E-commerce

Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service is conducted over electronic systems such as the Internet and other computer networks. Electronic commerce draws on technologies such 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. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. E-commerce can be divided into: E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall" The gathering and use of demographic data through Web contacts and social media Electronic Data Interchange (EDI), the business-to-business exchange of data E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters) Business-to-business buying and selling The security of business transactions

Timeline
1979: Michael Aldrich demonstrates the first online shopping system.
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1982: Minitel was introduced nationwide in France by France Telecom and used for online ordering. 1984: In April 1984, CompuServe launches the Electronic Mall in the USA and Canada. It is the first [5] comprehensive electronic commerce service. 1984: California becomes first US state to enact an Electronic Commerce Act defining basic consumer rights online. 2012: US eCommerce and Online Retail sales projected to reach $226 billion, an increase of 12 [21] percent over 2011. 2012: US eCommerce and Online Retail holiday sales reach $33.8 billion, up 13 percent.

E- commerce in india
India has an internet user base of about 137 million as of June 2012. The penetration of ecommerce is low compared to markets like the United States and the United Kingdom but is [3] [4] growing at a much faster rate with a large number of new entrants. The industry consensus is that [5] growth is at an inflection point. Unique to India (and potentially to other developing countries), cash on delivery is a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce
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tends to be Cash on Delivery. Similarly, direct imports constitute a large component of online sales. Demand for international consumer products (including long-tail items) is growing much faster than incountry supply from authorised distributors and e-commerce offerings.

India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and [1] to $14 billion in 2012. About 75% of this is travel related (airline tickets, railway tickets, hotel [6] bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million as of [7] 2009). India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-vis a global growth rate of 810%. Electronics and Apparel are the biggest categories in terms of sales. Key drivers in Indian e-commerce are: Increasing broadband Internet (growing at 20%
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MoM) and 3G penetration.

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Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers Busy lifestyles, urban traffic congestion and lack of time for offline shopping Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs Increased usage of online classified sites, with more consumer buying and selling second-hand [10] goods Evolution of the online marketplace model with sites like ebay, Infibeam, and Tradus. The evolution of ecommerce has come a full circle with marketplace models taking center stage again.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by 2016 [11] and $850 Bn by 2020, estimated CAGR of 7%. According to Forrester, the e-commerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012 [12] 16. As per "India Goes Digital" , a report by Avendus Capital, a leading Indian Investment Bank specializing in digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel market in India is expected to grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to growt to Rs 53,000 Crore ($11.8 billion) in 2015. Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$ 24 billion) by the year 2015 with both online travel and e-tailing contributing equally.
Problems of E- commerce 1. Lack of Strategic Direction "Build it and they will come" is not a strategy for e-commerce success. You wouldn't expect a new store to bring in business without advertising and promotion, so why would you build a website and expect it to boost business if nobody knows it exists? E-commerce must be supported with marketing and advertising if you want to make it part of your business as a true channel. Search engine optimisation is critical, as is the integration of promotional materials and marketing campaigns to generate traffic by promoting online and offline store locations and create synergy through consistency in brand messages.
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Just as misguided is the "spray and pray" approach. You can't be everything to everyone. Your product or service is designed to satisfy the particular needs of your target segments, and marketing and advertising should reflect that. Targeted communications are key. 2. Poor User Interface A user interface that is confusing or hard to navigate will deter customers and prospects and reduce repeat purchases. Targeted search, simple menu structures and clearly labelled products are some of the basic ways you can encourage visitors to purchase. For more tips on how to increase usability and enhance your customers' online experience click here. 3. Lack of Trust Trust and credibility with your customers is important both online and offline. Security issues can deter customers and prospects from ever buying. The online environment differs from the offline environment in that customers are required to provide full credit card details in order to purchase. As such, businesses must provide security against misuse of this information. Use of SSL (which enables the encryption of sensitive information during online transactions), known and trusted payment gateways and clearly displayed privacy policies will increase trust and credibility in the organisation. Make it simple for customers to see that others have purchased and have had a positive experience with your company through use of a "clients" or "testimonials" page where possible. As is common practice offline, businesses can also increase trust and credibility by providing tracking capability, delivery guarantees and returns policies, which provide customers with the peace of mind that the product will arrive within the specified time period, in good condition, and can be returned if it's not quite right. 4. Payment Gateway Issues Limited payment options and poor post-transaction communications can prevent customers and prospects from purchasing. Offline customers are provided with cash or card alternatives and a receipt for record of purchase. Similarly, online businesses should provide a wide range of payment options to ensure customers are capable of purchasing, as well as a "thank you" page with purchase reference/credit card receipt details to provide assurance that the transaction has been recorded and documentation is available for personal records. 5. Poor Technology Just as a shabby, unkempt retail outlet screams poor quality, outdated technology also indicates a product/service that is behind the times. Customer-driven changes in e-commerce technology occur constantly, and online retailers are expected to keep up. Your customers will turn to your competitors for products and services if they are more accessible, or provide additional benefits (eg. product comparison capabilities). Leading website technology which streamlines distribution, simplifies stock control and increases overall organisational effectiveness through integration with CRM databases and accounting systems can increase operational efficiency and reduce costs. providing players with a competitive advantage over those who lack such technology. 6. Lack of Transparency Offline, customers are able to view products and services in great detail, and can approach a customer service representative with any questions. Online, information should be just as readily available. Your website should provide all of the information your customers need to purchase, as well as a "help" section with frequently asked questions and clearly displayed contact details should they wish to speak to a customer service representative. Privacy policies should be visibly displayed and delivery guarantees and returns policies clearly stated. Encourage visitors to engage with your business by providing interactive applications such as forums where appropriate. 7. No Personalisation

One size does not fit all. Your website should provide a variety of products, prices and styles for different customer segments to increase probability of purchase - just as you would if you were operating offline,. Provide differentiated pricing and promotions for the various entry/point of sale sections of your website, (as you would promoting your product/service offline in various locations) and tailor the online experience as much as possible by allowing your visitors to tell you in detail what interests them. 8. Failure to Manage Customers Online, organisations can learn from customer experiences by:

developing communities around their product or service through social networking sites and forums, surveying or polling visitors, and using analytical tools like Google Analytics, coreDNA Statistics or Omniture to track where visitors are referred from and what interests them on the site. This data can then be used to refine strategy. In order to stay top of mind, organisations must reach customers regularly. Online, organisations should provide the opportunity for visitors to sign up for newsletters, subscribe to blogs via RSS and undertake personalised direct marketing campaigns via email to keep customers informed. In addition, your website should differentiate the product/service offering for various target segments where possible. 9. No Incentives It's no secret that promotions boost sales, and often we go online looking for a bargain (the cost of sale is lower online and visitors frequently expect prices to reflect this). If your website lacks incentives, or they're difficult to find, you may be losing business to your competitors. Follow the same principles you would offline and offer seasonal promotions, sales and loyalty programs which provide added perks. 10. Poor Product/Service Offering The online environment is highly competitive and shoppers are becoming more experienced. If you don't deliver what you promise, or offer poor customer service, bad news will travel fast (particularly as visitors can post details of their poor online experience all over the internet almost immediately!). Lastly, and possibly most importantly, none of this will help if your product or service isn't up to scratch. Just because you operate online doesn't mean you should ignore product/service quality. Conclusion While there are a number of reasons why a business may not succeed in e- Commerce, these are the most common, and should be avoided in order to achieve success in the online retail environment.

E COMMERCE LECTURE NOTES Group I-DiscussionReasons why business should go online 1. To Establish an Online PresenceTo be a part of Online community and show that the business interest is to serve them, a business needto be on the WWW for them because the competitors definitely will. Also, worldwide ecommercerevenues are too huge to ignore no matter what the business is.2. To NetworkA lot of what passes for business is simply nothing more than making connections with other people.Every successfull business person knows, it's not what you know, it's who you know. Passing out yourbusiness card is part of every meeting and every person can tell more than one

story of how a chancemeeting turned into the big deal. Well, what if you could pass out your business card to thousands,maybe millions of potential clients and partners, saying this is what I do and if you are ever in need of my services, this is how you can reach me. You can, 24 hours a day, inexpensively and simply, on theWWW. If you move, or get a new number you still have your virtual location where people can findyou .3. To Make Information AvailableWhat are your hours? What do you do? How can someone contact you? What methods of payment doyou take? Where are you located? What is today's special? Next week's promotion information? If youcould keep your customer informed of every reason why they should do business with you, don't youthink you could do more business? You can on the WWW.4. To Serve CustomersMaking business information available is one of the most important ways to serve your customers. But if you look at serving the customer, you'll find even more ways to use WWW technology. Allow yourcustomer to search for exactly what they want without hunting through the store, they can find colors,sizes and more without the help of a sales agent, its all right there at their fingertips. All this can bedone, simply, quickly and inexpensively, on the WWW.5. To Increase Public InterestYou won't get a national magazine to write up your local store opening, but you might get them to writeup your Web Page address if it is something new and interesting. Even if Nation Daily would write aboutyour local store opening, you wouldn't benefit from someone in another town reading about it, unlessof course, they were coming to your town sometime soon. With Web page information, anybodyanywhere who can access the Web and hears about you is a potential visitor to your Web site and apotential customer for your information there.

Compiled by: Ahenda J. A . Page 2 6. To Sell ThingsMany people think that this is the number 1 thing to do with the World Wide Web, but here it is numbersix to make it clear you should consider selling things on the Internet and the World Wide Web after youhave done all the things above and maybe even after doing quite a few more things from this list. Why?Well, the answer is complex but the best way to put it is, do you consider the telephone the best placeto sell things? Probably not. You probably consider the telephone a tool that allows you to communicatewith your customer, which in turn helps you sell things. Well, that's how we think you should considerthe WWW. The technology is different, of course, but before people decide to become customers, theywant to know about you, what you do and what you can do for them. This can be achieved easily andinexpensively on the WWW. When you are ready to sell, make sure you have the best in current Web technology without paying so much that you won't make a profit until the next century . That's smartbusiness.7. To Release Time Sensitive InformationWhat if your materials need to be released at a certain time? For example, contest winner or a

specialpromotion. Now the information can be made available at midnight or any time you specify, with allrelated materials such as photographs, bios, etc. released at exactly the same time.8. To Make Samples AvailableWhat if your widget is great, but people would really love it if they could see it in action? The album isgreat but with no airplay, nobody knows that it sounds great? A picture is worth a thousand words, butyou don't have the space for a thousand words? The WWW allows you to add sound, pictures andshort movie files to your company's info if that will serve your potential customers . No brochure willdo that. You could potentially send out samples but the cost to do that would be overwhelming for asmall business.9. To Reach a Highly Desirable DemographicThe demographic of the WWW user is probably the highest massmarket demographic available. Usuallycollege-educated or being college educated, making a high salary or soon to make a high salary. Evenwith the addition of the commercial online community, the demographic will remain high for manyyears to come.10. To Answer Frequently Asked QuestionsWhoever answers the phones in your organization can tell you, their time is usually spent answering thesame questions over and over again. These are the questions customers and potential customers wantto know the answer to before they deal with you. Post them on a WWW page and you will haveremoved another barrier to doing business with you and free up some time for that harried phoneoperator or yourself.