Beruflich Dokumente
Kultur Dokumente
BUSINESS PLAN
FOR
E-COMMERCE OPERATIONS
To: From:
The Management Team, Syed Mohammed Ali,
Infinite Business Solutions LLC, Infinite Business Solutions LLC,
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Table of Contents
1. Introduction ................................................................................................................................................... 3
2. Market Opportunity ....................................................................................................................................... 3
2.1 Oman Market ........................................................................................................................................ 3
2.1.1 Current Market Trends ................................................................................................................. 4
2.1.2 Domestic eCommerce (B2C) ......................................................................................................... 4
2.1.3 Cross-Border eCommerce ............................................................................................................ 4
2.1.4 B2B eCommerce ........................................................................................................................... 5
2.1.5 eCommerce Services .................................................................................................................... 5
2.1.6 eCommerce Intellectual Property Rights ..................................................................................... 5
2.1.7 Mobile eCommerce ...................................................................................................................... 5
2.1.8 Social Media ................................................................................................................................. 5
2.2 USA Market ........................................................................................................................................... 6
3. Technology ..................................................................................................................................................... 7
3.1 Oman Market Place ............................................................................................................................... 7
3.2 USA Drop Shipping ................................................................................................................................ 7
4. Revenue Sources ............................................................................................................................................ 8
4.1 Oman Revenues .................................................................................................................................... 8
4.1.1 Store Setup Fees ........................................................................................................................... 8
4.1.2 Sales Commission ......................................................................................................................... 8
4.1.3 Monthly Store Rent ...................................................................................................................... 8
4.1.4 Advertisements ........................................................................................................................... 8
4.1.5 Outsourced Store Management ................................................................................................... 9
4.1.6 Affiliate Commissions ................................................................................................................... 9
4.2 USA Revenues ....................................................................................................................................... 9
5. Expected Expenses ......................................................................................................................................... 9
5.1 Oman Operations .................................................................................................................................. 9
5.2 USA Operations ................................................................................................................................... 10
6. Manpower Requirement ............................................................................................................................. 10
6.1 Oman Resources ................................................................................................................................. 10
6.2 USA Resources .................................................................................................................................... 11
7. Legalities ...................................................................................................................................................... 11
7.1 Oman Laws .......................................................................................................................................... 11
7.2 USA Freedom ...................................................................................................................................... 11
8. Conclusions .................................................................................................................................................. 12
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1. Introduction
The modern ways of E-commerce have evolved with high demand in market from both sellers and
buyers for an easy, cost effective and trustable source of shopping and selling products, hereby
creating an opportunity for Information Technology companies to reach out to sellers and buyers
with the advantage of being connected with e-commerce.
In this Business Plan Infinite Business Solutions LLC (IBS) will foresee the plans of E-commerce
business for markets of Oman and USA.
2. Market Opportunity
The E-commerce market in Oman accounts to only 1% of total sales. It is still a nascent market and
have ample opportunities to grow in future. On the other hand, global e-commerce market is about
to reach US$ 2 trillion by 2020 and have a share of 7.8% of all sales. In developed nations, e-
commerce share ranges from 45-80%. China and India have seen a revolution in e-commerce
industry in past decade. Many companies are established during this time and became billion dollar
companies. More than 1/4th of the population of Oman still purchases products from foreign
websites.
Currently there is limited e-commerce activity by the private sector in the country. The government
is actively promoting a “digital society” and “e-government” services through the Information
Technology Authority (ITA). Some of the most frequently requested government services, such as
business registration and customs clearance of imported goods, payment of utility bills, payment of
traffic fines, etc. are being conducted on-line. In 2008 the GoO enacted legislation governing e-
Commerce, and ITA officials have recently identified opportunities for U.S. investors in: e-payments
(secure credentialing), Arabic language e-mobile content and e-government applications. The ITA
hosts an annual cybersecurity conference in Muscat, which may be of interest to firms interested in
entering the market. Oman Tradanet specializes in Business-to-Business services. Other sites
specializing in e-commerce applications are Business Gateways International, e-Oman (Information
Technology Authority) and Knowledge Oasis Muscat.
According to a study by Frost & Sullivan, internet spending in the Middle East is booming with GCC
countries expecting a 40 percent growth in eCommerce by 2020 and is expected to reach $41.5
billion. Oman is expected to have a total market share of 12 percent across the GCC countries.
Internet users constitute 74.2% of the population (2015).
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On May 18, 2008, Oman legalized electronic transactions by adopting the Electronic Transactions
Law, the first law for legalizing electronic transactions in Oman. The e-transactions law consists of 9
sections and combined as 54 articles and legalizes the use of digital signatures in electronic
commerce and communications through letters, emails, etc. in order to assure adequate protection
to both businesses and common public, this law provides for penalties in the case of electronic
crimes involving e-transactions. Protection for adequate privacy in matters related to personal data
held in computer systems and processes for enabling electronic transactions is assured by the new
e-transactions law of Oman.
In 2016, the Central Bank of Oman launched a national debit card payment gateway infrastructure
for e-commerce transactions, OmanNet Debit Card E-Payment Gateway infrastructure, which will
provide safe and secure e-commerce transactions, A new law for the protection of e-payment is
expected to be passed in the middle of 2017, details of which are unknown at the moment.
According to the study, nearly one fifth of the respondents made at least one online purchase last
year, a slight increase than 2012. 15 percent of the respondents identified Oman Air as the most
commonly visited website for online shopping.
Omani residents also use websites such as eBay, Aliexpress to order products, and there are
instances of using vehicle-related websites in the United States to order vehicle spare parts and
supplies. China remains a favorite country of origin for ordering furnishing, machinery, construction
materials, etc. Omani e-shopping consumers shop mostly for clothing, airline tickets, beauty care
products, and hotel reservations online.
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Thirty-nine percent of Oman respondents still feel offline shopping is “more secure”, with only 24
percent considering online shopping “equally safe,” a survey conducted by YouGov has found.
Across the Gulf Cooperation Council (GCC), the lack of confidence in online payment security has
deterred 34 percent from shopping online, says the report. The study interviewed 2,700 participants
from across the GCC, including Oman, UAE, Saudi Arabia, Bahrain, Kuwait and Qatar.
Clothing
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Airlines
Groceries(Food)
Travel
Beauty Care
Medicine
Coupons
Hotels
Ease of Use
Pricing
Customer Service
Financial Inclusion
Sales on the web reached $394.86 billion last year, a 15.6% increase compared with $341.70 billion
in 2015. That’s the highest growth rate since 2013, when online sales grew 16.5% over 2012.
For comparison purposes, total retail sales were $4.846 trillion for the year, a 2.9% jump from
$4.708 trillion in 2015. E-commerce sales represented 11.7% of total retail sales in 2016, more than
a full percentage point increase compared with a 10.5% share in 2015. It also means that e-
commerce represented roughly 41.6% of all retail sales growth in 2016.
The bulk of those gains go to web leader Amazon.com Inc., however, as the e-commerce behemoth
continues to gain loyalty among U.S. consumers. Here’s proof: The total value of transactions from
U.S. consumers on Amazon.com reached $147.0 billion last year, a 31.3% increase compared with
$112.0 billion in 2015, according to Internet Retailer and ChannelAdvisor Corp. estimates.
That means that Amazon comprised 65.9% of the $53.1 billion growth in U.S. online retail last year,
and 27.4% of the $127.6 billion increase in the total retail market.
In the fourth quarter, U.S. e-commerce sales grew 14.3% to $123.61 billion from $108.18 billion.
That’s far short of the 16.0% growth rate predicted by Internet Retailer based on earlier monthly
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reports of nonstore sales from the Department of Commerce. Nonstore sales occur mainly online
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but also include categories of retail sales that are declining, such as mail and phone orders, and
door-to-door sales. Thus, the growth in nonstore sales is consistently lower than the growth in e-
commerce sales.
The 14.3% growth rate for Q4 is the smallest year-over-year increase since the fourth quarter of
2014, when online retail sales grew 13.9%.
Still, online sales are growing much faster than store sales, which suggests that e-commerce remains
a primary growth driver in the retail industry as a whole.
Total retail sales reached $1.30 trillion in the fourth quarter, a 3.9% increase compared with $1.25
trillion in Q4 of 2015. When factoring out the sale of items not normally bought online, like
automobiles, fuel, and bar and restaurant sales, total retail sales reached $929.25 billion, a 3.3%
jump compared with $899.46 billion in the same period a year ago.
That suggests e-commerce represented 13.3% of total retail sales in Q4 compared with 12.0% in Q4
of 2015.
3. Technology
3.1 Oman Market Place
The Ecommerce Market Place for Oman is planned to be developed on Wordpress based
Woocommerce platform. Wordpress is a Powerful Application with Features of Limitless
possibilities. Wordpress is Customizable with lot of Responsive web and Mobile Sites Designs, SEO
Friendly with High Performance and Manage on the Go tools. Wordpress has High Security and
Powerful Media Management Easy and Accessible.
Wordpress has lot of free and paid plugins to enhance the features of any website. Wordpress also
has extremely powerful themes that can be used to develop websites, ecommerce platforms, social
networking platforms and various day to day usage web applications.
In our project we are going to utilize the wordpress multivendor marketplace theme. There are
various themes available and we need to finalize among Rehub and Onemall Theme. In addition to
this we can choose between Dokan, WC Vendors or WC marketplace plugin to organize the
marketplace feature.
In addition to this Wordpress has automated plugins for SEO and social media automation.
Shopify is a Canadian based company and has USA friendly features for sales channels and payment
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processing. Shopify can be easily integrated with numerous market places of USA and various part of
the world which allows us to sell not just on our website but also on various market places like
Amazon, Ebay etc. Shopify also offers easy support on social media channels such as Facebook store,
Instagram, buyable Pins etc.
Shopify’s Drop Ship Friendly plugin Oberlo is powerful and easy to use feature which allows to
import products from world’s leading wholesale marketplace AliExpress. Oberlo also allows easy
order management for the customers who have placed orders on our Shopify Store or any other
marketplace like Amazon and Ebay. Oberlo also manages and tracks deliveries, refund and
cancellation of orders.
4. Revenue Sources
The cost of store setup will be based on number of products where we allow upload of first 25
products to be free followed by cost of 100 OMR for product range 25 to 150 and additional 100
OMR for additional 100 Products.
4.1.4 Advertisements
Advertisement is a huge subject if revenue if organized properly at our store. To begin with we can
start with Google Adsense which has averagely good revenues depending on number of impressions
on a page and with the Cost Per Impression defined by Google. The CPI and CPM rates increase over
time.
However, we need not be dependent on the Google adsense for revenues. We have option to take
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up advertisements from local vendors on a monthly or a daily advertisement display rate and banner
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size which could vary from 30 OMR to 100 OMR per day.
5. Expected Expenses
USD OMR
Syed
Domain Name 3 1.2 Share 20%
Hosting 200 77 Gateway 4%
Mail Chimp 0 0
Facebook Ads 60 23.2
Google Adwords 60 23.2
Syed Salary 1300 501.8
Sales Executive 910 350
Photographer cum
Product Specialist 780 300
Other office Expenses 1039 400
Total Monthly 4352 1676.4
Theme One Time 64 24.63
Expenses of Oman Operations are majorly for operations and marketing and less for technology. The
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technology expenses are only the Theme, Domain name, Hosting, SSL Certificate and Image
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optimization. The marketing expenses are the Search Engine Optimization, Social media
Optimization, Email Marketing, Online Marketing and Offline Marketing. The operations expenses
are expenses to employees and office expenses.
USD OMR
Shopify 29 11.2 Payoneer 1%
Oberlo 29.9 11.5 Syed Share 20%
Amazon 39.99 15.4 Shopify 3%
Call Centric 0 0 Paypal 3%
Opus Virtual Office 99 38.2 Amazon 15%
Mail Chimp 0 0
Domain Name 0.75 0.3
Facebook Ads 60 23.2
Google Adwords 60 23.2
Syed Salary 1300 501.8
Total Monthly 1618.64 624.8
Theme One Time 60 23.2
6. Manpower Requirement
6.1 Oman Resources
The Oman Operations will begin with basic set of one resource in department of
1) Technology -1 (Syed)
Along with Expansion and growth of business we will need more resources in departments of Social
Media management, Search Engine Optimization, Marketing, Operations, and Product Specialists in
each category of products, customer service, legal operations and Sales.
7. Legalities
7.1 Oman Laws
Oman Laws are flexible for Ecommerce business and the government of Oman encourages
companies to expand ecommerce operations. Government of Oman is investing to expand E-
commerce business in the region.
As per discussions with Oman Chamber of Commerce we can continue to expand E-commerce
operations since we are a registered IT company and E-commerce is part of IT Services.
However, there have been few points demanded by Ministry of Consumer Protection, which are as
follows:
a) The Ecommerce website should have translation in Arabic Language for Arabic customers
b) The Website should not sell medicines, sex products and pregnancy stopping aids.
c) IBS should make one legal agreement with each vendor stating the points that IBS is only
providing a web platform to store to sell the products online and store should be responsible
for providing the delivery, return, exchanges and refunds. The store is responsible for good
customer service and IBS is just a coordinator between the customer and store.
d) As per ministry of consumer protection the return, exchange, refund of any product should
happen within 15 days from the day of order placement. Incase the issues are not solved in
15 days the customer has right to escalate the issue to consumer protection and action can
be taken accordingly.
Starting from January 2018, IBS will have to pay 5% VAT to government of Oman for the income
from foreign bank for sales of products in USA.
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8. Conclusions
E-Commerce Operations have high potential in both Oman and USA market, with Oman operations
having less competition and high future in coming years and like wise in the USA market the
opportunity is always expanding despite of competition.
Oman Operations have added advantage than USA operations in terms of scope for expansion by
upgrading technology platforms and increasing resources in each department to enhance the
revenues from entire region.
USA Operations are purely dependant on sales and more the sales more is revenue to IBS, where as
the Oman Operations have opportunity to form a strong brand in the region with revenues and
recognition.
Ecommerce is a huge opportunity for IBS and will give a consistent monthly income with its monthly
rental plans, product commissions, store setup fees and advertisements.
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