E-COMMERCE IN THE INDIAN ECONOMY

VIVEKANANDA COLLEGE

TOPIC:

E-COMMERCE IN THE INDIAN ECONOMY

A PROJECT SUBMITTED IN PARTIAL FULFILMENT

OF THE REQUIREMENT FOR DEGREE OF B.COM (H)

UNIVERSITY OF DELHI

PAPER CH6.3 (B)

BY

RUPALI WALIA

ROLL NO.2012034

UNIVERSITY ENROLMENT NO.VM/382/2012

2012-15

UNDER THE SUPERVISION OF

MRS. RADHIKA SRINIVASAN

(Mentor)

DECLARATION

This is to certify that the material embodied in this study entitled Ecommerce in the Indian Economy is based on my own research work and my indebtedness to other work/publications has been acknowledged at the relevant places.

This study has not been submitted elsewhere either wholly or in part for award of any degree.

Rupali Walia

(Students Name)

This is to certify that the project titled Ecommerce in the Indian Economy done by Rupali Walia is a part of his/her academic curriculum for the degree of B.Com(H). It has no commercial implication and is done only for academic purpose.

Mrs. Radhika Srinivasan

(mentor)

Dept. of Commerce

ACKNOWLEDGEMENT

I am extremely grateful to my mentor, Mrs. Radhika Srinivasan of Commerce Department, Vivekananda College, who provided valuable comments and suggestions from time to time for the accomplishment of my project. Her valuable encouragement made it possible for me to complete the project in its present form.

I would also like to offer my regards and blessings to all of those who supported me in any respect during the completion of this report. Their valuable suggestions from time to time gave me consistent feedback upon the same.

CONTENTS

OBJECTIVES OF THE STUDY

INTRODUCTION

LITERATURE REVIEW

Timeline

Rise of E-Commerce in India

Reasons Why Companies are Adopting E-Commerce

Laws and Regulations in India(briefly)

Top 10 E-Commerce Companies in India

Present scenario of Internet in our Country

Slow growth of E-Commerce Companies

Challenges Faced by E-Commerce Companies

E-Commerce Trend Booming in India

Company Profile of flipkart.com

CONCLUSION

BIBLIOGRAPHY

OBJECTIVES OF THE STUDYTo define e-commerce and its basic characteristics To know about its evolutionTo know the reasons for its success and failureTo know about its future growth prospects

INTRODUCTION

Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service over electronic systems such as the Internet and other computer networks takes place. Electronic commerce draws on such technologies as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices social media, and telephones as well.

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.

LITERATURE REVIEW TIMELINE

Years

Important Events that took place

1979

Michael Aldrich invented online shopping

1981

Thomson Holidays, UK is first B2B online shopping

1984

Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball, 72, is the first online home shopper

1990

Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer

1994

Netscape releases the Navigator browser in October under the code name Mozilla.

Pizza Hut offers online ordering on its Web page.

The first online bank opens.

Attempts to offer flower delivery and magazine subscriptions online.

1995

Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, internet-only radio stations,

Radio HK and NetRadio start broadcasting.

Dell and Cisco begin to aggressively use Internet for commercial transactions.

eBay is founded by computer programmer Pierre Omidyar as AuctionWeb.

1996

IndiaMART B2B marketplace established in India.

1998

Electronic postal stamps can be purchased and downloaded for printing from the Web.

1999

The peer-to-peer file-sharing software Napster launches.

ATG Stores launches to sell decorative items for the home online.

2000

The dot-com bust

2002

eBay acquires PayPal for $1.5 billion.

Niche retail companies Wayfair and NetShops are founded with the concept of selling products through several targeted domains, rather than a central portal.

2003

Amazon.com posts first yearly profit.

2004

DHgate.com, China's first online B2B transaction platform, is established, forcing other B2B sites to move away from the "yellow pages" model.

2005

Yuval Tal founds Payoneer - a secure online payment distribution solution

2007

Business.com acquired by R.H. Donnelley for $345 million

2009

Zappos.com acquired by Amazon.com for $928 million.

Retail Convergence, operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180 million, plus up to $170 million in earn-out payments based on performance through 2012

2010

Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying websites went ahead with an IPO on November 4, 2011. It was the largest IPO since Google.

2011

GSI Commerce, a company specializing in creating, developing and running online shopping sites for brick and mortar businesses, acquired by eBay for $2.4 billion.

2012

US E-Commerce and Online Retail sales projected to reach $226 billion, an increase of 12 percent over 2011.

Us E-Commerce and Online Retail holiday sales reach 33.8 billion, up 13 percent

2013

Indias worlds third largest internet user.

RISE OF E-COMMERCE BUSINESS IN INDIA

Basic challenge

The e-commerce frenzy is booming in India nowadays, many e-commerce portals are popping up every second in India. The biggest challenge in present scenario is how to deal with the issues mushrooming amidst this growth? The main problem plaguing the e-commerce business is- Lack of proper infrastructure and online frauds.

Due to budget constraint many small business in India overlook the importance of authentic software. Moreover, many small businesses are showing interest in online business and most of them are not even aware of how to go about securing and protecting their online business. Many online companies don't have a basic antivirus on their servers. The rampant software piracy in India has made small business vulnerable to spy and Trojan attacks. Many business use pirated software, which has high chances of getting injected with malware, virus and bots. It is extremely unsafe to use online transaction on such servers as bank and credit card details could be easily stolen while doing the transaction. According to Norton, half of the Indian Internet users are unaware of the online security solutions available to them.

Overcoming these setback

A huge percentage Indian online market is impaired by these challenges. However, there are few sectors like financial and banking sectors, have raised themselves above these challenges successfully and they represent the real growth of India. Many of the reputed banks and financial institution has beefed up their cyber security by taking charge to control the online frauds. To protect their interest as well as customers' interested, many reputed banks have beefed up their cyber security by following the best practice in the industry such as implementing Secure Socket Layer encryption. Banks are also educating their audience by sending them SMSs and emails regarding secure online transactions. Some banks are also utilizing other medium of communication like newspaper and magazines and having a prominent section dedicated to cyber security tips and suggestions.

The Reserve Bank of India has announced that they will take strict action against the banks who do not implement guidelines on electronic security and operations by 2012, this has been a very encouraging and legitimate stance towards the progress of online security and discouraging online frauds. More over many e-commerce sites are now offering cash on delivery which is encouraging the users to make more transaction with online stores.

There has been significant improvement done by ecommerce companies as well as banks in India to encourage online purchase. Because of which there has been a significant growth in online purchase which is essentially good for e-commerce market in India.

Reasons Why Companies are AdoptingE-Commerce

Lower Cost

Doing e-business is cost effective; it reduces logistical problems and puts a small business on a par with giants such as Amazon.com or General Motors. In a commercial bank, for example.a basic over-the-counter transaction costs 0.50 to process; over the Internet, the same transaction costs about 0.01. Every financial transaction eventually turns into an electronic process. The sooner it makes the conversion, the more cost-effective the transaction becomes.

Economy

Unlike the brickandmortar environment, in ecommerce there is no physical store space, insurance, or infrastructure investment. All you need is an idea, a unique product, and a welldesigned web storefront to reach your customers, plus a partner to do fulfillment. This makes ecommerce a lot more economical.

Higher Margins

Ecommerce means higher margins. For example, the cost of processing an airline ticket is 5. According to one travel agency, processing the same ticket online costs 1. Along with higher margins, businesses can gain more control and flexibility and are able to save time when manual transactions are done electronically.

Better Customer Service

Ecommerce means better and quicker customer service. Online customer service makes customers happier. Instead of calling your company on the phone, the web merchant gives customers direct to their personal account online. This saves time and money. For companies that do business with other companies, adding customer service online is a competitive advantage. The overnight package delivery service, where tracking numbers allow customers to check the whereabouts of a package online, is one good example.

Quick Comparison Shopping

Ecommerce helps consumers to comparison shop. Automated online shopping assistants called hopbots scour online stores and find deals on everything from apples to printer ribbons.

Productivity Gains

Weaving the web throughout an organisationmenas improved productivity. For example IBM incorporated the web into every corner of the firm products, marketing, and practices. The company figured it would save $750 million by letting customers find answers to technical questions via its website. The total cost savings in 1999 alone was close to $1 billion.

Teamwork

Email is one example of how people collaborate to exchange information and work on solutions. It has transformed the way organisations interact with suppliers, vendors, business partners, and customers. More interactions means better results.

Knowledge Markets

Ecommerce helps create knowledge markets. Small groups inside big firms can be funded with seed money to develop new ideas. For example, DaimlerChrysler has created small teams to look for new trends and products. A Silicon Valley team is doing consumer research on electric cars and advising car designers.

Information Sharing, Convenience, and Control

Electronic marketplaces improve information sharing between merchants and customers and promote quick, justintime deliveries. Convenience for the consumer is a major driver for changes in various industries. Customers and merchants save money; are online 24 hours a day, 7 days a week; experience no traffic jams, no crowds, and do not have to carry heavy shopping bags.

LAWS AND REGULATIONS IN INDIA (BRIEFLY)

E-commerce laws and regulations in India are still evolving. This has created a sort of confusion and uncertainty among e-commerce entrepreneurs in India. While some have opened e-commerce outlets through websites others are exploring a more appropriate and legal way of running an e-commerce business in India.

Legal issues of e-commerce in India vary as per different business models. For instance, electronic trading of medical drugs in India requires more stringent e-commerce and legal compliances as compared to other e-commerce activities. Digital communication channels for drugs and healthcare products in India are scrutinized more aggressively than other e-commerce activities. In fact, regulatory and legislative measures to check online pharmacies trading in banned drugs in India are already in pipeline.

Besides there are many legal formalities that are required in order to start a company and e-commerce activity in India.

Mostly people decide to open a private company to substantiate an e-commerce activity. To incorporate a private limited company you must approve its name, registered office address, have at least 2 directors with director identification numbers (DINs), must have a minimum authorised capital of Rs. 1 lakh, memorandum of association (MOA) and articles of association (AOA), digital signature certificates (DSCs) wherever applicable, etc. Once these conditions and requirements are fulfilled, a certificate of incorporation is sent by post to the registered office of the newly registered company.

The private limited company is also required to comply with income tax related compliances. These include obtaining permanent account number (PAN), tax deduction account number (TAN), value added tax (VAT) registration and obtaining of tax identification number (TIN), professional tax if applicable, service tax, etc.

In certain cases, compliance with labour laws is also required. For instance, the Shops and Establishment Act is a legislation implemented by various States in India. The Act lays down mutual statutory obligation and rights of employers and employees. Registration of shop/establishment is mandatory within 30 days of commencement of work. Other workmen and labour related legislations cover areas like employees provident fund, employees state insurance, etc.

However, e-commerce in India is also required to be conducted in a legally permissible manner. This is more so when the Information Technology Act 2000 (IT Act 2000) prescribes stringent penal and pecuniary penalties for violation of its provisions during e-commerce transactions.

The e-commerce players must ensure cyber law due diligence in India. This is more so when the cyber law due diligence for companies in India has become very stringent and foreign companies and websites are frequently prosecuted in India for non exercise of cyber due diligence.

The legal requirements for undertaking e-commerce in India also involve compliance with other laws like contract law, Indian penal code, etc. Further, online shopping in India also involves compliance with the banking and financial norms applicable in India. For instance, take the example of PayPal in this regard. If PayPal has to allow online payments receipt and disbursements for its existing or proposed e-commerce activities, it has to take a license from Reserve Bank of India (RBI) in this regard. Further, cyber due diligence for Paypal and other online payment transferors in India is also required to be observed.

List of Top 10 E-commerce Companies of India:(as on 02/07/2013)

1. Flipkart

Website: (www.flipkart.com)

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was founded by Sachin Bansal and BinnyBansal in 2007. In its initial years, Flipkart concentrated on online sales of books, but it later on expanded to electronic goods and a diversity of other products. Flipkart offers multiple payment methods like credit card, debit card, net banking, e-gift voucher, and the major of all Cash on Delivery. The cash-on-delivery model adopted by Flipkart has proven to be of great significance since credit card and net banking penetration is very low in India.

2. Snapdeal

Website: (www.snapdeal.com)

Snapdeal is a leading online marketplace, headquartered in New Delhi, India. Snapdeal features products across categories like mobiles, electronics, fashion accessories, apparel, footwear, kids, home and kitchen, sports, books; and services like restaurants, spas & entertainment amongst others. The company was started by KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in February 2010. Snapdeal also provides discounted deals connecting with local merchants.

3. FashionandyouWebsite: (www.fashionandyou.com)

Fashion and You is a private invitation only shopping club, based in Gurgaon, India. It was founded by Harish Bahl in November, 2009. The fashion site features collections by top designers for men, women and children for up to 80% off retail prices. Fashion and You obtain authentic designer merchandise straight from the brand and provides it exclusively to its members through limited-time events.

4. MyntraWebsite: (www.myntra.com)

Myntra was established by MukeshBansal, AshutoshLawania, and VineetSaxena in February 2007. All three are IIT graduates, and have worked for several start-ups. Myntra is headquartered in Bangalore and has been funded by Venture Capital funds like IndoUS, IDG &Accel Partners. Myntra.com works as an online shopping retailer of fashion and casual lifestyle products. The company started off in the business of personalization of products, and soon expanded to set up regional offices in New Delhi, Mumbai and Chennai.

5. InkfruitWebsite: (www.inkfruit.com)

Inkfruit is an online t-shirt store, where t-shirt designs are submitted and voted for by a group of people. It was initiated in December 2007 (then called Gnome) by Fingerprints Fashion Inc., based in Mumbai, India. KashyapDalal, an undergraduate of IIT Bombay, and graduated from IIM Lucknow is the CEO of Inkfruit. This concept is taken from Threadless to India by Inkfruit. The community of Inkfruit submits t-shirt designs. These designs are put to vote on a scale of 1 to 5. The design that receives most votes wins, gets printed and is put for sale. The member whose design is selected gets paid a winning amount.

6. DealsandyouWebsite: (www.dealsandyou.com)

Dealsandyou is a deals website to find the best deals in Indian shopping. The site provides offers for any one for local services such as full body massages or buffet restaurants. Shopping using these deals in the website is a nice experience which can save a great deal of money as well.

7. Homeshop18Website: (www.homeshop18.com)HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group, headquartered in NOIDA, India. HomeShop18 was launched on 9 April, 2008 as India's first 24-hour Home Shopping TV channel, where anchors performed live demonstration of products on sale. The television channel established HomeShop18's foothold in Indian retail because of high television penetration. Later, as the internet reach grew all over the country, HomeShop18 expanded to the internet.

8.Yebhi.comWebsite: (www.yebhi.com)

Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion e-retailer, launched in the year 2009. Yebhi, which began as BigShoeBazaar.com, has a registered user base of about 1.5 million people, of who about half a million have transacted on the site. Nexus Venture Partners and N. R. Narayana Murthys Catamaran Ventures invested40 crore in Agarwals company in mid-2011. On July' 10th 2012, Big Shoe Bazaar India Pvt Ltd. owner of Brand Yebhi.com announced that it has raised100 Cr in Series C round of funding led by Fidelity Growth Partners India and Qualcomm.

9. Indiangiftsporta

Website: (www.indiangiftsportal.com)

Indian Gifts Portal is an online gifts super-market that makes sending a gift to your dear ones a pleasure. It offers a wide range of gift-options, most of which are exclusive Indian products, right on your desktop. On click of a mouse, you will discover it is just the kind of gift store you've always been looking for.

10. Caratlane

Website: (www.caratlane.com)

Caratlane is India's first online jewellery store with an assorted range of diamond jewellery designs to offer every customer. They offer more than 1,40,000 loose diamonds, and over 1000 ready to choose diamond jewellery online like diamond rings, pendants, earrings, bracelets, bangles and gold coins for all budgets. The quality & authenticity of diamond jewellery is validated with BIS Hallmarking and Certification from International labs like GIA, IGI, HRD and AGS. The website offers discount up to 25 percent of prices.

PRESENT SCENARIO OF INTERNET IN OUR COUNTRYIndia is now worlds third largest Internet user after U.S., China.Three-fourths of its online population is under 35, says comScore report.

India now has nearly 74 million Internet users, a 31 per cent increase over March 2012, the report says. The numbers are lower than other recent estimates, possibly reflecting comScores methodology that only factors in PC and laptop-based Internet usage. The Telecom Regulatory Authority of India (TRAI) pegged the number of Internet subscribers in India at 164.81 million as of March 31, 2013, with seven out of eight accessing the Internet from their mobile phones. The comScore report, on the other hand, puts mobile and tabled-based Internet traffic at just 14% of the total. Mobile phone based Internet usage is a key component of Indian Internet usage, and Id say the recent growth is being driven by mobile Internet usage, NilotpalChakravarti, spokesperson of the Internet and Mobile Association of India toldThe Hinduon Thursday. In addition, many Netizens were using dongles to access the Internet.

Three-fourths of Indias online population is under 35 as against just over half worldwide, the comScore report, India Digital Future in Focus 2013, says, possibly reflecting Indias more recent improvements in literacy. Men under 35 and women between 35 and 44 are heavier users. But women account for less than 40 per cent of all Indian users, a far lower sex ratio than that of other countries.

A quarter of time spent online is on social media, the comScore report says, and another 23 per cent on email. While Google sites have the most unique visitors, Net users spend the most time on Facebook, which is at second place as far as unique visitors are concerned. Yahoo, Microsoft and Wikimedia sites follow in unique visitor numbers. Among social media sites, Linkedin and Twitter are the next most popular, while Orkut is in decline. Google is by far the most popular search engine, accounting for 90 per cent of all searches in India. Online retail is on the rise, with domestic retail sites being the most popular, the report notes, For online travel websites too, domestic websites are the most popular, the Indian Railways website being by far the most popular destination.

SLOW MOVEMENT OF E-COMMERCE COMPANIES IN INDIA

Over the last few years India has experienced a spurt in technology advancement with the advent of broadband and 3G penetration as well as smart devices. Convenience of online shopping in view of busy lifestyles, long queues, urban traffic congestion and availability of a wider range of products (incl. international labels) delivered to your door-step (incl. COD) at lower prices compared to brick and mortar retailers attributes to augmenting e-Commerce adoption. On the contrary, following are few aspects which may be slowing the adoption of e-Commerce in India;

Trust & Quality

Consumers when shopping for tangible products have several queries encircling the product quality and often would like to obtain a first-hand feel of the product (such as the fabric quality, fit, or screen display quality, etc.).Many e-Commerce companies have tried plugging the holes by making available large sized product images (incl. various perspectives), size guides, however, cautious buyers may still prefer interacting with the product in real-time before an online purchase; not sure if their behavior would change with time.

Advent of cash-on-delivery (introduced by Pizza shops) has helped mimic the shop-floor check-out experience and provides immediate gratification for monies spent; this seems to be working well and has taken the business of e-Commerce to greater heights. Many e-commerce firms, including Flipkart, Rediff, Infibeam, Yatra, Cleartrip and Makemytrip, offer cash-on-delivery options. Flipkarts COO and co-founder BinnyBansal says cash-on-delivery drives over half its sales. Most players have reported a figure between 40% and 60%.

China has had COD [cash-ondelivery] for the last 10 years, and even today a big chunk of e-commerce there happens through cash. I think that will be the case in India too, Abhishek Nayak, CEO of Gharpay

Negotiation vs. Price Discounts

Every shopper would like to strike the best deal for their buy; am sure you will agree that Indians have a keen sense of bargaining for price and would walk/drive any distance for a better price. With online competition brewing you would find shoppers wedged amid the huge pricing battlefield and bounce from one store to another for discovering the best-buy. Have you ever experienced walking into a store (e.g. electronic, stationery) and striking a deal with the shop-floor manager over-and-above the tagged price? Try negotiating in comparison to an online/neighboring store deal and you may be pleasantly surprised. Price could be the prime influencer for decision making however the satisfaction of winning a negotiation could be another strong driver for purchase.

ReturnPolicy

Several brick and mortar stores in India provide the flexibility of returning goods within a stipulated time period once bought; in doing so gain customer confidence and trust. Online stores have yet not matured to the level of offering favourable return policies and often shoppers are forced to accept delivered products. One major advantage that UK online shoppers have over real world buyers is a statutory cooling-off period of seven days. You can cancel an online transaction and receive a refund anytime in the first seven working days for any reasonor no reason. Jabong.com is one of the few India-based commerce companies which offers a 30-day free return policy (full order as well as part if ordered for multiple products) which has significantly contributed to their sales volume. Hopefully many more will soon get added to the list of options.

Broadband Penetration

The total number of broadband subscribers including DSL, cable, fiber optic, and broadband wireless platforms is estimated to reach around 15.3 million at the end of 2012. The penetration is currently low however growing at a rapid pace. Glancing at a blank computer screen waiting for products to refresh/display owing to spikes in connectivity speeds and the fear of a transaction being interrupted during check-out due to technical snags are inherent problems which are yet to be fine-tuned.

Shopping online has become a mainstream activity for the rural people. People are evaluating the option of ecommerce and as the Internet penetrates deeper, more and more people will try it, eBay India Director (Category Management), KashyapVadapalli

Credit Card Penetration

Unlike in the Western countries, in India cash is used for most transactions. Poor fraud protection policies and the fear of personal information leaking as well as spamming further contributes towards the low adoption and usage of credit cards in India. However, credit card usage is gradually increasing in the premium card segment.

The country saw a 2 percentage point drop in the number of credit card-holders last year,-HSBC India consumer assets head Manish Sinha

Several advertising campaigns are being launched by eCommerce companies to reduce online shopping apprehensions of a consumer. Im sure you must have seen/heard about the new television campaign, titled No Kidding, No Worries, by the e-commerce portal Flipkart, responds to an online shoppers worry in a humorous and quirky way. Few companies are using celebrities as curators/advocates for products and in that way hoping to inspire trust in consumers. The eCommerce scenario in India is fast growing with numerous players and the evolution of product interfaces/platforms and customer experiences have been significant over the last few years. However, in India online buying is buzzing amongst the younger generation from select urban areas and in general is still perceived as being complicated and bumpy.

CHALLENGES FACED BY E-COMMERCE COMPANIES

Security

Security continues to be a problem for online businesses. Customers have to feel confident about the integrity of the payment process before they commit to the purchase.

System and Data Integrity

Data protection and the integrity of the system that handles the data are serious concerns. Computer viruses are rampant, with new viruses discovered every day. Viruses cause unnecessary delays, file backups, storage problems, and other similar difficulties. The danger of hackers accessing files and corrupting accounts adds more stress to an already complex operation.

System Scalability

A business develops an interactive interface with customers via a website. After a while, statistical analysis determines whether visitors to the site are onetime or recurring customers. If the company expects 2 million customers and 6 million show up, website performance is bound to experience degradation, slowdown, and eventually loss of customers. To stop this problem from happening, a website must be scalable, or upgradable on a regular basis.

Ecommerce is Not Free

So far, success stories in ecommerce have forced large business with deep pockets and good funding. According to a report, small retailers that go headtohead with ecommerce giants are fighting losing battle. As in the brickandmortar environment, they simply cannot compete on price or product offering. Brand loyalty is related to this issue, which is supposed to be less important for online firms. Brands are expected to lower search costs, build trust, and communicate quality. A search engine can come up with the best music deals, for example, yet consumers continue to flock to trusted entities such as HMV.

Consumer Search is Not Efficient or CostEffective

On the surface, the electronic marketplace seems to be a perfect market, where worldwide sellers and buyers share and trade without intermediaries. However, a closer look indicates that new types of intermediaries are essential to ecommerce. They include electronic malls that guarantee legitimacy of transactions. All these intermediaries add to transaction costs.

Products People Won't Buy Online

Imagine a website called furniture.com or living.com, where venture capitalists are investing millions in selling home furnishings online. In the case of a sofa, you would want to sit on it, feel the texture of the fabric etc. Beside the sofa test, online furniture sotres face costly returns which makes the product harder to sell online.

Corporate Vulnerability

The availability of product details, catalogs, and other information about a business through its website makes it vulnerable to access by the competition. The idea of extracting business intelligence from the website is called web framing.

High Risk of Internet StartUp

Many stories unfolded in 1999 about successful executives in established firms leaving for Internet startups, only to find out that their getrich dream with a dot.com was just that a dream.

ECOMMERCE TREND BOOMING IN INDIA

With the soared and record breaking online sale in the months of October and November, it is evidently proved that e-commerce will outpace total retail sales in few years.Growth of e-commercewas low in starting years due to initial inhibitions, but, it is growing now with extraordinary pace as the confidence of Indian buyers is increasing slowly. Seeing the current behavior of Indian buyers, online experts estimated that the trend ofe-shoppingwill become basic phenomena among buyers in arriving years. The present and futuree-marketersare keeping their eyes on the Indian market trends and studying the consumer behavior for creating best and attractive deals potential clients. As per experts the coming holiday season in December will blur the retail market shine by online deals and free shipping offers.

In last two years manye-commerce websiteshave mushroomed online and giving tough competition to one another with striking deals like free shipping, coupons, free gifts, easy return policy, and many more. As per AlexaFlipkart, Ebay, Snapdeal, Jabong , Home Shop 18,Yebhi, Myntra, Naaptol, Tradusin, and Fashionandyou are the top tene-commerce websites in India.

While Indian online market future is going to be boom and not bubble, the retailers are fastening their belts for launchingonline stores. It is a peak time; early adopters have already initiated the processes such aswebsite design and promotionfor surviving the competition between website and retail in future. Gear yourself up for the cutthroat competition in Indian market ase-commerce is slowly outpacing practical retail stores.

Comparison shopping has been on a growth but is still under-served compared to global averages. The need to compare and consume in India across other online categories like travel, shows a similar consumer behavior in retail category. In the coming months, expect more and more consumers relying on online research of products for features and prices.Online retail has seen a heavy overlap with social networking and search due to aggressive marketing and strong inclination towards social commerce. We expect a larger portion of online retail from social commerce with India positioning itself as one of the fastest growing social networked user base and also larger size of social groups.

To conclude, E-Commerce has seen tremendous growth in the last 12 months. Models like Cash on Delivery and other consumer centric payment options and improved service quality will boost overall sales. It is definitely the most exciting phase among online retailers and consumers as this learning curve will put India on the global map as one of the largest e-commerce markets in the coming months.

COMPANY PROFILE

Company Overview ofFlipkart Online Services Pvt. Ltd.

Flipkart Online Services Pvt. Ltd. owns and operates an online shopping Website in India. It provides books, movies, music, games, consoles, gaming accessories, mobiles, mobile accessories, cameras, camera accessories, computers, computer accessories, network components, software, peripherals, home and kitchen appliances, TV and video products, and personal and health care products. Flipkart Online Services Pvt. Ltd. was founded in 2007 and is based in Bengaluru, India.

No. 447/B, 1st A Cross

12th Main, 4th Block

Opposite BSNL Telephone Exchange

Koramangala

Bengaluru, 560034

India

Founded in2007

Phone:

91 80 3023 7000

Fax:

91 80 3023 7000

Key Executives For Flipkart Online Services Pvt. Ltd.

Mr. Sachin Bansal

Co-Founder and Chief Executive Officer

Mr. Binny Bansal

Co-Founder and Chief Operating Officer

Mr. Sanjay Baweja

Chief Financial Officer

Age:54

Mr. Sujeet Kumar

President of Operations

Mr. Mukesh Bansal

Marketing Chief, Head of Flipkart Commerce Platform and Director

Compensation as of Fiscal Year 2014.

Flipkart Online Services Pvt. Ltd. Key Developments

Flipkart Appoints Punit Soni as Chief Product Officer

Mar 4 15

Flipkart announced that Punit Soni, a Google product management executive and former vice president of product management at Motorola, will join Flipkart as chief product officer. Punit will lead the product definition and innovation charter for Flipkart consumer products, marketplace and transaction platform. In this role, Punit will be driving product strategy, design and product marketing functions to build world class user interface and product solutions.

Flipkart Reportedly In Talks To Raise Funds

Feb 16 15

Flipkart Online Services Pvt. Ltd. intends to raise funds. Flipkart is again in talks with investors to raise at least $500 million. The company is discussing fund-raising with existing as well as new investors, sources said. It is likely to use the fresh funds for technology to match the scale of the business and market share. "They have begun searching for funds again, as the company feels accumulating funds, though not desperately needed at present, is a good strategy. Talks have just started and it may take a few months to finalize the intricacies," a source close to the development said, requesting anonymity. Business Standard added that Flipkart refused to comment on the matter.

Flipkart To Reportedly List In Next 18 Months

Jan 29 15

Flipkart Online Services Pvt. Ltd. is preparing to raise at least $5 billion through an initial public offering (IPO) on the US bourses in the next 18 months. Flipkart Online Services Pvt. has not officially signed on any banker for the listing process but has stepped up work on the same. Morgan Stanley (NYSE:MS), The Goldman Sachs Group, Inc. (NYSE:GS), Citigroup Inc. (NYSE:C) along with Deutsche Bank AG (DB:DBK), are in discussions with Flipkart Online Services Pvt. Ltd. for the sale mandate, Economic Times reported citing multiple sources directly involved in the matter. Flipkart Online Services Pvt. Ltd. declined to comment on the story. The Goldman Sachs Group, Inc., Citigroup Inc. along with Deutsche Bank AG declined comment, while Morgan Stanley did not respond to queries on this report.

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Flipkart went live in 2007 with the objective of making books easily available to anyone who had internet access. Today, we're present across various categories including movies, music, games, mobiles, cameras, computers, healthcare and personal products, home appliances and electronics and still counting! With over 11.5 million book titles, 11 different categories, more than 2 million registered users and sale of 30000 items a day, we can say with utmost confidence that we are one of the leading e-commerce players in the country.

Comparative analysis

1. Keep It Simple

When you look at some very well known online retailers and their logo design, you'll notice one common thread: simplicity. Largely text-based, both of the following brands have taken the name of their organization and formatted it to be easily read and identified, whether it appears on their site, in a list of search results or on an affiliate site.

This stripped-down format makes them easy to remember and also provides everything the customer needs to find them on the web since the logo itself doubles for the web address in each case.

2. Optimize for Mobile

Legibility for mobile shoppers is really important these days. With the growing level of shopping people are conducting on the go, its important to make sure the text you include in your logo isnt too small. Always keep an eye on the scalability of your design, ensuring the logo that appears on your ecommerce site or email receipt is easily read on the miniature screen of a cell phone or similar web-enabled device.

3. Reveal Your USP Through Images or Tagline

Position yourself by clearly defining the specific aspects of your product or service that are superior to the competition. If you are the only, the biggest, the oldest or the best, consider reflecting that distinction through a catchy slogan or quality art that lets your customers know youre in the lead. Shopify store Cookbook Village does this really well by including "Vintage and used cookbooks for chefs, collectors and foodies" right in their logo. They have another logo without the bottom text that scales better on mobile devices and that they use on Facebook and Twitter.

4. Maximize Your Web Pages with a Horizontal Design

When designing your logo, you might consider keeping the design primarily horizontal. By minimizing the vertical space and stretching graphics and text across the horizontal plane, you have a larger amount of real estate to showcase your products, preventing shoppers from having to scroll down when browsing. Shopify store A Book Aparthas a beautiful logo (not surprisingly) thatdoes a great job of using a horizontal design to increase the number of products above the fold.

5. Use Images Wisely

Its almost impossible not to think about Amazon without the image of their upward-arced arrow coming to mind. Plus, as you can see in the other online retailers mentioned above, the use of art is fairly minimal, making it that much more important to select images that are unquestionably tied to your offering. Shopify store So Worth Lovingincorporates a clean and minimalist image that will stick in a customer's mind. The half diamond, half heart conveys quality and value with one half and love with the other.

Where to Start

Start by getting inspired. There are a number of resources available on the web that can provide an endless catalog of art and inspirational ideas for making an ecommerce store logo. Also check out Shopify's guide on How to Design an Online Store Logo.

This is a guest post: Dylan Mazeika is an online writer with a background in marketing and small business. He enjoys writing articles and guest posts on the latest business and design trends, and helping small business owners with free logo design.

DEFINITION OF E-COMMERCE (ELECTRONIC COMMERCE OR EC)

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.

CONCLUSION

E-commerce is still in its formative stage. The business-to-business and intra-organizational segments currently dominate e-commerce. Many major digital retailers are as yet in the investment and brand-building mode and show no profits; yet many established retailers realize profits from the new selling channel. Buoyant growth is apparent throughout.

The technological infrastructure currently imposes several limitations on the development of a global market-space and on the personal convenience of the participants. An integrated consumer-oriented transaction space is yet to emerge. The consumer marketplace is being developed by a large number of entrepreneurial initiatives, many of them experimenting on the frontiers.

As many new moves are yet to take place and the supply chains are to be reconfigured, many new firms may be expected to emerge and specialize around newly redefined core capabilities. The business models of many existing firms will be threatened. E-commerce will present over time countless opportunities and challenges to our economies and societies. Expansion of commerce and technological innovations are two of the levers of economic growth. These forces are combined in the progress of E-commerce.

The prevailing judgment at this stage of E-commerce development is to allow free-market forces to assert themselves unhampered by excessive government regulation. The traditional institutions, such as banks of issue, commercial banks, universities, established business intermediaries, media and publishing companies, would find a need to redefine their roles in the new environment. The taxability of products traded globally over the Internet is as yet an open issue. Intellectual property that can be converted to on-line content may find itself reevaluate in the global marketplace.

The tension between the transactional efficiency of spot purchasing facilitated by electronic markets and the need for long-term relationships of trust and forbearance, enabled by electronic hierarchies, will persist and call for much study. The geographical limitations that have bound the place of residence to the place of work, and that have already been eroded by the growth of tele-work, may be expected to be even less binding. Indeed, the possibilities of the loss of rural space to the new ex-urbanites are already causing environmental alarms. A number of countries that had been marginalized by their geographical position take extremely active interest in E-commerce as the means to move to the center of the virtual geography. The redistribution work has to be studied from multiple perspectives.

E-commerce has entered a stage of rapid and sustained development. A large number of business models have been enabled by it. A number of questions have been posed here. All of these and many others will require further experimentation, experience, observation, analysis, and research.

BIBLIOGRAPHY

http://www.electroniccourts.in

http://www.quora.com/What-are-the-biggest-challenges-facing-eCommerce-sites-in-India

http://www.thehindu.com/sci-tech/technology/internet/india-is-now-worlds-third-largest-internet-user-after-us-china/article5053115.ece

http://www.bestindiansites.com/flipkart-top-ecommerce-company/

http://ptlb.in/ecommerce/

http://www.addictivemedia.co.in/The-rise-of-E-commerce-business-in-India.html

http://claricetechnologies.com/blog/2012/08/e-commerce-growth-in-india-is-slow-movingyesno/

http://www.hindustantimes.com/ecommerce-booming-in-india/

http://www.siliconindia.com/news/business/10-Best-ECommerce-Companies-in-India-nid-143370-cid-3.htmlutm_source=clicktrack&utm_medium=hyperlink&utm_campaign=linkinnews

http://yourstory.com/2013/01/5-challenges-that-an-early-stage-e-commerce-startup-face-in-the-indian-e-commerce-industry/

http://www.blog.finesseim.com/e-commerce-trend-india/

Various textbooks on the following topics were also referred to:-

E-commerce (B.Com level)

1