Electronic Commerce

• E-Commerce or Electronic Commerce means buying

and selling of goods, products, or services over the
internet. E-commerce is also known as electronic
commerce or internet commerce. These services
provided online over the internet network.
• Transaction of money, funds, and data are also
considered as E-commerce.

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Examples of E-Commerce company
• Amazon
• Flipkart
• eBay
• Upwork
• Olx
• Quikr
Advantages of E-Commerce

• E-commerce provides the sellers with a global reach. They remove the
barrier of place (geography). Now sellers and buyers can meet in the
virtual world, without the hindrance of location.
• Electronic commerce will substantially lower the transaction cost. It
eliminates many fixed costs of maintaining brick and mortar shops. This
allows the companies to enjoy a much higher margin of profit.
• It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves
time, energy and effort for both the consumers and the company.
• One other great advantage is the convenience it offers. A customer can
shop 24×7. The website is functional at all times, it does not have
working hours like a shop.
• Electronic commerce also allows the customer and the business to be
in touch directly, without any intermediaries. This allows for quick
communication and transactions. It also gives a valuable personal
touch.
Disadvantages of E-Commerce

• The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive.
• Although it may seem like a sure thing, the e-commerce industry has a high
risk of failure. Many companies riding the dot-com wave of the 2000s have
failed miserably. The high risk of failure remains even today.
• At times, e-commerce can feel impersonal. So it lacks the warmth of an
interpersonal relationship which is important for many brands and products.
This lack of a personal touch can be a disadvantage for many types of
services and products like interior designing or the jewelry business.
• Security is another area of concern. Only recently, we have witnessed many
security breaches where the information of the customers was stolen. Credit
card theft, identity theft etc. remain big concerns with the customers.
• Then there are also fulfillment problems. Even after the order is placed
there can be problems with shipping, delivery, mix-ups etc. This leaves the
customers unhappy and dissatisfied.
 E-Commerce - Business Models

Business - to – Business

• A website following the B2B business model sells its

products to an intermediate buyer who then sells the
product to the final customer.

• As an example, a wholesaler places an order from a

company's website and after receiving the consignment,
sells the end product to the final customer who comes to
buy the product at one of its retail outlets.
Business - to – Consumer

• A website following the B2C business model

sells its products directly to a customer. A
customer can view the products shown on the
website.
• The customer can choose a product and order
the same. The website will then send a
notification to the business organization via
email and the organization will dispatch the
product/goods to the customer.
Consumer - to – Consumer

• A website following the C2C business model

helps consumers to sell their assets like
residential property, cars, motorcycles, etc., or
rent a room by publishing their information on
the website.
• Website may or may not charge the consumer
for its services. Another consumer may opt to
buy the product of the first customer by
viewing the post/advertisement on the website.
Consumer - to – Business

• In this model, a consumer approaches a website

showing multiple business organizations for a
particular service. The consumer places an estimate of
amount he/she wants to spend for a particular service.
• For example, the comparison of interest rates of
personal loan/car loan provided by various banks via
websites. A business organization who fulfills the
consumer's requirement within the specified budget,
approaches the customer and provides its services.
Business - to – Government

• B2G model is a variant of B2B model. Such

websites are used by governments to trade
and exchange information with various
business organizations.
• Such websites are accredited by the
government and provide a medium to
businesses to submit application forms to the
government.
Government - to – Business

• Governments use B2G model websites to

approach business organizations.
• Such websites support auctions, tenders, and
application submission functionalities.
Government - to - Citizen
• Governments use G2C model websites to
approach citizen in general.
• Such websites support auctions of vehicles,
machinery, or any other material. Such
website also provides services like registration
for birth, marriage or death certificates.
• The main objective of G2C websites is to
reduce the average time for fulfilling citizen’s
requests for various government services.
 Challenges and Barriers in E- Commerce
Environment
• New technologies, like augmented reality and
IoT (Internet of Things) commerce, have
created even more challenges and
considerations for e-commerce businesses.
• E-commerce conversion margins are slim, so
driving relevant traffic to your site is crucial.
• The e-commerce explosion means competition
is fierce, fulfilling orders can be overwhelming,
and your return policy is critical.
 All aspects of e-commerce businesses face hurdles
and difficulties. Here’s a look at some top issues:
1. Cyber security
• E-commerce sites need the proper cyber security
practices and tools in place. In the case of a cyber
attack, a small business cannot afford to have
downtime in operations and sales, because every
transaction is a marginal financial success that the
business depends on.
• In the case of a ransomware attack, the organization
might not be able to access files and data that is
necessary [for] providing service to customers, such
as inventory reports
2. Competition
• Competition comes in many forms for small businesses,
especially in the e-commerce space. You have to keep up
with competitive pricing, products and services – all
competing for your target customer.
• Distinguishing yourself from your competitors is crucial
to standing out and attracting new customers for your
business.
• This can be accomplished by making sure your website
looks professional and is optimized correctly to suit
today’s Google algorithm. Also, by providing a unique
product or service, you can focus on a smaller
demographic, making it easier for you to increase your
domain authority.
3. Order fulfillment
• Not everything has to fall on the small
business owner’s back. You could be
inundated with more orders than you are
prepared to handle on your own. In this case,
outsourcing order fulfillment and
e-commerce shipping can ease your workload
and streamline the customer experience.
• Order fulfillment should be outsourced to a
third-party fulfillment company whenever
possible for increased efficiency.
4. Customer experience
• In a world where everything is happening
online, your customers expect more, and they
also know more about your products, prices
and competition.
• They expect to be treated the same way online
as offline, so if they can get a certain price in
person but can’t get that price online, they get
frustrated and purchase somewhere else.
5. Quality website traffic and visitor conversion
• Building, designing, and running an e-
commerce website is complex, but generating
quality conversions is even more challenging.
• To turn your traffic into converting customers,
you must have a website that is modern,
clean, user-friendly, trustworthy and virus-
free.
• Every industry is different, so understanding
your audience is crucial to designing a website
that resonates with your audience.
6. Visibility
• How are you supposed to get quality traffic to your
site and turn visitors into customers if people can’t
find your site? It’s a significant issue for e-commerce
businesses and one that could make or break a
business.
• If the company doesn’t show up on the first page of
Google’s search results for relevant keywords, then it’s
unlikely that prospective customers will find them.
• The best way to overcome this challenge is to invest in
SEO. E-commerce companies should conduct keyword
research, implement on-page SEO best practices, and
work on building high-authority links to their website.
7. Return and refund policies
• A good return and refund policy could be the difference
between success and failure. That sounds extreme, but it’s
true.
• If you want your brand to stand tall, then customer
satisfaction should be the first priority, and whatever you’re
selling should be the same as what’s advertised.
• Be transparent and create a smooth, fast and easy return
policy. Make it easy to understand and not too strict, so the
customer won’t have to go through hassles.
• If you don’t have a good return and refund policy, people are
less likely to trust you’re selling something worth the money.
When a site says ‘no returns or refunds,’ it makes the
customer much more likely to think it’s a risky purchase or,
worse, a scam, since online businesses can be less known.
8. Finding the right market
• The first step of any business is to find
product-market fit, and e-commerce is no
different. Product-market fit is the degree to
which a product satisfies market demand. The
easiest way to find that fit quickly is to build a
product that solves a problem you have.
9. Borderless e-commerce
• Because of the increase in e-commerce websites available
worldwide, shopping has become borderless. Consumers can
easily purchase from companies outside of their own
countries. As a result, e-commerce businesses must
accommodate customers of all backgrounds.
• Supporting a diverse customer base means providing
information in various languages. According to research, 76%
of online shoppers prefer to purchase products with
information in their own language, 92% would prefer shopping
in their local currency, and 33% might abandon the cart if
pricing is only in U.S. dollars.
• To maximize your chances of having a successful e-commerce
business, use thought and consideration when
accommodating other languages and cultures.
 Top e-Commerce Trends in 2024
1. Artificial Intelligence for Personalization
• Artificial intelligence (AI) simulates human intelligence
using computer science and big data. For eCommerce
purposes, business owners can train AI to adapt to
consumer behavior, resulting in more accurate and valuable
information.
• One of the top areas where businesses can implement AI
is personalization.
• Personalization is about tailoring user experience based on
what the company has learned about them. A survey found
that
80% of consumers are more likely to become returning bu
yers
if a company provides a personalized shopping experience.
• At a compound annual growth rate (CAGR) of 23.67%, the global
personalization software market is expected to surge over $5 billion by
2030. This is a significant jump from $943.25 million in 2022.

• Combining AI and machine learning, Starbucks is one of several

eCommerce businesses that offer top-notch personalization.
• In the third quarter of 2022, 60% of Starbucks’s cold beverage orders
were customized. The coffee shop and roastery utilize customer behavior
data to offer hyper-personalized suggestions.
• Starbucks tracks customer data on the mobile app to generate unique,
attractive offers in real-time. It considers customer preferences, activity,
past purchases, and location before
sending over 400,000 personalized messages through in-app push
notifications.
• Overall, the future of AI in the eCommerce landscape is promising. By
2027, the global AI market is projected to reach $407 billion – a dramatic
uptick from $86.9 billion in 2022. Another study reveals that
91.5% of leading brands and companies invest in AI continuously.
 2. Hybrid Commerce
• The future of e-Commerce is a blend of online channels and physical retail
experiences. This e-Commerce model integrates multiple channels and platforms to
provide a seamless experience, encouraging hybrid commerce or omnichannel
selling.
• A simple way to conduct omnichannel selling is by implementing click-and-collect.
Also called buy online, pick up in-store (BOPIS) , this service lets customers
check out online and collect their purchases at the store or pickup station.
• The convenience of online shopping, quick in-store visits, and zero shipping charges
has steadily grown the click-and-collect trend. Its value is projected to surpass
$154 billion by 2025. Leading retailers like Walmart, Target, and IKEA offer this
service.
• Furthermore, e-Commerce business owners can opt for a progressive web app (PWA)
to accommodate customers who prefer to shop online. A PWA is a win-win solution
for business owners choosing between building an e-Commerce app or website.
• Progressive web apps act like native apps that are compatible across different devices
and browsers. They are excellent for optimizing mobile users’ shopping experiences.
 3. Augmented and Virtual Reality

• AR uses a real-world setting while VR is completely virtual. AR

users can control their presence in the real world; VR users are
controlled by the system.
• The AR/VR market size, growing at a ten-year CAGR of 41.1%, is
expected to reach $856.2 billion by 2031.
• Augmented reality (AR) integrates the real, physical world with
computer-generated visuals, sound, or other stimuli.
Meanwhile, virtual reality (VR) is a simulated experience that
puts the user in a seemingly real computer-generated
environment using a special headset.
• Numerous e-Commerce brands are adopting AR and VR
technologies to offer a more immersive shopping experience.
• Consumers’ reactions are predominantly positive. According to a survey,
71% would shop more if a business used AR. Another study reveals that
companies using AR/VR content have a 94% higher conversion rate.

• IKEA is one of the companies paving the way for augmented reality.
• The IKEA Place mobile app uses Apple’s ARKit platform to let customers
view digitally-reproduced 3D product images in their homes. Users can
examine whether a furniture piece fits nicely in a room with their mobile
devices.
• Here are a few top uses of AR that have found their manifestation in
existing solutions: Education (anatomy learning for medical
students) Fashion (AR mirrors, Try-on apps, Runway shows) Retail
(Packaging solutions, try-before-you-buy, virtual fitting rooms)
• YouCam Makeup app lets users virtually try on real-life cosmetics
via a living selfie.
• A common example of VR is a flight simulator, which airlines and militaries
use to train their pilots
 4. Customer Relationship Management

• Customer relationship management (CRM) includes tools and

strategies to help eCommerce businesses manage customer
interaction. A great CRM strategy is essential, as
92% of customers would abandon a business after two or
three negative interactions.
• CRM lets business owners understand their customers’ needs
and behavior better. This helps strengthen relationships and
build a loyal customer base.
• The CRM market size is expected to hit around $128 billion by
2028. Additionally, over 91% of companies with 10 or more
employees use CRM to manage customer conversations.
• Loyalty and reward programs are excellent CRM
strategies. In fact, 75% of customers favor companies
that offer rewards. These programs also improve
retention rates by 5% and profits by 25% to 95%.
• The North Face’s loyalty program, XPLR Pass, lets
customers earn points through several actions –
purchasing an item, store check-ins, and referring a
friend.
• Every 100 points give customers a $10 reward that
they can spend on The North Face’s products. Loyalty
members can also access exclusive products, birthday
gifts, and field testing.
 5. Customer Support as a Priority
• Customer support has been and will always be essential in
every business. Issues with products or services can turn
away existing customers and potential buyers. Ultimately, a
company is responsible for offering quality assistance.
• 81% of customers believe a positive support experience
encourages repeat purchases. Reply time is essential, and
60% of customers agree that 10 minutes or less is the
benchmark for immediate response time.
• Consumer demand for instant interaction is why live chat
has become the preferred communication channel.
41% of consumers choose live chat over phone, email, and
social media support because it offers immediate help with
minimal effort.
• Despite the increasing demand for real-time
customer service, many businesses now utilize
customer service chatbots to help streamline the
customer journey from acquisition to retention.
• With an average CAGR (Compounded Annual
Growth Rate) of 25.7%, the global chatbot market
is forecasted to account for $3.99 billion by 2030.
As the demand for
immediate response continuously grows by 64%
yearly
, utilizing chatbots is an excellent step.
 6. Social Commerce
• Social media is an effective retail sales channel for making the
most of mobile shopping. A study shows that mobile devices
share 80% of social media traffic. Furthermore, 79% of
smartphone users have made a purchase using their mobile
devices.
• Already a multibillion-dollar industry, social media commerce sales
are expected to triple by 2025, reaching $1.2 trillion. On top of
that, global social network users surged over the four billion mark
in 2021 and are projected to reach almost six billion in 2027.
• eCommerce businesses should take advantage of this trend,
especially when 75% of users use social media platforms to
research products. Facebook is currently the most popular
platform, with around 2.9 million users worldwide.
• Moreover, built-in eCommerce platforms, such as
TikTok Shop, Instagram Shopping, Facebook
Shops, and Pinterest’s shoppable ads, business
owners can conveniently execute campaigns to
reach their prospective customers.
• Selling from social media channels is cost-effective
and can be a great solution for new eCommerce
stores. To boost sales, business owners can
integrate influencer marketing and live shopping.
• Influencer marketing helps drive organic traffic
and attract new customers with lower costs. For
every dollar spent, it generates a return of $5.78.
 7. Subscription Models
• Over the past few years, consumers have become
increasingly used to the convenience of shopping online.
The subscription model has become one of the leading
trends in the eCommerce industry as it offers a practical
solution to fulfill consumers’ recurring expenses.
• Unsurprisingly, the subscription market is growing
exponentially at a 71% CAGR and is estimated
to surge over $2 trillion by 2028.
• Various products come as subscriptions, from streaming
services to monthly clothing deliveries and daily meal kits
like HelloFresh. As of October 2022, HelloFresh has
attracted over seven million customers worldwide with its
customizable plans.
• 70% of business leaders agree that the subscription
model plays a vital role in the future of eCommerce
growth and expansion. Moreover, churn rate (a
measure of the number of customers who leave a
company during a given period. It can also refer to the
amount of revenue lost as a result of the
departures. ) is one of the main challenges for this
digital business model.
• To reduce subscription churn, offer special perks such
as free delivery, lower prices, and access to limited
products. Maintaining good communication with your
customers – like informing them about delayed
deliveries – is a great way to improve customer trust.
 8. Flexible Payment Options
• Don’t lose potential buyers just because your site doesn’t
accept their preferred payment methods. Consider offering
popular and alternative payment options to get a head start in
the future eCommerce trend.
• As mobile devices are nearly universal, providing mobile
payment solutions has become among the top eCommerce
trends worldwide.
• In 2021, digital or mobile wallets accounted for 49% of global
eCommerce transactions and were expected to facilitate
about 53% of all eCommerce transactions by 2025.
• However, be informed that payment methods’ popularity varies
by region. For example, most people in
South Korea favor credit cards over other payment options.
Meanwhile, bank transfers are the
most popular payment form in Thailand.
 9. Voice and Visual Searches
• Thanks to the advancement of AI, customers can
now take advantage of visual and voice searches.
• These AI-powered site search systems use machine
learning and natural language processing (NLP) to
determine the intent behind a search query and
offer the most relevant results.
• Visual search lets online shoppers conduct
searches using images.
It’s forecasted to grow at a CAGR of 17.5%,
anticipating over $32 million in market value by
2028.
• On the other hand, voice search lets people multitask,
helping them save time and avoid the hassle of typing a
query into a search bar. Around
47% of shoppers used voice commands to make an
online purchase, and 58% were satisfied with their
experiences.
• Due to the technology’s ability to capture shopping
habits, 61% of the respondents use it to repurchase
saved orders. The most frequently purchased items via
voice shopping are daily necessities, like groceries (48%).
• The voice search market value is estimated to
grow at a CAGR of 23.7%, anticipating a jump from the
estimated $11.21 billion in 2022 to $49.79 billion by
2029.
• To optimize your eCommerce store for voice
search, aim for the top position on Google as
it reads top-ranking content to voice
searchers. Furthermore, execute a proper
keyword strategy. People tend to ask complete
questions instead of phrases when using voice
search.
 10. Conversion Rate Optimization
• One essential task when running an eCommerce website is converting traffic
into purchasing customers. Applying conversion rate optimization (CRO)
encourages site visitors to buy your products or sign up for your newsletter.
• The future of CRO is customer-centric. More marketers will focus on
discovering what attracts and prevents visitors from taking action,
guaranteeing the best user experience possible.
• Therefore, business owners should strategize their eCommerce
developments and optimize every customer touchpoint, including the landing
page.
• Websites with over 30 landing pages yield seven times more leads than
those with less than 10. To ensure higher conversions, create a straightforw

• In digital marketing, a landing page is a standalone web page, created

specifically for a marketing or advertising campaign. It's where a visitor
“lands” after they click on a link in an email, or ads from Google, Bing,
YouTube, Facebook, Instagram, Twitter, or similar places on the web ard copy
to minimize unnecessary distractions.
 11. Marketing Automation
• Marketing automation, with the help of machine learning,
enables businesses to automate routine marketing tasks, such as
ads, outreach, and follow-up emails.
• This technology doesn’t rely on generic messages. It gathers and
analyzes customer data to create personalized messages for every
step of the buyer’s journey. The result is improved customer
engagement and increased conversion rates.
• Marketing automation will grow at 12.8%, anticipating $9.5
billion by 2027. Due to its effectiveness in streamlining workflows,
marketing automation saves more than six hours a week.
• The marketing automation algorithm helps reduce the cart
abandonment rate by pushing automated emails to encourage
customers to complete the checkout. In these emails, business
owners can offer free shipping coupons as an incentive to
improve their success rate.
 12. Zero-Party Data
• Zero-party data is that which a customer intentionally and proactively
shares with a brand. It can include preference center data, purchase
intentions, personal context, and how the individual wants the brand
to recognize.
• A survey by Cisco found that
86% of consumers care about data privacy – they demand
transparency and control over how businesses use their data. 47% of
the respondents have switched companies due to poor data policies
and practices.
• Apple answered this concern by incorporating
App Tracking Transparency. This feature lets internet users opt out of
data tracking for affiliate marketing or Facebook advertising purposes.
Google Chrome will also end its support for third-party cookies
starting mid-2023.
• To survive future data policy changes, we recommend collecting zero-
party data – information collected directly from relevant, consenting
customers.
• There are many ways to
collect zero-party data. Some examples are
quizzes, polls, and registration. As it offers a
more participatory customer experience, zero-
party data also helps business owners improve
engagement.

• However, avoid asking for too much

information at once. This may overwhelm
customers and stop them from sharing
valuable insights
E- Transition challenges
Transition to e-commerce in India
• Transitioning to e-commerce in India presents
both opportunities and challenges for
businesses. India has seen significant growth
in its e-commerce sector in recent years,
driven by factors like increasing internet
penetration, smartphone adoption, and
changing consumer behavior.
 Here are some key steps and considerations for businesses looking to
transition to e-commerce in India:

• Market Research: Begin by conducting thorough market research to

understand the Indian e-commerce landscape, consumer preferences,
and the competitive environment. Identify the target audience, their
preferences, and buying behavior.
• Legal and Regulatory Compliance: Comply with the relevant e-commerce
regulations and guidelines in India, such as the Information Technology
Act, GST (Goods and Services Tax) regulations, and data protection laws.
Ensure your business is registered appropriately.
• Local Partnerships: Consider partnering with local logistics companies and
payment gateways that understand the Indian market. This can help
streamline operations and build trust with customers.
• Mobile-First Approach: Recognize that a significant portion of e-
commerce transactions in India happens through mobile devices. Ensure
your website or app is mobile-friendly and optimized for various screen
sizes.
• Language and Localization: India is a linguistically diverse country.
Providing content and support in multiple languages can help reach a
wider audience.
• Payment Options: Offer a variety of payment options to accommodate the
preferences of Indian consumers. This includes credit/debit cards, digital
wallets, UPI (Unified Payments Interface), and cash-on-delivery.
• Supply Chain and Logistics: Develop a robust supply chain and logistics
network to ensure timely delivery of products across the country. Consider
warehousing and fulfillment centers strategically.
• Customer Support: Provide excellent customer support, as Indian
consumers often value personalized service. This includes addressing
queries, concerns, and returns efficiently.
• Price Competitiveness: Stay competitive in terms of pricing, as price
sensitivity is high in the Indian market. Consider offering discounts and
promotions.
• Digital Marketing: Invest in digital marketing strategies, including search
engine optimization (SEO), social media marketing, and paid advertising, to
reach and engage with your target audience.
• Mobile Apps: If feasible, develop a mobile app for your e-commerce platform.
Many Indian consumers prefer shopping through apps for convenience.
• Security and Trust: Prioritize the security of customer data and transactions. Build
trust by displaying trust badges, secure payment gateways, and customer reviews.
• Product Selection: Carefully curate your product selection to cater to the specific
needs and preferences of the Indian market.
• Sustainability: Highlight sustainability and environmental initiatives, as conscious
consumerism is gaining traction in India.
• Feedback and Adaptation: Continuously gather feedback from customers and be
ready to adapt to changing market dynamics.
• Scalability: Plan for scalability as the Indian e-commerce market is expected to
continue growing. Be prepared to expand your operations and infrastructure as
needed.

Transitioning to e-commerce in India can be a rewarding endeavor, given the

market's potential. However, it's crucial to approach it strategically, considering the
unique characteristics and challenges of the Indian market. Adapting to local
preferences and building trust with customers are key to long-term success in
Indian e-commerce.