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 now.
The digital revolution progressed much faster than the industrial revolution, other countries too took the initiative and jumped on the bandwagon to challenge and grab a piece of this from the USA, which is still easily ahead of the others. India with its brain power, software eminence, cheap and skilled labour, and a vast english speaking population among all the third world countries was not going to be left behind. A Ministry of Information and Technology was given the task to outline the objectives, frame laws and propose a business model, a detailed study was carried out to understand these initiatives.
Following the international developments, the Ministry Of Information and Technology (MIT) formulated an action plan. The main components of the action plan were high-speed backbone network, Internet and NII, interconnection of networks, PC Penetration and localization of software in Indian languages. Further, the government made a commitment to enhancing computerization, upgrading ERNET, promoting multimedia programs, advancing R&D, generating test beds for technology adoption and flagship applications of NII. For further implementation, goals were set to enhance IT use along with promotion of e-commerce, domestic and foreign investments, and regulatory and legal framework matching international norms. Anticipating the need to facilitate the growth for e-commerce, DOE/MIT initiated formulation of Cyber Laws in the country. A project of Electronic Data interchange (EDI) to facilitate trade amongst trading partners. EDI is the process for exchanging data in electronic formats between heterogeneous applications and/or platforms in a manner that can be processed without manual intervention.
Access to e-commerce: access to e-commerce means access to two things notably: access to Internet services and access to things that can be traded electronically. For the access to Internet services, there needs to be proper availability of infrastructure, hardware and software and access to the communication networks. For electronically trading we need the E-commerce rules and electronically traded services.
Study on E-commerce industry in India
To understand the situation in India, Nasscom conducted a survey on India’s potential for e- Commerce industry with the following points of reference:
(a) Anticipate future potential of E-commerce industry and market in India.
(b) Understand and evaluate the present state of E-commerce industry and market in
India.
(c) Suggest suitable strategies to enable Indian IT companies to address and capture a
significant share of E-commerce market.
(d) Analyze current Internet access and penetration in India and evaluate potential
threats.
(e) Identify present and potential global trends that are expected to define new
paradigms of E-commerce.
(f) Increased proliferation of Internet.
(g) Achieving a leadership position in E-commerce technologies and infrastructure
market.
(h) Developing state-of-the-art E-commerce enabling and access infrastructure in India.
A study done by the Indian Market Research Bureau (IMRB, 2000)
58% percent of Indian CEO’s rated E-commerce as crucial to their growth strategy, while only 20% of the of the India’s 318 major corporations surveyed were currently implementing E-commerce. Only 26 percent of PC-owners were aware of E-commerce, with the majority of them indicating that they would prefer to not make purchases on-line until quality of products and delivery could be guaranteed.
Penetration analysis of online services based on the NASSCOM (1999) study indicated that penetration rates of internet and E-commerce transactions in India are expected as follows: For Business-to-Business transactions, Indian industries are expected to reach online penetration of 2% by 2003 and 8% by 2008. It further expects that India’s active Internet population would spend close to 1.4% of its total regular household spending through Internet purchases by 2003.It is expected that by 2003 Internet Business-to-Consumer transaction would constitute 80 percent of the revenue.
Supply Chain Management optimization is one of the strongest drivers of global E-commerce solutions market, as it spurs Business-to-Business transactions. More than 68% of Indian software houses have informed of strong expertise in Supply Chain and Distribution Management solutions. Almost 32% of IT company respondents have identified web based consumer businesses as a major opportunity area, with expected paybacks beginning in 3-4 years. Some of the promising areas of E-commerce services are: legacy application integration; Internet application integration; EDI, Migration to web based models; new IT frameworks, integration with business strategy and strategic IT consulting (OECD, 1999).
Opportunities for India
If one looks at the opportunities for India at a macro level, till now outsourcing software and IT services from USA and other advanced countries was the norm. In this regard, India has emerged as a preferred destination with low cost operations, highly skilled labour and good software. Therefore, the Indian Software Export Industry could target for a significant share of E-commerce market in the years to come. In the emerging global digital economy, it would be necessary for Indian firms to follow the same online b2b practices as done by others in the world to be a stakeholder. E-commerce would give opportunity to small and medium Indian enterprises to project their capability globally and thus participate more proactively in such ventures. Many traditional sectors such as handicrafts, textiles, art, and herbal medicines which have failed in the past to tap the global markets due to lack of marketing resources, will find the internet an ideal medium. For tourism Indian monuments, temples, cultural heritage and classical music could be made known widely to the world at a very low cost of marketing and could be further leveraged in enhancing global tourism of which India gets only 2 percent. E-Commerce is one IT tool that could do wonders to the Indian economy in many fields. In NASSCOM study, India has the potential to create E-business worth $1.5 billion by 2004 and around $10 billion by 2008. E-commerce is a fast moving area internationally in terms of opportunities and the technologies. It is predominantly led by industry and user sector with government playing a catalytic role. Government by providing proactive policies and environment and facilitating support and critical inputs for growth can do wonders for E-commerce in and beyond India. In the last one year, significant progress has been made in the country in this regard. New Telecom Policy 1999, new ISP policy and certain specific policies have emerged out of acceptance of Part I of the Report of National Task Force on IT and Software Development. They have been implemented aggressively and without delay. The drive to set-up world-class information infrastructure at most competitive price has to be accelerated. The requirement to develop adequate bandwidth of the order of 10Gb on national routes and even terabits on certain congested important national routes will be immediately addressed to so that growth if IT as well as E-Commerce will not be hampered.
E-commerce and standards
Information Technology Bill (government of India, 1999) had been passed by the parliament. The bill provides for legal recognition of the electronic records and its verifiability through digital signature. The bill has enabled the conclusion of a contract and the rights and obligations of the involved parties. Since the bill has come into effect, people have been able to carry on trade via the electronic medium. Also, an amendment of the Indian Patent Act has been introduced for protection of intellectual property rights.
Following the phenomenal expansion of the Internet, the easy interconnectivity, applications in E-commerce have seen a huge increase in transactions. As information is exchanged freely, the system needs to de designed keeping in mind the aspects of privacy, integrity, authenticity, and non-repudiation. There are frequent reports of hacking and misuse of credit/debit cards etc. National capability in this area is required to ensure that no trap-doors are available giving rise to the lack of confidence on the
Part of business houses. There would be, in addition, indigenous products similar to Secure Electronic Transaction (SET) and Secure Socket Layer (SSL). Significant work needs to be done one a continuous basis to ensure the security. Infact now the encryption levels are of the order of 128bit level. Firewalls and intruder detection systems, and anti-virus software are all required to safeguard ones data.
With a view to ensure global seamless connectivity for E-commerce, as the demand picks up, the need for such standards has been felt. The general perception is that it should be private sector, market led approach to open standards supported by Government. In this regard, Ziff Davis of Global Information Infrastructure (GII) Group has been working for a standard for Internet based e-commerce involving a broad alliance of leading global corporations, institutions and individuals. NIST, USA is providing effective support for industry led standards (through alliance with Internet Engineering Task Force). These efforts include
- Building standards road-maps with private sector stakeholders;
- Providing technical assistance to industry in the development and harmonization of open standards;
- Establishing neutral test beds and developing reference implementations with technical experts from the private sector;
- Developing test methods and infrastructures for measurement and demonstration and
- Contributing to implementation guidelines set by ITU, ISO, IEC, UN, and CEFACT who have been working in this area.
It is necessary to set up a dedicated team in the country, which would follow these international trends and actively participate in these international standards so that capabilities and interest of India are taken care of. If India is to become a major stakeholder in E-commerce, Indian Industry needs full commitment from the government in this area. Real benefits of E-commerce will come to India if Indian industry leapfrogs in using these tools to re-engineer its operations aiming at gaining competitive advantage. USA and Europe through support of their respective governments have taken such initiatives. Specifically under the Fifth Framework Program of European Commission, one of the key actions is related to New Methods of Work and Electronic Commerce. In USA, industry, government and Small Business Electronic Commerce Working Group has been created to serve SMEs. Collaborative programs are being developed to help SMEs benefit from electronic commerce through increased training and education. To take lead in E-commerce, it is necessary to develop such programs. Various organizations of MIT could work with different leading industry associations to develop such awareness building and education programs. A special group could be set-up to develop this. A proactive role by WTO, WIPO and other multilateral organizations would put pressure on all countries to quickly gear-up for E-commerce culture. However, a major concern is the proposed zero-duty issue on E-commerce, if it is considered under GATT. Developing countries need to examine the consequences carefully and evaluate possible option of its classification under GATT. For certain international E-commerce, one needs to know if E-commerce transactions should be classified as cross-border trade or consumption abroad. Likewise, a considered view on domestic taxation issues needs to be taken.
Conclusion
India clearly stands to gain from the E-commerce revolution, with probably the cheapest labour available and low barriers to entry, an agreed standard for implementation, it’s a very practical business model For E-commerce. Also, Understanding e-commerce is a bit like learning how to drive a car. Reading the driver's manual is important, but ultimately you need to get behind the wheel and spend time navigating the roads to get a feel for what it is all about. Most e-commerce web sites are very large, often confusing and overwhelm the visitor with a huge amount of information. People cannot easily find what they are looking for. Moreover, the web site is presented in the same format to every visitor, irrespective of his needs. Now enforcing the E-commerce business model to the target audience and making it available to the common man without the fears of trading over the Internet need to be realized. As there exists a suitable legal framework and promotion of e-commerce enterprises and e-business initiatives. Even the security issues of cryptography and digital signatures addressed, e-commerce is a safe bet. Ever heard of M-commerce? This is another variant of E-commerce, by using mobile wireless devices. Did u know more people in India own a cell phone than credit cards? Why not be billed from your cell phone and at the end of the month receive statements (bills) on your monthly cell phone bills!!! . Isn’t nearly everyone already tired carrying so many different plastic cards in their wallets, isn’t this a much easier and simpler solution.
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