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Electronic Commerce, commonly known as e-commerce, has become a buzzword for businesses over

the past few years. With the increase use of computers in various fields and the increase awareness of

communications technologies, e- commerce has indeed gained popularity especially because it helps

to increase effeciency and reduce costs by simplifying business procedures. The potential of e-

commerce is enoromous in India, owing to the rapid growth of the number of internet users. The

enormous saving in time and money achieved by both buyers and sellers is the principal advantage.

The technolgical advancements on all spheres of life are the dricing factors for the spread of e-

commerce in India, as has happened in other parts of the world. (Joseph, 2006)

Selling online has not always been easy in developing countries like India. In 1991, K Vaitheeswaran

founded Fabmart.com now known as IndiaPlaza, India's first e-commerce site. Back then only a small

fraction of the 3m interenet users transacted online. Halting dial-up connections and text browsing

were not cut out for navigating complex payment gateways. Few Indians held credit cards and fewer

still were keen on disclosing their card details. But, nowadays more than 100m surf the web, close to

30m scour for bargains online, and this number grows by 1.5m every month. The industry is worth

around $10 billion today with travel-ticket sales alone accounted for $8.4 billion last year. In 2011,

investors ploughed more than $450m into Indian e-commerce. Flipkart, India's largest online store by

revenue, has so far raised $31m since its commencement in 2007 and the company employs more than

5,000 people. The company aims to hit $1 billion by 2014-2015 with average daily sales of about

$500,000. (Economist, 2012)

In the beginning of the current year, Amazon debuted in India through Junglee.com; a product-

comparison website which aggregates information from different e-commerce sites. There are various

other popular websites for e-commerce market in India.'Snapdeal' , the venture capital of the company

, has reached up to $52m. Myntra, a popular seller of fashion products, has also managed to tap

investors for $40m since its launch in the year 2007. This trend is likely to continue in India. Indians

are young with half of them almost under 25. The country's per capita income has risen by 12%

between 2008 and 2011 to $1,500. The International Monetary Fund(IMF) reckons it will reach

$2.300 by 2016. (Economist, 2012)

Source: (Forbes, 2011), Figure 1: Once more e-commerce is on the lips of entreprenuers and

investors. This time the surge is bigger and better than before.

Nobody saw it coming, nobody wanted it. It was in the year of 1991 Fabmart and Firstandsecond.com

wanted to be the Amazon, the two ginat book stores in India. Rediff was also selling knick-knacks on

its e-commerce channel. Sify had also joined the bandwagon, Apnaloan was promising to 'sell' loans

online, Shaadi.com wanted to find your dream 'other' . In the last ten years, China has created giant-

commerce companies like 360buy, Taobao and Tencent. Russia has Yandex and Mail. Brazil has

Mercado Libre and Buscape. All these companies came about because funding sources in these

geogrpahies did not dry up the way they did in India. Indian e-commerce is playing catch up. The

Figure 1 shows a glimpse of e-commerce industry in India. (Forbes, 2011)

Many beleive that the internet and other advanced digital information and technologies(ADvIT/IS) are

going to the great qualizer between developed and developing countries. Unfortunately, that seems to

be far from the truth. The internet and other ADvIT/IS provide less benefit to developing countries

than to developed countries. The technological infrastructure is easy to put in place. However, the sole

importing of ADvIT/IS is not enough to close that breach. A set of infrastructural deficiencies hinder

the successful accomplishment of the goals that are normally achieved in developed countries when

suing the same technologies. (Kamel, 2006)

E-Commerce has indeed tasted success in India. It has taken Indian Businesses to a new height and

has provided them with much needed global reach and competetive advantage. Moreover, it has also

helped in acquiring new customers, adjusting easily to global reforms, acquiring companies globally,

enhancing foreign product knowledge, reducing the soci-economic factors of the government, and

many other benefits. However, there are certain disadvantages like the product cannot be touch or felt,

expensive items need to be insured before delivery, the products cannot be bargained, delay in

deliveries can happen and many more. These demerits appear negligible when compared with the

merits. Moreover, it is believed that these demerits can be eliminated or improved with time. (Shariff,

2011)

RRAATTIIOONNAALLEE FFOORR TTHHEE SSTTUUDDYY

It is essential to carry out this research as this study will help us understand the movement of

electronic business in India. ‘Internet’ today is a socially acceptable medium where any kind of

information is freely available just with a click away. In most of the developed countries , more than

half of the population uses the web for multiple reasons namely business purposes, online shopping ,

banking, conducting surveys, etc. The growing importance of e-commerce actitivites cannot be

ignored in India. People are becoming increasingly aware of the growing advancement in

technologies . Seeing its multiple use and benefits, many now forsee internet as a boon to the society.

Moreover, their perspective towards the e-commerce has changed. They have now started to embrace

this shift from tranditional business. Furthermore, they now accept that e-commerce provides them all

ease, effeciency and effectiveness. With this research, firstly we will look at the growth and

development of e-commerce in the country chosen for the study i.e. India. Secondlly, we will also

analyse the extent to which people in the Indian market are ready to buy products online or carry out

the business dealings online . In other words, the readiness of Indian buyers for e-commerce will be

analysed. Furthermore, a comparison will also be brought about between the buying tendencies of

cutomers in Indian market and that in the international markets.

The study will also try to fill the gap between what has been written and researched on e-commerce

practices in India and what more can be done to improve the practices of e-commerce activities in

India. Clearly there have been many developments in the country related to the usage of internet by

all class of people. And there also has been a growing trend in the buyer’s readiness and acceptance

towards e-commerce. But, it is also true that many Indian customers still hesitate in sharing their card

details due to security reasons.This study will combine all these information to come up with certain

logical solutions to further boost the e-commerce activities in the country. The research is only based

on ‘India’ though secondary data on other countries will also be used to gain a clear insight into this

topic.

RREESSEEAARRCCHH AAIIMM The aim of this research is to find and analyse the factors that affect the growth of e-commerce

activities in India and suggest the necessary actions to be taken in order to change the traditional

outlook of those who are still skeptical about purchasing online and drive them to use e-commerce on

a frequent basis. This research is likely to be interesting seeing the growing dynamism and importance

of Indian economy in the world. This country is attracting many foreign investors who wish to

conduct business with their Indian counterparts. To add to this, the study will also analyse the past and

present situation of the e-commerce activities in India, the evolution of cusomters in this field, the

buyer’s readiness to disclose confidential information about their debit/credit cards, their preference

of shopping online to physicall visiting market for shopping and their belief in the quality of the

products available online . Furthermore, this study also aims to find the differences in the level of

satisfaction among buyers in India as compared to other countries. It will also help to reflect on the

differences in the mind-set of the consumers in India as compared to those residing in various other

parts of the world.The main focus of this research will be the reasons why , despite of so much of

devleopment in the country, the customers still do not trust the online retail shopping or business

dealings over the web completely. Further, the barriers that has hindered the growth of e-commerce

will also be looked at in this study. It is hoped that the recommendations so provided help overcome

these problems.

As per the published report of Intrenet and Mobile Association od India(IAMAI) on E-commerce

sector in India, a rapid growth of around 50% is expected in the next five years. The expansion mainly

inspired by the continuous rise in the online travel business in India. It has been noticed that online

travel sector increases around 76% in entire E-commerce market today. The Digital downloads

industry is also hoping a rise in this sector because of the outset of mobile devices available on net. E-

commerce market stood at Rs 46,520 crore in 2011. Due to evoultion in online marketing, the entire

E-commerce sector in India is predicted to further rise in near future. All these truly provide a clear

insight into the growing future of E-commerce sector in India. (India Internet, 2012)

According to McKinsey Report, the 'Internet' accounts for about 21 per cent of GDP growth in the

world's largest economies over the last five years. It accounts for about $8 trillion in the global

economy. More than 200 million users are now taking advantage of this service. The report is limited

to online economy in the G-8 countries plus a few more: Brazil, China, India and South Korea . It is

intersting to know the internet economy is growing fastest in the United States, grabbing about 30

percent of global internet revenues. But the UK is the world leader in online retail. Sewden leads the

world in internet's contibution to GDP, while countries like India and China have a peculiar internet

economy in addition to the fastest growing internet sectors. Both the countries rely on exporting

online services for a plurality of their economies. The figure 2 shows the contribution of internet to

GDP in large and developed economies. (The Atlantic, 2011)

Source: (The Atlantic, 2011), Figure 2

RREESSEEAARRCCHH OOBBJJEECCTTIIVVEESS

To look at the factors affecting the growth of e-commerce practices in India.

To understand the cutomer’s perspectives on the usage of internet for online shopping in

India.

To examine the barriers that hinders the growth of e-business in India.

To analyse the practices and improvements being carried out by other countries/economies in

e-commerce and analyse their validity in India .

To look at the customer willingness for E-commerce in India.

RREESSEEAARRCCHH QQUUEESSTTIIOONNSS

Why the majority of customers do not trust online shopping or e-business dealings in India?

Are the Indian buyers completely ready for E-commerce?

Why the e-commerce activties have not reached the status it should have in the Indian

market?

What are the barriers that hinders the growth of e-commerce activities in the Indian context of

business?

What could be done to improve the status of e-business in India? Can other countries prove to

be learning source to India?

22.. LLIITTEERRAATTUURREE RREEVVIIEEWW We all know that the internet economy is revoultionizing the world - in business, in governments, in

society at large. New rules are being written before the ink on yesterday’s rules is dry. Small upstarts

are capturing market share from giant corporations by leveraging the Internet. New markets,

business-to-business electronic marketplaces that broker the sale of goods and services among a

network of customers and suppliers are swiftly reshaping nearly every industry. Competition is

intensifying. Businesses can take nothing for granted except, of course, the certainity of change.

Companies need to be faster, more agile, and crucially, more intelligent. (Liautand, 2001)

According to the Economist Intelligence Unit, Denmark was ranked the best place in the world to do

e-business among the world's 65 largest economies. The factors included broadband and mobile-

phone penetration, as well as government regulation. America rose from sixth to second place in the

ranking since last year. Britain fell from second to fifth place and India despite being an IT

superpower was ranked at 49th position. The figure below shows the rank of India with other

countries in the E-readiness scores. (The Economist, 2005)

Source: (The Economist, 2005)

Another very important use of e-commerce in India is through ‘Online marriage broking’. It is one of

the successes of Indian e-business, used by the single looking foe ''love matches'' as well as by their

parents and siblings. So complex are the requirements of seeking a partner in India that the an e-

business has to be started to help the Indians meet their needs. 'Bharatmatrimony.com' is yet another

website . Then again, these single people and their parents seem no more trustworthy than those

anywhere else. Many may be lying, or may not be lonely at all. Bharatmatrimony claims 7.5m

members and 'Shaadi.com' another matrimony website claims to have 1m visitors in a month. The

internet is spreading fast in India, however taking the brokers with it. The online matchmaking is

reaching beyond India's big cities. The forces of globlisation ,which many Indians fear that they ruin

the tradition, can also bolster it. (The Economist, 2005)

India is growing and growing fast, today it boasts the fastest growing online customer base in the

world, fueled by mobile and PC desktop Web adoption. The country also boasts of the largest

potential audience in the world for social networks. Nielsen has reported that over 45,000 Indians will

join social networking sites each day over the next six months. According to their study, 80% of

Indian social media users spend more than 15 mintues on such sites everyday. India is famous for its

community-oriented culture. Spending time with family and freinds trumps ''me time'' . Moreover,

people rely heavily on their networks to discover what is new and what is worth spending time and

energy on. With over 50 million registered users, India is the second most-represented country on

Facebook and the sixth most represented country on Twitter. (Forbes, 2012)

Now in terms of thereotical context to present in the literature review of this research. We will look at

the follwing: There is a tendency when setting online sales objectives, to use a low-risk approach of

selling existing products into existing markets. This is called the ‘market penetration’ approach shown

in the figure below which may as well be called as the ‘Ansoff Matrix’’. This approach is used by

marketers for over 40 years to determine strategic priorities. It is very important to identify the

strategies that is to be used while targeting the customers using the medium of the internet. Below is a

figure which shows the online opportunities for product and market innovation. (Chaffey, 2008)

Source: (Chaffey, 2008)

Today India is getting flooded with pushy startups even while web-based sales remain a silver of the

overall retail market. Sudhir Sethi of IDG Ventures India reasons that e-commerce is set to take off

now that Indian e-retailing sales are about to tip past the $1 billion mark. Several e-commerce

companies from India will go public again taking a cue from China, He predicts. Flipkart, a well

known e-retailer is aiming for $150 million in sales and a 50% market share by 2015. Many e-retailers

started off 2012 with a bang, raising $150 million from Accel, IndoUS and TigerGlobal and then

expanding into newer turf by acquiring Letsbuy, a specialised e-commerce site selling digital gadgets.

In the Indian e-commerce market's growing maturity, specalised e-commerce sites have now emerged

too in the country like the host of social commerce(think GroupPon) players, with Snapdeal being the

most visible and the one to beat. Another one called Startup Asia which is a Bnaglore-based Myntra,

an online retailer of Indian fashion and lifestyle brands. (Forbes, 2012)

33.. RREESSEEAARRCCHH DDEESSIIGGNN AANNDD MMEETTHHOODDOOLLOOGGYY

RREESSEEAARRCCHH DDEESSIIGGNN:: DDEEDDUUCCTTIIVVEE AAPPPPRROOAACCHH TTOO LLAARRGGEE EEXXTTEENNTT The methodology used in the study will be a ‘Mixed Method Strategy’ in this case . There will be a

lot of use of ‘secondary research’ in forms of facts/figures, theories, past and present figures. Also,

the offical financial websites like The Economist, Forbes, The Financial Times, etc. will be used to

find relevant data for the study. The other books and journals from academic sources will also be used

for the same. The research design will be more of a ‘deductive approach’ as it is often associated with

quanitative type of research while inductive approach has more of primary research.. The primary

research here will be limited to acquiring information from organizations through questionnares. It is

believed that combining both the research designs for a particular study can result into more in-depth

fingings and a better explanation to the topic. But looking at the topic chosen for the research, more

of ‘secondary research’ fits well with the idea of taking up this research. As deductive approach is

well suited with the quantitative methodology, quantitative method in this research will be carried out

by sending questionnaires in the organizations to find out where the employees/employer sees the

status of e-commerce going in India.

RREESSEEAARRCCHH MMEETTHHOODDOOLLOOGGYY As mentioned before, there will be a mix of primary as well as secondary research. Primary research

will be done through ‘questionnaires’ and secondary research will be carried out by extracting facts

and figures from various academic sources and official website online. The information so found will

cover both the past and present scenario of e-commerce activities in India. Now questionnaires will be

sent to the organizations as mentioned above to gain the perspective of the employees/employer on e-

commerce activties in India . Furthermore, the questions so asked will also help in extracting

information like whether they are using this approach in their organizations and whether they think

there could be more development to uplift the activities of e-business in India. Talking about the type

of metholdogy chosen for the study, it is often said that one type of research can be extremely limiting

that is why the strengths of both the methodlogies should be well incorporated in this particular study.

(Onwuegbuzie, 2005) The sampling technique used in this research would be ‘Convenience

Sampling’ which will be for the participants~(employees/employer) who will fill out the

questionnaires in the organizations.

DDAATTAA CCOOLLLLEECCTTIIOONN TTEECCHHNNIIQQUUEESS As mentioned before, there will be a mix of primary data collection and secondary data collection

method. However, there will be more use of secondary data here.Both the negative as well as the

positive aspects of e-commerce in India will be covered. This will help in bringing forth the right

future of E-commerce in India accurately. Primray data collection method will be done through

questionnaires. These questionnaires then will be samples through ‘Convenience Sampling

Technique.

44.. LLIIMMIITTAATTIIOONNSS OOFF TTHHEE SSTTUUDDYY

Limited information might be available on the e-commerce activities in the Indian market as

it is very specific and the author is not taking into account the global scenario of the e-

commerce practice as the topic.

Due to time constraint it might not be possible to send out questionnaires in the organizations

as there is a limited period of time given to finish this particular study.

The author will be doing the study in India so it is possible to not have an access to a wide

variety of books and information from various articles and journals. Though the author will

try to utilise the use of library journals online from India.

55.. EETTHHIICCSS The ethics in this research will be the protection and confidentiality of the employees/employer who

will be filling the given questionnaires for this study. The participants of these organizations will be

informed before hand about the nature and type of this research as to avoid any conflicts or disputes.

This is a research project that is why there will be a continuous communication with the supervisor

about the nature and type of the work. The author is aware that it is unethical to be secretive and

dishonest about the research work from your supervisor. (Wilson, 2010)

66.. VVAALLIIDDIITTYY AANNDD RREELLIIAABBIILLIITTYY The research will make use of ‘Internal validity’ which is of two types: ‘Content’ and ‘Construct’.

The content validity is concerned with face validity and sampling validity. (Wilson, 2010) A part of

construct validity will be used for quantitative data which is in form of questionnaires here in this

study. In terms of reliablity , this research will be shown to the supervisor before hand in order to

seek his guidance on the relaiability and vaildity of the research and to obtain the final approval from

him in order to proceed with the research project.

CCoonncclluussiioonn

Jack Welch rightly said, “Any company old or new that does not see this technology as important as

breathing could be on his last breath.” It is indeed a win-win situation for those companies who have

entered into this new billion dollar industry in India. E-commerce has huge potential in Indian market

which is evident from its tentacles spreading in almost all types of industry from the fashion world to

even the matrimonial match makers. All seem to be benefitting from this business. With the

advancement and development of e-commerce in India, the innovations in security and confidentiality

in payment methods have also been seen. Services like Google Checkout assure the customers to save

their critical data securely and relieve them from the hassles of remembering the credit card details or

bank details. Moreover, alternative payment methods like PayPal have also added to the convenience

in online shopping.

The popularity of this business has forced out various other innovations as well. There are websites

available now which allows you to compare the ratings of various products and services. There are

those who are offering daily deals online. Local Search engines like Just dial has helped the sellers to

reach out to wider range of customers while they also allow customers to find out about various

options in their locality thereby bringing both the buyers and sellers together to facilitate further trade.

The e-traders are also using the growing craze of social networking websites to their advantage. They

are asking customers to share, rate and recommend their services or products to their friends in social

websites like Twitter, and Facebook. M-commerce, another logical extension of e-commerce, has

taken e-commerce to another level of portability and convenience wherein the customers now have

same website based services on their mobile phones. Amazon and Apple have been the first movers in

this innovation.

Undoubtedly this industry is likely to be a multi-billion industry in no time in India. E-commerce is

becoming a part and parcel of everyone’s lives and its growing every minute. At such, it will be

extremely difficult to exact loyalty from the customers. Hence, it is important for the sellers to follow

the strategy of market-penetration wherein the seller should compete more effectively to penetrate

further in the existing market with the existing product. New schemes should be introduced to

maintain their hold on the customers’ loyalty towards their brands. Moreover, the sellers should also

keep pace with their competitors as the customers are becoming increasingly price-sensitive in this

highly competitive market.

Lastly, the time has proved that e-commerce is no fad but the base of uncountable innovations and

multiple extensions. To survive and grow in this market, one has to be quick both with their thoughts

and actions. In a matter of no time, everything will be the “e” way in this soon to be the “e” world.

(mbahack.com, n.d.)

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