E-COMMERCE IN INDIANivin Vinoi

P14199PGDM-B

AbstractE-commerce is the procedure of conducting business online. There are a number of applications of e-commerce, including online retailing and electronic markets, electronic storefronts and on-line auctions. Granting to the current trend E-commerce has a good scope in widening of its market and reducing the operating costs. Simply E-commerce is not a passive tool that magically brings in business and win. It requires a great deal of hard marketing efforts. Careful consideration is needed regarding how to best confront the concern on its web site. Today India is growing as a dependable market for E-commerce traders. From giants like E-bay, Amazon to local players like jabong, olx etc. are doing good business in India.

Key words:ONLINE TRAVEL BOOKING SITES: Yatra.com, Travelocity.com, MakeMyTrip.com, KAYAK.com, Cleartrip.com, RedBus.com etc.ONLINE SHOPPING SITES: Flipkart.com, Myntra.com, Jabong.com, eBay.in, HomeShop18.com, Tradus.in, Shopping.India Times.com, SnapDeal.com, Infibeam.com, Zovi.com

INTRODUCTION

The primary goal of information technology and systems is the ability to transfer large quantities of data and information between organizations and individuals quickly and accurately. In many cases, information technology significantly reduces time, effort, and expenses. Applying the concept of IT and with the help of World Wide Web (WWW), E-commerce industry was

originated for pulling in life more comfortable. E-commerce is actually one of the functions of E-business. In addition to shopping functions, e-business is the operation of purchasing and selling goods or services electronically rather than through formal means, along with the support activities and transactions necessary to perform these jobs. India has an internet user base of about 250.2 million as of June 2014. The penetration of e-commerce is low compared to markets like the United States and the United Kingdom but is growing at a much faster rate with a large number of new entrants. The industry consensus is that growth is at an inflection point. The development of e-commerce industry has made lives easier for countless people. It’s not just gifts but even everyday items like grocery and notebooks and pens that can be bought online. Books, apparel, shoes, jewelry and accessories, travel tickets and hotel bookings are some of the commonly purchased items online.

Background of the study The rise of internet companies in India started in the mid-1990s. The first Indian internet companies, mainly featured online classifieds, matrimonial and job portals. The low penetration of net, lack of awareness and lack of development and confidence in online payment systems were reasons for internet companies not actively engaging in e-commercialism. It was only in the mid-2000s, the e-commerce industry in India started to take off. The first e-commerce services available were primarily offered in the travel industry. Even today travel booking websites hold a majority portion of the Indian commerce space. Some instances of travel sites are Yatra.com, Travelocity.com,

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MakeMyTrip.com, KAYAK.com, Cleartrip.com, RedBus.com etc. A couple of years later, the online retail industry started taking shape and it is rapidly growing today. E-commerce space relating to the deals and discount websites started becoming popular towards 2009 and onwards while the concept of social media for e-commerce is still trying to make a foothold in the markets despite having one of the largest populations using Facebook. The Indian e-commerce markets offers services in B2B, B2C and C2C segments with most of the players operating in the B2C segment. The main factors for the rapid growth in the revenues and number of e-commerce companies operating out of India was the growth of a young tech-savvy generation employed in IT companies, rise in disposable income, changing lifestyles and easier access to banking and internet facilities.

II. THE STUDY

India’s e-commerce market was worth approximately $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14 billion in 2012. Approximately 75% of this is travel related (airline tickets, hotel bookings, railway tickets, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million as of 2009). Agreeing to a survey by Forrester (Exibit1), the Indian E-commerce sector is set to grow the quickest in the Asia-Pacific region at a CAGR of 57% between 2012-2016. Though currently having one of the smallest bases, e-commerce market in India is set to grow by more than fivefold by 2016 as the number of online spending is expected to increase rapidly. The top 10 e-commerce websites in India on the basis of market shares are 1. Flipkart.com, 2. Myntra.com, 3. Jabong.com, 4. eBay.in, 5. HomeShop 18.com, 6. Tradus.in, 7. Shopping.India Times.com, 8. SnapDeal.com, 9. Infibeam.com, 10. Zovi.com. According to the number of visitors visited (Exibit 2) Mytra stands top. After that comes flipkart, then jabong, amazon, snapdeal, Home Shop 18.

Myntra, Jabong and zovi are exclusively for fashion and lifestyle products only whereas e-bay, flipkart, amazon, ebay, homeshop 18, tradus, shopping India times, snapdeal, Infibeam etc deals with all categories of items including electronic gadgets. There are lot of factors that attract customers to this online sites. Some of them are the cash back guarantee, ability to give cash on delivery, fast delivery, different variety of branded products at one platform, discount coupons etc. The entry of Amazon into Indian markets with its e-commerce website amazon.in has led to a new chapter in the e-commerce industry in India. With direct FDI still not permitted, Amazon has come up with an advanced business strategy to get in this sunrise sector in India. It has brought together different online vendors on a single platform. This could be a strategy that even bigger Indian players could use in the long run as the markets mature. The entry of Amazon to Indian market is a threat to flipkart. So for widening their platform flipkart bought myntra and also raised their investments. When new companies arrive the competition tightens, so companies will be forced to reduce prices and give lot of offers. Due to this the ultimate beneficiaries will be the customers.

III. FINDINGS AND CONCLUSION

Increase in annual disposable income per household by two and half time by 2015. It is expected to grow at a CAGR of 5.1% during 2005-2025.

Rise in the sales of PCs, tablets and smartphones as prices have declined.

Discretionary spending expected to rise to 61% in 2015 from 52% in 2005.

Continuous reduction in the cost of internet.

Increase in the number of payment options. The number of online transactions are expected to increase to 38 million by 2015, compared to 11 million in 2011. The number of debit and

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credit card holders is expected to increase substantially to 350.4 million and 73.7 million respectively in 2014.

Increase in time spent online by an Indian. Mean time spent by an Indian on the internet is expected to increase to 21 hours per month in 2015 from 17.4 hours spent in 2011.

In Union Budget 2014 it was brought up that manufacturing units will be permitted to trade their merchandise through retail, including e-commerce platforms without any additional approval. This paves path for the foreign direct investment (FDI) in the manufacturing sector.

E-commerce is slowly making way to Mobile commerce (m-Commerce) as more and more users are accessing the net and shopping online through smaller devices like smartphones, tablets and notebooks.These are all factors which shows that e-commerce has a wider scope in India.

E-commerce in India is a sunrise sector and companies that would desire to harvest the benefits of this growing industry would need to leap into the bandwagon shortly. The speedy development of this sector is propelled by dynamic demographics, growing income levels and changing life styles, increasing internet penetration and banking and other payment alternatives like e-wallets and so on. But challenges in the form of under-developed IT infrastructure, smaller number of credit card users, logistics issues and lack of governmental incentives plague this sector to certain extent. Despite the challenges, the e-commerce industry in India offers great scope due to the immense potential market size and increasing discretionary spend on the masses.

EXIBIT 1

EXIBIT 2

IV. REFERENCES

[1] Ruth A. Wienclaw, PhD, E-Commerce, http://search.ebscohost.com/.

[2] E-COMMERCE INDUSTRY IN INDIA,

http://www.academia.edu[3] E-COMMRCE IN INDIA, Wikipedia

[4] Business Line

Author profile

Nivin Vinoi is currently pursuing his Post Graduate Diploma in Management from Rajagiri Business School, Cochin.

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