Shavez Ecommerce Applications

PROJECT REPORT ON
MARKETING RESEARCH
SUBMITTED IN PARTIAL FULFILLMENT FOR THE
AWARD OF THE DEGREE OF MBA FOR
(2018-2020)
SUBMITTED BY SUBMITTED TO
SHAVEZ MR.YASHWANT KUMAR
UNIVERSITY PRN:-1828100401
BHARATI VIDYAPEETH DEEMED UNIVERSITY SCHOOL OF DISTANCE

EDUCATION
Academic Study Center - BVIMR, New Delhi An ISO 9001:2008 Certified Institute
NAAC Accredited Grade “A” University
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PREFACE
It is designed in such a way that student can grasp maximum knowledge and can get practical
exposure to the corporate world in minimum possible time. Business schools of today realize
the importance of practical knowledge over the theoretical base. The research report is
necessary as it provides an opportunity to the researcher in understanding the industry with
special emphasis on the development of skills in analyzing and interpreting practical
problems through the application of management theories and techniques. It is a new
platform of learning through practical experience.
SHAVEZ
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STUDENT UNDERTAKING
I SHAVEZ have completed the project titled “MARKETING RESEARCH “under the
guidance of MR. YASHWANT KUMAR. In the partial fulfillment of the requirement for
the award of degree of MBA BVDU, SDE, Academic Study Center BVIMR, New
Delhi. This is an original piece of work & I have neither copied and nor submitted it earlier
elsewhere.
SHAVEZ
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ACKNOWLEDGEMENT
"Accomplishment of any task necessarily depends upon the willingness and enthusiastic
contribution of time and energy of many people."
From the starting till the completion of this project, there are many people without whose
assistance all my efforts would have been fruitless. I, therefore, acknowledge all who
generously helped me by sharing their time, experience and knowledge with me without
which this project would have never been accomplished.
I must express my gratitude to Mr. AMARJIT R. DESHMUKH (our director sir) & Mr.
YASHWANT KUMAR (our project guide) whose perceptive guidance, constant
encouragement, constructive criticism and affection were the light of guidance during my
tenure of my work.
Finally, I would like to state that the project not only fulfilled an academic requirement, but
would also help me in future endeavors in the years to come
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Executive Summary
Oral hygiene is sought to be one of the most necessary aspects to maintain good health since
the pre-modern era where natural products like Neem sticks were used to maintain good
teeth. With the advancement of technology in the modern era, products like toothpastes,
mouth washes, dental floss, and teeth whiteners have been introduced. Realizing the
importance of these products in consumers daily lives especially toothpastes, many
companies like P & G, Hindustan Unilever etc. are planning to launch products to fight for
the share of the existing market giants. Before launching a new product in the market, the
companies need to realize the factors affecting the buying behavior so as to design their
marketing strategies to cater to the correct consumer segment(s). Initially, an exploratory
research was conducted to figure out what brands of toothpastes the consumers know about
and what factors do the consumers consider while making their purchase decision. Then
questionnaires were administered through an online survey. Two questionnaires were
administered with one question different where the first questionnaire had one non-attribute
based question while the second had attribute based question; this being done for using multi-
dimensional scaling. Other approaches used for analysis were tabs, cross-tabs, chisquare,
factor analysis, cluster analysis, etc. These statistical tools were used with the help of MS-
Excel and SPSS. The analysis from these tools helped gather useful insights upon what type
of respondents we had, what attributes the consumers consider while making the purchase
decision, how the consumers perceive the various brands to be etc.
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Table of Contents
Serial No. TOPICS PAGE

NO.
CHAPTER-1 1.1 INTRODUCTION OF MARKETING 7
RESEARCH
CHAPTER-2 RESEARCH METHODOLOGY 8-9
CHAPTER-3 FINDINGS AND ANALYSIS 9-10
CHAPTER-4 CONCLUSIONS 16-30

CHAPTER- 5 RESEARCH METHODOLOGY 31-32
CHAPTER-6 LIMITATIONS OF THE STUDY 33-35
* BIBLIOGRAPHY 36-39
* REFRENCES 40-42
* ANNEXURE 42-44
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CHAPTER – 1 INTRODUCTION OF MARKETING RESEARCH
Meaning
Research means detailed study of a problem. Here, the details of the marketing problem are
collected and studied, conclusions are drawn and suggestions are made to solve the problem
quickly, correctly and systematically. In MR, specific marketing problem is studied in depth
by collecting and analyzing all relevant information and solution are suggested to solve the
problem which may be related to consumers, product, market competition, sales promotion
and so on.
MR is special branch of marketing management. It is comparatively of recent in origin. MR

acts as an investigative arm of a marketing manager. It suggests solution on marketing
problem for the consideration and selection by a marketing manager. MR also acts as an
important tool to study buyer behaviour, changes in consumer life-style and consumption
patterns, brand loyalty and forecast market changes.
In brief, MR facilitates accurate marketing decisions for consumer satisfaction on the one
hand and sales promotion on the other hand. It is rightly treated as the soul of modern
marketing management. MR suggests possible solution on marketing problem to marketing
manager for his consideration and final selection. It is rightly said that the beginning and end
of marketing management is marketing research. It is primarily used to provide information
needed to guide marketing decision, market mix. It acts as a support system to marketing
management.
Features of Marketing Research
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1) Systematic and continuous process:- MR is a continuous process. One type of
research is not adequate to resolve all marketing problem. Similarly, new research
projects will have to be undertaken to solve new marketing problem and challenges.
A marketing company faces new marketing problem from time to time and for facing
them marketing research activities need to be conducted on regular basis. A
marketing company has to conduct MR regularly for its survival and growth in the
present dynamic marketing environment.
2) Wide in scope application:- MR is wide in scope as it deals with all aspects of
marketing of goods and services. Introduction of new products, identification of
potential markets, selection of appropriate selling techniques, study of market
competition, introduction of suitable advertising strategy and sales promotion
measures are some areas covered by MR.
3) Emphasises on accurate data collection and critical analysis:- In MR, required
data should be collected objectively and accurately. The data collected must be
reliable. It should be analysed in a systematic manner. This will provide
comprehensive picture of the situation and possible solution.
4) Offers benefits to sponsoring company and consumer:- MR is useful to the
sponsoring company. It raises the turnover and profit of the company. It also raises
the competitive capacity and creates goodwill in the market. It enables a company to
introduce consumer- oriented marketing policies. Consumer also gets agreeable goods
and more satisfaction due to MR activities.
5) Commercial equivalent of military intelligence :- MR is the commercial
intelligence activity. It is similar to military intelligence where systematic study is
made before taking any military action MR acts as the intelligence tool of marketing
management.
6) Tool for managerial decisions:- MR acts as a tool in the hands of management for
identifying and analysing marketing problem and finding out solution to them. It is
and aid to decision-making. It suggests possible solution for the consideration and
selection by managers. MR is an aid to judgement and never a substitute for it.
7) Applied type of research:- MR is applied knowledge. It is also called ‘decisional’
research as it provides specific alternative solution to deal with a specific marketing
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problem. It studies specific marketing problem and suggests alternative solution and
possible.
8) Reduces the gap between the producers and consumer :- MR is an essential
supplement of modern competitive marketing. It is useful for understanding the needs
and expectations of consumers. It reduces the gap between producers and consumers
and adjusts the marketing activities to suit the needs of consumer.
9) Not an exact science:- MR is both science and an art. It collects information and
studies marketing problem in a scientific manner. The information collected is also
applied to real life problem. However, MR is not an exact science. It only suggests
possible solution and not the exact solution to marketing manager for consideration
and selection. At present, MR is treated as a professional activity. We have
professional research agencies dealing with the marketing problem of their clients on
commission basis.
10) Use of different methods:- MR can be conducted by using different methods. Data
can be collected through survey or by other methods like observation method or
experimentation method. Even computers and internet are used for data collection.
The researcher has to decide the method suitable for his research project.
INCREASING NEED OF MARKETING RESEARCH
1) Growth and complexity of markets :- Markets are no more local in character. They
are now national and even global in character. The marketing activity is becoming
increasingly complex and broader in scope as more firms operate in domestic and
global markets. Manufactures find it difficult to establish close contact with all
markets and consumers directly. Similarly, they have no control on the marketing
system once the goods are sold out to middlemen. This situation creates new
problem before the manufacturers which can be faced effectively through MR as it
acts as a feed-back mechanism to ascertain first hand information, reaction, etc. of
consumers and middleman. Marketing activities can be adjusted accordingly.
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2) Wide gap between producers and consumers:- marketing research is needed as
there is a wide gap between producers and consumers in the present marketing
system. Due to mass scale production and distribution, direct contact between
producers and consumers. Producers do not get dependable information as regards
needs, expectation and reactions of consumers, they are unable to adjust their
products, packaging, prices, etc. as per the needs of consumers. The problem
created due to information gap can be solved only through MR as it possible to
establish contact with consumers and collect first hand information about their needs,
expectation, likes, dislikes, preferences and special features of their behaviour. Thus,
MR is needed for removing the wide communication gap between producers and
consumers.
3) Changes in the composition of population and pattern of consumption: - In
India, many changes are taking place in the composition of population. There is a
shift of population from rural to urban areas. There have been considerable changes
in the consumption and expenditure patterns of consumers in India. The incomes of
the people, in general, are rising. This brings corresponding increase in their
purchasing capacity and buying needs and habits. The demand for consumer
durables is fast increasing. The market are now flooded with consumer durables like
TV sets and so on. Manufacturers are expected to know such qualitative and
quantitative changes in the consumer preferences and their consumption pattern.
For achieving this objective, MR activities are necessary and useful. In brief, MR is
needed for the study of changes in the pattern of consumption and corresponding
adjustment in the marketing planning, policies strategies.
4) Growing importance of consumers in marketing:-Consumers occupy key
position in modern marketing system. They are now well informed about market
trends, goods available, consumer rights and protection available to them through
consumer protection acts, the growth of consumerism has created new challenges
before manufacturers and traders. Even growing customer expectations create
situation when manufacturers have to understand such expectations and adjust the
production policies accordingly. Indifference towards consumer expectations may
lead to loss of business. In the present marketing system, consumers cannot be
taken for granted. Marketing research particularly consumer research gives valuable
data relating to consumers. It is possible to use such data fruitfully while framing
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marketing policies. Thus, marketing decisions can be made pro consumer through
marketing research activities.
5) Shift of competition from price to non-price factors:- Cut-throat competition is
unavoidable in the present marketing field. Such competition may be due to various
factors such as price, quality, and packaging, advertising and sales promotion
techniques. Entry of new competitors creates new problems in the marketing of
goods and services. In addition, market competition is no more restricted to price
factor alone. There are other non-price factors such as packaging, branding, after-
sales and advertising which create severe market competition. Every producer has to
find out the extent of such non-price competition and the manner in which he can
face it with confidence. MR is needed as it offers guidance in this regards. A
manufacturer can face market competition even by using certain non-price factors.
The shifting of competition from price to non-price factors has made marketing of
consumer goods more complicated and challenging. This challenge can be faced
with confidence by using certain measures through marketing research.
6) Need of prompt decision making :- In competitive marketing, marketing executive
have to take quick and correct decision. Companies have to develop and market new
products more quickly than ever before. However, such decision is always difficult.
Moreover, wrong decisions may bring loss to the organisation. For correct decision
making, marketing executive need reliable data and up to date market information.
Here, MR comes to the rescue of marketing manager. Problems in marketing are
located, defined, analysed and solved through MR techniques. This suggests its
need as a tool for decision making. MR is needed as a tool for reasonably accurate
decision making in the present highly competitive market system.
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Advantages of Marketing research
1) Indicates current market trends:- marketing research keep business unit in touch with the
current market trends and offer guidance for facing market situation with confidence.
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2) Pinpoints deficiencies in marketing policies:- MR pinpoints the deficiencies as regards
product, pricing, promotion, etc. it give guidance regarding different of marketing. They
include product development, branding, and packaging.
3) Explains customer resistance: - MR is useful for finding out customer resistance to
company’s products. Remedial measures are also suggested by the researcher to deal with
the situation. This makes the product and marketing policies agreeable to consumers.
4) Suggests sales promotion techniques:- MR enables a manufacturer to introduce
appropriate sales promotion techniques, select most convenient channel of distribution,
suitable pricing policy for the products and provision of discounts and concessions to
dealers. Marketing research facilitates sales promotion.
5) Offers guidance to marketing executives:- MR offers information and guidance to
marketing executives while framing marketing policies. Continuous research enables a
company to face adverse marketing situation boldly. It acts as an insurance against
possible changes in market environment.
6) Facilitates selection and training of sales force: marketing research is useful for the
selection and training of staff in the sales organisation. It also suggests the incentives
which should be offered for motivation of employees concerned with marketing.
7) Promotes business activities: - marketing research enables a business unit grow its
activities. It creates goodwill in the market and also enables a business unit to earn high
profits through consumer oriented marketing policies and programmes.
8) Facilitates appraisal of marketing policies: Research activities enable business executives
to have an appraisal of the present marketing policies in the light of findings of research
work. Suitable adjustments in the policies are also possible as per the suggestions made
by the researchers.
9) Suggests new marketing opportunities: MR suggests new marketing opportunities and the
manner in which they can be exploited fully. It identifies emerging market opportunities.
10) Facilitates inventory study: marketing research is useful for the evaluation of company’s
inventory policies and also for the introduction of more efficient ways of managing
inventories including finished goods and raw material.
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11) CONSUMER ORIENTATION TO MARKETING RESEARCH:
Consumer orientation to marketing research means making research activities pro-

consumers rather than pro-manufacturer. It also means giving more importance to
consumers and their satisfaction, expectations, needs, etc. and not merely to sales
promotion and profit to the manufacturer. Such orientation is essential as consumer is the
centre of all marketing activities and his satisfaction is the base or basic consideration in
modern business.
The consumer orientation to MR is the result of modern concept of marketing which is

basically different from the traditional concept of marketing. It is consumer oriented and
service oriented. As a result in the marketing research activities special attention is now
given to consumers. All research activities are for making marketing useful, agreeable
and acceptable to consumers. This is what is described as consumer orientation of MR.
Research activities are now made pro-consumer rather than pro-manufacturer.
The importance of consumer is now accepted not only MR but also in all aspect of
business management. In fact consumer is the most important person in business. He is
the king and should be treated accordingly. All production and marketing activities are
for meeting his needs and also for raising satisfaction and welfare. He is the cause and
purpose of business activities. Finally, modern business is not profit oriented but
consumer-oriented or service-oriented. All these arguments are equally applicable to MR.
in other words, MR activities move around the consumer and his satisfaction.
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CHAPTER-2 RESEARCH METHODOLOGY
FIELD INVESTIGATION / SURVEY METHOD
Survey means a planned attempt to collect required information from representative

sample of the relevant population. Field investigation means collecting first hand
information by actually visiting markets or meeting consumers and dealers who are
directly related to marketing activities. Data collected for the first time through field
survey is called primary data. Here, data collected through suitable questionnaire and
interview a limited number of people selected from large group. Customer, creditor and
supplier are major source of primary data.
The primary data collected are superior to secondary data. Primary data are also
necessary when the secondary data are incomplete. Primary data needed to be collected
from different sources such as survey, observation and experimentation.
The primary data are reliable. However, problem in primary data is its cost, both in term
of money and time required for collection.
Primary data are of two types:-
a) Census:- It refers to the collection of data from the entire population. In India
population census is taken after every 10 years.
b) Sample:- sampling is an internal part of data collection through surveys. Sampling is
used to collect primary data when sources of data are too many to be exhaustively
handled. A sample is only representative portion of the population.
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Methods of field investigation/market survey
a) Mail surveys .
b) Telephone surveys.
c) Personal interview.
d) Consumer panels.
Field investigation is one of the widely used MR methods. Field investigation is important as
they are more accurate and unreliable. Here, direct communication is a established with the
consumers and information is collected by asking relevant question. Naturally the
information collected is accurate, first hand and factual. The conclusion drawn from such
data are more accurate and reliable.
Methodology
A survey was undertaken in some of the busiest shopping malls in Mumbai – Crossroads,
High Street Phoenix, Globus, InOrbit, Shopper’s Stop and R-Mall. Consumers were
approached directly and presented with a questionnaire which was designed to gain
information regarding their monthly income, general buying preferences, visiting preferences
and expectations regarding anything specific in the mall.
Once all this data was collected, it was then sorted out and statistically analysed. A graph of
each aspect contained in the questionnaire was made so as to get an exact percentage of the
findings. Conclusions, based on the outcome, hereby obtained were drawn and decisions
were taken about the probable buying behaviour of the average consumer.
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From the above graph, we can observe that out of 100 people visiting a mall:
 12 people have a monthly income below Rs. 5000

 36 between Rs. 5000 – Rs. 15000
 30 between Rs. 15000 – Rs. 25000
 22 have Rs. 25000 and above
Interpretation:
 12 out of 100 people cannot afford to make any significant purchases in a mall.
 36 out of 100 can afford to buy goods affordable to the lower middle-class.
 30 out of 100 have the potential of becoming profit-earning consumers for the mall.
 22 out of 100 have the ability to pay for expensive goods.
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Interpretation:
It is observed that people who are more educated have preferences and tastes which are quite
different from others who are less educated. It is observed that 10th passed and HSC passed
people tend to copy the lifestyle led by most of the well-educated people. This is because of
the simple reason that with education comes class.
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 46 visit weekly
 26 visit monthly
 13 visit fortnightly
 9 visit quarterly
 6 not specified
Interpretation:
Maximum numbers of people visit a mall on a weekly and monthly basis.
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From the above graph, we can observe that:
 69 go for shopping
 23 for window shopping
 18 for get-togethers
 9 for watching movies
 1 for other reasons
Interpretation:
Maximum number of people visit a mall for shopping purposes. A staggering second comes
window shopping. This is the target audience, the people who are useful from the profit-
making point of view.
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 57 shop for clothes and accessories

 10 shop for electronic goods
 13 for groceries
 20 for other items.
Interpretation:
Clothes and accessories clearly top the list in consumer buying preference in a mall. Other
items such as toiletries, chocolates, canned foods, wafers etc. are preferred by a considerable
amount of people. Electronic goods and groceries are not much of a hit in a mall.
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 31 spend below Rs. 1000

 39 spend between Rs. 1000 – Rs. 3000
 14 spend between Rs. 3000 – Rs. 5000
 16 spend Rs. 5000 and above.
Interpretation:
Majority of people spend between Rs. 1000 – Rs. 3000 during a visit to the mall (when they
are shopping). Items selling below and till this price limit would be most profitable.
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 80 shop for Branded Goods

 20 for Non-Branded Goods
Interpretation:
The average consumer prefers buying Branded Goods as far as he can. Since the standard of
living has risen, people associate brands with status in society. If this consumer is provided
with recognised brands within his budget, it can be a very profitable business. This is what
Peter England tried to do.
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 48 people think prices are reasonable

 35 think they are unreasonable
 17 can’t say.
Interpretation:
As far the prices are concerned, it is observed that a majority of people think that prices
charged in a mall are unreasonable. Though it is purely subjective, at the end of the day the
average consumer must feel that he/she has got more than his/her value for money. Only then
can malls flourish
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CHAPTER-3 FINDINGS AND ANALYSIS
Commerce has evolved over the centuries. Prior to the evolution of money it was the simple
“barter process” where things could be exchanged, say milk for grains. The evolution of
moneybrought with it, the concept of a “marketplace”. In a marketplace, Commerce is
function of 4P’s – Product, Price, Place and Promotions. All these four components play a
vital role in atransaction to take place. Different combinations of 4Ps determine different t
forms ofCommerce. Once the marketplace came into existence, a few pioneers realized that
people6would be ready to pay extra if they could deliver products at the customer’s doorstep.
A slightmodification on Price and Place led to the convenience of getting products at their
homes. Thisconcept delighted the customers and thus, the concept of “Street Vendors” was
born.
When the Postal System came into being the sellers decided to cash in on the new
opportunityand started using mailers giving description of their products. It led to the concept
of “MailOrder Cataloging”. From here, the evolution of the “Tele shopping” networks was
thusinevitable with the development of media vehicles.
The latest generation of commerce is one that can be done over the internet. Internet provides
avirtual platform where sellers and buyers can come in contact for sale and purchase of
goods andservices. They can be thousands of miles apart, may belong to different parts of the
world, mightspeak different languages, “E-Commerce” emerged as the boundary-less trade
medium in theera of globalization
Since, Internet has the ability to reach the customer’s home; the Distribution Channel
has startedto assume new meaning to the B2C and C2C e-Marketer. The Physical
delivery got converted toelectronic delivery; physical products were now electronic
products, displayed on a website.
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With options of paying online through debit and credit cards, even the Transaction was
purelyelectronic.
Fig: The dimensions of e-commerce
Another important P for the e marketer, Promotion, assumed importance, especially because
there is no face to face interaction between the buyer and seller. The focus of online
promotions is the ‘great deals’, ‘discounts’, ‘convenience’ offered by the Marketers.
1.3 The Status of E-Commerce in India and its Potential
E commerce stands for electronic commerce and pertains to trading in goods and services
through the electronic medium, i.e. the Internet or phone. On the Internet, it pertains to a web
site, which sells products or services directly from the site using a shopping cart or shopping
basket system and allows credit card payments. Back in 2005, the 100 million mark would
have seemed impossible. With a small number of 25 million internet users in India
(2.5%penetration) in 2005, we have seen a surge in the following years as the number
jumped to 46 million in 2007 and 100 million in 2010 which is more than a 100% growth.
The following table shows the YoY growth:
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1.3 E-Commerce in India today
Today E-commerce is a byword in Indian society and it has become an integral part of
our dailylife. There are websites providing anumber of goods and services. Then there
are those,which provide a specific product along with its allied services.
Some Internet portals provide almost all categories of goods and services in a single
site hence;they are targeting buyers of every possible product and service. The most
popular examples arewww.indiaplaza.com, www.india.com,
www.khoj.com,www.sify.com, www.rediff.com,www.indiatimes.com and so on.
These Indian E-commerce portals provide goods and services in a variety of categories.
To name a few:
• Apparel and Accessories for men and women
• Health and beauty products
• Books and magazines
• Computers and peripherals
• Vehicles
• Collectibles
• Software
• Consumer electronics
• Household appliances
• Jewelry
• Audio/Video entertainment goods
• Gift articles
• Real estate and services
• Business opportunities
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• Employment
• Travel tickets
• Matrimony
• Pets and more
1.3.2 Single-Product E-Commerce

Some Indian portals/websites deal in a specialized field, for example:
Automobiles:
Examples are: http://www.indiacar.com/ and http://www.automartindia.com/.
On these sites we can buy and sell four-wheelers and two-wheelers, new as well as
used vehicles, online. Some of the services they provide are:
• Car research and reviews
• Online evaluation
• Technical specifications
• Vehicle Insurance
• Vehicle Finance
• Dealer Locator
• Regional Transport Office regulations
• Expert speak
• Message board…and more.
Stocks and shares and e-commerce
In India today, we can even deal in stocks and shares through e-commerce. Some of the
sites are:
http://www.equitymaster.com; http://www.5paisa.com.Some of the services offered to
registered members are:
• Online buying/dealing of stocks and shares;
• Market analysis and research
• Company information
• Comparison of companies
• Research on Equity and Mutual Funds
• Tracking Market Trends
• Hotline for advice on Risk Management
• 24-Hour helpdesk….and more.
Real estate and E-commerce:
Portals like http://www.indiaproperties.com/ facilitate online dealing in real estate.
They offer either outright purchase or lease of a property through their portal. They
provide information on new properties as well as properties for resale .One can deal
directly with developers or builders or through consultants and brokers .Allied services:
• Housing Finance
• Insurance companies
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• Architects & Interior Designers
• NRI services
• Property Management Consultants
• Packers & Movers
• Security & Maintenance Services
• Vaastu or Feng Shui Consultants…and more.
Travel & Tourism and E-commerce:
India has a rich history with cultural heritage and e-commerce is instrumental, to a
large Extent, in selling India as a product, encouraging Indians as well as foreigners to
see its Multi faced culture and beauty. A major Government of India portal,
http://www.tourisminindia.com/ has a vast variety of information for a potential tourist.
The tourist destination sites are categorized according to themes like:
• Adventure - trekking, mountain climbing etc
• Eco-Themes pertains to jungles, flora and fauna
• Beaches of India
• Architectural attractions
• Forts and Palaces
• Buddhist attractions
• Hill resorts
• Desert treks
• Pilgrimage sites
Allied services offered are:
1. Passport & visa
2. Travel & accommodation information
3. Weather information
4. Festival & fair dates
5. Shopping
6. Tour Operators
7. Information on Cuisine & Restaurants
8. Car rental services…and more.
There are also sites that highlight the tourist destinations of a specific region in India,
like http:// www.incredibleindia.org which covers North East India.
Gifts and E-commerce:
In the bygone days, one had to plan what to gift a loved one, trudge across to your
favorite Shop, and browse for hours before purchasing a gift. Today there are specific
Indian websites making the act of gifting quick and easy to suit ones lifestyle. One such
site is http://www.indiangiftsportal.com/.
The gifts are categorized as:
1. Collectibles like paintings and sculptures
2. Luxury items like leather goods, perfumes, jewelry boxes, etc
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3. Household curios and carpets, etc
4. Toys & games
5. Chocolates
6. Flowers
7. Wood-craft & metal-craft
8. Idols for worship…and more.
Also the items can be searched by different regions of India, as every region has a
special style in making handicrafts.
Hobbies and E-Commerce:
The most popular hobbies from time immemorial are reading, music and films. On the
Indian website http://www.firstandsecond.com/ one can buy more than 300,000 titles of
books, cassettes, VCDs and DVDs.
The books cover a wide range of topics like Business, Art, Cookery, Engineering’
Children’s Stories, Health, Medicine, Biographies, Horror, Home & Garden, etc. As for
music and videos, they are available in English as well as in Indian languages to cater
to the varied tastes and the topics range from devotional songs, old-time favorites and
retro and jazz to the latest pop, rap, etc.
Matrimony and E-commerce:
It is said that marriages are made in heaven, but in the world of E- commerce they are
made on marriage portals like http://www.jeevansathi.com/ (meaning life-partner.com
in Hindi)and http://www.shaadi.com/ (meaning marriage.com in Hindi).One can search
for a suitable match on their websites by region of residence (India or abroad), religion
or caste. Once registered with them, they have email facility and chat rooms too, so that
the couple gets to know more about each other before making the biggest decision of
their lives.
Allied services for registered members:
1. Astrological services
2. Information on Customs and Rituals
3. Legal issues
4. Health & Beauty
5. Fashion & Style
6. Wedding Planners
7. Honeymoon Destinations…and more.
Employment and e-commerce:
Two major portals like www.monsterindia.com and www.naukri.com (meaning
job.com in Hindi) are instrumental in providing job seekers with suitable employment
at the click of ammo use. They have directories categorized under the headings
Employers and Job Seekers. The service for job seekers is free and for Employers they
charge a nominal fee. Jobs are available online in fields ranging from secretarial to
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software development, and from real estate to education. The opportunities offered are
unlimited.
1.4 Facilitators of E-Commerce in India

1.4.1 Information directories
Portals like http://www.trade-india.com/ and http://trade.indiamart.com/ maintain directories
giving trade details on almost any topic, whether it is from apparel to toys, from gems to
heavymachinery, or from food to employment. The products and services are listed with
appropriatesub-headings to make it easy for a serious information-seeker to find what he
wants. Some othersimilar sites are http://www.indiagrid.com/,http://indiainfo.com/,and
http://in.indiatimes.com/.
Allied services provided by them: Message boards, chat rooms, forums, etc.
1.4.2 Banks:
Net banking / phone banking:
This is an online banking facility available for savings account holders as well as current
Account holders. Some of the special Net banking services are:
• Demat accounts for sale/purchase of stocks and shares
• Foreign Exchange services
• Direct/Instant payment of bills on the account-holder’s behalf
• Financial Planning & advice
• Electronics Funds Transfer
• Loans to account-holders
• NRI services…and more.
Credit/Debit Cards:
Banks facilitate E-commerce by providing the most vital trade instrument, namely the
CreditorDebit Card, without which E-commerce would be impossible. Some of the major
Indian playersin this field are: http://www.hdfcbank.com/, http://www.icicibank.com/and
http://www.statebankofindia.com/.
1.5 Potential of E-Commerce in India

Microsoft Research India was inaugurated in January 2005 in Bangalore, as the sixth MSR
laboratory in the world. The arrival of a giant like Microsoft itself speaks of India’s potentials
a world-player in the field of Information Technology and e-commerce; and others will soon
follow. Indian researchers and technicians can further the fast emerging world of Ecommerce
in India and take it to greater heights.
What does the future hold for e-commerce? Many would say it is difficult to predict.
The forces that determine the web's winners and losers are just taking shape and
technological advances could add even more uncertainty. On the downside, some experts
predict that it will be increasingly difficult for smaller companies to establish their presence.
Public companies and traditional brand name retailers have deep pockets and a name
recognition that will make it difficult for smaller sites and mom-and-pop shops to attract
customers, thereby forcing them to compete with the big boys. On the Net, it's one big
neighborhood. On the upside, nearly all experts believe that overall e-commerce will increase
exponentially in coming years. usiness to Business transactions will represent the largest
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revenue. Online retailing will also enjoy a drastic growth. Areas expected to grow include
financial services, travel, entertainment and groceries.
And for those considering opening a virtual store front, forthcoming technology and
standards agreements will make it easier to create a site, to protect it against payment fraud,
and to share information with suppliers and business partners.
According to a Reuters, Google expects India’s Internet users to triple (a
whopping 300 million) by 2014. Now, what is it that will propel this huge
growth? Rajan Anandan, who heads Google’s India operations shared
with The WSJ that -”The next 200 million new users will largely be mobile?first users and
out of those, 100 million will be mobile-only users”. This is
mainly because telecom carriers have invested in high-speed wireless
infrastructure and smart phones will become cheaper. Let’s see how that
goes. So what does this user growth mean for E-commerce in India? Online travel
and movie ticket sales generate about $5 billion in revenue in India
compared to a massive $80 billion in neighboring China. It remains to be
seen whether this growth in Internet penetration will translate into more
number of users who will indulge in online purchasing. Anandan had also
mentioned that, “Making money off that growing audience, though, is
proving difficult thus far for Google and other Internet companies,” Also,
Indian online ad spending is only about $200 million per year – a small
14 fraction of the $80 billion global digital advertising industry.
32
CHAPTER-2 LITERATURE REVIEW
Electronic commerce or e-commerce consists primarily of the distributing, buying, selling,
marketing, and servicing of products or services over electronic systems such as the Internet
and other computer networks. The information technology industry might see it as an
electronicbusiness application aimed at commercial transactions. It can involve
Electronic funds transfer, supply chain management, e-marketing, online marketing, online
transaction processing, electronic data interchange (EDI), automated inventory management
systems, and automated data collection systems. It typically uses electronic communications
technology such as the Internet, extranets, e-mail, e-books, databases, and mobile phones
Enterprise resource planning software is meant to integrate all of the company’s information
into a single application, which benefits SCM applications by having a single source for up-
to-date information. ERP software, however, is expensive and difficult to implement as well.
Fig 2.1: Meaning of E-Commerce

2.1 Functions of Electronic Commerce
The four functions of e-commerce are:
1-Communication
2-Process management
3-Service management
4-Transaction capabilities
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Fig 2.2: Functions of Electronic Commerce
2.2 Distinct Categories of E-Commerce
Business-to-business (B2B): Business-to-Business refers to the full spectrum of e-
commercethat can occur between two organizations. Among other activities, B2B e-
commerce includespurchasing and procurement, supplier management, inventory
management, channelmanagement, sales activities, payment management, and service and
support. While we may befamiliar with a few B2B pioneers- e.g. Chemdex
(www.chemdex.com), Fast parts(www.fastparts.com), and Free Markets
(www.freemarkets.com) - some other exciting newconsortia are emerging.
Business-to-Consumer (B2C): Business-to-Consumer e-commerce refers to exchanges
betweenbusinesses and consumers, e.g., Amazon.com, Yahoo.com and Schwab.com. Similar
transactionsthat occur in business-to business e-commerce also take place in the business-to-
consumercontext. For instance, as with smaller business-to-business, transactions that relate
to the backoffice of the customer (i.e., inventory management at the home) are often not
trackedelectronically. However, all customer-facing, or front office activities are typically
tracked.These include sales activities, consumer search, frequently asked questions and
service andsupport.
34
Consumer-to-Consumer (C2C): Consumer-to-Consumer exchanges involve
transactionsbetween and among consumers. These exchanges may or may not include third-
[artyinvolvement as in the case of the auction-exchange eBay. Other activities include
classified ads(e.g., www.numberoneclassifieds.com), games (www.heat.net) jobs
(www.monster.com), Webbased communication (www.icq.com), and personal services (e.g.,
Yahoo! Personals,webpersonals.com).
Consumer-to-Business (C2B): Consumers can band together to form and present

themselves as a buyer group to businesses in a consumer-to-business relationship. These
groups may be economically motivated as with the demand aggregator, Mercata.com, or
socially oriented as with cause-related advocacy at voxcap.com. In 2012, B2C ecommerce
sales grew 21.1% to top $1 trillion for the first time, according to new global estimates by e
Marketer. This year, sales will grow 18.3% to $1.298 trillion worldwide, e Marketer
estimates, as Asia-Pacific surpasses North America to become the world's No. 1 market for
B2C ecommerce sales.
35
Sales in North America grew 13.9% to a world-leading $364.66 billion in 2012—a figure
expected to increase 12.2% to $409.05 billion this year—as more consumers shifted spending
from physical stores to retail and travel websites thanks to lower prices, greater convenience,
broader selection and richer product information. But despite strong growth, North
America’s share of global sales will drop from 33.5% last year to 31.5% in 2013 as Asia
Pacific surges ahead.
B2C ecommerce sales in Asia-Pacific grew more than 33% to $332.46 billion in 2012. This
year, the region will see sales increase by more than 30% to over $433 billion—or more than
one-third of all global B2C ecommerce sales.
36
The rapid growth in Asia-Pacific sales is a result of several factors. Three Asia-Pacific
markets China, India and Indonesia—will see faster B2C ecommerce sales growth than all
other markets worldwide this year, while Japan will continue to take a large share of global
sales. China, unsurprisingly, is the primary driver of growth in the region. The country will
surpass Japan as the world’s second-largest B2C ecommerce market this year, taking an
estimated 14% share of global sales, as its total reaches $181.62 billion, up 65% from
$110.04 billion in 2012.
The US will remain the single country with the largest share of worldwide B2C ecommerce
spending, at 29.6% in 2013—down from 31.5% in 2012 despite relatively strong
growth.This will continue throughout the forecast period, though China is closing the gap
fast. In 2016, China will have 22.6% of the worldwide market, vs. 26.5% in the US. China
also boasts the highest number of people who buy goods online in the world—nearly 220
million in 2012, according to e Marketer—a result of increasing internet penetration; a
burgeoning middle class with growing trust in online shopping; government-driven
campaigns to promote consumerism; as well as improved infrastructure, product selection
and services offered by online sellers and retailers.
37
According to e Marketer, B2C ecommerce sales in the US will grow 12% to $384.80 billion
in2013—after growing 13.8% to $343.43 billion last year—as average B2C ecommerce sales
peruser reach $2,466 this year among those who buy goods online in the US.
Average spending per user is lower in China—set to reach just $670 this year, e
Marketerestimates but the sheer growth in China’s digital buyers is staggering. The country
will nearlydouble the number of people who buy goods online between 2012 and 2016,
eMarketerestimates, resulting in considerable upside for B2C ecommerce sales in China
through theforecast period.
38
A Bottom-Up Approach to Evaluating the Global Ecommerce MarketE Marketer is relatively
distinct in its methodology for global B2C ecommerce sales. Thecompany forms its figures
through an analysis of various elements related to ecommerce sales—including macro-level
economic conditions, population figures, internet and broadband adoption,consumer
attitudes, historical trends in online sales, survey data from third parties, and estimatesfrom
other research firms, investment banks and other forecasters at a country and regional
levelbefore building its worldwide model.
39
For example, when evaluating overall B2C ecommerce sales in China, e Marketer
considerdata points from dozens of sources on top-line sales, growth, online buyers, online
buyerpenetration, internet usage, and other trends—including, but not limited to, those
included on thecharts above and below—before forming its own forecast.
In all, e Marketer analyzed more than 1,100 data sets from over 130 research sources whose e
commerce figures are each tracked and evaluated by e Marketer based on their respective
methodologies, definitions and historical accuracy looking at more than 22 markets and six
major regions, before forming its worldwide figures. E Marketer tracks and re-evaluate many
40
of its estimates more than once per year. When an estimate is re-evaluated and found to be
unchanged from the previous estimate, it is marked as "confirmed and republished" as of the
later date.
Definitions: e Marketer’s figures for B2C commerce sales include retail sales, travel
sales;digital downloads purchased via any digital channel (including online, mobile and
tablet) and sales from businesses that occur over primarily C2C platforms such as eBay.
These figures exclude gambling and event tickets. Digital buyers are internet users ages 14
and older who have made at least one purchase via any digital channel within the past year,
including purchases made on desktop, laptop, mobile and tablet devices. E Marketer converts
currency based on the average 2012 exchange rate as reported by the Economist Intelligence
Unit.Note: e Marketer benchmarks its Argentina B2C ecommerce sales projections against
Cámara Argentina de Comercio Electrónico (CACE) data, for which the last full year
measured was2011. E Marketer benchmarks its Germany B2C ecommerce sales numbers
against the Bundesverband des Deutschen Versand handels data, for which the last full year
measured was2011. e Marketer benchmarks its India B2C ecommerce sales projections
against the Internet &Mobile Association of India (IAMAI) data, for which the last full year
measured was 2011. eMarketer benchmarks its Japan B2C ecommerce sales projections
against the Ministry of Economy, Trade and Industry (METI) data, for which the last full
year measured was 2010. USB2C ecommerce is comprised of retail ecommerce and digital
travel sales. US retail ecommerceis benchmarked against the Department of Commerce data,
for which the last full year measuredwas 2011; US digital travel sales, which includes online
leisure and unmanaged business travel,is benchmarked against PhoCusWright data, for which
the last full year measured was 2010.Asia-Pacific includes American Samoa, Armenia,
Australia, Azerbaijan, Bangladesh, Bhutan,Brunei, Burma, Cambodia, China, Cook Islands,
Fiji, French Polynesia, Guam, Hong Kong,India, Indonesia, Japan, Kiribati, Kyrgyzstan,
Laos, Macau, Malaysia, Maldives, MarshallIslands, Micronesia, Mongolia, Nauru, Nepal,
New Caledonia, New Zealand, Northern MarianaIslands, North Korea, Pakistan, Palau,
Papua New Guinea, Philippines, Samoa, Singapore,Solomon Islands, South Korea, Sri
Lanka, Taiwan, Thailand, Tajikistan, Timor-Leste, Tonga,Turkmenistan, Tuvalu, Uzbekistan,
Vanuatu, Vietnam, Wallis and Futuna. Eastern Europeincludes Albania, Belarus, Bosnia and
Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic,Estonia, Georgia, Hungary,
Kazakhstan, Kosovo, Latvia, Lithuania, Moldova, Montenegro,Republic of Macedonia,
Romania, Russia, Serbia, Slovakia, Slovenia, Turkey, Ukraine, Poland.Latin America
includes Anguilla, Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados,Belize,
Bolivia, Brazil, Cayman Islands, Chile, Colombia, Costa Rica, Cuba, Dominica,Dominican
Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras,Jamaica,
Mexico, Montserrat, Netherlands Antilles, Nicaragua, Panama, Paraguay, Peru,Saint
Barthelemy, Saint Kitts and Nevis, Saint Lucia, Saint Martin, Saint Vincent and the
Grenadines,Suriname, Trinidad and Tobago, Turks and Caicos Islands, Uruguay, Venezuela,
Virgin Islands(British), Virgin Islands (US). Middle East & Africa includes Afghanistan,
Algeria, Angola,Bahrain, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde,
Central AfricanRepublic, Chad, Comoros, Congo (Brazzaville), Congo (Kinshasa), Cote
d'Ivoire, Djibouti,Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia, Gaza Strip,
Ghana, Guinea,uinea-Bissau, Iran, Iraq, Israel, Jordan, Kenya, Kuwait, Lebanon, Lesotho,
Liberia, Libya,Madagascar, Malawi,Mali,Mauritania,Mauritius,Mayotte,Morocco,
Mozambique, Namibia,Niger, Nigeria, Oman, Qatar, Rwanda, Saint Helena, Sao Tome and
41
Principe, Saudi Arabia,Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan,
Swaziland, Syria, Tanzania,Togo, Tunisia, Uganda, United Arab Emirates, West
Bank/Palestine, Western Sahara, Yemen,Zambia, Zimbabwe. North America includes
Canada, US. Western Europe includes Andorra,Austria, Belgium, Denmark, Faroe Islands,
Finland, France, Germany, Gibraltar, Greece,Greenland, Guernsey, Iceland, Ireland, Isle of
Man, Italy, Jersey, Liechtenstein, Luxembourg,Malta, Monaco, Netherlands, Norway,
Portugal, San Marino, Spain, Sweden, Switzerland, andUK.About e Marketer E Marketer is
the authority on digital marketing, media and commerce, offering insights essential to
navigating the changing, competitive and complex digital environment. By weighingand
analyzing information from different sources, e Marketer provides businesspeople, marketers
and advertisers with the most complete view of digital marketing available.
2.3 Significance of E-Commerce
The electronic market place participants are not limited only to digital product companies’
e.g.publishing, software and information industries. The digital age and the digital revolution
affec tall by virtue of their process innovations:Web-TV and digital television are going to
affect TV news and entertainment programs.Changes in telecommunication will affect the
way the information is received, product announcements, orders etc. Phones, Fax machines,
Copiers, PCs and Printers have become essential ingredients in doing business, so are E-mail,
websites and integrated digital communication Today’s office business machines are not
integrated (e.g. Faxed orders have to be typed in on computers), the much talked about
convergence will drive all these equipment into one digital platform, whether it be a
computer connected to the Internet and intranet, a new kind of device capable of interacting
with other devices, because that device will prove to be more efficient and productive.
User experience of e-commerce
E-commerce gives customers the freedom to purchase items from anywhere.According to a

February 2001 Business 2.0 report, 55 percent of users enjoy online shopping because there
are no salespeople involved. In a December 2000 study, it is also indicated that"anyone with
access to a credit card would buy over the Net." Based on such phenomena, it is safe to say
that interactivity, which is more secure than ever and saves the need of a middle man during
an online transaction, has played a major role in boosting the growth of e-
commerce.Compared to traditional retailing, users also cited the following reasons as to why
they prefer online shopping:
Convenience 84%
42
Saves time 72%
Avoids crowds 64%
Allows more time to research 61%
Lower prices 60%
Among these top five reasons, at least two of them cannot be provided by traditional
retailing, and they can only be enhanced by the inter activities offered by the Internet.
Therefore, interactivity is a significant revenue partner for sites that have adopted e-
commerce.The downside is that e-commerce sites are inundated with traffic during major
holidays. In 1999,AMR Research, a market analysis firm specializing in logistics, reported
that the peak in online orders during the holiday season came around Dec. 11, whereas the
shipping activity peaked the week of Dec.20, indicating there was a delay in preparing
orders."Two years ago, it was acceptable, even impressive, to send an e-mail confirming the
order had been received,'' said Ashley Deat on, manager of logistics services for the
European division of Kurt Salmon Associates, a consulting firm. "Now, the customer wants
to know where that order is in real time.''Customers also want more information about the
status of their Internet orders than they expect with catalog orders.This sheds light on the fact
that e-commerce requires a different outlook on building a logistics network. Products ship
from the company to the customer. The store no longer plays the intermediary, according to a
January 2000 article in the Journal of Commerce.2.4 Studies on E-Commerce Industry in
India To understand the situation in India, Nass com conducted a survey on India's potential
for e Commerce industry with the following points of reference:
(a) Understand and evaluate the present state of E-commerce industry and market in India.
(b) Anticipate future potential of E-commerce industry and market in India.
(c) Identify present and potential global trends that are expected to define new paradigms of
E?commerce scenario.
(d) Analyze current internet access and penetration in India and evaluate potential threats.
(e) Suggest suitable strategies to enable Indian IT companies to address and capture a
significant
share of E-commerce market.
(f) Increased proliferation of Internet.
(g) Achieving a leadership position in E-commerce technologies and infrastructure market.
(h) Developing state-of-the-art E-commerce enabling and access infrastructure in India.
Going by even the preliminary findings, it can be easily summarized that E-Business can
indeed emerge as a major opportunity for India. This acquires twin connotations of E-
commerce and E?Business transactions from local businesses and the huge opportunity for
software exports to other countries by quickly joining the E-Business opportunities. This
survey is the first of its kind which has taken into consideration India's twin assets – software
industry and rapidly restructuring industry sector. The scope of the study also included
finding a level of awareness among corporate executives about E-commerce and its benefits;
43
perceived importance of E-commerce as being integral to their corporate strategy framework;
prospective volume of transactions expected to be carried out through E-commerce;
opportunity for exports of E-commerce solutions and services .Penetration analysis of online
services based on the NASSCOM (1999) study indicated that penetration rates of internet
and E-commerce transactions in India are expected as follows:For Business-to-Business
transactions, Indian industries are expected to reach online penetration of 2% by 2003 and
8% by 2008. This would be about one tenth of E-commerce penetration in Japanese
industries during similar periods. It further expects that India's active internet population
would spend close to 1.4% of its total regular household spending through internet purchases
by 2003. Revenue streams would increasingly be aligned with emerging global model.Most
of the revenue would come from commercial transactions and a small amount would come
from advertisement revenues. It is expected that by 2003 Internet Business -to -Consumer
transaction would constitute 80 percent of the revenue. The advertisement revenues would
amount to about 5% of total advertisement money spent. It is predicted that 3-4 percent of
E?commerce could be the result of a growing group of affluent Indians living overseas who
are likely to make some form of purchase from Indian based Web sites either for their own
personal consumption or as gifts for their kin in India.
Some of the preliminary findings on E-commerce and E-Business software exports potential
are as follows: In the year 1999-2000, Internet and E-commerce related software and services
exports from India brought US $ 340 million out of an estimated US $ 3.9 billion software
and services exports. Supply Chain Management optimization is one of the strongest drivers
of global E-commerce solutions market, as it spurs Business-to-Business transactions.More
than 68% of Indian software houses have informed of strong expertise in Supply Chain and
Distribution Management solutions. Almost 32% of IT company respondents have identified
web based consumer businesses as a major opportunity area, with expected paybacks
beginning in 3-4 years. Some of the promising areas of E-commerce services are: legacy
application integration; Internet application integration; EDI, Migration to web based
models; new ITframeworks, integration with business strategy and strategic IT consulting
(OECD, 1999). With corporate planning to revive IT spending after Y2K problem, E-
commerce solutions have emerged as a major technological and business opportunity for
Indian software houses.However, there is a concern over present state of affairs with regard
to facilitating and supporting E-commerce in India because of the poor infrastructure.
However, the software industries in India as well as user industries are putting together their
resources for adopting E?Business strategies.In spite of passing of the I.T. bill, the
framework and infrastructure in India still is not conducive enough for proliferation of E-
Business. More than 88% corporate executives expressed keen awareness of increasing
adoption of E-commerce and its potential benefits. More than 41% of corporate executive
said that E-commerce transactions are integral to their corporate plans.Among the executives
responding, nearly 85% were industries which did not have direct or frequent contact with
end-consumers, but they can see that in the future they may have to. About18% of
corporations already have some form of E-commerce infrastructure in place. These have
been facilitated through upgrade of existing IT systems or fresh installations configured for
E?commerce transactions. The most commonly found business practice is to establish
extranets orEDI (Business-to-Business) infrastructure for initial or learning period. This
subsequently upgraded to internet based access mechanisms for customers. More than90% of
the executive scited perceived efficiency in Supply Chain Management as motive for
44
Business-to-Business E?commerce, and enhanced Customer Services (Customer
Relationship Management) for Business-to-Consumer transactions. The other reported
benefits included moving towards Justin-Time management. Almost 78% of respondents
concurred that for them technology is not a major concern, nor is the required budgetary
resources. However, the high cost of effecting such transactions and inadequate services with
regards to telecommunication in India along with bandwidth were cited as major
impediments. About48% of respondents said that given the right frame work and cost-
effective infrastructure, they would like to move towards adopting E?commerce at the
earliest. Some of the key industries that have high potential for early adoption of E-
commerce are: Financial (Stock Exchanges and Banks), Automobiles, Retail, Travel, IT and
Manufacturing. However, in India presently there are only two hubs of EDI based
transactions which are in Pune and Gurgaon.
2.5 E-Business Initiatives
There is a clear need of government action and international agreements on E-commerce
issues.It is generally recognized that there is a need for simple, transparent and predictable
legal environment for E-commerce on a national and international level and that
Governments should avoid undue restrictions on E-commerce in order to avoid competitive
distortion. To develop such global framework for E-commerce, a large number of
international and regional bodies have been working notably amongst them being OECD,
WTO, WIPO, NCITRAL and ITU. A comprehensive document reporting on international
and regional Bodies and their activities and initiatives in E-commerce was prepared
(Jan.1999) by OECD Secretariat for OECD Ministerial Conference, which was held in
Ottawa in1998. "A Borderless World: Releasing the Potential of Global Electronic
Commerce"(OECD, 1999) indicated the potential for global business for many countries.
Second half of 1999 saw commitments of some of the big companies to move their multi-
billion dollar purchasing operations on to the Internet. With many Fortune 500 Companies
moving their supply-chain transactions involving purchase and sales of goods and services on
tothe Internet has created a real necessity among those who do not have E-commerce
presence to move in quickly or be left behind. Now major multinationals such as Intel, IBM,
Cisco,3 Com,Dell and many others have had E-commerce models for 3-5 years. E-commerce
between business and consumers (B2C) which means direct purchase of products on the
Internet, for example, books, automobiles, music, entertainment, software, PCs and many
other products has also picked-up significantly. E commerce is one area where market
forecasts made in 1996-97turned out to be much less than actual performance. Projections
have been revised subsequently by most of the consultancy firms For rester (IEEE, 1999)
forecasts that worldwide Internet Commerce will reach between $ 1.4 and $ 3.2 trillion
in2003, up from a range of $ 55 billion to$ 80 billion in 1998. This growth will happens as
the world’s largest economies of India and China would completely come online by 2004
2.6 Opportunities for India
At macro level, if one looks at the opportunities for India, outsourcing software and IT
services from USA and other advanced countries have emerged as one of the means to
reduce the cost of
E-commerce today. In this regard, India has emerged as a preferred destination.
Therefore,Indian Software Export Industry could target for a significant share of global e-
45
Business/E-commerce market in the years to come. In the emerging global digital economy,
it would be necessary for Indian firms to follow the same online B2B practices as done by
others in the world to be a stakeholder. E-commerce would give opportunity to small and
medium Indian enterprises to project their capability globally and thus participate more
proactively in such ventures. Many traditional sectors such as handicrafts, textiles, art, and
herbal medicines which have failed in the past to tap the global markets due to lack of
marketing resources, should find an ideal medium in internet. Indian cultural heritage,
monuments, temples, and classical music could be made known widely to the world at a very
low cost of marketing and could be further leveraged in enhancing global tourism of which
India gets only 2 percent. E-Commerce is one IT tool that could do wonders to the Indian
economy in many fields. In NASSCOM study, India has the potential to create E-business
worth $1.5 billion by 2004and around $10 billion by 2008. E?commerce is a fast moving
area internationally in terms of opportunities and the technologies. It is predominantly led by
industry and user sector with government playing a catalytic role.Government by providing
proactive policies and environment and facilitating support and critical inputs for growth can
do wonders for E-commerce in and beyond India. In the last one year, significant progress
has been made in the country in this regard. New Tele com Policy 1999new ISP policy and
certain specific policies have emerged out of acceptance of Part I of the Report of National
Task Force on IT and Software Development. They need to be implement ed aggressively
and without delay. The drive to set-up world class information infrastructure at most
competitive price has to be accelerated. The following noticeable programs have been made
in India as of July 2001. (i) Since announcement of Internet Policy in November 98,
315licenses have been issued to ISPs by Dot. With the availability of a large number of ISPs,
it is expected that market forces will govern the pricing and prices will come down
further.(ii)National Internet backbone is being established which would provide connectivity
to Government as well as private ISPs. TRAI has fixed the upper limit for Internet tariff, ISPs
are revising tariffs periodically at a very economic, competitive and attractive prices to
mobilize the customers.(iii) VSNL, STPI and others are providing international bandwidth
from multiple locations .STPI with the single window facilities including high speed data
com services at 17locations countrywide has multiple sites and are enabling more than 1200
companies to set up Internet operations.(iv) NTP-99 has given significant importance to
online E-commerce. It is expected that information for E-commerce and B-commerce will be
passed seamlessly. The requirement to develop adequate bandwidth of the order of 10Gb on
national routes and even terabits on certain congested important national routes will be
immediately addressed to so that growth of IT as well as E-Commerce will not be hampered
2.7 Development of Suitable Legal Framework for E-commerce
Information Technology Bill (Government of India, 1999) has been passed by both Houses
of Parliament. The Bill provides legal recognition of electronic records and purposes
including its authentication through digital signature. This Bill has enabled the conclusion of
contracts and the creation of rights and obligations through the electronic media. It has
proposed to provide a legal implementation structure. It has also proposed to amend Indian
Penal code and Indian Evidence
Act to provide for necessary changes in the various provisions which deals with offences
relating to documents and paper based transactions; amendments to Section 2 of the Banker's
Book Evidence Act and RBI Act, 1934 will include safeguards for E-commerce transactions.
46
The IT Bill is also aimed at prevention of computer crimes. As the Bill comes into effect,
corporate and individuals will be able to rightfully carry on trade through electronic medium
without the fearof losing rights and obligations.
This will give E-commerce in India a much-needed boost. As the communication network
expands and computerization gathers momentum, the scope of E-commerce will expand. The
need for the banking and financial system to adjust to the changing circumstances has
become urgent. In India, E-commerce in the financial sector is catching up. The prerequisites
for the E-commerce in the financial sector are: total branch computerization; inter branch
connectivity inter bank connectivity; safeguards to ensure accountability of the transactions
put through computers and appropriate legal framework. In the advanced countries,owing to
the existence of a well developed telecommunications infrastructure, the accessibility of the
internet connection is expeditious, even when a large number of customers want to browse or
access a particular site. But in India the lines get very often choked and it is not uncommon
that one may be compelled to wait for a long time to get access to a particular website. So to
get E-commerce to be widely accepted as a reliable means of conducting business a state-of-
the-art communications network is needed. The INFINET commissioned by RBI recently is
major step in reducing delays and increasing faster communications in the financial sector.
The INFINET plays a key role in intercity Electronic Clearing Service (ECS), Electronic
Funds Transfer (EFT), Centralized Funds Management (CFMS), Centralized Funds Enquiry
System (CFES) and the proposed Real time Gross Settlement (RTGS) system. The practice
of payment through Internet is expected to pickup in the near future. Besides Credit Card,
Electronic Checks will be in use with multiple vendors and banks/financial institutions. With
WTO Commitments to encourage E-commerce in the Third World countries, Indian
Copyright Act, 1957 (amended in 1994) has been broadly in conformity. Likewise certain
amendment to Indian Patent Act in the form of the Patents Amendment Bill has also been
introduced in the Parliament. For protection of intellectual property rights, a Bill has also
been introduced in the Parliament. These are under the consideration of the Parliament. A
knowledge base in IPR has been created and IPR Cell set up in MIT provides facilitating
support. Worldwide new developments on IPR in the context of emerging digital economy
are followed and proactive actions are taken. In line with WIPO Treaties (WCT, WPPT,
Digital Agenda), a project is underway on Electronic Copyright Management System to
develop Image Watermarking Technology. To accelerate E-commerce in Internet, It may be
necessary to take follow-up action on WIPO Copyright Treaty, Technology Development
and Pilot Projects on E-commerce
47
CHAPTER-3
RESEARCH METHODOLOGY
3.1 Introduction
In the era of economic liberalization and increased competition, Indian industry is
attempting to harness technology to succeed in achieving its business objectives. In doing so,
it has focused on balancing the benefits provided by new technologies with the associated
risks inhaling one’s business depends on it. This has resulted in a race to be the first to be
second in implementing new technologies with most organizations waiting for their peers to
explore new areas before venturing into them.The basic elements required for successful
business engagement are changing rapidly. Pressures to economies, speed up operations, and
supply superior service are constant. One of the most visible, challenging, exciting, and ill-
understood means of responding to these pressures is the use of a number of electronic
channels, particularly the Internet and its offshoots.
‘
3.2 Objective
This is study is a research into the use of e-commerce by companies. This study is
conducted to evaluate the perceptions, status, and triggers on the use of e-commerce in Indian
companies. This survey has been conducted simultaneously in a number of countries in the
Asia-Pacific region.The results are expected to contribute significantly towards the current
thinking regarding e?commerce in this region. The results presented in this report pertain to
the Indian survey.The survey sample consisted of more than 110 Indian companies, 69 of
which had a minimum turnover of INR l billion, and 17 with an annual turnover above INR
10 billion. We chose the largest companies in the country because they were most likely to
have the greatest resources to commit to e-commerce and potentially the largest benefits to
reap. They are also the ones with,arguably, the greatest cultural and organizational obstacles
to overcome in order to do so.The research carried out by KPMG India and that took place
during late-1998 was referred to while carrying out this study. Respondents included CEOs,
CFOs, CIO’s, and Heads of Marketing at the companies surveyed.
3.3 Survey Methodology
The research study was conducted both Primary as well extensive Desk Research for
this report.Secondary data sources were used to gain a comprehensive and in-depth
understanding of the E?Commerce market in India. Inputs related to the internet users in
India, and segment-wise users of Internet in India etc. have been taken from I Cube 2006,
syndicated research product of the e technology group at IMRB International. These annual
syndicated set of reports on the Internet market in India are based on a large scale primary
survey covering 65,000 individuals across 26cities in India.Information from various
published resources and other research bodies were also used to perform a data validation
check and also to reach at the final numbers. Primary Research was conducted using in-depth
interviews with large and medium-sized B2C and C2C E-Commerce players. A detailed
questionnaire was administered to the players from various verticals of the ECommerce
Industry Respondents were required to classify their organizations as belonging to:
48
* Manufacturing (MFG),
* Financial Services (FS),
* Computers & Communications (C&C), and
* Other Industries.
3.3.1 Definitions
A very common question in this context is: “What exactly is e-commerce and what is
the impact of the Internet?” The Internet and its related technologies (Intranet, and Extranet)
are fast gaining popularity worldwide as like other technologies for electronic
communication between organizations (like EDI and Groupware). E-commerce is a generic
term to describe the way organizations trade electronically. It uses a group of technologies to
communicate with customers or other companies, to carry out information gathering, or to
conduct business transactions. Although the Internet is the best known of these, others
include Intranet, EDI, and smart cards. For the purposes of this survey, e-commerce was
defined as computer-to-computer,individual-to-computer, or computer-to-individual business
relationships enabling an exchange of information or value. Hence, the survey also sought to
explore the use of e-commerce through channels other than the Internet. The main objective
involved an attempt to determine the current awareness of, usage levels, and initiatives
undertaken in the area of e-commerce. Identification of perceived barriers to adopting e-
commerce by respondents was also a major objective. This yields a starting point to address
issues related to its adoption. The respondents consisted of people from diverse sectors of
industry. The survey also aimed to identify the benefits accrued by those organizations that
have already implemented such technology in one form of the other.This, along with the top
potential benefits expected by the respondents, gives an indication of the thrust areas for
those aiming to promote e-commerce in the country.
49
CHAPTER-4
DATA ANALYSIS
4.1 Usage of E-Commerce in India–a Demand Side perspective
Since the introduction of E-Commerce, there have been debates on future of its prospects in
India. Would it be as successful as it is in US or is it a mirage that attracts many but offers
nothing worthwhile? True enough; the players in the online marketplace are still struggling to
settle with a successful business model. Most of them are settling for Advertising Model,
hopingi t would help them break even. However, to grow beyond, the majority of the revenue
needs to be generated from customers. Customers on the other hand, have become choice-
spoilt. There is no dearth of offerings for them. They skip from one seller to other in search
of best deals in the standardized products market.In this section, we would,
• Focus on the usage of E-Commerce in India, and
• Understand the triggers and barriers for the online marketplace
4.2 Usage of E-Commerce
According to the survey conducted among the Industry players, the E-Commerce Industry in
India was worth INR 7080 crores at the end of 2006-07. Is it big enough? How much is it
expected to grow? Indian e-commerce market hosted US$3 billion of transactions in 2011
(Source: IAMAI) It is forecast that more than US$20 billion worth of transactions will be
carried out online over next five to seven years in India and 12-15% of the country’s
shopping activities will move online. (Source: IAMAI)A total of 9 million Indian internet
users carried out online transactions in 2011. This number is predicted to reach 38 million by
2015. (Source: Avendus)India’s B2C market is expected to grow at a CAGR of 34.2%
between now and2015(Source: E marketer)Online retail sales will reach US$2.4 billion
(excluding online travel) in 2012, with the number of online buyers in the country expanding
to 21.5 million (Source: E marketer)In November 2011, approximately 60% on Indian online
users visited retail sites, with 7.6 million and 7.1 million users visiting coupon and consumer
electronics sites respectively(Source: Com score)The adoption and usage of E-Commerce in
the country is a function of the overall environment for Internet usage in a country. To
correctly understand the likely growth path for E-Commerce in India it is imperative to
understand the internet ecosystem in the country. Some of the key variables that need to be
understood are the proportion of computer literates, internet penetration, frequency of access
to the internet, purpose of internet access etc. A correct mapping of these would help in
understanding the overall framework of E-Commerce in the country.
Source: I-Cube 2006 Syndicated Research of e-Technology Group @IMRB, March

2006
Figure 4.1: Frame-work of E-Commerce in the Country He PC literate population is on a fast
growth curve having grown 100% in 2006 over2004.Though in India overall penetration is
still low the important factor is that a critical mass of users is shaping up which will fuel
rapid growth over the next 3-4 years. A Claimed or Ever Internet User is defined as one who
has ever accessed Internet. A subset of Claimed Internet users, Active Internet Users are
50
defined as those who have accessed Internet at least once in the last one month. They are the
regular users of Internet and are aware of the recent trends and applications emerging on the
Internet. The population of Active Internet Users was 21 million in March 2006.As these
Internet Users mature with respect to exposure and awareness of internet,they tend to spend
more time online; access internet more frequently and surf non?communication based
applications and advanced online Applications like gaming, E-Commerce, etc However, as it
is evident from the charts below, E?Commerce is still not the key driver of the internet.
Internet usage in the country is still driven by email and information search E-Mail Chat
Information Entertainment E-Commerce Internet Users: Key Activities However, the
interesting part is that out of the 13.2 million internet users across 26 cities covered in I-Cube
2006, (Syndicated Research of e technology group @IMRB International),14.2% use the
internet to buy travel tickets; 5.5% people do online shopping especially products like Books,
Flowers, Gifts etc. and 5% people deal in stocks and shares through the internet. Though the
percentage contribution of E-Commerce is almost same over the years, however, the number
of Internet users using E-Commerce is growing rapidly.Thus, E-Commerce is surely being
adopted by the Internet users as a way to shop. They are buying a variety of products online
and visiting various websites to buy products from. Given the rate of growth in E-Commerce
users, size of the E-commerce industry is expected to reach INR 9210 crores at the end of
2007-08, a big jump of 30% over the current industry size.
4.2 Triggers and Barriers for the E-Commerce market in India
In addition to the industry size, it is imperative to understand the reasons behind the growth
and reasons hampering the growth E-Commerce industry in the country. This section
elaborates the triggers and barriers that impact the adoption of E-Commerce by the Internet
users we would start by enlisting the triggers which motivate the online shoppers to buy
Products online.
Table 4.1: Triggers in buying through internet

As evident from the table above, time saving is the major reason that drives Internet users to
shop online. It is followed by convenience of anyplace, anytime shopping online. Online
stores do not have space constraints, thus, a wide variety of products can be put for display.
Companies can display whole range of products being offered by them. This further enables
the buyers to choose from a variety of models after comparing the looks, features, prices of
the products on display.
51
To attract customers to shop online, e Marketers are offering great deals and discounts to the
customers. This is facilitated by elimination of maintenance, real-estate cost of the seller,
selling its products online. An insight into some of the problems stated by customers while
buying through Internet will help us to have a closer look at the issues which need to be
addressed by the online community.
Table 4.2: Barriers in buying through Internet

Absence of touch-feel-try creates concerns over the quality of the product on offer. Another
roadblock in the way of E-Commerce is lack of interactivity so as to allow for negotiations
between the buyer and sellers. In addition to above, the security of online payments is a
major issue requiring immediate attention of the e Marketers. Increasing rate of cyber crimes
has made customer apprehensive of revealing their credit card details and bank details online.
Moreover, the duration of selecting, buying and paying for an online product may not take
more than 15 minutes; however, delivery of the product to customer’s doorstep may take
about 1-3weeks. Further more our past observation has been that in India shopping is an
experience itself.Consumers look forward to it as an opportunity to get out of their homes
and interact with other people. The recent growth in the malls and the hypermarkets only
corroborate this fact. Thus,commerce has to bank on the convenience and discount platform
as there is no way that they can compete with the offline platforms on the experience that
they provide.
There is no doubt that Internet shopping has a number of benefits to offer. With changing
lifestyles, E-Commerce is surely the most appealing and convenient means of
shopping.However, the grave issues surrounding the market do not make it the “choice” of
most of the Internet users. Addressing the above specified issues, thus, has become critical to
expand beyond the current user base.
52
CHAPTER-5
RESEARCH FINDINGS
5.1 E-COMMERCE IN INDIA

Statistics for E commerce in India Indian e-commerce market hosted US$3 billion of
transactions in 2011 (Source: IAMAI) It is forecast that more than US$20 billion worth of
transactions will be carried out online over next five to seven years in India and 12-15% of
the country’s shopping activities will move online. (Source: IAMAI) A total of 9 million
Indian internet users carried out online transactions in 2011. This number is predicted to
reach 38 million by 2015. (Source: Avendus) India’s B2C market is expected to grow at a
CAGR of 34.2% between now and2015(Source: E marketer) Online retail sales will reach
US$2.4 billion (excluding online travel) in 2012, with the number of online buyers in the
country expanding to 21.5 million (Source: E marketer)In November 2011, approximately
60% on Indian online users visited retail sites, with 7.6 million and 7.1 million users visiting
coupon and consumer electronics sites respectively(Source: Com score).
53
Some Trends in Mobile, Digital Advertising & Social Media
1- Of the India’s general internet population, 9% of go online via mobile. (Source:
IMRB)At the beginning of Q4 2011, the number of mobile internet users reached 43
million.(Source: IMRB)
2-By 2015, India’s 4G service is projected to account for 28 million connections. (Source:
Avendus)
3-India could become one of the top five countries for smart phones by 2016, representing
almost 10% of the entire world supply. In 2011 it represented 2.2% of it. (Source:
IDC/Campaign Asia Pacific)
4- Online Advertising in India is currently generating $410 million a year and represents
7%of total advertising spent. By 2015, it is expected to generate $1.6 billion and comprise
10-15% of India’s overall Ad spent. (Source: Economic Times)
5-Mobile Advertising spent came to US$56.5 million in 2011. It is forecast to reach $247
million by 2015. (Source: E marketer)
6-India’s total social networking audience now totals 43.5 million according to one
survey.(Source: Com score)
7- There are more than 33 million users who on more than one social networking sites in
India. These sites are attracting more than 45,000 news users every day. (Source: Scribble/
Techonzo)
8- Every so often there is a shift in the prosperity of a market based on region. Right now the
focus is on the e commerce market of India, in particular focusing on the apparel industry.
According to statistics, the Indian apparel market is growing faster than any other industry in
the country, in regards to e commerce.
54
By the end of 2013, the country’s top e commerce retailers are expecting for their sales to
double. A study conducted by HomeShop18.com further breathes truth into their claims,as
their study revealed that in India; a piece of clothing is purchased approximately every40
seconds. There is just a high demand for clothing on the e commerce market right now,and
many e-shops are springing up as a result. Part of the growth is due to the growing
development of the country, where more citizen shave access to the internet each day; and
not to mention the growth of population in India. The mix has bred a whole new consumer
base, whose preference is to purchase clothing online, where they can find the brands they
like from various retailers without having to leave their homes. As the growth in population
and in e commerce preference is so rapid, there is a high demand for apparel online, which
keeps the retailers stocking the shelves and offering new styles on a more than regular basis,
also prompting more sales. The Indian e commerce market can also owe its growth to an
expanded payment method circle that allows customers to pay for their purchases when they
get the items delivered.This is called COD, or Cash on Delivery. Since the electronic card
option is not taking off as fast as the e commerce market is here, this offers an alternative for
customers who otherwise, would not be able to purchase anything online. In India, women
are progressively becoming more in charge of their own lives. This freedom of empowerment
has been part of the growth cycle, as they are now becoming more active shopping online;
whereas before, women did not really have that choice; so while the consumer market was
there, half of it could not partake in the industry. According to Deepa Thomas, an eBay
specialist of India’s eBay commerce, 41% of sales are taken by the lifestyle category, while
clothing ranked above it. It is evident that this industry is currently very lucrative, and that
entrepreneurs would be smart to take of 2013, if all processes remain the same, there is not
telling how much the increase will be by the end of 2014.Purchase history: 62 per cent of
shoppers having shopped for more than a year. 37 percent of online shoppers have started
shopping online in the last 12 months. 67 per cent of online shoppers have shopped online as
recently as three months showcasing the growing acceptance of e commerce Frequency of
purchase: 67 per cent of online shoppers have shopped online as recently as three months
showcasing the growing acceptance of e commerce. 53 per cent of online shopper shave
shopped online more than five times, 27 per cent of online shoppers have shopped online
more than 10 times.
5.2 INTERNET GROWTH IN INDIA
E-commerce figures in advertisement are likely to record the maximum growth between the
years 2000 to 2003, because of the substantial addition to the user base expected in this
period. The emergence of broad band and the convergence of media are likely to provide the
thrust to the online ad-spend budgets of companies. India to become second-largest internet
market in 2014The number of Internet users in India has reached 205 million in October this
year, registering a year -over-year growth of 40 percent according to a report by the Internet
and Mobile Association of India (IAMAI) and IMRB International. By December, the
number is expected to reach 213million.The report also estimates that by June 2014, India
will have 243 million internet users, at which point of time, it is expected to overtake the US
as the second largest Internet base in the world.China currently leads with more than 300
million internet users while the US has an estimated207 million internet users.According to
the report, the number of internet users in urban India was 137 million in October and is
estimated to touch 141 million by December. Rural India has witnessed year-over-year
55
growth of 58 percent in active internet users since June 2012. In rural India, there were
68million internet users in October and this is estimated to reach 72 million by
December.According to the report, the number of mobile internet users has also witnessed a
steady rise,with 110 million mobile internet users in October. This is estimated to reach 130
million by the end of December. In June, there were 91 million users accessing the internet
on mobile devices,with 70.2 million users in urban India. This number rose to 85 million in
October and is estimated grow by 47 percent and reach 103 million by December. Rural
India is not that far behind in this regard with a base of 21 million mobile internet users in
June. It reached 25million in October and will touch 27 million by December. Mobile usage
and hence, mobile internet usage has seen a huge jump from the 2012 penetration levels.
Compared to the 0.4percent mobile internet users in 2012, the penetration has grown to 2.4
percent.The report further finds that more than 50 percent of the urban internet users access
internet daily. However, this high frequency usage is not restricted to only the youth and
working men;this habit of accessing the internet daily is seen among other demographic
segments as well,including older men and non-working women. In rural India, 70 percent of
the active internet users also access internet using mobile phones, while 32 percent use
internet only through mobile. The Community Service Centers and Cyber Cafes are the main
point of access for 40percent of them.
5 to 10% of existing 50,000 docoms which are of Indian origin or are India oriented were
likelyto survive in the next 5 years. Online advertising in India is poised for a stupendous
leap.A shake-out in the content providers segment following large-scale redundancy as e-
commerceand online advertising sink their roots deeper. Intense competition in the Internet
ServiceProvider (ISP) segment is likely to focus on generating alternative streams. In the
case ofInternet enablers and software service providers, a significant increase in market size
wasexpected in the long term. On the structural front, a spate of mergers, acquisitions and
alliancesin the Indian Internet business in the medium to long to long terms, paving the path
for greaterconsolidation is expected
56
CHAPTER-6
RECOMMENDATION AND
CONCLUSION
6.1 Future Prospects on E-Commerce
The report of the United Nations Conference on Trade and Development

(UNCTAD) on E?commerce and Development makes the point that although
world economic growth has slowed,and in spite of the difficulties in which the
information technology and telecommunications sectors are mired, the rapid
growth of internet use and electronic commerce continues. Estimates show that
internet use is increasing by around 30 per cent annually, and although the rate of
growth of transactions through the internet is much slower, e -commerce could
represent up to 18per cent of worldwide business -to-business (B2B) and retail
transactions in 2006. Segments such as B2B have shown ra pid growth.And in
certain sectors, such as finance, travel services, software, information and other
e?services, online transactions have been growing at a much faster pace. For
instance, in the developed countries, online banking already represents betwee n 5
and 10 per cent of total retail banking transactions. Much of the growth has
occurred in Asia. The Report classifies India as a rising star in this regard,
pointing out that India’s IT services exports have almost doubled in two years
and now account for more than 16 percent of total exports and 8 per cent of all
foreign exchange earnings. Given the extraordinary growth rates of e -services
exports, the latter figure is expected to reach 30per cent by 2008. Policy
measures to support exporters of e-services should focus on increasing market
access in e services for exporters from the developing countries, as well as
addressing domestic obstacles related to technology, payments, infrastructure
(telecommunications) and standards.But the overall message of t he Report is a
very positive one despite the currents lowdown, the internet and online services
are poised to grow, and India will be one of the main Beneficiaries. The e -
commerce is one of the biggest things that has taken the business by a storm. It is
creating an entire new economy, which has a huge potential and is fundamentally
changing the way businesses are done. It has advantages for both buyers as well
as sellers and this win-win situation is at the core of its phenomenal rise. Though
there are some weak links,with improvements in technology, they will be ironed
out, making the e-commerce easy,convenient and secure. The e -commerce is
certainly here to stay.
6.2 Recommendations
57
The most important factor that is necessary in growing e Commerce in Indi a –
Trust. If we look at the Indian context, I feel that there is a general lack of trust
between retailers and customers.Consumers don’t trust the retailers because they
feel that they are either being over charged or that they wouldn’t be able to get
appropriate level of customer service once the sale is complete.Retailers don’t
trust the customers because they feel that the customers will take every
opportunity to misuse the return or exchange policies. It is my opinion that this
general lack of trust is the primary barrier that is impeding the growth of e
Commerce within India. Here are some of the practical techniques that online
retailers can employ to improve this level of trust.
and build an environment where customers feel safe in clicking that “Pro ceed to
Checkout”button.
1. Customer Reviews
Today’s customers are putting less trust on website marketing messages and
becoming more influenced by recommendations from other people. Customer’s
trust for an online retailer will increase if the retailer off ers an ability to let
customers share their positive as well as negative reviews about products or
vendors. The key is to not “moderate” the negative reviews because by allowing
customers to post negative reviews, it will actually enhance the credibility o f
there trailer as well as other reviews. Obviously, any foul language needs to be
moderated but any genuine issues with the products or vendors must be posted
along with the positive reviews.
2. Clear shipping and delivery commitment
At the time of setting up products for sale, clear shipping and handling time must
be associated with the product. This information should be displayed consistently
on all product pages so that customer’s expectations around shipping timeline can
be clearly set.
3. Analytics & Personalization
Although personalized product recommendations and content do not directly

increase customer’s trust, they do demonstrate to the customer that the online
retailer is making a good effort in understanding the customer’s individual needs
and is acting upon them. This implicitly improves the comfort level that the
retailer is not just looking to sell products but is making an honest attempt in
building relationship with the customer.
4. Operational Reporting & Dashboards
58
Online retailers must invest in strong operational reports that provide alerts and
metrics on orders that have a risk of missing the service level that was promised
to the customers. If you have recently implemented an e Commerce platform,
chances are that at times orders will get”stuck” in various states. Therefore, it is
important to establish thresholds around how long should orders stay in various
states (such as “Processing for Payment”, “Preparing for Shipment” etc.)and then
build automated alerts when orders exceed these t hresholds.
5. Vendor Penalties
In the Indian context, majority of the e Commerce sites work in a “drop -ship”
model. This implies that the online retailer doesn’t physically stock the goods,
and instead relies on external vendors to directly ship the mercha ndise to
customer’s home. In this case, it is extremely critical to set clear SLA’s on how
long will it take the vendors to ship the orders. There should be financial
penalties built into the contracts if the vendors miss the service levels. Also,
there should be penalties if the vendors receive excessive negative reviews from
customers.
6. Price Match Guarantee
A Price Match Guarantee (PMG) is a store policy which entitles a customer to a

refund of the difference between the store’s asking price and a competitor’s
price. It can not only help build trust with the customer, it can also help reduce
price competition across online retailers. This may sound counter intuitive but it
is one of the most discussed examples in “Game Theory” and it has actually
helped retailers in US to avoid direct price wars. Take for example a firm like
Circuit City that has a price match guarantee, which looks good to a consumer.
But that guarantee really allows Circuit City to charge higher prices since
competitors will be discouraged from setting a lower price that Circuit City only
will match when it must.
59
Chapter 7
BIBLIOGRAPHY
* E- Commerce, C.S.V. Murthy- Himalaya Publishing House, New Delhi 2002.
* Electronic Commerce from Wikipedia- the free encyclopedia
* http://en.wikipedia.org/wiki/Electronic_commerce
* E-Commerce- The Cutting Edge of Business, Bajaj & Nag- New Delhi 2000
* E-Commerce-induced Change in Logistics and Transport Systems, George

Erber,
*PeterKlaus und Ulrich Voigt in: Economic Bulletin 10, Vol. 38, 2001, p. 313-
320.
* Department of Electronics 1999, Information Technology Bill along with

Cyber Laws,
*Government of India, Published in Electronic Information & Planning, New

Delhi.
* Digital Economy 1999, U.S. Department of Commerce, Reports prepa red by

the Washington, D.C.
* GICC Report on Internet and E-commerce 2000, Government of India, New

Delhi.
* IEEE 1999, 'E-commerce Perspective from Different Parts of the World',

published .
* Information Technology, Special Issue, November, New Delhi.
* Information & Technology (IT) 1997, India's Advantage in Information

Technology, Vol.
* 1, Issue 3, pp. 117-124, December, New Delhi.
* IPAG 1999, 'Electronic Commerce Technologies and Applications', IPAG

Journal, NovDec,pp. 213-221, New Delhi, India.
* Nasscom McKinsey 1999, 'Indian Information Technology Strategy', Special

Issue,commissioned by Government of India, New Delhi.
60
* OECD 1998, A Borderless World: Realizing the Potential of Global
Electronic Commerce, OECD, Ottawa.
* U.S. Government, Toward Digital Quality: Working Group on Electronic

Commerce,Second Annual Report 1999, Washington, DC.
* WTO 1999, E-commerce, WTO and Developing Countries, Edited by Arvind

Panagariya, New York.
* WTO, Work Program on Electronic Commerce' 1999, Proceed ings of the

Ministerial Conference held in New York, NY, 1999
61
62
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PROJECT REPORT ON

SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE DEGREE OF MBA FOR

SHAVEZ MR.YASHWANT KUMAR

BHARATI VIDYAPEETH DEEMED UNIVERSITY SCHOOL OF DISTANCE

Serial No. TOPICS PAGE

CHAPTER-3 FINDINGS AND ANALYSIS 9-10

CHAPTER-4 CONCLUSIONS 16-30

MR is special branch of marketing management. It is comparatively of recent in origin. MR

Features of Marketing Research

INCREASING NEED OF MARKETING RESEARCH

Consumer orientation to marketing research means making research activities pro-

The consumer orientation to MR is the result of modern concept of marketing which is

FIELD INVESTIGATION / SURVEY METHOD

Survey means a planned attempt to collect required information from representative

Primary data are of two types:-

 12 people have a monthly income below Rs. 5000

Maximum numbers of people visit a mall on a weekly and monthly basis.

 57 shop for clothes and accessories

 31 spend below Rs. 1000

 80 shop for Branded Goods

 48 people think prices are reasonable

Fig: The dimensions of e-commerce

1.3 The Status of E-Commerce in India and its Potential

The following table shows the YoY growth:

1.3.2 Single-Product E-Commerce

1.4 Facilitators of E-Commerce in India

1.5 Potential of E-Commerce in India

Fig 2.1: Meaning of E-Commerce

Consumer-to-Business (C2B): Consumers can band together to form and present

E-commerce gives customers the freedom to purchase items from anywhere.According to a

Source: I-Cube 2006 Syndicated Research of e-Technology Group @IMRB, March

Table 4.1: Triggers in buying through internet

Table 4.2: Barriers in buying through Internet

5.1 E-COMMERCE IN INDIA

The report of the United Nations Conference on Trade and Development

2. Clear shipping and delivery commitment

3. Analytics & Personalization

Although personalized product recommendations and content do not directly

4. Operational Reporting & Dashboards

6. Price Match Guarantee

A Price Match Guarantee (PMG) is a store policy which entitles a customer to a

* E- Commerce, C.S.V. Murthy- Himalaya Publishing House, New Delhi 2002.

* Electronic Commerce from Wikipedia- the free encyclopedia

* E-Commerce-induced Change in Logistics and Transport Systems, George

* Department of Electronics 1999, Information Technology Bill along with

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