MSc BIT E-Commerce Operations

2003/2004: E-commerce in India

Introduction

One needs to look at the Internet phenomenon as an opportunity rather than a threat, realignment internally rather than just something happening remotely, external to one's business core. The Web-enabling of business is inevitable. The very nature in which companies communicate with their customers, suppliers and employees is undergoing a big change.

Only minorities of businesses are cynical about the impact of the Net on business in India. According to a study conducted by Nasscom: Among user organizations, more than 90 per cent expressed keen interest about the increasing adoption of e-commerce and its potential benefits.

Over 55 per cent of corporate respondents said that e-commerce transactions were integral to their corporate plans. Of these 85 per cent were industries that did not have direct or frequent contact with end consumption. About 23 per cent of top 500 companies in India have some form of e- commerce in place.

The most commonly found business practice is to establish extranets or EDI (business-to-business) infrastructure for a learning period. This is subsequently upgraded to Internet-based access mechanisms.

Over 90 per cent of the respondents cited, perceived efficiency in supply chain management as a motive for B2B e-commerce and enhanced customer service (customer relationship management) for B2C transactions.

Despite the lack of a regulatory infrastructure, the total volume of e-commerce transactions in India was $100 million during 1999-2000. E- business transactions in India reached $400 million during 2000-01. Of this, $65 million comprised retail transactions and $335 million of B2B transactions. With the regulatory framework firmly in place, an improvement in telecom infrastructure and an increase in PC penetration lead to $900 million of e-commerce transactions in India by 2001-02.

If one were to put these figures in perspective with the Internet population in India, then we can confidently predict that the best is yet to come for e-commerce. Internet usage is about to go through the roof. There were about 1.6 million Internet subscribers (or 5 million users) by March 2001. This figure increased to 4 million Internet subscribers (10 million users) by March 2002, and 8 million Internet subscribers (18 million users) by March 2003.

One must remember not to restrict oneself to Net-based e-commerce when talking about e-commerce as a whole. In fact, telephone, fax, TV, Electronic payment and money transfer systems, EDI and Internet are the ways E-commerce may be accomplished.

The E-commerce scope covers the gamut of B2B e-commerce, including customer relationship management, supply chain management, business intelligence through data warehousing and even virtual enterprises.

The Nasscom study has concluded that penetration of Internet and e- commerce transactions in India will increase by leaps and bounds. It is felt that in the case of B2B transactions, the Indian industry will reach online penetration of 5 per cent by 2003.

The Challenges, Choices and Developments

Studies indicate that increases in the freedom of the movements of goods, services, capital, technology and people coupled with rapid technological development resulted in an explosion of global e-commerce. The share of the global e-commerce a country is likely to receive, on the other hand, depends upon country level factors such as income and population size, the availability of credit, venture capital, and telecom and logistical infrastructure, tax and other incentives, tariff/non-tariff barriers, government emphasis on the development of human capital, regulations to influence firms’ investment in R&D, organizational level politics, language and the activities of international agencies.

     

The world is witnessing a lot of advancement in this Information age; it is silently but surely changing the social infrastructure within the nation for its socio-economic development as well as acting as a vehicle to integrate itself as a part of global networked/digital economy. While there is no single globally accepted definition of E-Commerce, in its most basic form it is the goods and services transacted over Internet. A more accepted definition could be the one accepted in the WTO Ministerial Declaration on E-Commerce “the production, distribution, marketing, sales or delivery of goods and services by electronic means” (WTO, 1999).

Join now!

Although Electronic commerce has been around for almost two decades in some form or the other, with the emergence of the Internet it has evolved into something much bigger. Infact the term E-commerce came into existence after the Internet. Accessible 24/7 anytime anywhere, so the time and place constraints are no more binding. E-commerce is essentially the traditional commerce with the added flexibility of electronic/digital networks. There are essentially two main types of E-commerce i.e. B2C (business to consumer) and B2B (business to business). C2C (consumer 2 Consumer) also was heard but never really acknowledged and hardly even heard ...

This is a preview of the whole essay