Ecommerce and Its Emerging Trend in India

eCommerce and its Emerging Trend in India
Author: Vineshkumar Kunhiraman
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Contents
Executive Summary ................................................................................................................... 2 Electronic Commerce or eCommerce ........................................................................................ 3 Evolution of the eCommerce Industry ................................................................................... 3 Difference between eBusiness, eCommerce and eTailing ......................................................... 4 Definition of eBusiness .......................................................................................................... 4 Is eCommerce same as eBusiness or different? ..................................................................... 4 Definition of eTailing ............................................................................................................. 4 Different formats of eCommerce ............................................................................................... 5 eCommerce Categories .......................................................................................................... 5 Different Business Models ..................................................................................................... 5 Benefits of eCommerce at a Glance ....................................................................................... 6 eCommerce Platforms ................................................................................................................ 8 The Architecture (SOA) ......................................................................................................... 8 List of platforms ..................................................................................................................... 9 Payment Platforms ............................................................................................................... 10 Latest Trends in eCommerce ................................................................................................... 12 Scope of eCommerce in India .................................................................................................. 13 Internet penetration in India ................................................................................................. 13 eCommerce Presence in India .............................................................................................. 13 Current Indian Players in eCommerce industry ................................................................... 16 Future of eCommerce in India ................................................................................................. 18 References: ............................................................................................................................... 22
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Executive Summary
The report attempts to touch upon the concept of eCommerce, understand the different business areas that are related to it. It also covers different business models, categories and service oriented architecture. We have provided a list of eCommerce platforms and payment options that can be useful for entrepreneurs venturing into eCommerce business. The second part of the report focuses on the presence of eCommerce in India. The report tries to identify the key areas responsible for growth of the industry in India. Based on the study done and understanding of the current scenario, we have managed to share our thoughts on future of eCommerce in India and the various strategies eCommerce businesses existing and new entrants should take to sustain in the industry and also provide competitive service to online customers.
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Electronic Commerce or eCommerce
Electronic Commerce or eCommerce is often misunderstood as buying and selling of goods and services over internet and financial transactions between organizations and customers. Though mostly known, this definition doesnt cover all the business areas. In broad terms, eCommerce encompasses all transactions that take place electronically buying, selling, customer service, inventory management, marketing, delivering, pre-sale and post-sales activities. eCommerce is the exchange of information across electronic networks, at any stage in the supply chain, whether within an organization, between businesses, between businesses and consumers, between the public and private sector, whether paid or unpaid Cabinet Office, UK government
The Different perspectives of eCommerce: 1. A Communication perspective the delivery of information, product/services or payment by electronic means. 2. A business process perspective the application of technology towards the automation of business transactions and workflows. 3. A service perspective enabling cost cutting at the same time as increasing the speed and quality of service delivery. 4. An online perspective the buying and selling of products and information online.
We can look at those transactions from sell-side and buy-side. Buy-side eCommerce This section involves the supplier, manufacturer, intermediaries and the organization and its functional units Sell-side eCommerce This section involves interactions between corporates, customers and the organization.
Evolution of the eCommerce Industry

Year 1994 1995 1997 1998 2000 2002 2003 2006 2007-2008 Event Netscape Launched; SSL encryption enabled online shopping Backbone of eCommerce formed; Amazon, eBay and Verisign launched Dell first company to reach @1 Mn in online sales Google Launched, USPS launched eStamps Dot-com Bubble burst eBay acquired PayPal Facebook launched for college students Google acquired YouTube; iTunes became first digital music retailer Private Sales Model, Social eCommerce, Mobile eCommerce, Daily Deals/Local eCommerce
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Difference between eBusiness, eCommerce and eTailing

Definition of eBusiness
eBusiness involves key business processes through the use of Internet technologies. Also defined as integration of all activities i.e. operations, business processes and models with the internal processes of a business through information and communication technology(ICT). The integration of information and communication technology (ICT) in business has revolutionized relationships within organizations and those between organizations and individuals. With development on web and internet technologies, electronic marketplaces have grown huge in sizes and narrowing down the gap with its traditional markets.
Is eCommerce same as eBusiness or different?

When using these two terms together, 3 inferences can be made: 1. eCommerce has some degree of overlap with eBusiness 2. eCommerce is same as eBusiness 3. eCommerce is subset of eBusiness In eCommerce, ICT is used in inter-business transaction or business-consumer transactions. Whereas, in eBusiness, ICT is used to enhance ones business by improving the processes that business organization (profit or non-profit) conducts over internet / intranet medium. eCommerce does not refer to many of transactions within a business, such as processing a purchasing order which is part of eBusiness. Thus, eCommerce is considered as a subset of eBusiness.
Definition of eTailing
Electronic Retailing or eTailing is selling of retail goods on the internet, mostly following the B2C model. Just as eCommerce is subset of eBusiness, eTailing as a whole is a subset of eCommerce.
eBusiness
eCommerce
eTailing
With many eTailing businesses coming up and consumers buying goods online, many brick and mortal retail businesses have entered into eTailing businesses, now famously known as Brick and Click stores. For eg, The Mobile Store (India), Carrefour (France), Wallmart (US).
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Also with businesses going online, there are other newer terminologies that have evolved: eMarketing, eSCM, eCRM, eProcurement.
Different formats of eCommerce

eCommerce Categories
The Interactions between an organization and its customers can be classified into 3 categories: Model Description Example Business-to-ConsumersB2C A eMarketplace for businesses to sell Amazon, Flipkart products and services to consumers Business-to-Business B2B A eMarketplace for businesses to sell Alibaba, olx products and services to businesses ie retailers or corporate consumers Customers-to-Customers A eMarketplace for consumers to sell Ebay, Google C2C products and services to consumers Adwords through a business organization who acts as a facilitator *alibaba and olx act as facilitators between wholesalers, suppliers and retailers or corporate consumers. Apart from above mentioned categories, there are other lesser known ones: Government-toConsumer (G2C), Government-to-Business (G2B), Consumer-to-Business (C2B), Consumerto-Government (C2G), Business-to-Government (B2G) and Government-to-Government (G2G)
Different Business Models

A list of eCommerce Business Models has been mentioned below: eTicketing (Yatra) Online Banking (ICICI Net banking) Magazine Subscriptions Direct Online Selling eTailing (Amazon, letsbuy) Digital Content + Downloads (Scribd) Online Trading (ICICI Direct) On Demand Service (NetFlix) Classifieds (Bharatmatrimony) Streamline Media Online Advertising (Google) Online Software (Cloud platform, SaaS etc) Auction Sites (eBay, BuyThePrice) Private Sales eTailing
Price Comparision and Deal Sites (Groupon, Naaptol) Digital Wallet Payment Services (EBS)
mCommerce
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eTicketing eCommerce organization who provide services like booking flight tickets, movie tickets eTailing Online counterpart of brick and mortar retail stores. Can be further classified as pure click (only online presence) and brick and click (physical retail and eTail stores) models Classifieds such as Matrimony sites (BharatMatrimony), job sites (Naukri) Online Advertising Providers The famous Adwords of Google is example of this. It provides online advertising presence to various organizations who carry their business either traditionally or online. Digital Wallet Payment Providers They facilitate online payment services through credit card, debit card or net-banking to online merchants On Demand service Services like ordering food online, or movie dvds (Netflix) fall into it. Digital Content + Downloads: Here an online facilitator (scribd.com) shares the digital content of an organization (B2C) or users (C2C) for subscription charges. Online Software services: Google Business Docs, salesforce, Amazon AWS provide online SaaS application for organizations wherein the latter can save lot of operational costs. Price Comparison and Deal Sites In price comparison, the eCommerce organization provide price related information of the goods customer looking for and help him find cheapest option available. In Deal Sites, the eCommerce organization has strategic tie-ups with retailers or other businesses wherein they help the latter to have increased footfalls by providing discount offers based on the number of customers looking for the product/service. Private Sales Similar to eTailing model, but the online store is open only for invited users & registered users. mCommerce With smartphone market dominated by Apples iPhone and Googles Android adopted devices available at affordable rates and 3G and GPRS services bringing high-speed internet on mobile phones, many business organizations have adopted the mobile framework to expand their business.
Benefits of eCommerce at a Glance

1. Cost Reduction Since the entire business activity and transactions take place online, the huge investment needed for a physical presence reduces. Also lesser labor force. 2. Measurement When it comes to online, measurement becomes easier task. Where does the user belong to, the internet connection speed, internet service provider, whether its first visit or returning customer, how did he land on the site and on which page, products he browsed through, time spent on the site, products he added to the cart. Everything can
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be tracked, counted and measured. With the help of this data, it becomes easier for the organization to take necessary action to increase the conversion rate.
3. Interactivity Websites are great at interactivity with lots of buttons, images, and links. By clicking, visitors engage and involve themselves in discovering the products. Interactivity drives personalisation. Website can greet a repeat customer with his name and also take him back to the point where he left his last transaction. Also options like chat with customer care executive online improve interaction level. 4. Personalization There are three levels of personalization. 1. Recognition, 2. Personalization, Customization. For a repeat customer, Recognition can save time because the user doesnt have to enter details like name, delivery address all over again. Also the user interface can be personalised based on users past site activities. And in Customization, user can choose the content to be displayed, customise the interface. 5. Global Reach A physical presence has a very limited reach within same city or same state or same country. But online presence can take ones business across the globe and exploit new customers and new markets and that too, at zero set-up cost. Moreover, the organization can provide service 24 hours a day, 7 days a week and 365 days a year, which means more service time and more business.
5. Global Reach 1. Cost Reduction
4. Personali zation
eCommerce
2. Measure ment
3. Interactiv ity
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eCommerce Platforms
The Architecture (SOA)
The eCommerce Architecture consists of 3 layers- Back-end Resources, Core Services and Delivery Channels. The back-end resources like Inventory Management, Payment Gateways, Shipping, Datawarehouse and others are integrated with core services that facilitate eCommerce. Similarly core services are integrated with the service mediation layer to provide good user experience. Content Search Filtered Navigation Store Locator Publishing Image Mgmt Social Media Blogging Cust. Reviews Forums Community Facebook Group & Connect Catalog Product Details Pricing Promotions Product Images Bundles Cross and Up Customers Cust. Mgmt Account Mgmt Loyalty Programs Referrals Free Gifts Shopping Cart Checkout Order Capture Shopping
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eCommerce and its Emerging Trend in India Content Mgmt Sell Categories
Address Book
Fulfillment & Cust. Service Shipping Options
Reporting
Inventory
Payment
Orders
Web Analytics Ship Order A/B Testing Gift Wrapping Sales Reporting Return Merchandise Tracking Business Intelligence
Allocation & Release Inventory Mgmt Back Orders Pre-orders
Payment Processing Tax Mgmt Secured Payments
Order Mgmt Order Tracking Order Verification
The above table gives a clear picture of core services involved in eCommerce business. When a user lands up on an eCommerce site, first he gets exposed to the content few product details shared on the home page, search and navigation which takes the user to catalog or directly to product page. Over here, he gets more information about the product, more images, product review and other shopping options i.e. up-selling and cross-selling. When the user has selected the product to be purchased, he proceeds to checkout wherein he places the order, provides the delivery address and selects the payment mode. The user can avail benefits of loyalty and referral programs which gives him discounts on his order cost or free gifts. Once the user places an order, now the role of an organization comes into picture. It needs to verify the order and ship the order to the customer on payment realization. The organization may also provide other shopping benefits like order tracking, gift wrapping, return merchandise and online or over-the-call shopping advices to make the customer shopping experience service oriented. Apart from that, there are few back-end activities like inventory management, procurement, business intelligence, web analytics which defines the success rate of their online marketing, store layout and sales generation.
List of platforms
There are couples of open source, paid and cloud based eCommerce platform providers which provide complete set of functionalities right from product catalogue to offers to shopping cart and checkout to secured payment and post-sales activities. With many of these being very user friendly, one doesnt need to have technical expertise to set up his or her own eCommerce site.
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eCommerce and its Emerging Trend in India Software Magento osCommerce Zen Cart X-Cart CubeCart VirtueMart UberCart LiteCommerce Spree Avactis OXID eShop DigiStore E-Junkie Prestashop MartJack Infibeams BuildaBazaar Amazon Fulfillment Web Service
Type Free and Paid Free Free Paid Free Free Free Paid Free Free and Paid Free Free Free Free Paid Cloud Service (India) Paid Cloud Service (India) Paid Cloud Service
Url http://www.magentocommerce.com/ http://www.oscommerce.com/ http://www.zen-cart.com/ http://www.x-cart.com/ http://www.cubecart.com/ http://virtuemart.net/ http://www.ubercart.org/ http://www.litecommerce.com/ http://spreecommerce.com/ http://www.avactis.com/ http://www.oxid-esales.com/ http://www.digistore.co.nz/ http://www.e-junkie.com/ http://www.prestashop.com/ http://martjack.com/ http://www.buildabazaar.com/ http://aws.amazon.com/fws/
Back-end and Front-end screen layout of Prestashop
Payment Platforms
Cash on Delivery - For purchase transactions done online, consumers have the option of making the payments offline by this mode. The eCommerce organization has tie-ups with logistic providers who ensure the orders are delivered on time and safely. Also the logistic provider facilitate additional functionalities like Cash on Delivery wherein they take the order
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payments from the customers on delivery and forward the amount to the organization for an additional charge. Cheque/Demand Draft Payment - Many eTailers also provide the option of payment through Cheque and Demand draft wherein the customers are first expected to courier or post the Cheque/DD with the exact order amount. On debiting the amount to the account, the organization then releases the order to the customer through the logistics people. Electronic Fund Transfer - It is a major form of electronic payment systems in banking and retailing industries. EFT is system of financial exchange between the buyers and sellers in the online environment through the internet browser that is facilitated by a digital financial instrument such as encrypted credit card numbers backed by bank or intermediary. To make online payments secured, payments are done through Secured Sockets Layer (SSL) which ensures crucial information like credit card number which is vulnerable to interception by network sniffers are encrypted between customers browser and organizations server authorizing the credit card information. Many banks provide online payment solutions for eCommerce organizations. Apart from that, there are also intermediaries like CCAvenue who provide fast, secure, affordable and complete online transaction processing by having tie-ups with the several banks. Moneybookers Transecute Authorize.net When it comes to buying and paying online, safety and trust are important factors that influences a customers buying decision. So many eTailers and online payment providers get their website verified and secured by SSL Certificates provided by Verisign or TrustedShop. The SSL certificates improve customers perception of safety and trust, which leads to more conversion rate (from visitors to customers) and less abandoned shopping carts. According to customer case studies done on online buying, it has been found that transaction rate had increased by 20-25% where the eCommerce sites were secured. Paypal Google Checkout Paymate EBS CCAvenue WorldPay 2Checkout Hipay Payseal CashTicket
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Latest Trends in eCommerce
1. Social media driving consumption These days users are making use of social media to get reviews about products from friends and even strangers; sites like ThisNext (http://www.thisnext.com) where users share their shopping experiences, products they bought, store reviews and the site recommends the eShops from where the products can be purchased. Another example is naaptol.com 2. Continued consolidation among private sales companies - The Members Only Online Store or Private Sale Sites offer special deals for members, custom and luxury items, or flash sales for group purchases. Example: Gilt.com, Fetise.com 3. Evolvement of deals / local eCommerce sector With many online and offline businesses looking for more footfalls and huge sales, local eCommerce sector has a good role to play as a mediator. Groupon.com, snapdeal.com, sosatha.com, dealsandyou.com to name a few fall into this category. 4. Mobile Commerce catching up with traditional online and offline business With high speed internet on mobile phones and ease of transferring businesses to mobile through mobile websites or applications, mCommerce is an emerging trend. Users can carry on the transaction on the move. 5. Emerging new business models: Push Shopping and Penny Auctions Push Shopping site Jewel Mint (http://www.jewelmint.com) first takes customers style quiz and based on that, suggest or even provide personalised products. Penny auction where the user pays a non-refundable fee to place a bid and best bid wins the product and pays for final bid price instead of retail price of the item. 6. Expansion of virtual goods and currencies To drive customers to keep buying without looking into their wallet, many businesses (social networking websites, online gaming sites) have made use of virtual currencies to increase their sales. 7. 3rd Party seller platforms Amazon and eBay allows 3rd party businesses to sell their products using the formers platform. Herein the latter saves lot of set-up cost and former gains margin on the sales.
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Scope of eCommerce in India

Internet penetration in India
Internet connection in India has grown from 29Mn in March 2007 to 80 Mn in March 2011, a 175% increase. From highly skewed urban dominated in 2000, it has moved to 50:50 urban rural ratio in 2009. Also in 2009-10, 35% of internet population belong to age group of 35% and 41% to age group of 41%. This data clearly shows that youth and young working professionals are lot exposed to internet.
eCommerce Presence in India

Many eCommerce sites in India were started long back in 1999. A decade later, today very few of them have survived. In India, Internet is primarily used for communication such as emailing, messaging, social networking. Barring services such as Online Ticketing, online users are still sceptic when it comes to shopping online or net-banking. Large number of 13 | P a g e
surfers uses Internet for information about the product or service which they later plan to buy from a physical shop. Based on a survey study done by I-Cube in 2009 across 15 major cities, out of 17.5 Mn regular active users, there were 13.6 Mn users who would look for information to make buying decisions and of that, only 40% i.e. 7.4 Mn prefer buying online.
I-Cube 2009 Report
eCommerce Industry in India is mainly dominated by Online Travel services with the eTailing slowly emerging YoY, thanks to many innovative and foreign sister-clone eTailing companies started in last 5 years. In eTailing, electronic products like PCs, laptops, computer peripherals, cameras and mobiles contribute the most. Apart from eTailing in Non-Travel segment, financial services and online classifieds (jobs, online matrimony, car renting, real estate), booking movie tickets, gaming subscription are emerging markets.
Year Total Market Size Online Travel Industry Online Non-Travel Industry eTailing Digital Downloads or Paid Content Subscription Financial Services Other Online Services (Classifieds, Matrimony)
Net Commerce Market 2007-11 (in Crores) Dec-07 Dec-08 Dec-09 Dec-10* 8146 14030 19688 31598 6250 10500 14953 25258 (77%) (75%) (76%) (80%) 1896 3530 (25%) 4735 (24%) 6340 (20%) (23%) 978 1120 1550 2050 238 290 1200 680 920 435 1540 1210 680 2000 1610
Dec-11* 46520 37890 (81%) 8630 (19%) 2700 1100 2680 2150
Net Commerce Report March 2011 [Estimated data for 2010 & 2011]
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Net Commerce Report - March 2011
Net Commerce Report - March 2011
eCommerce Industry in India has witnessed more than 100% growth from 2007 to 2009. It is expected to grow 4.7 times by Dec 2011. Online Travel Industry has grown 150% from 2007 to 2009 and expected to reach 500% by Dec 2011. eTailing has grown 58.5% from 2007 to 2009 and expected to grow 176% by Dec 2011.
Better idea of each category and the services that fall under it is mentioned below: Category Services Domestic Air Tickets Railway Tickets International Air Tickets Online Travel Hotel Bookings Bus Tickets Tour Packages / Travel Insurance Computers, accessories, storage and peripherals eTailing Cameras & Mobiles 15 | P a g e
Financial Services
Digital / Mobile Download
Other Online Services
Personal Items Electronic Durables Home & Kitchen Appliances Toys, Gifts, Flowers Insurance and related services Fund-based Transactions paying bills Online Transactions for financial services Ringtones / Wallpapers / Picture download Mobile recharge for pre-paid and payment of post-paid bills Software and utilities for mobile Paid Music / Video / Other content downloads Mobile games download Online Jobs Movies / Cinema Hall Tickets & CD/DVD Rentals Online Matrimony and Dating Other B2C classified Cars, Real Estate Online Food Delivery Online Gaming Subscription
The following are the reasons for online users not shopping online: [Given in the decreasing order] 1. Lack of Trust Many users are not confident about the quality of the products that will be shipped, and also about the eCommerce company because of their virtual presence. People also not confident sharing their personal information online especially banking and Debit/Credit card details. 2. Fulfillment Issues Many users are sceptical about the post-order service, whether they will really receive their order, will it be the same as ordered, brand new or used. 3. Shopping Experience Some users do not feel it convenient using the online store layout, browsing through the products. They find it more comfortable with physical stores. 4. Want to see product before buying Many users want to get tangible experience of the products before they buy. In shopping complexes, one can try the dress before buying them, which is missing when it comes online. 5. No Need for shopping online. With organized and un-organized stores in the near-by location, people find no reason to buy them online.
Current Indian Players in eCommerce industry

The Indian eCommerce industry since its beginning was dominated by online travel industry. It has been perceived that other eCommerce models like eTailing have picked up because of success of online travel portals. Online travel portals like Makemytrip, Yatra, Cleartrip and Travelguru have been successful to a great extent with boom in online ticketing sales which is clearly visible by their 80% share of eCommerce in India. Many of them are expanding their portfolio of services to hotel booking and packages.
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India has witnessed multiple dozen of eTailing players entering the market in the 5 years. Bangalore based Flipkart initially launched as Amazon clone selling only books has diversified (expanded horizontally) into electronics, entertainment, home appliances in 20102011. The company, selling more than 1500 SKUs, aims to be USD 1 Bn company by 2015. Another example of expanding business horizontally is Yebhi.com who was initially shoeonly store like zappos.com and now sell accessories, bags and clothing. The year 2010-11 also witnessed many deal sites or say Indian version of US Groupon.com entering the market. Snapdeal, Dealsandyou, Sosasta (Groupon India), Taggle, MyDala, BindaasBargain to name a few. Also couple of private sales like 99labels, FashionAndYou have been doing good business in the online market selling high end luxury goods. Myntra.com who sells branded products in footwear, apparels even sell customized products. Also many brick and mortar stores like The MobileStore, Univercell, BigBazaar, eZone have invested online to have their eCommerce stores to sell the same products online. Reliance has started BigFlix where users can rent movie cds and dvds, thus providing OnDemand service to customers. Even multiplexes like PVR, BigCinemas provide online ticket booking facility to its customers. Matrimony site like BharatMatrimony have implemented a good business model to expand their presence. Understanding the Indian marriage customs and traditions, they have created individual state-wise matrimony websites and also to the extent of caste-based portals. Online Job portals like Naukri, Monsterindia connect the people seeking jobs to HRs of many companies who are looking for right candidates. On Financial segment, ICICI direct, Sharekhan provide online trading platforms to invest in stocks, IPO and mutual funds. Also almost all banks provide net-banking and ATM services to its customers. With online services provided by banks and intermediaries like Bill Desk, customers now can pay their bills online.
List of eCommerce players has been listed below. Company Bindaadbargain Buytheprice Dealsandyou Fashionandyou 99labels Fetise Flipkart 17 | P a g e Category One deal a day Auction Member-only group buying Luxury Fashion Brands Luxury Fashion Brands Luxury Fashion Brands Books, Electronics, Home eTailing eTailing/Auction Deak Sites eTailing Private Sales eTailing Private Sales eTailing Private Sales eTailing
eCommerce and its Emerging Trend in India Letsbuy Inkfruit Magazinemall Myntra Naaptol SnapDeal Taggle Tradus Yebhi TheMobileStore Ezone Next Edigiworld Yatra Makemytrip Bookmyshow Bigflix ICICI Direct ICICI, HSBC, HDFC Net Baking BillDesk
Appliances Electronics, Home Appliances T-shirts Magazine Subscription Customised apparel, gifts, shoes Broad Based Group Buying Members only buying group Auction Luxury fashion brands Brick and Click Brick and Click Brick and Click Electronics, Home Appliances Online Travel Booking Online Travel Booking Online movie ticket booking On Demand Movie Rent Online Stock Trading
eTailing eTailing eTailing eTailing eTailing Deal Sites eTailing eTailing eTailing eTailing eTailing eTailing eTailing eTicketing eTicketing eTicketing On Demand serv. Financial services Financial services Financial services
Pay Bills Online
Future of eCommerce in India

With quite good Internet penetration in India and even non-metro areas having access to Internet, there seems to be promising future for eCommerce in India. Just as people have started using social sites like Facebook and Twitter where they share lot of personal data, their outlook towards shopping online will definitely have a twist. As per the trend of 2007 to 2009 seen above, eTailing will be the primary growth driver for eCommerce in India in the future. The reason apart from online users outlook will be continuing niche and generalised websites over the Internet selling huge range of merchandises which are difficult to find under a single retail store. As Internet penetrates more into Tier 2 and Tier 3 cities and increase in broadband speed with falling costs, there is bound to be increase in the number of online users that would be willing to shop online. For online payments, there will be an increasing awareness of exchange of money over the internet by stakeholders as well as regulators. The regulators are in process of formulating guidelines to make the options of online payment available to all users as there are couple of intangible benefits of shopping transacting money online such as convenience, reduced 18 | P a g e
personnel and resource overheads to organizations and government, minimized security issues due to stringent methods adopted by banks and financial institutions. Other driving forces are the demographics, economy, changing lifestyle, exposure to new ideas and awareness about safe online shopping.
Strategies to be used
For an emerging market like eCommerce, there are many dos and donts to be followed. Below are few strategies that eCommerce organizations need to follow to provide better user experience and increased conversion rates. 1. Even though there are so many eCommerce players in the market, they tend to lag when it comes to technology. So it is very essential to make use of IT services, create niche portal making use of IT and web technologies to improve end-to-end processes. 2. Digital Marketing is the key today It gives a platform to reach wide internet audience through different channels such as a. Social Media Marketing SMM is a good platform for Integrated Marketing Communications such as advertising, public relations, promotions, direct marketing, and personal selling. Examples - Facebook business groups, Facebook connect, twittering about latest products, Facebook Ads. Facebook Ads provide functionality wherein the organization can select the target group based on users age group, users profile and interests. b. Video Marketing A picture says 100 words, but a video 10000. Thats the amount of multiplicity that video marketing can do if rightly used. Creating video reviews of the products sold and uploading it YouTube, sharing it on social media sites apart from their own portal gives them a lot of visibility, as many users will be using social media, YouTube medium to get product reviews. c. Content Management When a user plans to buy products online and if he doesnt find content that talks about the product, there are high chances of him not buying it from the store. So content management is a must. Apart from portal, there is a great need to blog the content as many users who look for information can get directed to the portal and converted into sale. d. Search Engine Optimization (SEO) SEO is an important tool to be used properly by all web based businesses. It gives tremendous visibility to the products sold on the site when customer uses search engines for the product. e. Search Engine Marketing SEM uses Adwords, article submissions, advertising, ensuring SEO has been properly done. Google Adwords is one of good means of reaching the right target. Also mobile ads industry is growing big because of number of smart phones in the market and number of applications available in iPhone and Android enabled phones. Businesses should check the conversion rate of sales to their investments on SEO and SEM using web analytic tools and keep changing site layout, re-work on SEO to increase their sales.
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f. Email Marketing: Newsletter, subscriptions, offer/deals information A very good medium to inform the consumers about new product launches, new services offerings, discounts and lot more. Personalization is a MUST when it comes to email marketing. Many users may have abandoned their last transaction, so it can act as welcome back mail to them. 3. Site layout is another important factor just like store layout in retail formats. A lot of study has to be done on site layout, by taking user feedback as a tool. Ease of search and filtering capabilities, site navigation and product comparison capability should be ensured. 4. Provide necessary information at the right places Shipping mode and cost on checkout page, delivery time on checkout page and shipment page, Secured payments (Verisign Seals) on checkout page and payments pages. 5. Expert product review, product rating is another tool to be used. Also video reviews for products like mobiles, electronics can be useful guide for consumers planning to buy. It gives some element of tangible experience of the products which mostly Indians look for. 6. Interactivity On call or chat assistance to help customer select the product or buy from the store. Since there are high chances of customers abandoning the transaction for reason such as lack of information about product or shipment/payment mode, the customer care number or Chat buttons should be at easily visible spots. 7. Inventory management of every SKU that enter the store and are delivered is necessary. 8. Should involve customers in post-sale activities like testimonial, feedback to improve on service level. 9. Instead of competing on Prices, organizations should compete on Customer Service. With business being done virtually, there is a need to be highly customer focussed which will increase the trust of customers to shop online. 10. Ensure secured payments gateways for online payments as well as provide offline payment options such as Cash on Delivery. 11. To have horizontal product base rather than being a category specialist. Also ensure upselling and cross-selling of products. As per various studies, this increases sales by 1015%. 12. For Indian customers, price is an important element that influences buying decisions. Periodic offers, loyalty and referral points can be used to increase sales. 13. Site and other process scalability should be considered before the business starts flourishing, leaving lesser time to respond. 14. Innovation With many of the eCommerce sites act as sister sites i.e. doing business in a similar fashion, existing and new businesses need to come-up with innovative business models to sustain for long time. Few business models which can be explored in India a. Shopping experience and recommendation websites b. Private Sales in non-apparel category for branded products c. eTailing sites for kids d. Social eCommerce e. mCommerce f. eCommerce focussed on rural markets 20 | P a g e
eCommerce and its Emerging Trend in India Though many of the strategies have been already implemented by market leaders, it becomes equivalently important for others to follow it, which will provide better user experience for shopping online and hence, will add to the growth of eCommerce industry as a whole.
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References:

E-Business and E-Commerce Management Dave Chaffey Management Information Systems James A OBrien Dataquest 2011 IMRB iCube Report 2009, 2010 Comscore 2011 Net Commerce Report 2011
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