E-Commerce

Role of E-Commerce in developing businesses
Akhil Agarwal and Jitendra Bansal PGDM 2010-12 (Institute Of Management Technology, Nagpur) Abstract
E-commerce is a method of buying and selling of information, products and services electronically. It can be defined as modern business methodology that addresses the needs of the organization, merchants and consumers to cut costs while improving the quality of goods and services and speed of service delivery. This paper introduces about the Use of ecommerce, its growth, opportunities and challenges in India and particularly for the development of small and medium size enterprises.

banking, ticketing (including airlines, bus, railways), bill payments, hotel booking etc. have been of tremendous benefit for the customers. The process of innovation, growth of online marketplaces and technological developments are spurring e-Commerce by improving the interface between buyers and sellers and bringing them closer. There are lots of advantages offered by ecommerce to business which allows companies to:
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Introduction
The cutting edge for business today is ecommerce. Most people think e-commerce means online shopping, but web shopping is only a small part of the picture. The term also refers to online stock, bond transactions, electronic trading of goods and services, online delivery of digital content, electronic fund transfers, electronic share trading, electronic bills of lading, commercial auctions, Online sourcing, public procurement, direct consumer marketing, and after-sales service, buying and downloading software without ever going to a store. E-commerce provides multiple benefits to the consumers in form of availability of goods at lower cost, wider choice and saves time. People can buy goods with a click of mouse button without moving out of their house or office. Similarly online services such as
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Address an ever rising population of online users Access unlimited shelf space Remain beyond the boundaries of operational timings and geographic distances Cater to countrywide city markets (for consumers and suppliers) at low costs Deliver digital content online Conduct online sourcing or public procurement

Type of E-commerce
There are six type of e-commerce are defined which are as follows? ? ? ? ? ? B2B(Business to Business) B2C(Business to consumer) B2G(Business to Government) C2C(consumer to consumer) G2B(Government to Business) G2C(Government to consumer)

In India most of the transactions are done under B2C category.

1. E-Commerce in India
For developing countries like India, ecommerce offers considerable opportunity. Indian middle class of 288 million people is equal to the entire U.S. consumer base. This makes India a real attractive market for ecommerce. Some facts about e-commerce in India? There are some 8000-10000 ecommerce websites in India for ecommerce in which 1500-1600 are government owned. The first company, that launched Internet services in India, was stateowned Videsh Sanchar Nigam Ltd (VSNL) in August 1995. The majority of Indian Web sites are being registered in the zone of Indian domains: .in or .co. in. The registration is cheap enough as a two year contract costs just $99. First e-commerce site supporting Hindi was launched in India i.e. ezeego1.com, the country??™s first meta search travel site to book flight tickets on domestic circuits.

81,000,000 that means that 7.1% of Indians are the users of the Web. Totally the number of users in India makes up 12.5% of the whole Asia. The study also shows the following figures: ? E-Commerce transactions has crossed the Rs. 2300 crore milestone in 200607, a jump of around 300 percent from the 2004-05 figure of Rs. 570 crore. The average number of online transactions has increased from 4.4 lakhs in 2004-05 to around 7.95 lakhs per month in 2005-06, a growth of a healthy 80 percent. In 2007-2008, Delhi and Mumbai have contributed 30% and 40% of the e- shopper population respectively. 88% of online shoppers in India are male, with 86% having at least a bachelor??™s degree. Indian citizens use Internet for a number of activities including e-mail and IM – 98%, job search ??“ 51%, ebanking ??“ 32%, bill payment -18%, stock trading ??“ 15%, and matrimonial search ??“ 15%

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1.2 SME Segment in India
In India, ???small and medium enterprises??™ (SME) is a generic term used to describe small scale industrial (SSI) units and mediumscale industrial units. Any industrial unit with a total investment in its fixed assets or leased assets or hire-purchase asset up to Rs10 million is considered as a SSI unit and investment up to Rs. 100 million is considered as a medium unit. SME sector in India is the key driver of the nations economic growth with a contribution of over 40 percent of the countrys industrial output and about 35 percent of direct exports and another 15 percent of indirect exports. In terms of employment it is a very crucial

1.1 Current scenario of E-commerce in India

According to a 2008 Report brought out by the Internetworldstats.com, there is a significant 1,520% growth during the period of 2000-2008. In 2000 just 0.5 % of the population (or 5,500,000) appeared to be Internet users. In the year 2006 the number was 40,000,000 (or 3.6%). According to the Internet Service Providers Association of India (ISPAI) in 2006 broadband usage in India was growing 20% per month. Also in 2008 the number doubled and the amount of people got an Internet access reached

sector being the second largest sector after agriculture and employs 20 million people. SMEs are increasingly seeing the benefits arising from e-commerce as expanded geographical coverage giving them a larger potential market into which they can sell their products and services.

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1.3 E-Commerce and the government
Government is also taking the initiatives to enhance the e-commerce usage in India. In the same chain, to improve the governmentcitizen interface and greatly enhance the customer experience, the Indian railways have emerged as a beacon in the realm of egovernance success stories. Today, India??™s citizens can check the availability of railway tickets, monitor their status (from standby to confirm) and basically purchase train tickets online, greatly easing their lives. E-Commerce has virtually revolutionized the manner in which the railways deliver a part of their services to citizens, making it convenient for ordinary people to buy tickets painlessly and effortlessly.

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Announcement of the national long distance service beyond the service area to the private operators. Complete non-monopolization of undersea fibre connectivity for ISPs on August 15, 2000. Free Right of Way facility, with no charge in cash or kind, to access providers to lay optical fibre networks along National Highways, State Highways and other roads. Permission for interconnectivity of Government and Closed User Group (CUG) networks. The establishment of Public TeleInfo Centres (PTIC) having multimedia capabilities has been permitted. 100 percent FDI has been allowed in B2B e-commerce.

Barriers in the development of ECommerce

Even supporting by the government, yet there are Some of the barriers to ecommerce adoption in India include the following: ? Limited Internet access among customers and SMEs (current level of internet usage is low among businesses and users) Poor telecom and infrastructure for reliable connectivity (Internet connectivity slow, access costs are high and connections are unreliable) Multiple gaps in the current legal and regulatory framework Multiple issues of trust and lack of payment gateways (privacy of personal and business data connected over the Internet not assured; security and confidentiality of data not in place) Law Enforcement Agencies are not fully equipped and trained to deal with cybercrimes

1.4 Government??™s initiatives to boost Ecommerce activity
The Government has been taking key initiatives over the past few years to create an environment that is conducive to E-commerce activity. These include the following:
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Announcement of the Information Technology Act 2000 which put in place a cyber law regime in the country. Announcement of the ISP policy for the entry of private Internet service providers in November 1998. Permission to private ISPs to set up international gateways. Permission of Internet access through cable TV infrastructure. Initiation of the setting up of the National Internet Backbone.

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Possible Solutions to overcome the barriers
? ? Develop e-infrastructure in the country through effective Telecom Policy measures. To launch community information centres that provide broadband Internet access to population in the underdeveloped and underprivileged areas such as in the northeast and hillarea states An appropriate communication strategy needs to be formulated to spread e-commerce awareness among enterprises and public IT education would be a major driving force towards the development, adoption and growth of e-commerce in India. Quality programmes to impart training and IT education needs to be developed by using modern technologies like multimedia, online training and testing etc. IT education could be encouraged by facilitating the setting up of institutes for imparting such education. Currently, 40 per cent of India??™s population is illiterate and only 20 per cent understand English. Since most of the content in Internet is in English or other foreign languages, a large portion of the content and applications is not accessible to a significant majority of the Indian population. So, on one hand local language content and applications need to be developed, on the other hand, voice applications on Internet accessible through a normal touch tone telephone need to be developed. Effective policy framework should outline by the Indian government to minimize the digital divide in the country. Public Key Infrastructure need to be established for issuance of certificates to citizens and government agencies, creating electronic payment gateways for accepting service charges, involving banks and credit card agencies, and establishing service delivery points.

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Legal framework is required to encourage people to perform purchase transactions over the Net through credit cards without fear of misuse. Proper cyber laws and regulations needs to be there to take proper actions against cyber crimes.

Conclusion
A developing country can become industrialized and modernized if it can extensively apply IT to enhance productivity and international competitiveness, develop e-commerce and e-governance applications. An information-based society or knowledge based society is composed of IT products, IT applications in society and economy as a whole. The Internet is boosting efficiency and enhancing market integration in developing countries. The developed world has had a long lead over the developing countries in the telecom infrastructure. But India is set to take lead on many factors. The total number of Internet connections is large in absolute numbers, large enough to have a critical mass of 70 to 80 million users to be able to make an impact on ecommerce and e-governance. In the next 3 to 5 years, India will have 120150 million Internet users which will surpass many of the developed countries. Internet economy will then become more meaningful in India.

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References:
? ? www.internetworldstats.com Internet & Mobile Association of India report on ???Internet Usage in India. Emarketer, January 2008 2005 Report brought out by the Internet & Online Association (IOAI),

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NASSCOM (National Association of Software and Service Companies) July 2006 report on e-Commerce in India: Making a comeback! Newsline Issue No. 57 Department of Information Technology, India report on Initiatives for E-Commerce CapacityBuilding of SMEs in India. 2008 Report by Internetworldstats.com Bank of India (bankofinida.com) SME policy Internet Service Providers Association of India (ISPAI) 2006 Report Assocham report on E-Commerce Industry in India.