system which connects searchers to different intermediary sites for different
phrases, so the flow of visits between sites must be understood by the marketer in their
sector.
To help understand and summarize the online linkages between online businesses and
traffic flows it is worthwhile to produce an online marketplace map. This shows the
relative importance of different online intermediaries in the marketplace and the flow of
clicks between your different customer segments, your company site and different
competitors via the intermediaries.

The main elements of the online marketplace map are:

1.) Customer segments -
The marketplace analysis should identify and summarize different target segments for an
online business in order to then understand their online media consumption, buyer
behaviour and the type of content and experiences they will be looking for from
intermediaries and your web site.
2.) Search intermediaries -
These are the main search engines in each country. Typically they are Google, Yahoo!,
Microsoft Live Search and Ask.
The Google Trends tool is a free tool for assessing site popularity and the searches used
to find sites and how they vary seasonally, which is useful for student assignments.

1.7-Benefits of E-Commerce:
Benefits of online services are summarized by ‘six C’s’ –

1. Content:
There is more detailed and in-depth information of product which support the buying
process.
2. Customization:
Customization of content like e-mail alerts
3. Community:
Discuss anything through forums,help sections, chat-rooms and blog comments.
4. Convenience:
Ability to select , purchase product any time from your desktop. That means there is
24x7x365 availability of a service.
5. Choice:
The web gives a wider choice of product and suppliers than via conventional distribution
channels
6. Cost reduction:
Internet is low-cost place of purchase as they have lower staff and distribution costs than
a retailer that runs a network of high-street stores

1.8-Advantages of E-Commerce:

1. E-commerce provides the sellers with a global reach. They remove the barrier of place
Now sellers and buyers can meet in the virtual world, without the hindrance of location.
2. Electronic commerce will substantially lower the transaction cost. It eliminates many
fixed costs of maintaining brick and mortar shops. This allows the companies to enjoy a
much higher margin of profit.
3. It provides quick delivery of goods with very little effort on part of the customer.
4. Customer complaints are also addressed quickly. It also saves time, energy and effort
for both the consumers and the company.
5. A customer can shop 24×7. The website is functional at all times, it does not have
working hours like a shop.

1.9-Disadvantages of E-Commerce:

1. The start-up costs of the e-commerce portal are very high. The setup of the hardware
and the software, the training cost of employees, the constant maintenance and upkeep
are all quite expensive.
2. Although it may seem like a sure thing, the e-commerce industry has a high risk of
failure.Many companies riding the dot-com wave of the 2000s have failed miserably. The
high risk of failure remains even today.
3. At times, e-commerce can feel impersonal so it lacks the warmth of an interpersonal
relationship which is important for many brands and products. This lack of a personal
touch can be a disadvantage for many types of services and products like interior
designing or the jewelry business.
4. Security is another area of concern. Only recently, we have witnessed many security
breaches where the information of the customers was stolen. Credit card theft, identity
theft etc. remain big concerns with the customers.
5. Then there are also fulfillment problems. Even after the order is placed there can be
problems with shipping, delivery, mix-ups etc. This leaves the customers unhappy and
dissatisfied.

1.10-The importance of search engines:

There are lakhs of Search Engines available on the Internet. Out of those, only few search
engines are effective. That means they will respond to your questions quickly and gives
you the best and most suitable information.
Here, we have also listed the Top 10 Search Engines in India -

1) Google.com

2) alexa.com

3) live.com

4) baidu.com

5) Bing/MSN

6) Yahoo

7) Ask.com

8) duckduckgo.com

9) Aol.com

10) excite.com
Search engines are a key type of intermediary for organizations marketing their services
online, since today they are the primary method of finding information about a
companyand its products. Research compiled by Searchenginewatch
(www.searchenginewatch.com) shows that over 90 per cent of web users state that they
use search engines to find information online.
Search engines also offer a directory of different web sites. We see how search engines
and also how companies can market themselves on the search engines through search
engine optimization and paid search marketing. For marketplace analysis it is useful for
companies to assess demand for products and brand preferences in different countries
using tools such as the Google Keyword Tool which shows the volume of searches by
consumers related to clothes in the UK in a one-month period.
CPC is the cost per click charged to advertisers. Google uses this tool to encourage
advertisers to use its Adwords advertising service.

Before there was Flipkart, Myntra, and Snapdeal, there was Fabmart. Before the Bansals,
there was K Vaitheeswaran.
While we hail the current e-commerce majors for changing the way we shop, there was a
man, quite ahead of time, who started India’s first e-commerce website Fabmart.com
back in 1999.
Fabmart was acquired by Aditya Birla Group and rebranded to More. But Vaitheeswaran
continued his marketplace under a new brand Indiaplaza.com.
“When we started, there were no shipping companies, no payment gateways. We had to
do all of that on our own,” he says.
But then came the Bansals with their deep discounts and washed away Indiaplaza, which
had to shut shop in 2013.

Four years later, Vaitheeswaran has penned down his journey of being a failed
entrepreneur with his book ‘Failing to Succeed: The Story of India’s First E-Commerce
Company’.
 K Vaitheeswaran

In 2018, E-commerce and Consumer Internet companies have raised over $7 billion in PE
/ VC capital (including Venture debt) spread over c. 200 deals of which $5.9 bn early
stage capital, $1.3 bn was invested as expansion/growth capital. Whilst, late stage
companies have attracted substantial capital, it is the early stage companies which has
seen highest number of deal activity.
 Major sectors that attracted the capital-

OYO, Swiggy, Byjus, PayTm Mall, Pine Labs, Zomato, Udaan, PolicyBazaar,
CureFit have collectively raised a lion’s share ($4.6b in 2018) of the total investments
into this segment. Majority of funding is towards building supply chain; expanding into
new segments; global expansion; acquisition or consolidation; bring innovative product
offerings to the market. Further, the recent exits recorded by the investors in the recent
past have also proved the trust is well placed by the PE / VC community in the start-up
ecosystem. The Walmart-Flipkart deal is one of the largest deals in 2018, with the $16
billion acquisition, big investors have made 60% return on investment and has bolstered
potential of the sector growth indicators.
 This deal inspires other companies to expand and grow and has also provides
stimulus to new and existing investors who have made significant gains in this
transaction. In addition to this there has been US$1.7 billion M&A/strategic Investments
in the sector. Other key investments made to help consolidation in the marketplace and /
or secondary transitions are Alibaba’s investment in BigBasket and PayTm, Tencent’s
investment in Dream11, Naspers investment in Byjus and Swiggy, have shown that
Indian start-up ecosystem is thriving and is poised for next level of growth.
The services delivered through hyperlocal business models have always had a
large market, be it concierge, grocery, food or pharma. Though the sector witnessed a
temporary slump in terms of deal activity as scale became a challenge with the pressure
on unit economics, any optimization of logistics cost would have a direct impact on
customer experience. The PE/VC interest in hyperlocal delivery was revived with Google
investment in Dunzo. Companies like Swiggy, Zomato, Grofers, Milkbasket, Dailyninja,
etc. were able to raise funds for expansion. Companies focused on improving unit
economics by improving order densities, frequency of delivery to achieve operating
efficiencies and use technology to optimize operations and improve customer experience.
Latest fund raise by Swiggy has also been made to enable the company to launch
operations into newer territories, acquire satellite kitchen companies/brands in order to
improve unit economics. While hyperlocal delivery has been primarily associated with
grocery and food delivery services, there are also other areas of applications including e-
pharmacy, concierge services, etc. Subscription services providing regular customer
engagement are also strong enablers, this is only a small fraction of the potential market.

1.11-Growth of e-commerce in India:

There has been a paradigm shift in terms of the lifestyle preferences and buying trends
among Indian consumers over the last decade. Urban India has gradually embraced
consumerism and is increasingly opting for seamless services.
India is rapidly marching towards becoming a digitally empowered society. The
push for e-governance, the proliferation of smartphones, increasing Internet access and
booming digital payments are fueling the country’s journey towards a trillion-dollar
digital economy by 2025. The widespread acceptance of Digital is being seen as a
catalyst for overall economic growth, and with the combination of favorable
demographics and policy reforms, India presents a unique and powerful growth story.

With Internet penetration expected to almost double to 60% by 2022, the country is
arguably the world’s most promising Internet economy, with a rapidly increasing
‘netizen’ population. With improving data affordability, consumption growth and newer
financial products, the e-commerce market is set to grow, be it across e-tail, travel,
consumer services or online financial services. From the next set of online shoppers,
three out of every four customers are expected to come from Tier II cities or beyond, and
a vast majority of them would be less tech-savvy, seek greater transparency from brands
and prefer consuming content in local languages’.

The growth projected in the sector, certainly augurs well for not only companies but also
investors. There is also a new class of angel investors comprising experienced
professionals and successful entrepreneurs who are investing alongside institutional
investors, which helps investee companies source talent, gain operational and strategic
benefits. Looking at this space, execution of strategies for better operational management
and unit economics as well as greater control on the cash burn are important; but
companies also need to constantly innovate and engage consumers more effectively to
continue on the journey of keeping them online.
The e-commerce has transformed the way business is done in India. The Indian e-
commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion
as of 2017. Much growth of the industry has been triggered by increasing internet and
smartphone penetration. The ongoing digital transformation in the country is expected to
increase India’s total internet user base to 829 million by 2021 from 604.21 million as of
December 2018. India’s internet economy is expected to double from US$125 billion as
of April 2017 to US$ 250 billion by 2020, majorly backed by ecommerce. India’s E-
commerce revenue is expected to jump from US$ 39 billion in 2017 to US$ 120 billion in
2020, growing at an annual rate of 51 per cent, the highest in the world.

1.12-Market Size:

Propelled by rising smartphone penetration, the launch of 4G networks and increasing

consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion
by 2026 from US$ 38.5 billion in 2017 Online retail sales in India are expected to grow
by 31 per cent to touch US$ 32.70 billion in 2018, led by Flipkart, Amazon India and
Paytm Mall.
During 2018, electronics is currently the biggest contributor to online retail sales in India
with a share of 48 per cent, followed closely by apparel at 29 per cent.
 Some of the major developments in the Indian e-commerce sector are as follows:
 Flipkart, after getting acquired by Walmart for US$ 16 billion, is expected to
launch more offline retail stores in India to promote private labels in segments such as
fashion and electronics. In September 2018, Flipkart acquired Israel based analytics
start-up Upstream Commerce that will help the firm to price and position its products in
an efficient way.
 Paytm has launched its bank - Paytm Payment Bank. Paytm bank is India's first
bank with zero charges on online transactions, no minimum balance requirement and
free virtual debit card
 As of June 2018, Google is also planning to enter into the E-commerce space by
November 2018. India is expected to be its first market.
 Reliance retail is going to launch online retail this year. It has already launched its
food and grocery app for beta testing among its employees.
 E-commerce industry in India witnessed 21 private equity and venture capital deals
worth US$ 2.1 billion in 2017 and 40 deals worth US$ 1,129 million in the first half of
2018.
 Google and Tata Trust have collaborated for the project ‘Internet Saathi’ to
improve internet penetration among rural women in India.
 1.13-Government initiatives:

Since 2014, the Government of India has announced various initiatives namely, Digital
India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and
effective implementation of such programs will likely support the e-commerce growth in
the country. Some of the major initiatives taken by the government to promote the e-
commerce sector in India are as follows:

 In order to increase the participation of foreign players in the e-commerce field, the
Indian Government hiked the limit of foreign direct investment (FDI) in the E-
commerce marketplace model for up to 100 per cent (in B2B models).
 The heavy investment of Government of India in rolling out the fiber network for
5G will help boost ecommerce in India
 In the Union Budget of 2018-19, government has allocated Rs 8,000 crore (US$
1.24 billion) to BharatNet Project, to provide broadband services to 150,000 gram
panchayats
 As of August 2018, the government is working on the second draft of e-commerce
policy, incorporating inputs from various industry stakeholders.

1.14-Achievements:

Following are the achievements of the government in the past four years:
 Under the Digital India movement, government launched various initiatives like
Udaan, Umang, Start-up India Portal etc.
 Under the project ‘Internet Saathi’, the government has influenced over 16 million
women in India and reached 166,000 villages
 Udaan, a B2B online trade platform that connect small and medium size
manufacturers and wholesalers with online retailers and also provide them
logistics, payments and technology support, has sellers in over 80 cities of India
and delivers to over 500 cities.
 According to the UN’s eGovernance index, India has jumped 11 positions to 107
in 2016 from 2018 in 2014.
 The government introduced Bharat Interface for Money (BHIM), a simple mobile
based platform for digital payments.

1.15-Indian E-commerce market growth:

The Indian e-commerce market would become worth over $100 billion by the year 2022,
with a growth of around 25 per cent from the current level, a report said on Friday.
There is a need to harmonise the e-commerce policy framework in the country to enable
growth in the sector, stated a joint report by Nasscom Propelling India towards global
leadership in e-commerce.
The e-commerce segment has the potential to create over one million jobs by 2023 in the
country, it said.
"The Indian e-commerce market of 35 billion dollars is expected to grow at 25 per cent in
the next five years and exceed 100 billion dollars by 2022," said the report.
Online financial services would witness fastest growth in the segment in years ahead, the
report said, although 90 per cent of the e-commerce market would be held by e-tail
(electronic retail) and e-travel service providers.
Sandeep Ladda, Partner, Global TMT Tax and India Technology Sector Leader, PwC
India, said: "The next phase of growth in the sector would come from ensuring a
seamless shopping experience, building digital trust, voice-based or conversational
commerce and creating an inventory of localised content."

1.16-E-commerce Statistics to Consider:

Helpful numbers to put these statistics in perspective: The world population is 7.6 billion
and the internet has 4.1 billion users.The Indian e-commerce industry has been on an
upward growth trajectory and is expected to surpass the US to become the second largest
e-commerce market in the world by 2034. The E-commerce market is expected to reach
US$ 200 billion by 2027 from US$ 38.5 billion in 2017. India's e-commerce market has
the potential to grow more than four folds to US$ 150 billion by 2022 supported by rising
incomes and surge in internet users. Online shoppers in India are expected to reach 120
million in 2018 and eventually 220 million by 2025. Average online retail spending in
India was US$ 224 per user in 2017.
1.17-Indian Ecommerce Industry Analysis:
( Last updated on August, 2019)
The Indian e-commerce industry has been on an upward growth trajectory and is
expected to surpass the US to become the second largest e-commerce market in the world
by 2034. The E-commerce market is expected to reach US$ 200 billion by 2027 from
US$ 38.5 billion in 2017. India's e-commerce market has the potential to grow more than
four folds to US$ 150 billion by 2022 supported by rising incomes and surge in internet
users. Online shoppers in India are expected to reach 120 million in 2018 and eventually
220 million by 2025. Average online retail spending in India was US$ 224 per user in
2017.
E-commerce and consumer internet companies in India received more than US$ 7
billion in private equity and venture capital in 2018. Online retail sales in India are
expected to grow by 31 per cent to touch US$ 32.70 billion in 2018, led by Flipkart,
Amazon India and Paytm Mall. Online retail is expected to contribute 2.9 per cent of
retail market in 2018.
Much growth of the industry has been triggered by increasing internet and
smartphone penetration. Internet penetration in India grew from just 4 per cent in 2007 to
34.42 per cent in 2017, registering a CAGR of 24 per cent between 2007 and 2017. As of
December 2018 overall internet penetration in India was 46.13 per cent. The number of
internet users in India is expected to increase from 604.21 million as of December 2018
to 829 million by 2021. Internet penetration in rural India is expected to grow as high as
45 per cent by 2021 compared to the current rate of 23.87 per cent. The e-commerce
retail logistics market in India is estimated at US$ 1.35 billion in 2018 and is expected to
grow at a 36 per cent CAGR over the next five years. It also received and investment of
$6.25 billion from January –May 2019.
A young demographic profile, rising internet penetration and relative better economic
performance are the key drivers of this sector. The Government of India's policies and
regulatory frameworks such as 100 per cent foreign direct investment (FDI) in B2B e-
commerce and 100 per cent FDI under automatic route under the market place model of
B2C e-commerce are expected to further propel growth in the sectors. As of August 2018,
the government is working on the second draft of e-commerce policy, incorporating
inputs from various industry stakeholders. In February 2019, the Government of India
released the Draft National e-Commerce Policy which encourages FDI in the marketplace
model of e-commerce. Further, it states that the FDI policy for e-commerce sector has
been developed to ensure a level playing field for all participants.
According to the draft, a registered entity is needed for the e-commerce sites and apps to
operate in India.
Certainly, we can’t say that one e-commerce type is better than the other but a retailer can
build a successful business with any of them providing that their business strategy is well
thought out. Still, it is interesting and useful to know what types dominate the market
now, isn’t it?
Here are some figures-
Currently, the global B2B e-commerce market, valuing US$10.6 trillion in 2018,
is over 5 times larger than the B2C market. The top positions among product lines are
occupied by fashion (61%), travel (59%), and books and music (49%).
As for supply chain models, inventory management and warehousing is ramping
up the number of warehouses in the US has increased 6.8% over the past five years.
India is expected to witness a surge in the consuming class-

 By 2022, the Indian middle class will be the largest segment of the population.

 By 2025, India’s contribution to the global middle class consumption would be

approximately on par with China’s (~15%)

 By 2027, India’s middle class is expected to overtake that of the US and China, post
which India is expected to dominate.

1.18-Impact of E-commerce:
The impact of E-Commerce industry are still in very nascent stage but are visible. The
impact at the moment can be seen in the following sectors -

1. Technology-
One of the major drivers of technology will be E-Commerce industry and vice versa.
We are seeing new age technological solutions(AI/Machine Learning) being taken up
to solve the business problems to bring commerce to everyone digitally. This is seen
in both B2C and B2B sector. Investment into technology sector is happening to drive
growth in the E-Commerce domain.

2. Logistics-
Logistics industry is both a bottleneck and a driver for e-commerce industry. For the
same we see how last mile and inter-city logistics solutions have come up to digitally
connect the different stakeholders across the country. The Uber model of moving
passengers is implemented in some form or the other in the logistic sector. The
growth of E-Commerce will drive innovation in the logistic sector to make the
products available to the end user
.
3. Travel-
At the moment 70% of the contribution to E-Commerce comes from the travel sector
which includes the online ticket bookings to other travel arrangements. This has made
the market competitive by bringing all players on the same platform and has also
 given consumer more options. Travel industry will be earliest adopters to become
completely digitised and that is thanks to E-Commerce.

4. Education-
One of the industries to have the most profound impact of E-Commerce is the
education. The ability of E-Commerce to provide quality education to everyone is
immense. India will have one of the biggest set of youth population and hence the
scope for education sector to be the biggest achievers because of E-Commerce is
sure.

5. Etail-
The flag bearers of the E-commerce wave have been the various E-Retail commerce
platforms. Etail sector is projected to contribute to around 3% of the total Retail sells
by 2020 and is at present around 1%. This wave is seen in both B2C and C2C model
and is bound to grow further. This is not only for goods but also has captured the food
sector.

6. Other Industries-
The way of working in the Real Estate sector is already seeing the change because of
the E-Commerce industry. This will change further with all property related
transactions coming online and getting closed online as well. Banking sector is
benefiting as well with reduced operations cost of online transactions. E-Commerce
in health care has brought health related solutions to the urban India and will further
penetrate deep into Tier I and Tier II cities.

7. Support Industries-
There are various support industries which have developed because of E-Commerce.
These are digital advertising, analytics, payment gateways etc.. These will become
billion dollars sectors as E-Commerce grows exponentially.

Besides the impact to these industries, E-Commerce is helping make the market more
competitive, driving better customer experience and driving accessibility of goods to
all. E-Commerce is also bringing transactions online which makes the system more
transparent and to an extent may further drive technological adoption. This will also
 help in driving corruption levels down with everything coming online. The impact are
profound and will evolve with time.

2.E-BUSINESS

2.1-Definition:
Electronic business (e-business) refers to the use of the Web, Internet, intranets, extranets
or some combination thereof to conduct business. E-business is similar to e-commerce,
but it goes beyond the simple buying and selling of products and services online.
Electronic business is also known as online business. Online business is a business where
the transaction takes place online. Here, the buyer and the seller don’t meet personally. The
term “e-business” was coined by IBM’s marketing and Internet team in 1996. E-business is
a part of e-commerce. E-commerce means electronic commerce.
The rapid growth of internet in the few years has been extraordinary. Companies both
small and large are using the internet as a tool to expand their business, which helps them
to enlarge globally in market. The evolution of e-business has made extreme changes in
the business and Every organization is adopting e-business strategy because everyone
realized that key way to succeed in the modern business is by using e-business strategy.
Initial companies use internet as a tool for marketing purposes.
 E-business has set up a new opening for small and large organizations to
fight in the global market. E-business in nothing but just doing business over the internet
for doing e business you need a website through which we can sell or buy our goods,
information search, providing the required information or services to the customers. An e-
business can be an addition of your business or sometimes it can be independent of
physical location and the E-business offers easy way to do business over the internet. E-
business allows the organization to be connected when it is extended. That means
customers, suppliers, employees, stakeholders and E-business allows data flow form
business-to-business or system-to-system. The main function of e-business is connecting
organization and the customers/users as a result of these human functions will be
removed from different functions. E-business strategy also defines how an organization
gains value internally from using electronic networks, such as through sharing employee
knowledge and improving process efficiencies through intranets.
E-business is the conduct of business on the internet, not only buying and selling
but also serving the customers.IBM has first launched e-business in October, 1997. Now-
a-days many organizations are thinking of doing their business on internet. Many
organizations are using the internet to buy parts and supplies from other organizations,
and to do work in partnership on sales and promotions and to do research jointly. Due to
the convenience and availability of internet throughout the world, many firms like
amazon.com have founded out how to sell books using internet successfully. The internet
has completely changed the way companies interact, how they communicate information
with the business partners, it also changed the company's investment with changing
internet technology. As the companies start their e-business many are thinking on return
on investment and business strategy whether to concentrate on customer satisfaction,
people aware of internet.
According to IBM corporation the definition of e-business is "e-business is
exploiting the combined power of the internet and information technology to
fundamentally transform key business strategies and process." The use of e- business is it
can be helpful as a technical and customer support. An e- business which uses chat
instead of traditional phone saves the time and it also provides more opportunities than
phone and the example of technical support is operators can approach remotely on
customer's computer and help them in solving the problem.
The purpose of e business or internet websites have become more important,
companies use their websites to provide the information about the company, searching for
particular product, delivery, customer satisfaction.
2.2-Approaches to e-business strategy to follow:

Covering all aspects of e-business including strategy, digital marketing and

supply chain management, E-Business and E-Commerce Management gives you the
benefit of:

• A structured approach to planning, implementing, assessing and improving

e-business strategy for all types of organization.

• The latest on managing e-business security and cutting edge e-marketing

techniques such as social media and search engine optimization.

• Case studies of technology leaders such as Dell, Facebook and Google,

as well as start-ups and small businesses.

• Real-life interviews with professionals who describe their e-business strategies.

2.3-Advantages of e-business:

Some of the major advantages of e-business are as follows :

 Easy to Set Up:

It is easy to set up an electronic business. You can set up an online business even by
sitting at home if you have the required software, a device, and the internet.

 Cheaper than Traditional Business:

Electronic business is much cheaper than traditional business. The cost taken to set up an
e-business is much higher than the cost required to set up a traditional business. Also, the
transaction cost is effectively less.

 No Geographical Boundaries:
There are no geographical boundaries for e-business. Anyone can order anything from
anywhere at any time. This is one of the benefits of e-business.

 Government Subsidies:

Online businesses get benefits from the government as the government is trying to
promote digitalization.

 Flexible Business Hours:

Since the internet is always available. E-business breaks down the time barriers that
location-based businesses encounter. As long as someone has an Internet connection, you
may be able to reach and sell your product or service to these visitors to your business
website.

2.2-Disadvantages of e-Business:

But it isn’t all good news. E-business does have certain disadvantages when compared to
the traditional way of doing business. Some of the limitations of e-business are as follows :

 Lack of Personal Touch:

E-business lacks the personal touch. One cannot touch or feel the product. So it is
difficult for the consumers to check the quality of a product. Also, the human touch is
missing as well. In the traditional model, we have contact with the salesperson. This
lends it a touch of humanity and credibility. It also builds trust with the customer. An e-
Business model will always miss out on such attributes.

 Delivery Time:

The delivery of the products takes time. In traditional business, you get the product as
soon as you buy it. But that doesn’t happen in online business. This lag time often
discourages customers. However, e-businesses are trying to resolve such issues by
promising very limited delivery times. For example, Amazon now assures one-day
delivery. This is an improvement but does not resolve the issue completely

 Security Issues:
There are a lot of people who scam through online business. Also, it is easier for hackers
to get your financial details. It has a few security and integrity issues. This also causes
distrust among potential customers.

3.E –MARKETING

3.1-Definition:
E-marketing is also known as Electronic Marketing, Online Marketing, Digital
Marketing, Internet Marketing, Web Marketing and by many other names, but the core
concept of it remains the same.
E-Marketing is nothing but to market the brand, company, product or yourself on
anything connected to the Internet.
It is the process of marketing a product or service using the Internet.
Not only does it include marketing on the Internet, but also includes marketing done via
e-mail and wireless media. It uses a range of technologies to help connect businesses to
their customers.
E-marketing is the mix of modern communication technology and traditional
principles that marketers usually apply.
When we talk about modern communication technology, this is electronic media, more
known as the internet E-marketing, through online tools and resources, can be used by
your company via direct emails, blogs, SMS or text messaging, web pages, videos,
banners, pictures, advertisements (like pay per click, display or social media advertising),
search engine optimization, social media, affiliate marketing, and many more.

3.2-Objectives of e-marketing:

 Brand building.

 Advertising.

 Selling.

 Provide customer service and support.

 Improve interaction with current and potential customers.

3.3-Types of E-Marketing:
1. Search Engine Optimisation (SEO)
2. Search Engine Marketing (SEM)
3. Pay-Per-Click Advertising (PPC)
4. Social Media Marketing (SMM)
5. Content Marketing
6. Affiliate Marketing
7. E-Mail Marketing

3.4-Advantage of E-Marketing:
1. Internet provides 24 hours and 7 days “24/7” service to its users. So
you can build and make customers relationships worldwide, and
your customer can shop or order product at any time.
2. The cost of spreading your message on internet is nothing. Many
social media sites like Facebook, Linkedin and Google plus allow
you freely advertise and promote your business.
3. You can easy and instantly update your registered customers or
subscribers through email.
4. Visitors or potential customers of your website can get up to the
minute information on each visit.
5. If you are having a sale, your customers can start shopping at the
discounted prices literally as soon as they open their email.
6. If a company has an information sensitive business, like a law firm,
newspaper or online magazine, that company can also deliver its
products directly to customers without having to use a courier.

3.5-Disadvantages of E-Marketing:

1. If you want a strong online advertising campaign you have to spend

money. The cost of web site design, software, hardware,
maintenance of your business site, online distribution costs and
invested time, all must be factored into the cost of providing your
service or product online.
2. Almost over 60% of households now a day shop online. While that
numbers are continuously growing, your company needs to reach
maximum people.
3. Some people prefer the live interaction when they buy any product.
And if your company has a small business with one location, this
may also deter customers from buying who lives on long distances.
4. Your company should have updated information on your site. This
requires research and skills and thus timing of updates is also
critical.
5. Is your company web site secure? There are many incorrect
stereotypes about the security of the internet. As a result, many
visitors of your business web site will not want to use their credit
card to make a purchase. So there is a fear in the minds of your
visitors of having their credit card info stolen.

3.6-E-marketing chain of activities:

In e-marketing the following chain of activities can be identified: -

 Choosing the right place for the advertisement:

It must be found out: How many visitors does this place get? What percentage of
visitors meet the company‘s target audience definition? On average, how much does it
cost the company to show the ad to one member of the target group?
 Addressing:

It is not necessary in an advertisement to identify particular mark of a product or

service.’ Rough lie’ may make visitors interested, but may repel them. It is important
at any cost to attract those visitors who are defined as target group members.

 Attracting the visitor:

The main objective here is to lure the visitor into the company‘s product catalogue.
Critical factors: attractive homepage of a company, high speed loading the page, clear
and easy link to the product or service catalogue.

 Captivating the visitor:

The visitor should like the product so much that they want more information about it.
Critical factors: good products, attractive presentation, easy link to request
information.

 Customer identification:

The visitor must disclose their data and request more information. Critical factor: a
balanced information order form, not deterrent, promising an adequate compensation
for the effort when presenting all the information needed for marketing.

 Direct contact:

The visitor has to get all the data they want, and even more, just to feel flattered.

 Critical factors:

Efficient and accurate response, direct work with the client, constant feedback.

3.7-E-marketing strategies:

Strategy is a plan that combines business objectives, policies and actions into a unified
whole. Marketing strategy is a process, a series of actions that are designed for a
particular marketing objective. Marketing strategy focuses on marketing objectives and
this distinguishes it from overall business strategy. Conclusion – marketing strategy aims
to answer 3 questions: -
 Where to compete? – to identify target markets.

 How to compete? – to design basic competitive tolls and techniques.

 When to compete? – when to carry out strategic actions.

E-marketing is often identified as an integral part of a company‘s overall marketing

strategy, so it means that overall marketing strategy objectives can be accommodated to
it. Objectives that are narrower in scope are attributed to the Internet marketing
3.8-E-marketing Principles:

E-marketing includes of the main principles of traditional marketing but with a couple of
differentiating characteristics. One main benefit of e-marketing is that its impacts are
quantifiable.
This enables your company to work more efficiently and effectively, thus creating higher
ROIs and profits. Moreover, an e-marketing strategy that has been implemented well can
reach a cost effective consumer acquisition as compared to traditional marketing.

 Increased Reach and Audience. Due to the features of the internet, your target
customers can be anywhere in the world. Different from typical marketing
methodologies, the internet’s advantage is that your prospects and your customers
can be included in the marketing mix of your business at any time of the day, at
any place in the world.

 New Marketing Routes. E-marketing has marketing routes that simply are not there
in traditional marketing. It is not just advertising via broadcast email and search
engines. New opportunities in viral marketing, social networking, and other
approaches solely found on the internet offers access to customer groups that were
previously unreachable.

 Cost Effective Marketing. Using online technologies can create a large reduction in
your marketing budget. When your company precisely targets your core customers,
e-marketing can usually give the most cost effective approach to raise the customer
base, increase brand awareness, and keep yourself in touch with your consumers.

 Complete Accountability. When executed properly, e-marketing gives complete

accountability for its results. Activities that are online are completely trackable
since tools can precisely show your company’s ROI, indicating that there is value
in each cent you spend on e-marketing.

3.9-E-Marketing Tips:
Here are some tips on how you can use e-marketing for acquiring new customers
effectively.

The top source of new site visitors are search engines. Actually, Google already has
eighty-eight-percent (88%) of the market. So try to prioritize ranking your company well
in Google. You can accomplish this through three main steps.

 Appear on top in Google search results. The title of your web page is used by
Google as the suggested title of its search results. In addition, describe your
company in an informative but precise manner. Domain names are also a
significant portion of the search results of Google. Hence, pick an easy-to-read and
descriptive domain name for your website. Moreover, subpages must also be easy
to read. Moreover, meta descriptions are defined as page summaries usually made
use of by Google on their results page. Write meta descriptions that are unique for
every page using 160 characters or less.

 Make Google understand your pictures. Put in short but descriptive file names for
your pictures. The attribute, “alt” describes the picture. This aids Google in
understanding what the picture is. Moreover, write a caption that is short below
every picture. You must include significant information through text instead of
pictures.

 Update your website and continuously offer useful and updated content. Think of
your website as a storefront but in the virtual world. In the same way that you do
not leave your physical store unattended for a month, you would not do the same to
your website. Always update your website and keep it fresh by having a blog,
announcing sales, special offers, and new products. Think that you are a customer
yourself, so give them the information that they want.

3.10-E-Marketing Best Practices:

After discussing the tips of e-marketing, here are a few best practices you can emulate,
particularly for small businesses.

 Make it convenient to subscribe.

Ease of subscription applies for both your website and your emails. Create a signup page
on your website, blog, Facebook, as well as other social media sites, where you know
your customers or targeted prospects are active.Even though you might want to get their
names, birthdays, etc. so you can give a special gift or an offer or invite them to join your
groups, do not put in too many required fields. A subscription form that is simply too long
will turn your customers off your product or service.

 Guarantee that you send to customers on a permission-based list.

You should not always assume that you have the permission. Just ask for it. Moreover, as
soon as you get permission, do not take it for granted.There are studies that of those who
would join email lists, 77% would unsubscribe because they receive information
excessively or the information is not interesting or relevant to them at all.

 Be wary of bought or rented third-party lists.

If you find third-party lists that can be bought or rented and if it is too good be true, it
probably is. Work on making your very own permission-based list by asking your target
customers to sign up for your subscriptions as often as you can.

Place a “Subscribe Now” option on your site, emails, invoices, trade shows,
advertisements, and the like.

 Instill a strict privacy policy.

Know that you should have a strict privacy policy for your host list. A study by Quris
showed that seventy-four-percent (74%) of those surveyed would be suspicious of
businesses sharing their contact information with others.In essence, do not rent or sell
your house list to others. Ensure that you have a clear and understandable privacy policy
on your website and emails.

 Create a good and working content formula.

Create a good and working content formula for yourself and for your customers. Some
components of good e-newsletters, emails, or blogs, for example, incorporate tips,
expertise, success stories, case studies, Q&As, industry news, industry trends, industry
statistics, did-you-knows, how-to articles, contributed expert articles, and short surveys.

You can also have special or exclusive offers, as long as they do not sound like you are
selling something. Since many have their own cluttered inboxes, it is good to make these
interesting yet short. If you are unsure of what to send or convey to your customers,
perform a short and quick survey from your database and ask for their feedback.

 Create suitable timing for e-communications.

Although timely sending of emails to your customers per month is safe, you can do more
(like weekly) or less (like quarterly). A typical complaint from customers is that
permission-based emails are sent too often.You can ask your readers which frequency
they would like. This is also a good question to ask in your surveys.

 Know your customers’ preferences.

Know the preferences of your customers or readers. Provide them with content in the
popular formats, whether it may be in text, AOL-friendly, or HTML versions. It is
important to have a multi-format deployment because it satisfies all the preferences of
your customers.

 Avoid big files and attachments.

Many people are afraid of viruses and spam. This means that people try to avoid opening
emails with attachments. They are also afraid of having their web browser or laptop
crash, since opening large files sometimes does this. If you have an attachment you
would like to share, post it on a web page and turn it into a trackable hyperlink.

 Continuously measure and refine.

Customers can be flexible and adaptable when it comes to email or website loyalty. So
make sure you continuously measure and refine your communications. Focus on click-
throughs, opt-outs, bounce rates, open rates, etc. and respond as needed.If no one clicks
on a particular topic, you may have to take that topic out and look for a new and more
interesting one. Focus on the open rates and requests for unsubscribing because it is a
significant metric to look at.

 Personalize your content.

Personalize your website by knowing your customer well. If you will email your
customers, use the readers’ first names and related personal information that is significant
to the reader. This increases your response rate. Hence, personalize as much as possible.
  Place an enticement.

Place in enticing title lines on your website or enticing subject lines for your emails. This
should make them want to read further or open your email. Try not to sound like you are
a spam email by putting in words such as “urgent” or “free.”

3.11-Different types of online intermediatories:

1. Agents and Brokers-

Agents and brokers are nearly synonymous in their roles as intermediaries. In fact, when
it comes to real estate transactions, they are synonymous to any client, despite the
differences in their roles in the industry. In most cases, however, agents serve as an
intermediary on a permanent basis between buyers and sellers, while brokers do this on a
temporary basis only. Both are paid in commission for each sale and do not take
ownership of the goods being sold.
In addition to real estate, agents and brokers are also common in the travel agency.
Companies routinely use agents and brokers when importing or exporting products across
the border.

2.Merchant Wholesalers and Resellers-

Merchant wholesalers, which are also simply called wholesalers, buy products from
manufacturers in bulk and then resell them, usually to retailers or other businesses. Some
carry an extensive range of different products, while others specialize in a few products
but carry a large assortment. They may operate cash-and-carry outlets, warehouses, mail
order businesses or online sales, or they may simply keep their inventories in trucks, and
travel to their customers.
3.Distributors or Functional Wholesalers-

Also called functional wholesalers, distributors do not buy products from the producers.
Instead, they expedite sales between the manufacturer and retailers or other businesses.
Like agents and brokers, they can be paid by commission, or they can be paid in fees
from the manufacturer.

4.Traditional and Online Retailers-

Whenever a consumer buys a product from anyone other than the company that makes it,
the consumer is dealing with a retailer. This includes corner stores, shopping malls and e-
commerce website. Retailers may buy directly from the producers or from another
intermediary. In some markets, they may stock items and pay for them only after they
make a sale, which is common for most book stores today.
Any e-commerce website that's not owned by the company that makes a product,
which it then sells to a consumer, can also be called a retailer. However with companies
such as Amazon, which make their own products and sell them directly to customers in
addition to products made by other companies the line between producers and retailers is
becoming increasingly blurry.

Some of the main new intermediaries identified by Sarkar et al (1996) were:

 Directories (such as Yahoo!, Excite)
 Search engines (AltaVista, Infoseek)
 Malls (BarclaySquare, Buckingham Gate)
 Virtual resellers (own-inventory and sell-direct, e.g. Amazon, CDNow)
 Financial intermediaries (offering digital cash and cheque payment services, such as
Digicash)
 Forums, fan clubs and user groups.
 Evaluators (sites which perform review or comparison of services)
 E-marketing focuses on marketing your company online. You may use
direct or indirect marketing features on the internet to connect your
company to new customers, retain present customers, and build a brand
identity. You have to realize, whether you are a business with a physical
presence or work completely online, marketing in the internet is something
you have to work with and put to your advantage. This would mean that
you could reach millions of people around the world. It is unsurprising, then,
that businesses have been moving more and more of their marketing
resources online.
An e-marketing plan is needed to detail the specific objectives of the e-business
strategy through marketing activities.
E-marketing joins creative and technical aspects of the Internet, including:
design, development, advertising and sales. It includes the use of a website
in combination with online promotional techniques such as search engine
marketing (SEM), social medial marketing, interactive online ads, online
directories, e-mail marketing, affiliate marketing, viral marketing and so on.
The digital technologies used as delivery and communication mediums
within the scope of e-marketing include-
a) Internet media such as websites and e-mail.
b) Digital media such as wireless, mobile, cable and satellite.
 SOSTAC summarizes the different stages that should be
involved in e-marketing strategy.
3.12-Digital Marketing Industry in India:
As the internet access is main-stream, it has intensified the use of mobile phones,
computers, and laptops leading to a high change in the growth of digital channels both in
strength and volume. Be it social media, surfing for information on Google or making
purchases, India has transformed this medium into a full-fledged market. And this market
has flourished into creating Digital Marketing as a prime source of bringing business
through the internet!

Digital Marketing is growing at a rate of 25-30% in India annually. And if statistics are to
be believed, India has reached 500 million users of the internet by the end of 2018. India
also has the World’s largest Facebook population. The high-speed digitization, online
portals, social media channels, etc lead to a growth of digital marketing in a trend par
imagination.

The earliest examples of online connectivity were demonstrated with the introduction of
Michael Aldrich online shopping system. In the following years, the Thomson Holidays
UK was launched, then came the IndiaMART B2B in 1996. It was ultimately in 2007 that
the launch of Flipkart, an e-commerce marketing website changed the structure of
marketing in India. What followed was a rise in the number of people picking up mobile
phones, online shopping, at-home delivery, and internet marketing as a means to
popularize the brands.
Over the years the Digital Marketing Industry has prospered into bringing a large percent
of business online with its promising ability to create a global network and flourish even
the small businesses internationally.
According to the International Journal of Advanced Research Foundation, India is
undergoing a golden period of digital marketing growth ever since 2013 and the trend
continues till 2020 at least.

From 69 million online shoppers in 2016 and more than 100 million in 2017, India has
seen a stark rise in the internet population. Ever since the launch of Digital India in 2015
as an initiative to improve online infrastructure and digital empowerment, there has been
mushrooming of a complete market of start-ups, services and more than connect people
globally! It has resulted in a rise of active internet users, mobile connections, social
media traffic and more.
Digital marketing has become a genre of business. With more number of businesses
opting to create a brand image online and reach out to the audience globally, the
technicalities around the internet are also increasing. Websites, blogs, marketing
campaigns, SEO strategies, etc have penetrated deep into the metrics of the technicality
that influences one’s presence on the internet. As a result, it takes some well-equipped
experts to create a social standing for a brand. Over the past decade, the digital marketing
agencies and professionals with deep insight into the field have emerged to cater to the
needs. With sound skills, imaginative minds and par excellence knowledge of what shall
work for a business online – these experts are the flag bearers of digital marketing.

Digital marketing is a big umbrella under which the technical, as well as non-technical
skills to create a wave of popularity over the internet, is covered. The industry has created
a variety of job roles for individuals to seek employment and display their talents. It takes
experts from the field of web designing, web development, social media consultants,
brand consultants, content writers, graphic designer, artists, etc to come together and
collectively work towards creating a visual representation of ideas that is easy to plant
into the minds of the audience. As the industry grows, the demand for creative experts in
the field is rising too generating more employment in India and making India a hub for IT
activities.

Online podcasts, web stories, entertainment, sports, business, social awareness and career
in India gets more dependent on digital platforms for generating revenue, sharing
information and country’s progress, Digital Marketing is becoming a promising industry
with rapid career growth, increasing influences, and widespread activities!
3.13-Future outlook:
Considering the recent developments and market trends, hyperlocal space will see more
companies, including big players like Ola, Swiggy, Bigbasket, etc., to foray into different
services like medicines, milk, cleaning, other personalized services. Big players like
Cardekho, Olx, Quikr, etc. would look to tap the international market for expansion. With
low entry barriers, companies in this segment will always have a looming fear of newer
players coming in. Those who offer seamless services will carve their niche in this sector
and survive in the long run. The existing players would look at bolstering volume through
horizontal services and adding customer touch points.
As the market expands, there will be consolidation in the segment; while there is
certainly depth in the market, but unit economics will be difficult to achieve beyond two
or three large scaled players. The companies will continue to use Machine Learning (ML)
and AI capabilities to focus on solving the key issues of the sector like route planning,
order consolidation, estimating optimum time slots and overall servicing costs.
As the digital classified segment undergoes a rapid transformation, a few challenges like
unverified listings, optimization of CAC and low customer loyalty would need to be
addressed to ensure profitable business models and customer retention. Convergence of
online businesses is expected since the end customer is the same and there is a high
possibility of e-tailing, e-services and digital classifieds to come together as a strong one-
stop value proposition in the coming years. This would further enhance revenue streams,
monetize possibilities and reduce overall cost of customer acquisition. For verticals like
automobiles and real estate financing, lead generation and ancillary services like
insurance spaces, etc. could also drive additional monetization. While major players
would try to increase adoption of online solutions, smaller players would focus more on
providing niche services to a selected group of customers. Dynamic transaction-based
pricing models, monetization of data and investment in technology to drive
differentiation amongst peers and creating unique customer experiences would be a key
driver for investments in the near future.
Some of the key aspects witnessed over the last 12 months are also equally relevant to
how the future is going to pan out which include:-
(a) Converting online interactions to transactions:
India has the one of the highest active number of internet users globally and given that
average mobile data usage stands at 8gb/ subscriber/month is a testament to the high
level of digital interaction. However, majority of this data consumption is spent on
entertainment, social media, product research and not on transactions.
(b) Rural commerce:
With companies witnessing intense competition in urban cities along with the immense
untapped or under tapped potential of tier 2/3 cities, the next wave of growth will be
driven by success of e-commerce and consumer internet companies in these cities. The
rural commerce sector is likely to be $10-$12 Bn1 opportunity in the next 4 years. Many
companies are tacking the challenges of rural markets, such as logistics, content, etc
bringing down hurdles for expansion of products and services. We have already seen
how logistics and social e-commerce companies are starting to see Preface: a surge in
their offerings by helping not only solve issues but also help in onboarding new
customers to the digital arena.
(c) Vernacular:
One of the major barriers for adoption of digital services is the availability of content in
local Indian languages. By 2021, the number of internet users in India using local
languages will be 536 Mn, exceeding the number of internet users using English. With a
growing base of Indian language users from both urban and tier 2/3 cities, it is essential
that companies provide full stack of services available in the users language of choosing.
Voice search is another important access point that needs to be enabled and optimized by
industry players, which will certainly make for a convenient shopping experience and
also keep bringing more consumers online.
(d) Omni-channel strategy:
Offline-online play for retail chains and online companies provides for a much broader
interaction touch-points with customers. We have seen a series of new models that are
being deployed such as ‘shop & drop’, ‘brick to click’, ‘click to brick’, ‘Manless stores’,
‘Integrated buying’, omni-channel, etc all with a target of upselling and gaining
customers while keeping convenience at its very core. Companies are now pivoting their
‘brick and mortar’ stores to experience centres.
(e) Data driven personalization:
Providing customers product of choice based on past preferences or current searches
have reaped rewards in terms of repeat customers across formats. This ‘Digital Gold’
allows for business to understand user behaviour and will continue to play a key role in
shaping goto-market strategies. With the demographic diversity of India, and the volume
of customers onboarding services steadily increasing, harnessing relevant data to provide
granular level personalisation will not only help customers but also provide an effective
feedback loop for companies to tailor their process to the targeted customer base.
Another key development impacting this sector has been an evolving regulatory
environment. Government regulations according to the Press Note 2 and recently
released draft E-Commerce policy have significant impact on companies in this segment.
In order to comply with the current direction of the policy companies need to adopt
various strategies including change current operating model which would lead to
increased cash burn, and stress on current supply chain network. In addition to the
above, the draft policy also focusses on data and associated ownership as it suggests to
treat data as a ‘national asset’ which needs to be regulated in terms of cross-border data
flows, access / storage of data etc
Over the past couple of years, we have seen how new and innovative solutions have
proved themselves in the market. Some have disrupted traditional sectors while others
have spurred new sectors altogether. While it is difficult to crystal gaze into what this
dynamic industry can provide in the near future, no one can deny the potential the sector
carries with it. The trend we witnessed in terms of consolidation will continue into 2019.
Segments in E-commerce and consumer internet space have depth but a higher burn
needed to scale given the demographics and online adaptability which will result in
aggregation. Also, companies will need to consolidate/acquire to add services and
segments to expand the level of engagement with customers and utilize the pipe much
better leading to better unit economics.
The investors have also seen the significant value creation network as a result of the
Walmart-Flipkart deal; they are likely to see this sector as an important investment
opportunity especially in ancillary areas which feed e-commerce and consumer internet
companies in areas like Technology, support, logistics, etc. This should also see increase
interest from family offices and corporate VCs. While regulations have been evolving,
the government has taken steps to try and proactively address some of the concerns by
talking to both industry players and investors groups. E-commerce policy including
aspects of Data privacy policy, should hopefully be in place before the end of 2019 which
should provide for a more consistent and operational certainty.
India is at an infliction point, where there is a change in the way we perceive digitally
enabled services. By all estimates, the world in looking at India for innovations and
unique service offerings and not only providing support and knowledge but also
investments to back high growth potential segments in the e-commerce and consumer
internet space. There has been consistent growth of FDI investments in India for the past
couple of years, and we will continue to see the global community show confidence in
India’s ability to be a game changer in the E-commerce and Consumer Internet sector.

CONCLUSION:
The e-commerce industry been directly impacting the micro, small & medium enterprises
(MSME) in India by providing means of financing, technology and training and has a
favourable cascading effect on other industries as well. The Indian e-commerce industry
has been on an upward growth trajectory and is expected to surpass the US to become the
second largest e-commerce market in the world by 2034. Technology enabled
innovations like digital payments, hyper-local logistics, analytics driven customer
engagement and digital advertisements will likely support the growth in the sector. The
growth in e-commerce sector will also boost employment, increase revenues from export,
increase tax collection by ex-chequers, and provide better products and services to
customers in the long-term.