Paper Title: A study on Impact of E-commerce on Retail Industry

Project Submitted to the Department of Commerce and Management,

St. Xavier’s University, Kolkata.
In partial fulfilment for the Degree of Bachelors of Commerce in Finance
By:
Swati Agarwal
(Registration number: XK01-2112-0533-20)
Under the supervision of Dr. Sumantra Bhattacharya
Department of Commerce and Management,

St. Xavier’s University, Kolkata,

Action Area IIIB, P.S. – New Town,
Kolkata – 700160, Website: www.sxuk.edu.in

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 CERTIFICATE

This is to certify that Ms. SWATI AGARWAL student of Bachelors of Commerce,

has carried out this Project titled Impact of e-commerce on retail industry.

Under the supervision and guidance of Dr. Sumantra Bhattacharya, in the

Department of Commerce and Management, St. Xavier’s University, Kolkata,

India. The work submitted is original to the best of our knowledge and has not
been carried out elsewhere in any other University or Institute.

_____________________________ __________________________

(Signature with Stamp) (Signature with Stamp)

Dr. Sumantra Bhattacharya Dr. Somak Maitra

(Supervisor) (Dean of Commerce and Management)
Department of Commerce and Management St. Xavier’s University, Kolkata.
St. Xavier’s University, Kolkata. Kolkata – 700160, India.
Kolkata – 700160, India.

________________________
Swati Agarwal
(Signature of Student)
Course: B com (honors)
St. Xavier’s University, Kolkata.
Kolkata – 700160, India.

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Paper Title: A study on Impact of E-commerce on Retail Industry

Department/ course: B.com (Honors) in Finance

Semester: Sixth
Paper Code: BCHRCC620J
Name of Student: SWATI AGARWAL
Roll No.: 0110
Date of Submission:

Declaration by the Student

_____________________________________

I affirm that, to the best of my knowledge, I have identified all my sources

and that no part of my Dissertation Paper contents any unacknowledged material.

_______________________________

Signature of Student (with date)

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Acknowledgment

Throughout a decade, various economists, industrialist, and radical thinkers contribute useful
and thought-provoking insights to our research project.

Their impact to the study’s success, as well as global economy in general, is immeasurable.

I’d like to express my gratitude to the following people for guidance in this project:

Dr.. Sumantra Bhattacharya (Supervisor), Department of Commerce and Management, St.

Xavier’s University, Kolkata.

Dr. Somak Maitra (Dean), Department of Commerce and Management, St. Xavier’s
University, Kolkata.

Than
k You,

Swat
i Agarwal.

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Table of Contents

Contents Pages

1. Introduction - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8–11
1.1 Background of Study - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8-10
1.2 Conceptual Framework - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10-11
1.3 Chapter Planning - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11
2. Literature Review - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12-19
2.1 Research Gap - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 19
3. Objectives of Studies - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20
4. Research Methodology - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 21-22
5. Data analysis and Findings - - - - - - - - - - - - - - - - - - - - - - - - - - - - 23- 31
6. Conclusion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 32-33
7. Scope for future study - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 34
8. Bibliography - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 35-36

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List of tables

1. Total usage in India

2. Total revenue of retail market V/S e-commerce
3. Employment generation
4. Total sales
5. Size of market

List of figures

1. Total usage of retail industry in India

2. Total usage of E-commerce in India
3. Category wise breakup of retail market
4. Category wise breakup of E-commerce
5. Total revenue of retail market
6. Total revenue of e-commerce
7. Employment generation of retail market
8. Employment generation of E-commerce
9. Total sales of retail market
10. Total sales of E-commerce
11. Size of retail market
12. Size of E-commerce

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 Executive Summary

The e-commerce market is on rise, but it does not mean that retail market has gone down
significantly. The study is all about how e-commerce impact is shown on retail industry.
According to the data collected we have seen large shift of people from traditional retail
market to e-commerce mainly after covid-19 pandemic. Also that due to e-commerce,
traditional retail market is not fully affected. The percentage growth is more in e-commerce
but traditional market is also growing. It’s not that traditional retail market is not growing at
all. We have seen that majority per cent of food and grocery sector still belongs to traditional
retail sector and majority electronic sector belongs to e-commerce.

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 1. Introduction

The retail sector has been significantly impacted by the growth of e-commerce. Online
merchants are posing a serious threat to traditional brick-and-mortar shops since their sales
are expanding considerably more quickly than those of physical businesses. Online sales
increased by 44 percent in 2020, since in sales dropped by 14%, according to a survey by
Digital Commerce 360. Convenience is one of the main factors driving e-commerce growth.
Consumers can now use their PCs or mobile devices to shop anytime, anyplace. As a result,
there has been a change in consumer behaviour, with more consumers favouring online
shopping over going to physical businesses. The accessibility of a greater choice of products
is another element promoting the expansion of e-commerce. Internet shops may provide a
considerably wider range of products than physical retailers because they are not constrained
by physical area.

1.1 Background of the study

Retail is the direct sale of goods to a buyer who wants to utilise them from a particular point
of purchase. The single purchase point could be a physical retail location, an online store, or a
catalogue. The main goal of retail is to draw customers in through visual merchandising and
advertising. Maintaining inventory, keeping shelves stocked, and collecting payments are all
necessary. Yet merchants are more than just venues to buy things; they give producers a
market so they can pay attention to making their goods. Retailers are dependent on a
framework that provides them with goods to sell to customers. Relations with companies that
are part of the retailer's supply chain must be built in order to purchase inventory and
guarantee they have the goods they wish to sell. Retailers, wholesalers, manufacturers, and
consumers make up the retail distribution network (end-user). While the merchant is linked to
the wholesaler, the wholesaler is tied to the manufacturer directly. E-commerce, commonly
referred to as electronic commerce, is the term used to describe the exchange of money and
data for the purpose of transacting business through the internet. The term "ecommerce" is
frequently applied to the online sale of tangible goods, however it may also refer to any form
of business deal made possible by the internet. Ecommerce, as opposed to e-business, is the
term used exclusively to describe the exchange of products and services online. On August
11, 1994, a man used his web page NetMarket, the American retail platform, to sell a Disc by
the band Sting to a friend, starting the history of e-commerce. This is the first instance of a

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customer making a purchase from a company over the World Wide Web, or "ecommerce" as
it is now generally known. Since then, internet shops and marketplaces have developed to
make it simpler to find and buy things. Ecommerce has benefited independent contractors,
small enterprises, and big businesses alike by allowing them to offer their products and
services on a size that was not feasible with conventional offline shopping. In the upcoming
years, the worldwide e-retail market is anticipated to expand significantly. Total e-commerce
sales are anticipated to exceed $5.5 trillion in the year 2022 and continue to increase,
surpassing $8 trillion by 2026. Together with e-commerce, the word "e-business" is also
often used to describe how businesses have grown electronically with the aid of the internet,
enabling them to reach a larger audience and boosting sales. The terms "e-commerce" and "e-
business," which are used interchangeably, lack a clear definition. E-commerce, which
concentrate on external activities whereas E-business concentrates on both internal and
outside operations, is actually a subset of E-business. E-commerce affects many different
domains in both positive and negative ways. The secret to achieving success in e-commerce
is to simultaneously lessen the drawbacks and boost the advantages (Dahiya, 2017).
Competition has grown, which is one of the major effects of electronic commerce just on
retail sector. Electronic commerce has make it simpler for newcomers to break into the retail
market and compete with existing firms, claims a McKinsey & Company report. Retailers are
under pressure to enhance their product offers and consumer experiences as a result of
growing competition. E-commerce has also brought about modifications in customer
behaviour. Customers are growing at ease making purchases online and are more inclined to
conduct online product research before doing so. This has caused consumers to spend more
money with internet shops instead of traditional brick and mortar stores. E-commerce has
significantly impacted traditional retail stores, which are still in operation. An e-Marketer
analysis claims that while e-commerce has increased, traditional retail shop foot traffic has
decreased. Due to this, several retailers have been compelled to close their locations or
concentrate on internet sales. Retailers have started to appreciate the need of omni channel
strategy as e-commerce has grown in popularity. Retailers that provide both online and in-
store deals have a competitive advantage, claims a PwC study. Customers today need a
seamless interaction across every channel, and businesses that can provide it will succeed
more often.  Electronic commerce has made it possible for them to break into the retail sector.
As e-commerce has grown, it has become simpler for small enterprises to connect with
customers competing with bigger shops. The amount of small enterprises adopting e-
commerce to make their products available has increased as a result of this. The retail

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business has been significantly impacted by e-commerce. Small businesses now have more
chances thanks to the increased competition, altered consumer behaviour, and loss in foot
traffic to conventional retail establishments. Electronic commerce on the retail sector will
probably continue to change as it expands. India's population is renowned for having a great
potential for expansion. Consumer spending is significantly responsible for retail growth. For
permanent and online services to gain more market share, technology is essential. Each retail
industry should think about the obstacles to market expansion. To register diverse
competitors, fixed-line shops must use the survey's suggested technique. In order to foster
confidence among its varied consumer base and increase GDP, India must expand its retail
industry, whether it operates online or off. This conceptual analysis examines changes in
consumer behaviour brought on by online purchases, sometimes known as conversions. It
also outlines particular tactics that must be used to boost sales in brick-and-mortar
establishments. Throughout the coming years, strategy can aid merchants in growing their
revenues. As a result, both online and offline shops may come to the conclusion that in order
to increase their business and speed up economic growth, they need concentrate on creating
solid partnerships with manufacturers (Maiya, 2020). 

Difference between e-commerce and retail market

Start-up costs: Opening a physical shop is generally more expensive than doing so online.
Retail costs are often higher because to expenditures like rent, utilities, personnel, and decor.

Responsibilities: Despite the fact that both kinds of businesses may need a workforce of
qualified workers, retail stores need more on-site manual labour than online shops need.
Employees may be in charge of customer support, order fulfilment, marketing, shipping, and
inventory management while running an online store, compared to the employees of a
physical store who may also be in charge of customer contacts, returns and exchanges, and
visual merchandising.

Client base: Since local residents are often capable of visiting the shop to shop, retail
establishments may cater to local customers. Depending on delivery, e-commerce companies
may have clients anywhere in the nation or the world.

1.2 Conceptual framework

Customer expectations have altered as a result of the growth of e-commerce. Consumers

increasingly need a smooth purchasing experience across all platforms, whether they are

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using a mobile app, an internet store, or both. To remain competitive, retailers need to offer
an experience across all channels that lives up to these standards. Retailers are therefore
required to offer customers an uniform shopping experience irrespective of the platform they
select. Clients ought to be able to return items bought online and pick them up in person, for
instance, or buy items online and pick them up in person. For the delight and loyalty of the
customer, this smooth connection between the various channels is essential. Over the past
2 years, the COVID-19 epidemic has led to shifts in customer tastes, routines, and attitudes.
This has a big effect on how consumers purchase and use products and services. Modern
business tactics are now being used by multinational retailers to seize fresh retail prospects.
The distinction between online and traditional consumption channels is no longer made by
consumers. Large corporations are experimenting with various strategies to create flawless
retail experiences which are integrated among all channels as a result. Retailers are
experimenting with income models to enhance their consumer value offer by utilising both
well-established e-commerce platforms and conventional methods. The results indicate that
e-commerce has caused a change in consumer behaviour, with more people choosing to
purchase online due to its ease, accessibility, and affordable prices.

1.3 Chapter planning

Chapter 1: Introduction

Chapter 2: Literature Review and research gap

Chapter 3: Objective of the study and Research methodology

Chapter 4: Data Analysis and findings

Chapter 5: Conclusion and recommendation and Limitation of the study

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 2. Literature review

This study covers the research that has been done on how e-commerce has affected the retail
industry. Instead of presenting fresh evidence, it evaluates the current circumstances. Instead
than being preoccupied with how e-commerce would affect sales through traditional item and
product sector typologies, the focus is on the method as it supports Business to consumer
behaviour and how retail procedures and practices may be changed. This article has
contended that despite the considerable ambiguity and a variety of conflicting opinions
regarding the fate of e-commerce and e-retailing and their influence on urban design and the
city center, evaluations that rely on product/merchandise categories constrain comprehension
of the future. E-commerce is an innovative procedure, therefore an approach that scrutinizes
the procedures in retailing and how they contrast between physical store and online store
retailing presents a more lucid perspective of the essence of the "threat" (or chance) to current
retail destinations and operations. (Burt & Sparks, 2003).

This study only looked at retailers who were experimenting with new channels, or businesses
who were using experimental electronic commerce to support their core operations. Since
there is expected to be tremendous growth in transactional e-commerce over the next five
years, this topic is highlighted. The authors come to the conclusion that the Welsh
supermarket is not fully utilising the opportunities provided by e-commerce, which could
eventually result in job losses and economic decline due to competition from foreign e-
commerce companies. This article presents the discoveries of a comprehensive investigation
into the involvement and utilization of e-commerce by conventional, physical small-scale
merchants in Wales. E-commerce is swiftly transforming into a common method of
conducting business, particularly in the retail industry. Nevertheless, scholars have mainly
disregarded how e-commerce will affect local (small) enterprises, (which are generally small
and micro businesses) and their communities. Instead, the examination of electronic
commerce usage among retailers has focused on prominent retailers. (Lewis & Cockrill,
2002).

This article investigates the impact of e-emergence commerce's and spread on supply-side
industrial structure. They outline a broad industry model in which consumers with varying

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search costs purchase goods from diverse providers. They view e-commerce as a decrease in
the cost of consumers' searches. We evaluate the model by utilizing U.S. statistics for three
sectors where e-commerce has plausibly reduced the expenses of consumers' search: travel
agencies, bookstores, and new car dealers. The model's anticipated market share adjustments
are evident in each industry. Interestingly, even though the industries underwent comparable
modifications, the particular mechanisms by which e-commerce induced them were distinct.
In the case of bookstores and auto dealers, a decline in small establishments across the
industry reflected market-specific impacts, demonstrating that more small-store closures
occurred in local markets where consumers' usage of e-commerce channels increased rapidly.
Conversely, for travel agencies, the shifts reflected general changes prompted by airlines
reducing agent commissions as customers began to purchase tickets online (Goldmanis,
Hortacsu, Syverson, & Emre, 2010).

This article examines the impact of electronic commerce on employment in the retail sector
across 35 European nations over the past decade. Factors such as retail sales and e-commerce
firm turnover are considered, as well as micro data on internet accessibility and online
purchases. Moreover, macro data such as HICP and GDP are utilized to account for business
cycles that affect economies. Various estimation techniques are employed, ranging from
simple to more intricate methods, including IV estimation via a Two Stage Least Square
approach using data from individuals who purchase online and household internet
accessibility as instrumental variables for the endogenous e-commerce variable. The study
reveals a negative correlation between e-commerce firm turnover and employment in the
retail industry. The disruptive effect of digital trade on traditional retail jobs is evident.
However, due to the lack of information on employment in the e-commerce sector, it remains
unclear whether the surge in electronic commerce will generate enough new jobs to
compensate for the loss of traditional retail employment. For the past ten years, e-commerce
has grown at an average pace of 20% each year while physical stores have been having
trouble. Globally, e-8.5% commerce's proportion of all retail transactions in 2016 was still
small. According to research company Euro monitor, even in South Korea, the nation with
the greatest percentage of retail purchases conducted online, the figure is only 18%. Instead,
it was 10% in the United States, the largest consumer market in the world. In contrast, its
contribution was even less important in middle-income nations (e.g., less than 5% in Brazil
and India). Nonetheless, there are solid grounds for anticipating that it will grow significantly

13
larger. New generations are expanding in wealthy nations, buying things online as they move
during their peak spending years ( Americo & Veronico, 2018).

This research compiles these modifications by examining questionnaire information acquired

from 2500 American purchasers, chronicles the significant variations in in-store and online
grocery shopping conduct, presents potential reasons for these changes, and suggests
pertinent managerial consequences in both the near and distant future. It is imperative to
document this awareness as pandemics and significant crises that necessitate comparable
behaviours are expected to recur. The results shed light on a number of trends and areas of
focus, including the removal of non-core assets, increased emphasis on asset selection,
redefining the role of physical stores, the use of ESG factors in property and investment
management, and the use of customer engagement as a tenant selection factor. A number of
ramifications for the rising street and urban retail environment are also highlighted by their
findings. The emergence and evolution of digital technology has accelerated the evolution of
the retail industry during the past few decades. Due to the electronic commerce revolution
and its ongoing growth, almost the entire world has seen changes in consumer behaviour, the
structure of retail, and the transformation of the high street. The retail platforms supported by
digital innovation had to fast adapt in particular owing to the COVID-19 epidemic, and it is
anticipated that this transition will continue to be supported as customers and businesses
adjust to new norms (Nanda, Xu, &  Zhang, 2021).

The findings in the first chapter indicate that rise in wholesale profits makes e-commerce
lucrative for manufacturers. The first two chapters demonstrate how growing consumer
surplus is a result of e-commerce, and how the impact on merchants' earnings is tied to their
online strategy. For customers, e-commerce makes it possible to make purchases from
anywhere and at any time. Furthermore, they can save time buying online and compare online
offers easily. The firms can develop online strategies to try to obtain more profits thanks to
the online distribution channel. In some countries such as France, a large part of online sales
in the food market are not made with deliveries but by going to a click and drive store where
consumers buy online and then pick up their order by car in a dedicated warehouse or the
dedicated parking of a supermarket ( Bonnet, 2022).

The e-commerce industry in India is encountering numerous challenges due to issues with
infrastructure and computer illiteracy. A significant proportion of customers residing in rural
regions lack sufficient understanding about computers and the internet. Additionally, some

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urban customers do not have access to credit facilities, which has restricted the online buying
and selling of goods to the tech-savvy urban population. Nevertheless, Indian marketers can
achieve success in international markets by focusing on the fundamentals of a good website.
E-commerce is a technological revolution that is currently in high demand. E-commerce
offers many benefits that improve customer happiness and consumer locational opportunism
while also allowing the business to improve its competitive advantage. E-commerce has
made significant strides in the fashion clothing and accessory sector over the past ten years.
Many businesses seek to develop, formulate, and restructure their plans. Customer
relationships are rapidly replacing the traditional impact of manufacturing. E-commerce
offers opportunity to both major and small clothes shops (Kumar & Bagai, 2018-2019).

The paper examines how this technological advancement aids in understanding consumer
behaviour and has significantly stimulated the online retail sector. The retail sector has
developed over time and demonstrated a willingness to adopt new technology in its
workplace practices. Technology advancements in hardware, software, and
telecommunications have offered marketers tools for managing the online retail ecosystem.
Modern software development is assisting marketers in efficiently managing their corporate
operations. Acceptance of technology not only improves methods of client contact but also
aids businesses in formulating their marketing and sales strategies (Kate, 2019).

2,500 U.S. individuals were polled about their retail grocery purchasing habits throughout the
pandemic. The results of the survey reveal that buyers now have higher hopes for in-store
protection; they have decreased store visits often; they spend less time travelling to and from
stores; they spend more money per shopping trip. The expansion of transactions across
various e-commerce grocery platforms coincided with the growth in in-store expenditure,
creating ideal competition in the newly growing online food retail sector. This kind of ideal
competition is uncommon in the monopolistic ecommerce sector as a whole, and it gives
platforms new options to reform and jointly construct a viable online food retailing sector
(Chen, Wang , xu, & Schwartz, 2020).

The retail sector is incredibly significant and vast. When it comes to employment and
turnover, it is typically the largest sector of the economy. About 12% of the non-farm
workers in the United States worked in the retail sector, which in 2003 generated revenues of
US$ 3.7 trillion, or 34% of the nation's GDP. 37 This was more than the total number of
workers employed in US manufacturing. This increased investment in technology has raised

15
entry barriers in the retail sector and led to huge scale advantages for big enterprises. There
are also scale economies in purchasing. A larger merchant can use its purchasing power to
negotiate better terms and tailored services with vendors, including cross-border logistical
solutions (Nolan, Zhang , & Liu, 2007).

(Dholakia, Xiao, Dholakia, & Mundorf, 2000) concentrated on five effort-intensive features of
these shopping sprees: value comparison, time required for shopping, product details other
than cost, interpersonal relationship, and access to the store. This allowed us to contrast
physical and e-shopping in terms of their indulgent values for various categories of consumer
products and services. For ease of use, we refer to physical shopping as p-shopping and
electronic shopping as e-shopping. They have solely examined the possible effects of retail
electronic commerce on consumers' actual travel. Yet, the logistic of the supply chain for
retailers are also impacted by e-commerce. E-commerce promotes the placement of supply
facilities in lowland areas with convenient shipping access rather than large shopping malls.
Also, delivery vehicles travel to the neighbourhood rather than individual customers visiting
the establishments. The gap between the decreased customer travels and the increased
delivery trips brought on by e-commerce in a particular location would therefore be the total
number of trips avoided. During the busy Christmas season, e-commerce provides advantages
in terms of accessibility and time savings. As a result, the accessibility of online shopping
throughout the holiday season may help to reduce traffic congestion brought on by buyers in
commercial areas. In both the p-shopping and e-shopping modes, they scored these five
aspects of purchasing for each class of consumer goods.

Retailers must understand the multi-channel shopping habits of today's consumers in order to
meet changing and evolving customer expectations and requests. Customers around the world
now have the advantage over sellers and demand buying experience wherever, anytime, and
through any distribution platform thanks to smartphones, tablets, and essentially
"unrestricted" access to the Internet from the convenience of their homes, places of
employment, or while shopping in-person or on the go. (Maheshwari, 2013)

Retail business is a set of actions intended to raise consumer satisfaction, or the perception
that a good or service has lived up to expectations. Its significance varies depending on the
product, industry, and client; for example, damaged or defective goods can be exchanged.
This research has been conducted to determine the relationship between retail client service

16
and the sales of the local shop. Reviewing various retail services provided by Indian shops is
the goal. Also, the study aims to determine consumer satisfaction levels with regard to retail
services and the effects of those services on sales. The conclusion was drawn that, Retail
stores are part of the service sector and provide both goods and services. As a result, retail
good management not only shares the traits of good product quality but also possess unique
qualities in terms of service quality. Although the services provided by the shop are subpar,
planning and process execution need to be improved. Retail stores use these services to
increase sales and foster client loyalty so that they can compete on a global scale. The shop
should draw young people who shop for both themselves and their families. In addition, the
shop needs to focus on drawing in a variety of clients (Kotni, 2011).

Manufacturers and retailers are responding to the "new normal" consumer mode, which is
leading to adjustments and improvements in shopper marketing. Manufacturers as well as
retailers can manage current products and introduce new products more effectively and
efficiently by inventing and/or embracing innovations in customer marketing methods.
Substantial advancements in manufacturer and retailer shopper marketing strategies are being
shaped by significant developments in technology, the economy, regulation, and
globalisation. Recent advancements in consumer marketing include those related to
multichannel marketing, measurement, organisation, store atmosphere and style, in-store
merchandising, and digital marketing activities. The main managerial hurdles to attaining a
manufacturer-retailer-shopper win-win-win solution are closing the manufacturer-retailer
collaboration gap, surmounting management obstacles, and resolving consumer welfare and
concerns. The following seven major unresearched issues related to the shopping cycle are
based on plausible future scenarios and our speculation of changes in the environment and
shopper marketing practises: new insight generation through non-traditional discoveries, the
interaction effects of rational and emotional drivers, individual and environmental factors on
shopper behaviour (Shankar, Inman, Mantrala, Kelley, & Rizley, 2011).

The author concluded that mobile marketing, which entails two- or multi-way interaction and
promotion of a deal between a business and its clients utilising a mobile channel, device, or
software, is becoming more and more significant in the marketplace. They put out a
conceptual structure which includes the mobile, the user, and the retailer as three essential
entities. The framework covered a number of linked topics, including competition, important
retailer mobile marketing initiatives, key consumer segments, drivers and inhibitors of mobile

17
adoption, and key mobile properties. Also, they discussed effective retailer mobile marketing
techniques, underlined the organisational and customer problems around this issue, and
outlined potential future research directions (Venkatesh, Shankar, Hofacker, & Naik, 2010).

This study's goal is to ascertain how merchants will be impacted as the rise in e-commerce
rises. Many businesses started out in the retail industry by establishing their own websites
that featured a variety of services and alluring consumer incentives. The platform operates as
a coalition that makes use of all the goods provided by little shops in big malls. It includes
apparel, footwear, installation supplies, furniture, jewellery, and cuisine. An online store that
satisfies the requirements was the outcome. The survey finds that as internet buying patterns
grow, there are less steps taken to visit brick and mortar stores (Maiya, 2020).

E-commerce has influenced how industry dynamics have changed, with online retailers
getting a larger market share and traditional stores finding it difficult to adjust. Traditional
brick-and-mortar retail establishments have been significantly impacted by e-commerce,
which has resulted in decreasing foot traffic, lowered sales, and greater competition from
online retailers. The survey also discovered that traditional shops can succeed by leveraging
their strong existence, providing distinctive in-store experiences, and using technology to
improve the customer experience. For decision-makers, industry professionals, and
academics interested in the fate of the retail business, the study's findings are significant. This
study intends to enlighten ongoing discussions on the prospects for the sector and to give
insight into the best approaches for adjusting to the shifting retail landscape by putting light
on the effects of electronic commerce on physical retail outlets (Mahmood, 2023).

This study links industry features with elements brought on by the evolving external
environment to examine how Ecommerce has affected the Gems sector and Jewellery
sector industry. The Market-Based Vision (MBV), Resource-Based View (RBV), and Margin
Requirement Economics  are combined to achieve this purpose, and this "new lens" is then
used to examine the effects of Ecommerce on the G&J Industry and concentrate on its
characteristics. This article also fills a knowledge gap since very little known about how
Ecommerce affects Small and Medium Businesses in the Gems and Jewellery market. While
analysing the changes to the external environment brought on by e-commerce, these impacts
and the consequent organizational and strategic implications serve as the analysis's analytical
unit. Linking the various theories and concepts and looking into their applicability to the G&J
business represents one of the efforts made in relation to these issues. Regardless of whether

18
they directly engage in Ecommerce or not, industry participants must grasp how these
fundamental elements interact. This paper incorporates these factors in order to give the
essential theoretical basis, suggest potential outcomes, and offer insights into how small and
medium enterprises in the G&J business might successfully engage in E-commerce
regardless their restricted financial capabilities (Rossberger, 2013).

The primary goal of the study is to detect patterns in customer shopping behaviour. By this
type of analysis, the company may determine which customers need to be contacted in order
to market the appropriate product to the appropriate consumer. A public dataset that can be
downloaded from the Dunnhumby website serves as the primary transaction database for the
implementation phase. In the initial stage, loyalty customer transactions from the previous
three months were used, and the datasets were cleaned using a Python script that will be
covered in greater detail in the research. Market basket analysis is one of the often used
applications. The Association rule, on the contrary hand, is a rule-based method that may be
used to uncover common themes in huge datasets. This falls under unsupervised machine
learning techniques. The two main models, which fall under the Association rule, are
Information filtering and Cooperative filtering models. Using Software Machine Learning
Studio, the researcher created two user interfaces for this study. Both Python and R Studio
scripts were used in the implementation procedure. The research project's end results include
the implementation of a personalised promotion strategy and, finally, a machine learning
model (Wijayasekara & Asanka, 2021).

2.1Research gap

The researcher have not yet explore the traditional retail market and e-commerce over last 8
to 10 years. The researcher has focused on a particular sector while doing their research.

19
3. Objective of the study

 To explore the condition of traditional retail usage and e-commerce usage in last 10
years.
 To find out total revenue of traditional retail market and e-commerce.
 To analyse the impact of e-commerce on traditional retail industry.

20
 4. Research methodology

Research design: Descriptive data as it describes the particular set of measurements. It is

frequently more acceptable to employ descriptive data analysis rather than explanatory data
analysis when working with secondary data (data that has already been gathered and is
available for analysis). One explanation for this is because secondary data is frequently
gathered to answer a specific research topic or for a particular goal, and the data might not
have been gathered in a fashion that enables thorough investigation of the correlations
between variables. For instance, secondary data from a government survey may give precise
information on a population's demographics but may not have enough details to establish the
causality of two variables. Descriptive data analysis is a good option for secondary data since
it may give a fast summary of the information and point out any trends or patterns that could
be present. This may be helpful for additional study or for exploratory data analysis.
Explanatory data analysis, on the other hand, necessitates a deeper comprehension of the data
and the connections between variables. It frequently entails the creation of hypotheses, the
discovery of causal linkages, and the statistical testing of these relationships. This kind of
analysis is better suited for the collecting of primary data, where the analyst has complete
control over the data collection and can structure the study to address certain research issues.
In conclusion, descriptive data analysis is frequently more suited when dealing with
secondary data because it may quickly summarise the data and assist find patterns or trends.
Explanatory analysis of the data is better suited to primary data collection, in which the
researcher has complete control over the data collection and may structure the study to
address certain research issues.

Type of research: Quantitative data is frequently utilised in secondary data research, which
examines data that has already been gathered and compiled by another person. Instances of
quantitative data sources which are suitable for secondary data analysis are given below:

Surveys: A lot of businesses carry out surveys to gather quantitative information on a range
of subjects, including consumer behaviour, market trends, and societal issues. To learn more
about people's beliefs, attitudes, and behaviours, this data can be studied.

21
Government data: A broad variety of quantitative data on subjects including demography,
growth figures, healthcare outcomes, and crime rates is gathered and published by
government agencies. This data can be used by researchers to examine patterns and trends
throughout time.

Business data: Organizations frequently gather and maintain quantitative information about
their customers, finances, and operations. This information may be utilized to assess
corporate performance, spot patterns, and guide decisions.

Academic research: Using surveys, experiments, and other techniques, researchers in a

variety of disciplines, including psychology, sociology, and economics, collect quantitative
data. These data can be examined to evaluate theories, test hypotheses, and provide new
knowledge.

Therefore, quantitative data through secondary information can be a useful tool for academics
because they offer a wealth of data that can be evaluated to learn more about a variety of
phenomena.

Type of data: Secondary data

Data which was gathered and examined by a different individual for a reason other than the
current study topic is referred to as secondary data. Researchers may find secondary data to
be a useful resource since it gives them access to a variety of sources of data and can be
gathered more cheaply and quickly than primary data. Researchers can use secondary data as
a great resource to develop new knowledge and find answers to open-ended issues. To make
sure they are suitable for their study objectives, researchers must carefully assess the quality
and dependability of secondary data sources.

Population sample is not there as the research is done on the basis of secondary data.

Data’s are shown in the form of bar chart, pie cart, and graph so we can interpret the data
easily.

Data have been collected from Statista and IBEF because it shows accurate data.

22
 5. Data analysis and Findings

Table 1: Total usage in India

Year Retail industry (percentage) E-commerce (percentage)

2012 97 0.6
2013 95 1
2014 93 1.7
2015 90 4.4
2016 88 5.9
2017 85 10.5
2018 82 12.5
2019 80 15.7
2020 80 18.9
2021 76 21.7

Figure 1: Total usage of retail industry in India

23
 Retail Industry (percentage)
120

100
97 95 93 90
80 88 85 82 80 80
76
60

40

20

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Figure 2: Total usage of e-commerce in India

25
E-commerce (percentage) 21.7
20 18.9
15.7
15
12.5
10.5
10
5.9
5 4.4

1 1.7
0.6
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

This data shows the total usage of retail industry and e-commerce. So according to the data
retail industry is gradually decreasing as the user are more preferring ecommerce and e-
commerce is increasing with the increase of internet users. Now the users are preferring to
buy from home as it is also less time consuming and easy returns are also available. We can
see from the graph that retail industry is decreasing slowly but the increase of e-commerce is
fast. Here we can see the impact of e-commerce on retail industry.

24
Category wise breakup of total retail market and e-commerce

Figure 3: Category wise breakup of retail market

Retail market

food and grocery

8% lifestyle
10%
electronics
10% other

72%

Figure 4: Category wise breakup of E-commerce

E-commerce

1% food and grocery

25% lifestyle
30%
electronics
other

44%

According to the data, retail industry is large seller of food and grocery (72%) whereas
ecommerce is small seller of food and grocery (1%). E-commerce is the large seller of
electronics (44%) whereas retail industry sells only 10% of electronics. In case of lifestyle
ecommerce sells 25% whereas retail industry sells only 10%. We can see in most of the
sector e-commerce has taken large place except food and grocery.

25
Table 2: Total revenue of retail market v/s ecommerce

Year Retail market (billion) e-commerce (billion)

2013 22500 16.4
2014 25500 29.5
2015 28500 52.1
2016 32400 109.2
2017 36600 163.1
2018 40100 229.2
2019 44100 343.8
2020 47100 469.1

Figure 5 : Total revenue of retail market

Retail market (billion)

50000

45000

40000

35000

30000

25000

20000

15000

10000

5000

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

26
Figure 6 : Total revenue of E-commerce

e-commerce (billion)
500
450
400
350
300
250
200
150
100
50
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

According to the data, retail industry revenue is increasing gradually but in e-commerce
revenue is increasing very fast from 2016. As we can see in year 2016 e-commerce revenue
was 109.2 and increased to 163.1. The increase was 66.95%. As the ecommerce usage has
increased in this year. But we can see decent speed growth of retail industry and not the huge
change as seen in the retail market graph compared to e-commerce graph.

Table 3: Employment generation

Years Retail market(million) e-commerce (million)

2013 36 0.0145
2014 37 0.023
2015 38 0.033
2016 39 0.045
2017 40 0.064
2018 41 0.085
2019 42 0.11
2020 43 0.15

27
.

Figure 7: Employment generation in retail market

Retail market(million)
44

43
42
42
41
40
40
39
38
38
37
36
36

34

32
2013 2014 2015 2016 2017 2018 2019 2020

Figure 8: Employment generation of E- commerce

e-commerce (million)

0.16 0.15

0.14

0.12 0.11

0.1
0.085
0.08
0.064
0.06
0.045
0.04 0.033
0.023
0.02 0.0145

0
2013 2014 2015 2016 2017 2018 2019 2020

As shown in the graph, we can see that employment generation in retail industry is growing
but will the same speed throughout but in e-commerce we can see that employment
generation is growing will the speed. As the use of internet is increasing everyone is shifting

28
to e-commerce. Consumers are mostly choosing e-commerce as it is very less time
consuming and convenient for them to buy goods sitting at home.

Table 4: Total sales

Years Retail market(USD Billion) E-commerce(USD Billion)

2013 427 16.4
2014 462 23.6
2015 503 38.5
2016 548 55.3
2017 590 65.1
2018 649 74.3
2019 703 82.1
2020 776 89

Figure 9: Total sales of retail market

Retail market(USD Billion)

900

800 776
703
700 649
590
600 548
503
500 462
427
400

300

200

100

0
2013 2014 2015 2016 2017 2018 2019 2020

29
Figure 10: Total sales of E-commerce

E-commerce(USD Billion)
100
89
90
82.1
80 74.3
70 65.1
60 55.3
50
38.5
40
30 23.6
20 16.4
10
0
2013 2014 2015 2016 2017 2018 2019 2020

As shown in the graph, trend line shows that total sale in retail industry is growing but will
the slowly throughout but in e-commerce we can see that total sale is growing will the high
speed. As the use of internet is increasing everyone is shifting to e-commerce and due to
increase in e-commerce, retail market is growing slowly.

Table 5 : Size of market

Year Retail market E-commerce

2013 430 13
2014 534 16
2015 600 23
2016 641 32
2017 710 38.5
2018 792 52
2019 779 64
2020 705 82

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Figure 11 : Size of retail market in India

Retail market(USD Billion)

900
800

700

600
500

400
300

200

100
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Figure 12 : Size of E-commerce in India

E-commerce(USD Billion)
90

80

70

60

50

40

30

20

10

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

According to data, retail industry market size was growing in starting till 2019 but from 2020
we can see the downfall in the market size. It was affected due to covid-19 pandemic. Due to
this pandemic we can see lot of consumer shifting to e-commerce. Which leads to growth in
e-commerce market size. As the impact of e-commerce was shown on retail industry not only
because of internet but covid-19.

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 6. Conclusion

In conclusion, organizations must be creative in their attempts to adjust and compete

effectively because the online shopping's effect on the traditional retail industry is evident.
The secret to success in the electronic commerce industry is the capacity to deliver a
remarkable customer experience and make decisions based on data. Businesses that remain
ahead of the curve and innovate new technology and tactics will thrive as emerging trends
like electronic commerce and personalised buying experiences continue to drive growth. E-
commerce has a bright future, and companies who set themselves up for expansion now will
gain in the long run.

The retail sector has been greatly impacted by the growth of e-commerce, which has also
changed how people shop and make purchases. This study attempts to investigate how e-
commerce has affected the retail sector, including consumer behaviour changes, competition
in the market, and the general retail environment.

A literature evaluation of pertinent studies is part of the study's mixed-methods approach,

which also includes data analysis of market reports and statistics. The results indicate that e-
commerce has caused a change in consumer behaviour, with more people choosing to
purchase online due to its ease, accessibility, and affordable prices. Brick-and-mortar stores
have therefore had to modify their approaches in order to stay competitive, with many
incorporating electronic commerce into their corporate structures.

People have begun to favour modern lifestyles, but it doesn't imply we should give up our
ancient habits. There are some products we still like to get from a close neighbourhood shop.
Traditional retail will always have a position in the market. Nowadays, there are kirana shops
everywhere. Hence, rather than looking for a real 24-hour store, you will most likely shop
there if we need anything right away. For instance, if you observe people purchasing milk,
they almost always do it from a nearby kirana store. There is fierce competition among
markets today, and it has gotten even fiercer with the digitalization and modernization of
markets.

Over the past 2 years, the COVID-19 epidemic has led to shifts in customer tastes, routines,
and attitudes. This has a big effect on how consumers purchase and use products and
services. Modern business tactics are now being used by multinational retailers to seize fresh
retail prospects. The distinction between online and traditional consumption channels is no

32
longer made by consumers. Large corporations are experimenting with various strategies to
create flawless retail experiences which are integrated among all channels as a result.
Retailers are experimenting with income models to enhance their consumer value offer by
utilising both well-established e-commerce platforms and conventional methods. With a
number of new trends emerging that will influence the sector, the development of electronic
commerce is bright. The development of social commerce, which allows customers to make
direct product purchases through social media sites like Facebook and Instagram, is one of
these trends. Youngsters, who are more inclined than older consumers to make purchase of
goods through social media, are particularly fond of this trend.

The use of machine learning and artificial intelligence to customise the purchase experience
for clients is another trend. Retailers can offer specialised advice and individualised
promotions that boost consumer happiness and loyalty by evaluating customer data. Retailers
can utilise information about a customer's past purchases to offer them tailored discounts and
promotions, for instance, if they frequently purchase goods from a specific brand.

E-commerce has also heightened rivalry within the retail sector, with new players attacking
established shops and upending the market. The report also looks at how e-commerce has
altered supply chains, logistics, and fulfilment as well as the general retail environment. The
study's conclusion is that e-commerce has had a substantial impact on the retail sector, posing
both difficulties and prospects for retailers. Retailers must keep on innovating and adapt in
order to stay competitive in this rapidly changing market. They must use data and technology
to improve the consumer experience and stay one ahead of their rivals.

33
7. Scope for further study

 The analysis are limited to India – situation would have been different if analysis is
done for the globe.
 After year 2021 data were not available on usage of traditional retail market and e-
commerce.
 In some factor after year 2020 data were not available.
 In further study more factors can be included and data can be analyse for further
years.


34
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