A PROJECT REPORT ON A PROJECT REPORT ON
““GLOBAL TRENDS IN ECOMMERCE
GLOBAL TRENDS IN ECOMMERCE””
SUBMITTED BY SUBMITTED BY AJAY KUMAR ANIL AJAY KUMAR ANIL T.Y.B.M.S.
T.Y.B.M.S. (SEMESTER (SEMESTER V)V)
FOR THE DEGREE OF FOR THE DEGREE OF
THE BACHELOR OF MANAGEMENT STUDIES THE BACHELOR OF MANAGEMENT STUDIES
CONDUCTED BY CONDUCTED BY
UNIVERSITY OF MUMBAI UNIVERSITY OF MUMBAI
UNDER THE GUIDANCE OF UNDER THE GUIDANCE OF PROF. KUSHAL RAJPUT PROF. KUSHAL RAJPUT
ACADEMIC YEAR ACADEMIC YEAR
2015 - 2016 2015 - 2016
DEEP’S MIDC COLLEGE OF MANAGEMENT (B.M.S) DEEP’S MIDC COLLEGE OF MANAGEMENT (B.M.S)
SARAVALI, BOISAR (W),
Deep’
Deep’ S
S
Education Society
Education Society
Deep’
Deep’ S
S
MIDC College of Management.
MIDC College of Management.
Saravali, Boisar (West), Pin
Saravali, Boisar (West), Pin
—
—
401501.
401501.
CERTIFICATE
CERTIFICATE
We hereby certify that Mst:Ajay kumar anil of
We hereby certify that Mst:Ajay kumar anil of Deep’s MIDC college ofDeep’s MIDC college of
Management studying in TYBMS has completed project on,
Management studying in TYBMS has completed project on, “global trend in“global trend in ecommerce
ecommerce”” in the Academic year 2015-16. The information submitted in thein the Academic year 2015-16. The information submitted in the academic year 2015-16. The information submitted in the project is true and academic year 2015-16. The information submitted in the project is true and original to the best of our knowledge.
original to the best of our knowledge.
Project
Project Guide: Guide: PrincipalPrincipal
Internal Examiner: Internal Examiner:
External
Deep’
Deep’ S
S
Education Society
Education Society
Deep’
Deep’ S
S
MIDC College of Management.
MIDC College of Management.
Saravali, Boisar (West), Pin
Saravali, Boisar (West), Pin
—
—
401501.
401501.
CERTIFICATE
CERTIFICATE
We hereby certify that Mst:Ajay kumar anil of
We hereby certify that Mst:Ajay kumar anil of Deep’s MIDC college ofDeep’s MIDC college of
Management studying in TYBMS has completed project on,
Management studying in TYBMS has completed project on, “global trend in“global trend in ecommerce
ecommerce”” in the Academic year 2015-16. The information submitted in thein the Academic year 2015-16. The information submitted in the academic year 2015-16. The information submitted in the project is true and academic year 2015-16. The information submitted in the project is true and original to the best of our knowledge.
original to the best of our knowledge.
Project
Project Guide: Guide: PrincipalPrincipal
Internal Examiner: Internal Examiner:
External
I hereby declare that the project titled
I hereby declare that the project titled “ global trends in ecommerc“ global trends in ecommercee” is an” is an
original work prepared by me and submitted to University of Mumbai in partial original work prepared by me and submitted to University of Mumbai in partial fulfillment of B.M.S. Degree for the Academic Year 2015-16.
fulfillment of B.M.S. Degree for the Academic Year 2015-16.
The matter embodied in this project report has not been submitted to any The matter embodied in this project report has not been submitted to any other university or institution for the award of the degree. This project is my other university or institution for the award of the degree. This project is my original work and has not been presented earlier in this manner. This original work and has not been presented earlier in this manner. This information is purely of
information is purely of Academic Interest.Academic Interest.
Signature: Signature:
Name:Ajay kumar anil Name:Ajay kumar anil Roll No:
Roll No: BMS/13/017BMS/13/017
Semester V Seat No: 1250375 Semester V Seat No: 1250375 Place:
Place: Saravali, Saravali, Boisar Boisar (W). (W). Date: Date: 07 07 December, December, 20152015
DECLARATION
DECLARATION
I am extremely grateful to
I am extremely grateful to University of MumbaiUniversity of Mumbai for having prescribed this for having prescribed this project work as a part of academic requirement in the Bachelor of project work as a part of academic requirement in the Bachelor of Management (BMS) course.
Management (BMS) course.
I wish to appreciate the management and Staff of
I wish to appreciate the management and Staff of Deep’s MIDC College ofDeep’s MIDC College of Management
Management for the entire state of art for the entire state of art infrastructure and resource.infrastructure and resource.
I wish to express a special thanks to my project guide
I wish to express a special thanks to my project guide Prof. Kushal RajputProf. Kushal Rajput
without whose guidance the project may not have taken shape and a sincere without whose guidance the project may not have taken shape and a sincere
thanks to Principal of the college “
thanks to Principal of the college “Mr. Mr. Bhagesh Bhagesh Sankhe”Sankhe” for his continuous for his continuous faith.
faith.
Finally I would like to thank all those who directly or indirectly have helped me Finally I would like to thank all those who directly or indirectly have helped me towards the execution of this project with full
towards the execution of this project with full sincerity.sincerity.
A sincere thanks to all. A sincere thanks to all. Ajay kumar anil
Ajay kumar anil
ACKNOWLEDGEMENT
ACKNOWLEDGEMENT
PREFACE
E-commerce as anything that involves an online transaction. E-commerce provides
multiple benefits to the consumers in form of availability of goods at lower cost,
wider choice and saves time. The general category of e-commerce can be broken
down into two parts: E-merchandise: E-finance. E commerce involves conducting
business using modern communication instruments: telephone, fax, e-payment,
money transfer systems, e-data interchange and the Internet. Online businesses like
financial services, travel, entertainment, and groceries are all likely to grow. Forces
influencing the distribution of global e-commerce and its forms include economic
factors, political factors, cultural factors and supranational institutions.
It has an impact over the economy of many countries among which India is on the
top of that list. It has named as new gold rush in e-commerce. E-commerce has
many reasons that why it is very crucial in developing the country . For the study
we have taken several parts of the world such as North America , Latin America ,
Europe , Middle-East , Africa and South Asia ,and Australia. E-commerce has an
intent to bring some transformation in the society and that’s the reason its essential
SCOPE OF STUDY
This study being “desk analysis" contains views of various writers and researchers
of E-commerce. This study includes the global trends including India as a major
source of E-commerce , increasing use of e- commerce in developing nations ,
reasons behind success of e-commerce as an industry , the use of e-commerce in
global sourcing , advantages of E-commerce and several more topics being
covered under the project analysis. The use of e-commerce in various countries and
RESEARCH OBJECTIVES
The study is focused on achievement of following objectives:
To assess the latest trend in e-commerce globally.
The impact of growth of e-commerce.
To analyse the latest global scenario of e-commerce.
. EXECUTIVE SUMMARY
The Internet is dramatically expanding opportunities for business-to-business
(B2B), Business-to-consume ( B 2 C ) e -commerce transactions across borders.
For B2Ctransactions especially, the Internet sets up a potential revolution in global
commerce: the individualization of trade. It gives consumers the ability to conduct
a transaction directly with a foreign seller without traveling to the seller’s country.
While this could be done in the past by post, telegram, phone, or fax, such sales
were relatively rare because the consumer had to know in advance where to make
contact and what to buy. The Interne t al lows sellers to put their storefronts,
in the form of Web pages, in front of consumers all over the world. Technology
has expanded t h e consumer marketplace to an unprecedented degree, and it
will change the way we think about trade. The implications of this for economic
development, globalization, and cultural exchange are immense . This
creates opportunities for both consumers and small enterprises that must not be
squandered. But for all the potential of global e-commerce, there are countless
vexing policy questions to be worked out, any one of which can threaten the
viability of this nascent form of trade. All of the Internet issues being debated in
the United States — consumer protect ion, data privacy, taxation, content regulation, copyright, spam, technology deployment , and many more — need to be
resolved at the international level as well .
However, unlike the United States ,which has a federal government and a
constitutional guarantee of free trade, global ecommerce faces two additional
serious complications: no central international authority to make the rules and
regulations and no uniform commitment to global free trade . Moreover,
conducting electronic commerce across national border s adds many more policy
issues to the mix — jurisdiction, customs duties, import and export restrictions , intellectual property licensing, and more — that are only now being examined.
TABLE OF CONTENTS
Executive summary
Introduction of the topic
Scope of the study
Objectives
Acknowlegment
Research methodology
I. Conceptual Framework
Global trends in E-Commerce
E-commerce in India
E-Commerce in Global Sourcing Scenario.
Security concern in e-commerce
E-commerce: A Boon for the Current Economic Downturn
Key Reasons for success of e-Commerce
Factors affecting Distribution and form of Global e-commerce.
o Buying and selling online.
o Advertisement and searching phase.
o Payment phase
o Delivery phase.
Brief review of literature on e-commerce.
II. Summary & Conclusion
INTRODUCTION
E-commerce (electronic commerce or EC) is the buying and selling of goods and
services on the Internet, especially the World Wide Web. In practice, this term and
a newer term, e-business, are often used interchangably. For online retail selling,
the term e-tailing is sometimes used
Electronic commerce is generally considered to be the sales aspect of e-business. It
also consists of the exchange of data to facilitate the financing and payment aspects
of business transactions.
E-commerce can be divided into
E-tailing or "virtual storefronts" on Web sites with online catalogs,
sometimes gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts
Electronic Data Interchange (EDI), the business-to-business exchange of
data
E-mail and fax and their use as media for reaching prospects and established
customers (for example, with newsletters)
The security of business transactions
Today Ecommerce is an integral part of business because of various reasons like:
Ease of use & Accessibility all across the globe
Great variety & easy compassion of products from different vendors
Trusted payment channels
Shopping can be done sitting in the convenience of home shopping, hence it
is less time consuming. It is therefore very important for any new
entrepreneur to understand the significance of E-Commerce and should
know how to utilize this tool for the growth and development of business.
So, whether you have an existing business or launching a brand new business,
whether the volume of your business is large or small, you can always generate
profit by demonstrating your products or services online, thereby acquiring a large
amount of viewer exposure. In concise, buying and selling will result in profits and
returns.
There are so many factors which makes e-commerce to come to the fore front in
today's world. Saving precious time involved in business transactions is really a
prominent factor. Like for instance, net banking makes it easy to carry out money
scenario. This asserts the fact that Ecommerce is beneficial to both business and
consumer wise as payment and documentations can be completed with greater
efficiency and reliability. Another important factor determining the flow of whole
business is connectivity. Connectivity is very important for both consumers and
business. Ecommerce provides better connectivity for all the potential candidates
all over the globe, thus helping in enhancing the business without any geographical
barriers. From the view point of the customer, Ecommerce is a good platform for
hassle free shopping by sitting in your home. The customer can browse through all
the products and services available and can review and compare the prices of the
similar products available in the online space.
In global market scenario, the emergence of Ecommerce as a forerunner has
opened up various windows of opportunities for a variety of online companies and
investors. More and more resources are being directed into electronic securities,
internet facilities, business plans and new technologies due to the boom in the
space of E-commerce. As a result various new markets have emerged from
RESEARCH METHODOLOGY
Sources of Data
For having the detailed study about this topic, it is necessary to have
some of the secondary information, which is collected from the
following:-Books, Websites and Newspapers. So in this basically
secondary data
is used in collecting the information. The sources of
data are:
Websites:
Wikipedia
Wikinvest
India-commerce
Newspapers:
Hindustan Times
Type of Study
The research design or type of study specifies the methods and
procedures for conducting a particular study. The type of research design
applied
here are “Descriptive” and “Desk Analysis” as the objective is
to have knowledge about the ecommerce in global Scenario. Descriptive
study means situation, but not the causal linkages among its different
elements. Descriptive studies (such as a cross-sectional study) help in
generating hypothesis on which further research may be based. Desk
analysis is to Gather and analyze information, already available in print
or published on the internet.
CONCEPTUAL FRAMEWORK
Global trends in E-commerce
Government programs are a significant vehicle for c-commerce
implementations
Retail, grocery and logistics industries are the most active in encouraging
trading partners to implement EDI
Small and medium sized companies demand flexible integration solutions
European companies focus on core competencies and outsource technology
to consulting groups
High percentage of first time implementers seek to achieve full integration
Organizations are seeking a scalable, reliable system that is easy to deploy
and manage
Software needs to be capable of handing different business processes and
must integrate with existing IT investments
As social media, app stores and global availability become standard, many
companies are looking to enhance the online customer experience. And while retail
and other transactions via Internet are customary, more than ever companies are
make online purchases. Here are eight trends happening right now in global
e-commerce that seek to enhance the user experience:
Micro-payments – Among the most revolutionary changes in the coming
months — not years — is the use of micro-payment systems from a variety of
financial firms, e.g., Paypal, Visa, WesternUnion, among others, including
banks. This trend is facilitated by the W3C working group that approved
these protocols and technical standards for the interworking. These systems
will change not only how we carry money but how we value money and
think about purchases. (Consider how a purchase of $4.99 feels in a mobile
app store vs. at Dunkin' Donuts.) Payment systems that make it easier to
buy online, coupled with mobile technologies will accelerate the usage of
global e-commerce applications.
Mobile technologies – More people access the Internet on their mobile
devices than on any other device. We are rapidly approaching the time (if we
are not already there) where designs must be created for the mobile Web
first, and for the desktop second. Mobile technologies facilitate comparison
databases, a consumer could snap a bar code in Walmart and quickly reference
product reviews and prices on walmart.com (or compare prices with Walmart
competitors). Mobile technologies also facilitate impulse buys – especially with the advent of micro-payments tied to the mobile device. Just recently,
Starbucks customers can not only place an order with their Smartphone, but
also make a purchase.
Social media – As Facebook has become the most visited site on the Web,
the role of social media, including Facebook and its local clones such as
Twitter, is increasingly important. Social media sites increasingly act as
points of entry to e-commerce sites, and vice versa, as e-commerce sites
build rating, loyalty and referral systems tied to social media. Group buying
(e.g., Groupon) is also gaining mainstream ground, with many "deal of the
day" sites competing for an increasingly savvy consumer base, but
improvements lie ahead as the social aspects and user experience are refined.
Fulfillment options – I believe that users will want to have multiple
fulfillments and return options when interacting with a vendor: ship to
address, courier, pick-up in store, return to store, etc. Having many
fulfillment options is how customers view their overall customer experience.
Some companies have made a business proposition online by being
exceptional in service to the online channel (e.g., Zappos).
Global availability – Increasingly, consumers want the availability to buy
products from foreign sites and have them delivered locally. Thus, currency
and customs will be of growing concern to many online retailers. Along
with this, there will be concerns with local privacy laws and restrictions on
related data collection and storage.
Localization – While the trend is to globalize, what’s often more important
is to localize. User Centric’s research clearly shows that sites that ‘feel’
local – with proper imagery, language, time/date, weights/measures, currency, etc. – resonate far more than sites that seem culturally distant or sterile.
Customizability – Consumers want control, and want to be able to design
the details of the items they purchase.
Time-based availability – Some of the hottest and most successful sites are
those that have a time-critical response component. Sites like Groupon, Gilt
and others capitalize on the perception of limited-time availability. Creating
E-COMMERCE IN INDIA
New Gold Rush in E-commerce in India
Kunal Bahl, founder- CEO of e-commerce site Snapdeal.com bought out
eSportsbuy.com for an estimated of Rs.50 crores.
Bahl has 20 – million (Rs. 100 crore) stash for acquisition-significant because Snapdeal is itself a startup-but a rich on. It has raised Rs.52 million from ventures
funds.
Bahl is not alone who is scouting for potential suitor. In February this year
aggressively online shopping site Flipkart.com acquired rival Letsbuy.com. Early
last year, US- based social buying site Groupon acquired India’s SoSasta.com and
renamed it as Crazeal.com.
And so it seems that e-commerce is not about customers buying goods. It is about
firms shopping for others. Industry trackers say leading sites are gobbling up rivals
to build size, or acquiring customer niches either to add product segments or to get
technologies that help efficient operations.
In the game in which future share issues are on the radar for bigger players, the
smaller ones often prefer to cash out than be crushed in lonely pursuits in an
At stake is a huge market will growing potential because India has 900 million
mobile phones, with a big chunk of that growing up from voice talk to Internet,
wile the current Web user base at more than 100 million is in itself a significant
number.
Industry estimates say India’s e-commerce market will zoom from the current Rs.51000 crore to Rs.10,20,000 crore in revenues by 2020. The race lead to
buyouts-often at the cost of profitability.
“At present sites are falling over each other to offer deep discounts, but you do not
survive only through discounts. This only creates a disloyal discount shopper who
moves from one site to another in search of the cheaper deal,” said Mahesh Murthy
, managing partner of investment firm Seefund Advisors. Murthy added that sites
without a credible differentiation strategy and loyal customers base would
bleed-and will be up for grabs.
Experts say acquisition of other sites is also a good strategy to built brand and
broaden a loyal customer base. Snapdeal.com snapped up eSportsbuy.com to get
access to its large catalogue of sports and fitness products. Flipkart.com started out
with books, added cameras and mobile handsets and then got Letsbuy.com to
“There in no room for newer players in the general category but there is space for
niche category players,” he said. This has been observed by Prashanth Prakash,
partner at Accel partners, which has invested in Flipkart.com.
Private enquiry is doing a huge amount of work backstage. Venture capitalists say
they more than doubled the funding level in e-commerce over the past year, and
the average size of investment has ranged from Rs.20 to 40 million.
However, having a deep pocket is no guarantee to success. “Money can only delay
your death. The only key to survive is to have a credible differentiation strategy,”
Murthy said.
Size is not everything, but could help if investors have a sense of timing. “As the e -commerce companies grow and get brand loyalty the valuations are expected to
increase even further. It will be the time when we can offload our stake, for hefty
profits,” a venture capitalist with significant stake in leading e-commerce site.
Hundreds of Internet startups went bust in 2000 and 2001 in the “dotcom bubble”
and comparing the current e-commerce rush to that may not be farfetched said
Shailen Amin, co-founder and CEO of footwear sites Bestylish.com.
“There are a lot of guys in this business who don’t have a retail background. They
are form either consulting or technology. So one should ask if they are really
In the world where old-fashioned retail meets high-technology and innovative
management, the winners could well be those who understand dimensions.
What the consolidation?
High operational costs affect profit margins.
Most e-commerce sites compete on deep discounts, which hit their
margins.
Some firms feel the time is right to cash in on brand, customer base.
Private equity (PE) and venture capitalists (VC) are eyeing safe exit
while e-commerce ventures are still profitable.
What makes a Long-Term Player?
Loyal customer base, fundamentally strong business models, clear
product/service differentiation.
Deep pockets to tide over initial gestation period.
Challenges for E-Commerce Sites
Low customer loyalty
High returns rates on cash-on-delivery
State of Play
Acquiring site is a good way to built brand, broaden loyal customer base and
add categories.
The companies that are selling have real valuations, real transactions and
real customers, and are not based on eyeballs.
E-commerce companies in India offers the most tangible and finest e-commerce
solutions, provide high end e-commerce solution taking utmost care of the privacy
and security of the e-commerce website. E-Commerce service includes shopping
carts, database programmers, graphic design services, graphics, e-business, Flash
TOP TEN E-COMMERCE COMPANIES IN INDIA
20North.com:
This website offers variety of products like electronics ,books ,music ,movies ,car
accessories. The site also offers lucrative deals. Log onto the site to shop. Happy
Shopping!!!
99labels.com:
This site offers many fashion and luxury brands at good prices. Check this site for
more brands .
Dealsandyou.com:
This site offers various kinds of deals be it holidays, shirts etc. Also this site gives
heavy discounts on regular basis that cab be profitable for the shoppers. Browse
this site for more.
Fashionandyou.com:
This site also is a great place to shop and that too sitting at home. Also this site
declares sale and heavy discounts almost every day. Sign Up today to get more
Flipkart :
This site offers various kinds of products and that too at one place. Mobile, its
accessories , books, camera and laptop accessories. and many more things are
available on this site. One can find deals for home appliances also that are
available at affordable prices. Check this site
Indiangiftsportal:
This is known for providing gifts for various occasions like birthdays ,anniversary,
wedding, bhai dooj, diwali and many more .Also flowers, cakes ,chocolates and
many more things are offered by this site. Browse it today to send gifts to your
loved ones.
MagazineMall:
This company specifically deals in magazines and one can get magazines of
different and unique categories like Gardening/Housekeeping, lifestyle,
Bindaasbargain:
Here new deal comes everyday at 10 am and it is India's first One Deal A Day
online shopping site.Check out the site for new deal. Happy Shopping
Buytheprice.com:
The site offers Mobiles, Computers, Cameras, Home Appliances ,Life style, Audio
and Video and much more. Variety of products are available under each category.
Perfume2order:
It has categories like Perfumes for Men, Perfumes for Women, Deodorants & Deo
Stick, Perfume Gift Set, Designer Wallet & Belts, Flowers, Handbags & Clutches,
E-COMMERCE IN GLOBAL SOURCING SCENARIO
What Is E-commerce And How Does It Augments Global Sourcing?
E-commerce or electronic commerce, as it is popular, allows domestic as well as
international trade over the Internet. The advent of E-commerce is boon for global
sourcing and import and export. The boost to global sourcing and import/export
through E-commerce is because of its to conduct online marketing, monitoring
supply chain and monetary & data transaction in a dependable manner.
Evolution of E-commerce with Global Sourcing?
It is hard to tell whether import/export volume has swelled because of E-commerce
but sure it made global sourcing easier to monitor with its evolutionary phases.
Three decades ago, it facilitated fund transfers- albeit electronically besides
facilitating exchange of POs and invoices in international trade. Electronic teller
machines are the recent manifestations now overtaken by internet creditcard
processing and endorsement of unsigned invoices even in international trade.
Looked at from both import and export traders' perspective, international trade is
easier conducted electronically. Here are the points why present international trade
depends much on E-commerce.
Quick and ease of setting up E-commerce storefronts for both global
sourcing as well as import/export.
Automatic running off of an import and export outfit without having to
recruit many staff.
Global sourcing agents/companies can evaluate/list import/export vendor
Online.
Software assisted documentation for each global sourcing and import export
transaction
Ability to handle multiple, quick and secure data and money transaction
crucial to international trade, simultaneously
In international trade, global sourcing happens to be one of the chief aspects of
import and export business. Global sourcing is an integral part of B2b scenario and
has essentially transformed world economies as well as boosted business in a great
way. Nonetheless, it is also giving great transformation to the work culture around
transforming work cultures around the world silently with China business playing a
major role.
Being an extension of open market dynamics, global sourcing facilitates the export
and import of goods to be in the reach of several small and medium enterprises in
different countries. In this b2b scenario, E-commerce plays an active role in the
global sourcing where the business houses are putting in deep efforts and reaping
the benefits. In this rally of export and import, traders happen to claim the share of
the pie in global sourcing.
E Commerce & Global Sourcing
Global sourcing is one of the widely known strategies of ensuring smooth
business and access to markets in a cost effective manner. In such a scenario,
E-commerce has brought in a new transformation. It has added to
advantages like removing the barriers of time zones, differences in costs,
geographical locations etc. This has resulted in a major push in development
in infrastructure, technology and several other sectors across the globe. As
we see, E commerce is driving the export and import and propelling the
economic growth of numerous developing as well as developed nations.
Business strategies are becoming easy to execute and business houses are
having a wide range of options from where they can make their choices.
E-commerce has made the path of business smoother and has facilitated not
only in lower cost, but also resulted in procuring material from places where
there is specialization. Moreover, business negotiations are easier and
decisions are quicker due to this boon. Driving the import and export
business in this global sourcing scenario has opened new frontiers for higher
growth. The ease in supply chain is one of the best advantages that has come
from e-commerce in the global sourcing scenario.
China, a major player in the global sourcing scenario has reaped several
benefits in the e-commerce enabled era. The use of internet has facilitated
trade and boosted it at an immense rate. Business from all over the world has
been bagged by this country in spite of the competitive market. Chinese
traders have minted fast money and are still running in that race.
Security concerns in Global Sourcing
E-commerce is not without security concerns, loss/misuse of encrypted data which
are still being seriously being viewed by import/export operators before engaging
in international trade electronically. The truth is E-commerce providers employ
SSL (Secure Sockets Layer) to encrypt data/money (remember banks) transfer
from your desktop to your clients'. You can say, E-commerce is secure for both
E-commerce has arrived on the global sourcing scene as both import and export
and international trade partners are accepting it. Despite its growing stature and
popularity E-commerce is still thriving in retail sector domestically and the
international trade needs to cover a long distance before it catches up. Another
reason for import/export operators' leaning towards E-commerce is the growing
costs of delays in processing POs and invoices through traditional methods which
render global sourcing useless.
E-commerce: A Boon for the Current Economic Downturn
E-commerce: A Boon for India
By the end of 2011, the e-commerce market in India had clocked close to Rs
50,000 cores. It is interesting to consider whether the global economic downturn
may have negatively impacted the growth of e-commerce or possibly accelerated it
as consumers look to new online channels which can often deliver greater value
than traditional stores.
Today, even though there are less than 10 million internet users who are actually
engaging in e-commerce activities, there are about 150 million internet users in
The growing reach in terms of internet connectivity to the interiors of India
coupled with the positive experiences of end consumers when buying online
beyond the metros and big cities are key drivers of the e-commerce boon in India.
Businesses in even the smallest towns and villages are becoming increasingly
aware of e-commerce and are excited by the growth potential.
The growing penetration of e-commerce along with positive consumer experiences
is reflected in a trend towards higher value online purchases. Today, consumers
across urban India are confident enough to make purchases that exceed Rs
20,000-25,000. Earlier, the same shoppers stayed in the Rs 2,000-5,000 ranges. According
to one study almost 57% of business for e-commerce product sites came from tier
I, tier II and tier III cities while the eight metros accounted for the remainder 43%.
The same pattern was visible in the service sites too, with tier I, tier II and tier III
cities contributing 54% of revenue versus 46 % by the eight metros.
According to a report by the IAMAI, the current e-commerce market in India is
around US$ 10 billion. But with different levels of adoption, the market has the
potential to grow anywhere between US$ 70 billion – US$ 150 billion under one scenario and at another level it can grow between US$ 125 billion – US$ 260 billion by 2024-25.
E-commerce: The world over
Globally, the scenario is much the same. Brazil, one of fastest growing
economies in Latin America, is seeing considerable growth. According
to a recent report, it estimates business-to-consumer (B2C) ecommerce,
including both retail e-commerce and online travel sales, will total to
$18.7 billion in 2012, a growth of
21.9% over the previous year. Brazil will account for more than half of
the total B2C e-commerce sales in Latin America through 2013, thanks
in large to its huge populace and growing number of online buyers.
Retail e-commerce itself in the U.S.is predicted to grow at 17% and it
will likely account for $200 billion in sales in 2012 , according to a
presentation at a popular forum. Retail e-commerce totalled $48.2 billion
during the third quarter of 2011; an increase of 13.7% compared with the
third quarter of 2010, according to estimates from the U.S. Census
Bureau. 2011 also saw the European online market boom despite the
floundering euro. Germany’s online trade increased 17% in 2011 to
€21.48billion compared to 2010, crossing the €20 billion mark for the
first time, outstripping traditional mail order sales by 10%. A similar
growth rate of 10% to 15% is expected in 2012.
In the global scenario, China is fast emerging as the biggest player in
e-commerce. According to an e-commerce report, by 2015, it may well
surpass the U.S. In an astonishing illustration of its online growth rate,
China has added the equivalent of the entire population of France in
internet users in each of the last four years. It will add the equivalent of
the entire population of Canada as e-shoppers in each of the next four
years. China is projected to rise from 145 million e-shoppers today to
329 million by 2015.
KEY REASONS FOR THE SUCCESS OF E-COMMERCE
Shopping 24x7
: E-commerce facilitates shopping anytime,
anywhere and for almost anything desired. Busy consumers prefer
this to the restrictions of when a mall/shop is open and the need to
physically travel to a shop. Online business takes shopping a step
further by taking itself to the customer creating conveniences of
shopping anywhere and at anytime.
Reduced operational cost:
Since the entire business can be
moved online, the need for physical stores has become obsolete.
Less infrastructural investment and associated labour costs drives
up the profit margin. The seller can then transfer this benefit to the
customer in the form of discounted pricing which boosts the appeal
of online shopping
.
Easy to compare:
It is far easier and quicker to compare prices of
decide the right price or terms for themselves. The comparison is
not restricted to items from a single seller, or a single region. One
can explore products across global markets via e commerce.
Safe & secure
:Customers can trust the process of going online and
purchasing only when transactions are fast, convenient and secure.
A high degree of integrity is possible only when the online
electronic payment provider is reputable and trustworthy. In India,
all payment transaction providers are required to comply with the
security requirements laid out by the Reserve Bank of India
making the system more robust and reliable.
Increased reach for the merchant
: Just as the customer finds
them able to venture across geographic markets, the merchant too
is able to display his product to customers in new territories.
Market penetration also becomes far more achievable with
e-commerce; it is possible for a merchant in Mumbai to extend his
reach to north-eastern cities or even rural villages that are now
connected by the online network.
Social media trend
: In India, with the increasing propensity of
social media, businesses have now begun to engage their
customers on social networking portals such as Facebook.
Promotions, sales and new products are increasingly showcased
through such channels and mobile apps are now available that
suggest products to users based on their profiles. These are likely
to be rapidly developing marketing channels for the future.
The e-commerce world is changing rapidly in the digitized world. These
e-commerce developments may have been accelerated by the global
economic downturn which may be driving consumers to find new ways
of reducing their costs of living. The online channel offers a clear value
proposition for both merchants and consumers making it the most sought
Brief Literature Review
In present scenario E-Commerce is playing very essential role in the online
business. Although it is one of the best & cheapest intermediate for reaching out to
new customers in the online market, if e-commerce implemented effectively, it
also offers a smart way of doing online business & expanding it more.
An online business eCommerce podium is planned & implemented to make the
most of its reach to potential customers and provide them with a convenient,
satisfying & protected shopping experience.
Advantages of E-Commerce to the Online Business
E-Commerce helps to Increase the sales revenue to the business
Business people can spend less money and earn high profits with e-commerce
It is very Easier to scale up online
Easily we can track the segment of customers who are happy with purchasing
goods through online
Avoid losing sales to competitors who are online
Instantaneous global sales presence in quick time
We can Operate the business in 24 *7 basis
Easily we can increase our business customers
We set up shop anywhere in the world, self-governing of geographical
Inexpensive way to turn your Web site into a revenue center
Reduce Customer Support costs via e-mail marketing & customary newsletters
We can create customized mailing list
Easily we can drive free traffic to the website
Instantly we can develop our business across the internet by using various
e-commerce strategies
Customers can easily buy their products by using different payment gateways
Develop more shopping carts by using e-commerce
We can easily promote our business website by using various promotional
activities such as Search Engine Optimization, Pay Per Click Management,
Email Marketing, Social Media Optimization, Online Banner Advertisement,
Online Branding and Affiliate Management etc
B2C - business to consumer
In the Australian context B2C (business to consumer) trading activity has
been slow to take off as at first consumers had doubts about the security of
credit card transactions.
Initial B2C trading focused on music CDs, software and books - items which
were compact and easily shipped and where prices could be slashed once the
a good example of this. These products pushed the perimeters of the market
out for goods bought on-line.
Books and CDs are relatively generic products. A CD bought in the US will
have the same music and quality as one bought locally (the exception is the
cover art) and so there is no doubt in the consumers mind exactly what the
product is. This is not the case with clothing, where sizes can confuse the
purchase decision... and where tactile senses figure strongly in the
purchasing decision.
Ebay has really transform purchasing behaviour on the web. Many people
have made their first ecommerce transaction on Ebay. Many people sell on
Ebay too, given raise to the work-from-home/drop shipping model of
ecommerce.
Interestingly though B2C transactions of previously localised or hard to find
products can be extremely strong. If you have a unique product that is highly
relevant to a niche audience, you are likely to do very well on the web.
Although sales are increasing rapidly on the Internet, the volume of turnover
figures continue to fail short of industry estimates. But as retail web sites
become more navigable and privacy policies are displayed, more people will
B2B - business to business
On the Internet, B2B (business to business) is the exchange of products or
services between businesses rather than between businesses and consumers.
Although early interest centered on the growth of retailing on the Internet,
forecasts are that B2B revenue will far exceed B2C revenue in the near
future.
According to studies published in early 2000, the money volume of B2B
exceeds that of B2C by 10 to 1. Over the next five years, B2B is expected to
have a compound annual growth of 41%.
Payment Gateways
Both PayPal and Paymate offer credit card to bank account payments. Using
one of these services you can invoice a customer, they can pay on Paymate
and the funds will be deposited in your bank account ... less a transaction
fee.
Unlike a credit card merchant facility you will not have ongoing, minimum
monthly fees... and the transaction fee is better than what most card
companies offer small merchants. Additional these service are being backed
into other ecommerce sites and shopping carts. Ebay for example uses
The Rise and Rise of Auction Sites
Auction sites such as Ebay and TradeMe have done an enormous amount to
get ordinary people involved in online trading. Today many Ebay merchants
are establishing their own web sites to avoid Ebay and Pay Pal fees. They
have learnt about how to present their product in their Ebay store and what
issues are important to their customers in purchasing their product and now
they are ready to start their own web site.
Security
On the Internet, security is handled by passing "keys" between Internet
server and client browser. When entering a secure site your browser is
passed a public key by which transactions between you and the web server
are encrypted. The servers key is always kept private.
On your web site security can be handled two ways - depending on your
budget. You can "piggyback" on someone else's "key" or you can register
and pay for your own key or SSL certificate at Thwate or Verisign.
Generally today businesses who host web sites offer access to a secure
server and you can use their server and secure certificate for less than if you
However the person browsing your site will notice the URL change to one
they do not recognise - or trust. This may put your customers off (although
there is no evidence of this). Therefore one of the advantages of buying your
own key would be to have a URL for your secure pages that is consistent
with the rest of your site.
Presently, in Australia, Verisign may sell you a key for over $800 while
foreign ecommerce providers like Instant SSL can sell it for $150. Although
Verisign will argue that their key comes with a range of value add benefits,
SUMMARY AND CONCLUSION
There is a wide acceptance of e-commerce in world due to the internet
facilities available.
The countries such as India, Brazil, and China etc which are on the path of
development are using e-commerce for carry out various transactions.
The e-commerce can surpass geographical limits and can prove to be worthy
by reaching to customers. It caters to the demands of both the national and
the international market.
The e-commerce can help in providing an edge to your rivals in the market
as one can better serve them globally.
The Countries such as USA, Australia, Canada , UK etc are trying to come
up with something innovative which will change the current scenario.
The countries are well aware of its benefits and are becoming more
innovative in this field as customers can easily select products from different
providers without moving around physically and it also help business to
CASE STUDY
eBay: Global Garage Sale Today,
eBay is the leader of world e-commerce. The company is a highly notable success story of the dot-com bubble. Although it has been a subject to some controversy, eBay is one of the most successful companies in the history of American businesses. The company has been in business for more than 16 years, growing faster than any other company in the world during this time. It now runs an online global market, holding in its hands a business with more than US$40 billion in automobiles, clothing, computers, paintings, numismatics, arts, and everything else. eBay’s first and most famous motto inviting sellers and buyers to its worldwide convention and flea market was “Come to think of it, eBay”. Today, more than 430.000 people earn all or most of their income from selling products on eBay. If they worked for the company, eBay would be the second largest employer in the United States after Wal-Mart Stores Inc., which was listed as the world’s largest public corporation according to revenues by the Forbes 2000 list in 2010. eBay conducts more transactions every day than the NASDAQ Stock Market or the New York Stock Exchange. It has more regular users than American Express has cardholders. More than US$80.000 worth of goods and services change hands on the site every minute. No company ever has created more opportunities for their customers, which is why eBay’s royalties run deep. Every year the company hosts a conference called “eBay live”, where buyers and sellers from around the world gather for a three-day celebration of the eBay experience. NG, št. 3– 4/2011 Strokovni članki – Professional papers The current paper takes an unprecedented look inside this company, which — in a remarkably short period of time — has moved itself into the fabric of American culture and beyond. Even one of the most popular TV shows in America “Live with Jay Leno” has a section of the show entitled “Some of the stuff we found on eBay”. During such segments, Leno shows funny items sold on the site, such as a picture of Jesus\ Christ with his autograph and a Doritos potato chip that looks like the Pope’s hand. Other bizarre items include
nuclear bombers, submarines, Soviet space capsules, and a grilled cheese sandwiche with the picture of a Virgin Mary on it. However, eBay is not about selling funny or bizarre items. It is much more than that. Within three of starting eBay on Labor Day weekend in 1995, Omidyar (1942) — the founder and chairman — had become a darling of Wall Street and the media. Omidyar was born in Paris to parents of Iranian origin, who moved to Washington DC when their son was six years old. His background was originally in software engineering. He graduated from St. Andrew’s and soon after earned a degree in computer science from Tufts University (Bachelor of Arts/Science), planning to take over the Internet world. Omidyar once said that he invented eBay in his free time solely because he had an interest in efficient markets. Omidyar is now one of the world’s richest men and belongs to an elite group of Forbes 400 mavericks based on the 2008 list. On October 3, 2009, he was listed as the 156th richest person in the world by
Forbes’ The World’s Billionaires List. Fortune estimated his wealth to be US$1.6 billion based
on surging eBay stock prices, with shares increasing up to 115 percent in 2009. Four years after its foundation, in September 1999, eBay made a debut on the NASDAQ Stock Market. It went public with an initial public offering (IPO) that raised more than US$60 million. Investors were attracted by the fact that eBay would not have any money invested in inventory. In four months, the stock experienced a 17-fold rise. It went public at $18 and closed at $203 (Crane 2009, p. 4). Today, Omidyar and his wife are well-known philanthropists who founded the Omidyar Network in 2004. Another important figure in eBay is Margaret Meg Whitman (1956), who was the CEO and president of eBay from 1998 to 2008 and served on its board of directors. When she joined eBay in March 1998, it had 30 employees and revenues of approximately US$4 million. This businesswoman was proclaimed by Harvard Business Review and Forbes as the most powerful
woman in American business. She graduated from Princeton University (B.A.) and Harvard Business School (MBA). Whitman called eBay the first global online marketplace to connect buyers and sellers 24 hours, seven days a week across the globe, without having to see or hear
each other. eBay has fundamentally changed how and what people think about trade. No one was thinking of eBay as a global marketplace when Whitman took over as CEO in 1998. At the time, eBay was a small business that traded Beanie Babies. Today, its headquarters are located on two huge campuses in San Jose, California; the company also has a customer service in Salt Lake City and operations in more than 30 countries. When they started with promotion on television, eBay had approximately 9.000 employees and 135 million customers. By the first quarter of 2008, it had 15.500 employees. In 2009, it had annual revenues in excess of US$8,727 billion. Records show that five years ago, more than 1,8 billion items were listed for sale. Today, approximately 120 million items are listed in eBay stores, a place where sellers can show all of their items. At any minute of the day, eBay knows exactly where its money is coming from. Every time an item is listed on a site, eBay gets a fee; once the item sells, eBay gets another fee. Additional fees are associated with listing pgrades, picture services, and stores. On average, eBay’s stake in a sale of an item is roughly 7 percent of its selling price. In 2005, its fees added up to US$4.2 billion. eBay also collects fees from its online processing center, PayPal, which is eBay’s paying system that provides up to $1000 in insurance to both buyers and sellers. PayPal is a form of an e-commerce business as well, allowing payment and money transfers to be made via the Internet. Prior to PayPal, people used traditional paper methods (e.g., checks and money orders) for the payment of services. PayPal provides an electronic alternative to these methods. A PayPal account can be directly connected to an electronic debt from a bank account or to a credit card. A recipient of a PayPal transfer has two alternatives; request a check from it and establish his/her own PayPal deposit account or request a transfer to his/her bank account. This intermediary service clearly facilitates worldwide e-commerce. PayPal also charges fees to clients, including transaction fees for receiving money (i.e., a percentage of the amount sent together with an additional fixed amount). Generally speaking, the fees charged depend on several factors, including currency, payment option, country of the sender, country of the
recipient, amount, and recipient’s account type. In addition, eBay purchases made by credit card through PayPal may incur a “foreign transaction fee” if the seller is located in another country. In such cases, the credit card issuers are automatically informed of the seller’s country of origin. Thanks to eBay’s great cash flow, in October 2002, PayPal became its wholly owned subsidiary. Five years later, PayPal began operating as a Luxembourg- based bank. Since March 2010, it has had an agreement with the People’s Republic of China bankcard association called China Union Pay to allow the People’s Republic of China to use PayPal to shop online. Today, PayPal, as a subsidiary of eBay, is planning to expand its workforce throughout Asia to include 3.000 employees by the end of 2011 (The Economist, July 2010, p. 38).
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