“A PROJECT REPORT ON INCOME TAX RETURN AND E-FILING

PROCESS”

Submitted in Partial Fulfilment for the Award of the Degree of

(M.B.A) 2021-2023

Submitted By: Sunil Verma

University PRN: 2128100669

BHARATI VIDYAPEETH DEEMED TO BE UNIVERSITY, PUNE

SCHOOL OF DISTANCE EDUCATION, PUNE
Academic Study Centre - BVIMR, New Delhi
An ISO 9001:2008 Certified Institute
NAAC Accredited Grade “A” University

i
 DECLARATION

I Sunil Verma, M.B.A 3rd Semester would like to declare that the project report entitled

“A PROJECT REPORT ON INCOME TAX RETURN AND E-FILING PROCESS”

Submitted to Bharati Vidyapeeth University Pune, School of Distance Education Pune,
and Academic Study Centre BVIMR New Delhi in partial fulfilment of the requirement
for the award of the degree. It is an original work carried out by me under the guidance of
Mr.Yashwant Kumar.

All respected guides, faculty member and other sources have been properly acknowledged
and the report contains no plagiarism.

To the best of my knowledge and belief the matter embodied in this project is a genuine
work done by me and it has been neither submitted for assessment to the University nor to
any other University for the fulfilment of the requirement of the course of study.

SUNIL VERMA

Student Name with Signature

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 ACKNOWLEDGEMENT

The project entitled “A PROJECT REPORT ON INCOME TAX RETURN AND E-

FILING PROCESS” Was Challenging assignment for me as it required an improved
environment, extensive endeavour and all necessary support. I take this as an opportunity
to express my gratitude to Mr. YASHWANT KUMAR, my project guide for her able
guidance, cooperation and out of the box thinking without which this project would not
have completed successfully. The successful progression of my project also gives me the
opportunity to acknowledge and appreciate the staff of the college that provided me much
needed stimulating suggestion and encouragement in order to steer this project towards its
completion

……………………………………
Signature of the scholar
Place: Delhi SUNIL VERMA
PRN NO.
2128100669

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 EXECUTIVE SUMMARY

The Internet is dramatically expanding opportunities for business-to-business (B2B), Business-

to-consume (B 2 C) E-commerce transactions across borders. For B2Ctransactions especially,
the Internet sets up a potential revolution in global commerce: the individualization of trade. It
gives consumers the ability to conduct a transaction directly with a foreign seller without
traveling to the seller’s country. While this could be done in the past by post, telegram, phone,
or fax, such sales were relatively rare because the consumer had to know in advance where to
make contact and what to buy. The Internet allows sellers to put their storefronts, in the
form of Web pages, in front of consumers all over the world. Technology has expanded t h e
consumer marketplace to an unprecedented degree, and it will change the way we think about
trade. The implications of this for economic development, globalization, and cultural
exchange are immense. This creates opportunities for both consumers and small
enterprises that must not be squandered. But for all the potential of global e-commerce, there are
countless vexing policy questions to be worked out, any one of which can threaten the viability
of this nascent form of trade. All of the Internet issues being debated in the United States—
consumer protect ion, data privacy, taxation, content regulation, copyright, spam, technology
deployment , and many more—need to be resolved at the international level as well

However, unlike the United States, which has a federal government and a constitutional
guarantee of free trade, global ecommerce faces two additional serious complications: no central
international authority to make the rules and regulations and no uniform commitment to global
free trade. Moreover, conducting electronic commerce across national border s adds many
more policy issues to the mix—jurisdiction, customs duties, import and export restrictions ,
intellectual property licensing, and more—that are only now being examined

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 CONTENTS

S. No Topic Page No.

1 CHAPTER 1: 1-13
1.1 INTRODUCTION TO TOPIC
1.2 OBJECTIVES OF STUDY
1.3 SCOPE OF STUDY
1.4 VALUE OF STUDY
1.5 LITERATURE REVIEW

2. CHAPTER 2: 14-15
RESEARCH METHODOLOGY

3. CHAPTER 3: 16-29
FINDING AND ANALYSIS

4. CHAPTER 4: 30
CONCLUSIONS

5 CHAPTER 5: 31
RECOMMENDATIONS

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6 CHAPTER 5: 32
LIMITATION OF STUDY

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 CHAPTER 1- INTRODUCTION

Income Tax in India: Guide, IT Returns, E-filing Process 2019

Taxes in India can be categorized as direct and indirect taxes. Direct tax is a tax you pay on
your income directly to the government. Indirect tax is a tax that somebody else collects on
your behalf and pays to the government such as restaurants, theatres and e-commerce websites
recover taxes from you on goods you purchase or a service you avail. This tax is, in turn,
passed down to the government.
Direct Taxes are broadly classified as:

1. Income Tax – This is taxes an individual or a Hindu Undivided Family or any taxpayer
other than companies, pay on the income received. The law prescribes the rate at which
such income should be taxed.

2. Corporate Tax – This is the tax that companies pay on the profits they make from their
businesses. Here again, a specific rate of tax for corporates has been prescribed by the
income tax laws of India.

Indirect taxes take many forms: service tax on restaurant bills and movie tickets, value-added
tax or VAT on goods such as clothes and electronics. Goods and services tax, which has
recently been introduced, is a unified tax that has replaced all the indirect taxes that business
owners have to deal with.

31 JANUARY 31 MARCH 31 JULY OCT-NOV

Deadline to submit Deadline to make Last date to file your Time to verify your tax
your investment proofs investments under tax return return
Section 80C

Income Tax Basics

Everyone who earns or gets an income in India is subject to income tax. (Yes, be it a resident
or a non-resident of India). Also read our article on Income Tax for NRIs. Your income could
be salary, pension or could be from a savings account that’s quietly accumulating a 4%
interest. Even, winners of ‘Kaun Banega Crorepati’ have to pay tax on their prize money. For
simpler classification, the Income Tax Department breaks down income into five heads:

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 Head of Income Nature of Income covered

Income from Income from salary and pension are covered under here
Salary
Income from Income from savings bank account interest, fixed deposits, winning KBC
Other Sources
Income from This is rental income mostly
House Property
Income from Income from sale of a capital asset such as mutual funds, shares, house
Capital Gains property
.
Taxpayers and Income Tax Slabs

Taxpayers in India, for the purpose of income tax include:

 Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and BOI
 Firms
 Companies

Each of these taxpayers is taxed differently under the Indian income tax laws. While firms and
Indian companies have a fixed rate of tax of 30% of profits, the individual, HUF, AOP and
BOI taxpayers are taxed based on the income slab they fall under. People’s incomes are
grouped into blocks called tax brackets or tax slabs. And each tax slab has a different tax rate.
In India, we have four tax brackets each with an increasing tax rate.

 Income earners of up to 2.5 lakhs

 Income earners of between 2.5 lakhs and 5 lakhs
 Income earners of between 5 lakhs and 10 lakhs
 Those earning more than Rs10 lakhs.

Income Range Tax Tax to be paid

rate
Up to Rs.2,50,000 0 No tax
Between Rs.2.5 lakhs and Rs.5 lakhs 5% 5% of your taxable income
Between Rs.5 lakhs and Rs.7.5 lakhs 10% Rs.12,500+ 20% of income above Rs.5
lakhs
Between Rs.7.5 lakhs and Rs.10 15% Rs.1,12,500+ 30% of income above
lakhs Rs.10
lakhs

This is the income tax slab for FY 2022-2023 for taxpayers under 60 years. There are two other
tax slabs for two other age groups: those who are 60 and older and those who are above 80.
A word of note: People often misunderstand that if they earn let’s say Rs.12 lakhs, they will be paying a
30% tax on Rs.12 lakhs i.e. Rs.3,60,000. That’s incorrect. A person earning 12 lakhs in the progressive
tax system, will pay Rs.1,12,500+ Rs.60, 000 = Rs.1,72,500

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Exceptions to the Tax Slab

One must bear in mind that not all income can be taxed on slab basis. Capital gains income is an
exception to this rule. Capital gains are taxed depending on the asset you own and how long you’ve had
it. The holding period would determine if an asset is long term or short term. The holding period to
determine nature of asset also differs for different assets. A quick glance of holding periods, nature of
asset and the rate of tax for each of them is given below.

Type of Holding period Tax rate

capital asset
House Property Holding more than 24 months – Long Term Holding 20% Depends on slab rate
less than 24 months – Short Term
Debt mutual Holding more than 36 months – Long Term Holding 20% Depends on slab rate
funds less than 36 months – Short Term
Equity mutual Holding more than 12 months – Long Term Holding Exempt (until 31 March
funds less than 12 months – Short Term 2018) Gains > Rs.1 lakh
taxable @ 10% 15%
Shares (STT Holding more than 12 months – Long Term Holding Exempt (until 31 March
paid) less than 12 months – Short Term 2018)Gains > Rs1 lakh
taxable @ 10% 15%
Shares (STT Holding more than 12 months – Long Term Holding 20% As per Slab Rates
unpaid) less than 12 months – Short Term
FMPs Holding more than 36 months – Long Term Holding 20% Depends on slab rate
less than 36 months – Short Term

Income Tax Return (ITR)

A tax return is defined as a form or different types of forms filed with a taxing authority which
reports income, expenses, and other pertinent tax information. Tax returns make it simple for
taxpayers to calculate their tax liability, schedule tax payments and request refunds for the
overpayment of taxes. All taxpayers who are filing their income tax returns are required to
determine the type of income tax return (ITR) form they need to fill before actually filing their
returns. The form to be filled is solely dependent on the income that the taxpayer earns or in
certain cases if the taxpayer holds assets in a country other than India or earns any form of
income from a country other than India.

Different types of ITR forms

In total, there are almost 9 types of ITR forms available for a tax payer to file his taxes. However,
only the following forms are to be taken into consideration by individuals when filing returns as

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per the Central Board of Direct Taxes in India

•ITR-1
•ITR-2
•ITR-2A
•ITR-3
•ITR-4

The following income tax return forms are applicable only for companies and firms:
•ITR-5
•ITR-6
•ITR-7

ITR-1

Also known as the Sahaj form, this income tax return form is to be filed solely by an individual
taxpayer. Any other assesse liable to pay tax is not eligible to avail of this form for filing their
returns. This form is applicable for the following people:

•A person who earns his income via salary or through other means such as pension

•A person who earns his livelihood from a single housing property

•An individual who has no income from no other business or who have no income from the sale
of any assets i.e. capital gains

•Individuals who do not own any assets or property in countries apart from India

•An individual who has no source of income from any country outside India

•A person whose income from agriculture is below Rs.5,000

•A person whose source of income is from various investments or sources like investments,
schemes or fixed deposits etc.

•Individuals who have not earned income from any windfall such as lotteries, horse racing etc.

•People who want to accumulate their spouse’s or underage child’s income with their own, as
long as the income to be clubbed is in accordance with the criteria mentioned above.

ITR-2A

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 Introduced in the assessment year 2015-16, The ITR-2A form is a new income tax return form.
This form can be used by a Hindu Undivided Family (HUF) or an individual taxpayer. The
ITR-2A form is applicable for the following people:

•People who are also earning income from more than one housing property
•A person who has no income from any other business or who have no income from the sale of any assets
i.e. capital gains
•People who tend to earn income from different investments or sources such as Fixed Deposits, Investments,
and Shares etc.
•A person who does not own any property or assets in countries other than India
•A person who does not have a source of income from any country outside India
•A person whose income from agriculture is below Rs.5,000
•Individuals who have not earned income from any windfall such as lotteries or horse racing

ITR-2

The ITR-2 Form is a type of ITR form which is generally used by individuals who have accrued
income through the sale of assets or property. Also, this form is useful for individuals who earn
income from countries outside India. In most cases, individuals or Hindu Undivided Families
(HUF) can avail of this form to file their IT returns. This form is applicable for the following
persons

•People who earn income through salary or through means such as pension

•A person whose source of income is through the sale of assets or property in India i.e. capital
gains

•A person who tends to earn income from more than one housing property

•People who don’t earn money from any business venture

•A person who own assets in countries outside of India

•People who earn income from countries outside of India

•A person whose income from agriculture is above Rs.5,000

•A person who gets his income from any windfall like lotteries or horse racing

ITR-3

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 The ITR-3 Form is useful for an individual taxpayer or a Hindu Undivided Family, who solely
operates as a partner in a firm but who do not conduct any business under the firm. This is also
applicable for individuals who do not earn any income from the business conducted by the
firm. This form is usually filed by those taxpayers whose taxable income earned from business
is only in the form of the following:

•Salary

•Commission

•Bonus

•Interest

•Remuneration

ITR-4

This type of ITR form is useful for those individuals who conduct a business or who earn income through
a profession. This form is applicable for all types of businesses, undertaking or profession, without any
limit on the income earned. Taxpayers can also club any income they receive from windfalls, speculation,
salaries, lotteries, housing properties etc., along with the income earned from their business. An
individual with any profession, right from shopkeepers, doctors or designers to agents, retailers and
contractors, is eligible to file their ITR using this form

ITR-4S
Also known as Sugam form, the ITR-4S form can be used by any individual or Hindu Undivided Family
(HUF) for filing their income tax returns. This form is applicable for the following persons.

•Individuals who earn income from any business

•Individuals who earn income from a single housing property
•Individuals who do not earn income through the sale of assets or property in India i.e.: capital gains
•Individuals whose income from agriculture is below Rs5,000
•Individuals who do not own any assets or property in countries other than India
•Individuals who do not earn income from any country outside India

ITR-5

The ITR-5 form is used only by the following bodies to file income tax returns:

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•Firms

•Limited Liability Partnerships (LLPs)

•Body of Individuals (BOIs)

•Association of Persons (AOPs)

•Co-operative Societies

•Artificial Judicial Persons

•Local Authorities

ITR-6

Except those companies or organizations that claim tax exemption as per Section 11, the ITR-6
form is used only by all companies. Organizations that can claim tax exemptions as per Section
11 are organizations in which the income received is accumulated from the property used for the
purpose of religion or charity. This particular income tax return form is only available to be filed
online.

ITR-7
Those individuals or companies that are required to submit their returns under the following sections are
required to file their income tax returns through ITR-7.
•Section 139(4A) - Under this section, returns can be filed by individuals who receive income from any
property that is held for the purpose of charity or religion in the form of a trust or legal obligation
•Section 139(4B) - Under this section, returns are to be filed by political parties provided their total income
earned is above the non-taxable limit
•Section 139(4C) - Under this section, returns are to be filed by the following entities:
•Any institution or association mentioned under Section 10(23A)
•Any association involved with scientific research
•Any institution mentioned in Section 10(23B)
•Any news agency
•Any fund, medical institution or educational institution
•Section 139(4D) - Under this section, returns are to be filed by entities such as colleges, universities or any
other such institution wherein income returns or loss are not required to be provided in accordance with
other provisions outlined in this section.

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E-Filing of Income Tax Returns:
As per section 139(1) of the Income Tax Act, 1961 in the country, individuals whose total income during
the previous year exceeds the maximum amount not chargeable to tax, should file their income tax returns
(ITR).The process of electronically filing income tax returns is known as e-filing. The filing of returns
can be done in two ways – one is the conventional offline route which requires you to visit the office of
the Income Tax Department and doing it manually, and the other is to file the returns on the internet. E-
filing has been gaining a lot of popularity in recent years thanks to advancements in technology. E-filing
is also relatively easier in comparison with offline filing as it doesn’t involve tedious paperwork and can
be done from the comfort of your home

Types of e-Filing:
•Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital
Signature Certificate (DSC) by a chartered accountant.
•If you e-file without DSC, ITR V form is generated, which should then be printed, signed and
submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the date of e-
filing.
•You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC

1.1.1 CHARACTERSTICS

Exchange and Share Data across the World

Text messages, documents, graphics, photographs, music, video, and much more, can be
converted into data and sent as email attachments or presented on a web site. There are no
postage, printing and packaging costs with ecommerce communications. So, use this new
communications method to work quicker, and in new ways, with customers and suppliers
outside of your locality or country. Increasing number of companies are gaining competitive
advantage by using the Internet for direct selling and for communication with suppliers,
customers, creditors, partners,
Send Messages Faster and Cheaper
When you send a message, you only pay for the Internet access. As soon as the message
arrives at your ISP, it is sent for zero cost to all the people to whom it has been addressed.
Moreover, the message is likely to arrive at its destination, in a matter of seconds or minutes,

8
depending on the size of the email and its attachments. Think of the possibilities for saving time
and money with email.

Approve and Proof Work Quickly

A quotation, purchase order, letter, design drawings, brochure, or advert colour proof, etc.
can be emailed to you as an attachment for your approval. Using email in this way can
dramatically speed-up the turn-around of work between you and your business contacts.

Introduce Collaborative Working

With fast, reliable and cheap ecommerce communications, it is possible for colleagues,
customers, suppliers and partners, to use collaborative working practices to manage, share, and
enhance the project work, regardless of location where they are at a particular instance.

Update Employees Instantly With New Policies or Procedures

Email and messengers etc. works well when communicating with colleagues/pals who are off-
site, out of the country, or teleworking.

Hold Web Meetings (Data Conferencing)

A great way to have a virtual meeting is to upload a document (spreadsheets, project plans,
etc) on to a web site and enable it to be viewed and edited in real-time through the Internet.
Holding virtual meetings can save significantly on travel expenses and time.

Take Advantage of Time Differences

As ecommerce communications are so fast and low cost, new business relationship have
been established where work is exchanged between time zones at the end of one day, which, on
the other side of the world, is the beginning of either the same or next day.

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 Send Out email automatically
Event-triggered emails can be used to acknowledge orders made on web sites, and to update
customers on order progress. Alert-emails or SMS messages can also be used to notify technical
support of critical issues or maintenance problems. There, and many other similar applications,
are effortless, cheap, and efficient ways of enhancing customer service and the brand
experience.

Use the Internet to Improve Business Administration

With a mobile phone connected to a portable computer, employees working off-site can
access and update internal information, such as customer records, price lists, time sheets,
schedules, and job reports. Providing remote Internet access for staff makes it possible for the
latest information to be at hand, for administrative tasks such as invoicing, employee
whereabouts, and expense claims etc.

Train on the Web

The multi-media capabilities of web sites make them ideal for creating a virtual learning
environment for employees and customers. When training material is updated, the latest version
is immediately available. On-line learning facilities enable trainees living all over the world to
access courseware when it is convenient to them, and without having to travel to a training
centre, which in turn, saves time and expenses.

Replace the Fax Machine and Save Money

If a multi-page document has to be faxed to many people, it can work out expensive on
telephone bills, especially if a national or international call has to be made. The cost savings can
be huge if email is used instead, and the message can also be sent to multiple people for no extra
cost

1.1.2 HISTORY OF E-COMMERCE

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 E-commerce began before personal computers were prevalent and has grown into a
multi-billion dollar industry. The meaning of the term "electronic commerce" has changed over
the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial
transactions electronically, usually using technology like Electronic Data Interchange (EDI) and
Electronic Funds Transfer (EFT), where both were introduced in the late 1970s, for example, to
send commercial documents like purchase orders or invoices electronically.
The 'electronic' or 'e' in e-commerce refers to the technology/systems; the 'commerce' refers to
be traditional business models. E-commerce is the complete set of processes that support
commercial business activities on a network. In the 1970s and 1980s, this would also have
involved information analysis. The growth and acceptance of credit cards, automated teller
machines (ATM) and telephone banking in the 1980s were also forms of e-commerce.
However, from the 1990s onwards, this would include enterprise resource planning systems
(ERP), data mining and data warehousing.
In the dot com era, it came to include activities more precisely termed "Web commerce" - the
purchase of goods and services over the World Wide Web, usually with secure connections
(HTTPS, a special server protocol that encrypts confidential ordering data for customer
protection) with e-shopping carts and with electronic payment services, like credit card payment
authorizations
Today, it encompasses a very wide range of business activities and processes, from e-
banking to offshore manufacturing to e-logistics. The ever growing dependence of modern
industries on electronically enabled business processes gave impetus to the growth and
development of supporting systems, including backend systems, applications and middleware.
Examples are broadband and fibre-optic networks, supply-chain management software,
customer relationship management software, inventory control systems and financial accounting
software

Concerning Decisions/ Foot steps

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 When the Web first became well-known among the general public in 1994, many
journalists and pundits forecast that e-commerce would soon become a major economic sector.
However, it took about four years for security protocols (like HTTPS) to become sufficiently
developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of
businesses in the United States and Western Europe developed rudimentary web sites
Although a large number of "pure e-commerce" companies disappeared during the
dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such
companies had identified valuable niche markets and began to add e-commerce capabilities to
their Web sites. For example, after the collapse of online grocer Webvan, two traditional
supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through
which consumers could order groceries online The emergence of e-commerce also significantly
lowered barriers to entry in the selling of many types of goods; accordingly many small home-
based proprietors are able to use the internet to sell goods. Often, small sellers use online
auction sites such as EBay, or sell via large corporate websites like Amazon.com, in order to
take advantage of the exposure and setup convenience of such sites

Concerning Transformation of IT

EDI Some authors will track back the history of ecommerce to the invention of the telephone
at the end of last century. EDI (Electronic Data Interchange) is widely viewed as the beginning
of ecommerce if we consider ecommerce as the networking of business communities and
digitalization of business information
Large organizations have been investing in development of EDI since sixties. It has not gained
reasonable acceptance until eighties. EDI has never reached the level of popularity of the web-
based ecommerce for several reasons:
1. High cost of EDI prohibited small businesses and medium-sized companies from
participating in the electronic commerce.
2. Slow development of standards hindered the growth of EDI.
3. The complexity of developing EDI applications limited its adaptation to a narrow user base.
The Internet and the Web The Internet was conceived in 1969, when the Advanced Research
Projects Agency (a Department of Defence organization) funded research of computer

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networking. The Internet could end up like EDI without the emergence of the World Wide Web
in 1990s. The Web became a popular mainstream medium (perceived as the fourth mainstream
medium in addition to print, radio and TV) in a speed which had never been seen before. The
Web users and content were almost doubled every a couple of months in 1995 and 1996. The
web and telecommunication technology had fuelled the stock bubble in the roaring 90s and
eventually pushed NASDAQ over 5,000 in 2000 before it crashed down to 1,200 in 2002.

XML and Web Services Besides the availability of technical infrastructures, the popularity of
the Web is largely attributed to the low cost of access and simplicity of HTML authoring, which
are the obstacles of EDI development. The Internet and the Web have overcome the technical
difficulty of EDI, but it has not solved the problem of slow development of ecommerce
standards.
XML, as a Meta mark-up language, provides a development tool for defining format of data
interchange in a wide variety of business communities. Web Services offers a flexible and
effective architecture for the implementation. There is no doubt that XML and the Web Services
will shape the course of ecommerce in years to come

1.1.3 CATEGORIES OF E-COMMERCE

Based on the parties involved in the exchange, e-commerce has been categorized into the
following applications –
B2B (Business to Business) – It encompasses all the electronic transactions between two
organisations. Dealings between industrial manufacturers and distributors, partners, wholesalers
and retailers, i.e. every exchange which involves businesses at both the ends, comes within the
spectrum of B2B e-commerce.
B2C (Business to Consumer) – Though, the size of B2B e-commerce is almost six times the
size of B2C in India, and is expected to reach $700 billion by 2020 (Shankar, 2016), it is the
idea of B2C that an average customer holds with respect to e-commerce transactions. It
involves the sale of goods and services by a vendor to the end consumers, through a website
utilizing shopping cart software.

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 C2C (Consumer to Consumer) –It includes all transactions of goods and services
between consumers and doesn’t form a significant portion of e-commerce. For example, an
online portal can be provided by a third party like eBay, which can be used by consumers to put
second-hand goods for auction or conduct other transactions.
C2B (Consumer to Business) – Like B2C, C2B model also involves the interaction
between business and consumers but with their roles reversed; it is the consumer who creates
value for the business and gets paid for the same.
Growth of E-commerce in India: An Analytical Review of Literature DOI: 10.9790/487X-
1906019195 www.iosrjournals.org 92 | Page B2G (Business to Government) – It involves
interaction between business and public sector via internet technologies, for the purpose of
licensing and tax procedures and other government related operations. The size of B2G in e-
commerce market is insignificant. E-commerce in India has seen tremendous growth in the
recent years, especially, in the B2C segment, thriving on various advantages like
convenience, time saving, easy comparison and feedback, availability of options and
comparatively low prices, over the traditional business. (Franco & S, 2016). According to a
research by Forrester, a leading global research and advisory firm, the e-commerce market in
India was estimated to grow the fastest within the Asia-Pacific Region at a CAGR of over 57%
between 2012-16. The report, titled “Asia Pacific Online Retail Forecast, 2011 To 2016,” had
been issued by Forrester Research Inc. Analyst Zia Daniel Wigder, with Steven Noble, Vikram
Sehgal and Lily Varon. (Chanana & Goele, 2012).

1.1.3 ADVANTAGES OF E-COMMERCE TO ONLINE BUSINESS

•E-Commerce helps to Increase the sales revenue to the business

•Business people can spend less money and earn high profits with e-commerce
•It is very easier to scale up online
•Easily we can track the segment of customers who are happy with purchasing goods through
online
•Avoid losing sales to competitors who are online
•Instantaneous global sales presence in quick time
•We can operate the business in 24 *7 basis

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•Easily we can increase our business customers
•We set up shop anywhere in the world, self-governing of geographical locations
•Inexpensive way to turn your Web site into a revenue centre
•Reduce Customer Support costs via e-mail marketing & customary newsletters
•We can create customized mailing list
•Easily we can drive free traffic to the website
•Instantly we can develop our business across the internet by using various e-commerce
strategies
•Customers can easily buy their products by using different payment gateways
•Develop more shopping carts by using e-commerce
•We can easily promote our business website by using various promotional activities such as
Search Engine Optimization, Pay Per Click Management, Email Marketing, Social Media
Optimization, Online Banner Advertisement, Online Branding and Affiliate Management etc

1.2 RESEARCH OBJECTIVES

The study is focused on achievement of following objectives:

•To assess the latest trend in e-commerce globally.
•The impact of growth of e-commerce.
•To analyse the latest global scenario of e-commerce.
•The impact of growth on overall economy.

1.3 SCOPE OF STUDY

This study being “desk analysis" contains views of various writers and researchers of E-
commerce. This study includes the global trends including India as a major source of E-
commerce, increasing use of e- commerce in developing nations, reasons behind success of e-
commerce as an industry, the use of e-commerce in global sourcing, advantages of E-commerce
and several more topics being covered under the project analysis. The use of e-commerce in
various countries and their influence over the people or citizens of that country is remarkable.

15
1.4 VALUE OF STUDY

The findings of this study would benefit a wide spectrum of stakeholders it would also assist
policy makers in developing policies which would evaluate the impact of ecommerce strategy in
the banking sector hence developing policies which regulate and support the development of e-
commerce strategy in banks. Further, the study would be useful to academicians as it would
generate more areas of further research in the discipline of e-commerce strategy in the banking
Industry

1.5 LITERATURE REVIEW

Gupta (2014) in her paper “E-Commerce: Role of e-commerce in today’s business”,

presents a comprehensive definition of e-commerce while isolating it from e-business. The
paper enlists the different e-commerce models i.e. B2B, B2C, B2G and C2C, narratively
analysing the nitty gritties of each. Rina (2016)also elaborates the different applications
of e-commerce in “Challenges and Future Scope of E-commerce in India”, at the same
time, defining the degree to which they are operational in the country. Gunasekaran, Marri,
McGaughey, & Nebhwani (2002) give a broad outlook of electronic commerce within
organisational systems in “E-commerce and its impact on operations management”,
defining it with reference to e-trading and elaborating- how it has permeated every field of
business. The paper identifies the revolutionary role played by earlier internet applications like
e-mail and eletronic data interchange and details the revolutionary changes brought by the
internet technologies in manufacturing, marketing, purchasing, design, production, selling and
distribution, warehousing and human resource management. Internet based technologies have
enabled businesses to shorten development, purchase and procurement cycles, maintain upto
date product and market information, significantly increase the speed of communications
and increase the quality of customer relationships by facilitating close contact and constant
communication. The paper studies in depth, the significance of web based technologies in
different business operations, thus, improving their efficiency through effective B2B e-
commerce. Mishra & Kotkar(2015) trace the timeline and development of B2C e-commerce in
“A Study on Current Status of E-Commerce in India: A Comparative Analysis of Flipkart and

16
Amazon”with its inception in the mid 1990s through the advent of matrimonial and job portals.
However, due to limited internet accessibility, weak online payment systems and lack of
awareness, the progress was very slow. The Indian B2C e-commerce industry got a major
boost in mid 2000s with the expansion of online services to travel and hotel bookings which
continue to be major contributors even today.Das & Ara(2015) observe in “Growth of E-
Commerce in India”that though online travel and hotel bookings still control the lion’s
share of e-commerce market, their share has comparitively fallen over the years due to the
recent augmentation and consequent rise of e-tailing services. There has been a tremendous
surge in the volume of investment in this sector. With the e-commerce markets in the west
reaching their saturation, investors see tremendous potential in the Indian market, in the light
of which, many start ups have received funding from venture capitalists and private equity
firms. China's Alibaba Group and affiliate Ant Financial became the largest shareholders
of One97 Communications, the parent of Indian e-tailer Paytm, by investing $680 million, in
2015 (Aulakh, 2015). To tap the potential of what it regards as “underdeveloped internet
economy” of India, Japanese investment company and technology powerhouse Softbank
invested $627 million into online retailing marketplace Snapdeal and $210 million in Ola
cabs. (Mac, 2014). Similarly, New York firm Tiger Global Management has funded
companies such MakeMyTrip, Flipkart, Myntra and Quickr. The availablity of funds has
presented a favourable ecosystem and growth opportunities for big as well as small companies.
It has enabled local startups to survive in cut throat competition against foreign giants and has
facilitated the penetration of e-commerce to every facet of human life; such that the
differntiation between e-commerce and traditional buisness is getting blurred.(Aggarwal,
2014). Through “Probles and Prospects of E-Commerce”, Raghunath & Panga (2013)
present a comprehensive analysis of various nuances of e-commerce while accentuating that, in
present time every business activity, be it advertising, ordering, payment etc, can be performed
in the digital ecosystem. The paper also enlists numerous points on the importance of e-
commerce which are responsible for its development as the new convention. It has enabled the
creation and exploitation of new business opportunities, at the same time increasing the say
of customers in the development of new products and services. E-commerce has not
only augmented the performance of internal business management, but, has also enabled better
customer relationships by promoting a business model that is essentially based on information

17
 sharing. The accessibility of internet connectivity and other online tools herald a new
revolution. SWOT analysis of e-commerce conducted by Awais & Samin (2012) highlights
ubiquity, low operating cost, improved customer interaction and time saving as the unique
strengths of e-commerce,but, at the same timeaccentuates upon the necessity for the firms to
adapt themselves to the changing environment and innovate constantly to come up with better
offerings for customers. With an increase in the number of players in the B2C segment,
competition for the first position is set to intensify, making it imperative for the firms to
enhance service quality and to invest in logistics, so as to derive benefits from increase in
the disposable income of houseolds, rise in internet subscriptions and infilteration of
mobile commerce. (Das & Ara, 2015). In the face of rising competition, the survival of the
firms will depend upon how efficiently they are able to bridge the exsting gaps in e-
commerce transactions. The ubiquitous nature of internet has enabled e-commerce to defy
geographical boundaries and permeate different markets,so as to elicit demand from sub-urban
and rural areas, after having succesfully tapped its potential in metropolitan cities. In
anticipation of increasing demand from Tier 2 and 3 cities, many e-commerce firms are
undertaking efforts to widen their reach by investing in better infrastructure. In the light of
growing number of websites, offering similar goods and services, greater significance is
being attributed to Internet Marketing, which shall play an unparalleled role in audience
acquisition for e-commerce websites, by displaying the advertisements on search engine
result pages and other portals. Internet Marketing shall not only propel e-commerce but will
also emerge as an important support tool to brick and mortar stores.(Gangeshwer, 2013). Apart
from Internet Marketing, Deshmukh, Deshmukh & Thampi (2013) recognise another
important development: m-commerce, which they identify as a subset of e-commerce.
“Transformation from E-commerce to M-commerce in Indian Context” reviews the current
and potential status of e-commerce and m-commerce in the Indian market, while projecting the
latter as the potential future. The paper discerns ubiquity, personalization, flexibility and
immediacy as the singular advantages of m-commerce. The authors affirm the idea that smart
phone penetration and rise in inetrnet user base, mostly driven by youth, shall propel the growth
of e-commerce. Statistical data is used to emphasize that the infrastructure requisite for
m-commerce development already exists, however, it is yet to be properly deployed. With
mobile penetration providing a boost to digital downloads and enabling cheaper monetary

18
transfers, the need of the hour is to enhance customer confidence by providing them assurance
of safety and privacy, which shall accelerate movement towards a cashless economy. Despite
innumerable prospects, the growth of e-commerce in India has not been upto its full potential
due to certain challenges that inhibit the growth of firms. The growth of digital commerce in
India is impeded by inadequate infrastructure, logistics failure, lack of tax uniformity and
declining margins. In the face of intense competition, firms have to pamper the
customers with huge discounts, everyday offers and liberal returns policy which proves
detrimental to their profits. As against the firms following inventory model, e-marketplaces
are more adversely affected by subsidies as they have to offer incentives to the seller for listing
their products on the website in addition to the humungous discounts and wide range of offers to
the customers. The increasing fulfillment costs (includes every cost incurred from the point an
order is placed till the time its delivered to the customer.), lack of last mile connectivity in
many sub-urban and rural areas and the rising reverse logistics also hinder the the growth of e-
commerce firms by resulting in huge loss.(Rina, 2016).

CHAPTER 2- RESEARCH METHODOLOGY

19
 Research methodology is the specific procedures or techniques used to identify, select, process,
and analyse information about a topic. In a research paper, the methodology section allows the
reader to critically evaluate a study’s overall validity and reliability. The methodology section
answers two main questions: How was the data collectedOr generated? How was it analysed?

2.1 SOURCES OF DATA

For having the detailed study about this topic, it is necessary to have some of the secondary
information, which is collected from the following:-Books, Websites and Newspapers. So in
this basically secondary data is used in collecting the information.

2.2 METHOD OF DATA COLLECTION

The sources of data are:

Websites:
•Wikipedia
•Wikinvest
•India-commerce
Newspapers:
•Hindustan Times

2.3 TYPES OF STUDY

The research design or type of study specifies the methods and procedures for conducting a
particular study. The type of research design applied here are “Descriptive” and “Desk
Analysis” as the objective is to have knowledge about the ecommerce in global Scenario.
Descriptive study means situation, but not the causal linkages among its different elements.
Descriptive studies (such as a cross-sectional study) help in generating hypothesis on which
further research may be based. Desk analysis is to Gather and analyse information, already
available in print or published on the internet.

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2.4 RESEARCH DESIGN

Analytical Research - Analytical research is a specific type of research that involves critical
thinking skills and the evaluation of facts and information relative to the research being
conducted. Variety of people including students, doctors and psychologists use analytical
research during studies to find the most relevant information.

CHAPTER 3- FINDINGS AND ANALYSIS

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3.1 GLOBAL TRENDS IN E-COMMERCE

•Government programs are a significant vehicle for c-commerce implementations

•Retail, grocery and logistics industries are the most active in encouraging trading partners to
implement EDI

•Small and medium sized companies demand flexible integration solutions

•European companies focus on core competencies and outsource technology to consulting groups

•High percentage of first time implementers seek to achieve full integration

•Organizations are seeking a scalable, reliable system that is easy to deploy and manage

•Software needs to be capable of handling different business processes and must integrate with
existing IT investments

As social media, app stores and global availability become standard, many companies are
looking to enhance the online customer experience. And while retail and other transactions via
Internet are customary, more than ever companies are simplifying the ways in which customers
interact with their website and ultimately make online purchases. Here are eight trends
happening right now in global e-commerce that seek to enhance the user experience:

•Micro-payments – Among the most revolutionary changes in the coming months—not years—
is the use of micro-payment systems from a variety of financial firms, e.g., PayPal, Visa,
Western Union, among others, including banks. This trend is facilitated by the W3C working
group that approved these protocols and technical standards for the interworking. These systems
will change not only how we carry money but how we value money and think about purchases.
(Consider how a purchase of $4.99 feels in a mobile app store vs. at Dunkin' Donuts.) Payment
systems that make it easier to buy online, coupled with mobile technologies will accelerate the
usage of global e-commerce applications.

•Mobile technologies – More people access the Internet on their mobile devices than on any
other device. We are rapidly approaching the time (if we are not already there) where designs
must be created for the mobile Web first, and for the desktop second. Mobile technologies
facilitate comparison shopping; with the advent of barcode reader apps and price-comparison

22
databases, a consumer could snap a bar code in Walmart and quickly reference product reviews
and prices on walmart.com (or compare prices with Walmart competitors). Mobile technologies
also facilitate impulse buys – especially with the advent of micro-payments tied to the mobile
device. Just recently, Starbucks customers can not only place an order with their Smartphone,
but also make a purchase.

•Social media – As Facebook has become the most visited site on the Web, the role of social
media, including Facebook and its local clones such as Twitter, is increasingly important. Social
media sites increasingly act as points of entry to e-commerce sites, and vice versa, as e-
commerce sites build rating, loyalty and referral systems tied to social media. Group buying
(e.g., Groupon) is also gaining mainstream ground, with many "deal of the day" sites competing
for an increasingly savvy consumer base, but improvements lie ahead as the social aspects and
user experience are refined.

•Fulfilment options – I believe that users will want to have multiple fulfilments and return
options when interacting with a vendor: ship to address, courier, pick-up in store, return to store,
etc. Having many fulfilment options is how customers view their overall customer experience.
Some companies have made a business proposition online by being exceptional in service to the
online channel (e.g., Zappos).

•Global availability – Increasingly, consumers want the availability to buy products from
foreign sites and have them delivered locally. Thus, currency and customs will be of growing
concern to many online retailers. Along with this, there will be concerns with local privacy laws
and restrictions on related data collection and storage.

•Localization – While the trend is to globalize, what’s often more important is to localize. User
Centrica’s research clearly shows that sites that ‘feel’ local – with proper imagery, language,
time/date, weights/measures, currency, etc. – resonate far more than sites that seem culturally
distant or sterile.

•Customizability – Consumers want control, and want to be able to design the details of the
items they purchase.

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•Time-based availability – Some of the hottest and most successful sites are those that have a
time-critical response component. Sites like Groupon, Gilt and others capitalize on the
perception of limited-time availability. Creating a sense of urgency drives traffic and purchase
behaviour.

3.2 E-COMMERCE IN INDIA

New Gold Rush in E-commerce in India

Kunal Bahl, founder- CEO of e-commerce site Snapdeal.com bought out eSportsbuy.com for an
estimated of Rs.50 crores.
Bahl has 20–million (Rs. 100 crore) stash for acquisition-significant because Snapdeal is itself a
startup-but a rich on. It has raised Rs.52 million from ventures funds.
Bahl is not alone who is scouting for potential suitor. In February this year aggressively online
shopping site Flipkart.com acquired rival Letsbuy.com. Early last year, US-based social buying
site Groupon acquired India’s SoSasta.com and renamed it as Crazeal.com.
And so it seems that e-commerce is not about customers buying goods. It is about firms
shopping for others. Industry trackers say leading sites are gobbling up rivals to build size, or
acquiring customer niches either to add product segments or to get technologies that help
efficient operations.
In the game in which future share issues are on the radar for bigger players, the smaller ones
often prefer to cash out than be crushed in lonely pursuits in an aggressively competitive game.
At stake is a huge market will growing potential because India has 900 million mobile phones,
with a big chunk of that growing up from voice talk to Internet, wile the current Web user base
at more than 100 million is in itself a significant number.
Industry estimates say India’s e-commerce market will zoom from the current Rs.51000 crore to
Rs.10,20,000 crore in revenues by 2020. The race lead to buyouts-often at the cost of
profitability.
“At present sites are falling over each other to offer deep discounts, but you do not survive only
through discounts. This only creates a disloyal discount shopper who moves from one site to
another in search of the cheaper deal,” said Mahesh Murthy , managing partner of investment
firm Seefund Advisors. Murthy added that sites without a credible differentiation strategy and
loyal customer’s base would bleed-and will be up for grabs.

24
 Experts say acquisition of other sites is also a good strategy to build brand and broaden a loyal
customer base. Snapdeal.com snapped up eSportsbuy.com to get access to its large catalogue of
sports and fitness products. Flipkart.com started out with books, added cameras and mobile
handsets and then got Letsbuy.com to acquire muscle in electronic goods, while Groupon’s
buyout was to enter India.
“There is no room for newer players in the general category but there is space for niche category
players,” he said. This has been observed by Prashanth Prakash, partner at Accel partners,
which has invested in Flipkart.com.
Private enquiry is doing a huge amount of work backstage. Venture capitalists say they more
than doubled the funding level in e-commerce over the past year, and the average size of
investment has ranged from Rs.20 to 40 million.
However, having a deep pocket is no guarantee to success. “Money can only delay your death.
The only key to survive is to have a credible differentiation strategy,” Murthy said.
Size is not everything, but could help if investors have a sense of timing. “As the e-commerce
companies grow and get brand loyalty the valuations are expected to increase even further. It
will be the time when we can offload our stake, for hefty profits,” a venture capitalist with
significant stake in leading e-commerce site.
Hundreds of Internet start-ups went bust in 2000 and 2001 in the “dotcom bubble” and
comparing the current e-commerce rush to that may not be farfetched said Shailen Amin, co-
founder and CEO of footwear sites Bestylish.com.
“There are a lot of guys in this business who don’t have a retail background. They are form
either consulting or technology. So one should ask if they are really qualified to run e-retail
businesses.”
In the world where old-fashioned retail meets high-technology and innovative management, the
winners could well be those who understand dimensions.

What the consolidation?

•High operational costs affect profit margins.

25
•Most e-commerce sites compete on deep discounts, which hit their margins.
•Some firms feel the time is right to cash in on brand, customer base.
•Private equity (PE) and venture capitalists (VC) are eyeing safe exit while e-commerce
ventures are still profitable.

What makes a Long-Term Player?

•Loyal customer base, fundamentally strong business models, clear product/service
differentiation.
•Deep pockets to tide over initial gestation period Challenges for E-Commerce Sites
•Low customer loyalty
•High returns rates on cash-on-delivery
•High cost of customer retention

State of Play
•Acquiring site is a good way to build brand, broaden loyal customer base and add categories.
•The companies that are selling have real valuations, real transactions and real customers, and
are not based on eyeballs.

E-commerce companies in India offers the most tangible and finest e-commerce solutions,
provide high end e-commerce solution taking utmost care of the privacy and security of the e-
commerce website. E-Commerce service includes shopping carts, database programmers,
graphic design services, graphics, e-business, Flash designs etc.

3.3 TOP 1- E-COMMERCE COMPANIES IN INDIA

26
•20North.com:
This website offers variety of products like electronics, books, music, movies, and car
accessories. The site also offers lucrative deals. Log onto the site to shop. Happy Shopping!!!

•99labels.com:
This site offers many fashion and luxury brands at good prices. Check this site for more brands.

•Dealsandyou.com:
This site offers various kinds of deals be it holidays, shirts etc. Also this site gives heavy
discounts on regular basis that cab be profitable for the shoppers. Browse this site for more.

•Fashionandyou.com:
This site also is a great place to shop and that too sitting at home. Also this site declares sale and
heavy discounts almost every day. Sign Up today to get more deals.

•Flipkart :
This site offers various kinds of products and that too at one place. Mobile, its accessories,
books, camera and laptop accessories. And many more things are available on this site. One can
find deals for home appliances also that are available at affordable prices. Check this site
•Indiangiftsportal:
This is known for providing gifts for various occasions like birthdays, anniversary, wedding,
bhai dooj, diwali and many more .Also flowers, cakes, chocolates and many more things are
offered by this site. Browse it today to send gifts to your loved ones.

•MagazineMall:
This company specifically deals in magazines and one can get magazines of different and
unique categories like Gardening/Housekeeping, lifestyle, fashion, luxury, current affairs and
many more.

•Bindaasbargain:

27
Here new deal comes everyday at 10 am and it is India's first One Deal A Day online shopping
site.Check out the site for new deal. Happy Shopping

•Buytheprice.com:
The site offers Mobiles, Computers, Cameras, Home Appliances ,Life style, Audio and Video
and much more. Variety of products are available under each category.

•Perfume2order:
It has categories like Perfumes for Men, Perfumes for Women, Deodorants & Deo Stick,
Perfume Gift Set, Designer Wallet & Belts, Flowers, Handbags & Clutches, Sunglasses and
many more things.

3.5 E-COMMERCE IN GLOBAL SCENARIO

What Is E-commerce And How Does It Augments Global Sourcing?

E-commerce or electronic commerce, as it is popular, allows domestic as well as international
trade over the Internet. The advent of E-commerce is boon for global sourcing and import and
export. The boost to global sourcing and import/export through E-commerce is because of its to
conduct online marketing, monitoring supply chain and monetary & data transaction in a
dependable manner.

Evolution of E-commerce with Global Sourcing?

It is hard to tell whether import/export volume has swelled because of E-commerce but sure it
made global sourcing easier to monitor with its evolutionary phases. Three decades ago, it
facilitated fund transfers- albeit electronically besides facilitating exchange of POs and invoices
in international trade. Electronic teller machines are the recent manifestations now overtaken by
internet credit card processing and endorsement of unsigned invoices even in international trade.

Why is E-commerce Popular in International Trade and Import/Export?

28
 Looked at from both import and export traders' perspective, international trade is easier
conducted electronically.
Here are the points why present international trade depends much on E-commerce.

•Quick and ease of setting up E-commerce storefronts for both global sourcing as well as
import/export.
•Automatic running off of an import and export outfit without having to recruit many staff.
•Global sourcing agents/companies can evaluate/list import/export vendor Online.
•Software assisted documentation for each global sourcing and import export transaction
•Ability to handle multiple, quick and secure data and money transaction crucial to international
trade, simultaneously

In international trade, global sourcing happens to be one of the chief aspects of import and
export business. Global sourcing is an integral part of B2b scenario and has essentially
transformed world economies as well as boosted business in a great way. Nonetheless, it is also
giving great transformation to the work culture around the globe with China playing a lead role
in global sourcing. Nevertheless, it is also transforming work cultures around the world silently
with China business playing a major role.

Being an extension of open market dynamics, global sourcing facilitates the export and import
of goods to be in the reach of several small and medium enterprises in different countries. In
this b2b scenario, E-commerce plays an active role in the global sourcing where the business
houses are putting in deep efforts and reaping the benefits. In this rally of export and import,
traders happen to claim the share of the pie in global sourcing.

E Commerce & Global Sourcing

29
•Global sourcing is one of the widely known strategies of ensuring smooth business and access
to markets in a cost effective manner. In such a scenario, E-commerce has brought in a new
transformation. It has added to advantages like removing the barriers of time zones, differences
in costs, geographical locations etc. This has resulted in a major push in development in
infrastructure, technology and several other sectors across the globe. As we see, E commerce is
driving the export and import and propelling the economic growth of numerous developing as
well as developed nations. Business strategies are becoming easy to execute and business
houses are having a wide range of options from where they can make their choices.

•E-commerce has made the path of business smoother and has facilitated not only in lower cost,
but also resulted in procuring material from places where there is specialization. Moreover,
business negotiations are easier and decisions are quicker due to this boon. Driving the import
and export business in this global sourcing scenario has opened new frontiers for higher growth.
The ease in supply chain is one of the best advantages that has come from e-commerce in the
global sourcing scenario.

•China, a major player in the global sourcing scenario has reaped several benefits in the e-
commerce enabled era. The use of internet has facilitated trade and boosted it at an immense
rate. Business from all over the world has been bagged by this country in spite of the
competitive market. Chinese traders have minted fast money and are still running in that race.

Security concerns in global sourcing

E-commerce is not without security concerns, loss/misuse of encrypted data which are still
being seriously being viewed by import/export operators before engaging in international trade
electronically. The truth is E-commerce providers employ SSL (Secure Sockets Layer) to
encrypt data/money (remember banks) transfer from your desktop to your clients'. You can say,
E-commerce is secure for both import/export operators as well as global sourcing agents alike.

E-commerce has arrived on the global sourcing scene as both import and export and
international trade partners are accepting it. Despite its growing stature and popularity E-
commerce is still thriving in retail sector domestically and the international trade needs to cover

30
a long distance before it catches up. Another reason for import/export operators' leaning towards
E-commerce is the growing costs of delays in processing POs and invoices through traditional
methods which render global sourcing useless

E-commerce: A Boon for the Current Economic Downturn

E-commerce: A Boon for India

By the end of 2011, the e-commerce market in India had clocked close to Rs 50,000 cores. It is
interesting to consider whether the global economic downturn may have negatively impacted
the growth of e-commerce or possibly accelerated it as consumers look to new online channels
which can often deliver greater value than traditional stores.

Today, even though there are less than 10 million internet users who are actually engaging in
e-commerce activities, there are about 150 million internet users in India or around 75 million
households that are ready for e-commerce.

The growing reach in terms of internet connectivity to the interiors of India coupled with the
positive experiences of end consumers when buying online beyond the metros and big cities are
key drivers of the e-commerce boon in India. Businesses in even the smallest towns and villages
are becoming increasingly aware of e-commerce and are excited by the growth potential.

The growing penetration of e-commerce along with positive consumer experiences is reflected
in a trend towards higher value online purchases. Today, consumers across urban India are
confident enough to make purchases that exceed Rs 20,000-25,000. Earlier, the same shoppers
stayed in the Rs 2,000-5,000 ranges. According to one study almost 57% of business for e-
commerce product sites came from tier I, tier II and tier III cities while the eight metros
accounted for the remainder 43%. The same pattern was visible in the service sites too, with tier
I, tier II and tier III cities contributing 54% of revenue versus 46 % by the eight metros.

According to a report by the IAMAI, the current e-commerce market in India is around US$ 10
billion. But with different levels of adoption, the market has the potential to grow anywhere

31
between US$ 70 billion – US$ 150 billion under one scenario and at another level it can grow
between US$ 125 billion – US$ 260 billion by 2024-25.
E-commerce: The world over
Globally, the scenario is much the same. Brazil, one of fastest growing economies in Latin
America, is seeing considerable growth. According to a recent report, it estimates business-to-
consumer (B2C) ecommerce, including both retail e-commerce and online travel sales, will total
to $18.7 billion in 2012, a growth of
21.9% over the previous year. Brazil will account for more than half of the total B2C e-
commerce sales in Latin America through 2013, thanks in large to its huge populace and
growing number of online buyers.

Retail e-commerce itself in the U.S.is predicted to grow at 17% and it will likely account for
$200 billion in sales in 2012 , according to a presentation at a popular forum. Retail e-
commerce totalled $48.2 billion during the third quarter of 2011; an increase of 13.7%
compared with the third quarter of 2010, according to estimates from the U.S. Census Bureau.
2011 also saw the European online market boom despite the floundering euro. Germany’s
online trade increased 17% in 2011 to €21.48billion compared to 2010, crossing the €20 billion
mark for the first time, outstripping traditional mail order sales by 10%. A similar growth rate of
10% to 15% is expected in 2012.

In the global scenario, China is fast emerging as the biggest player in e-commerce. According to
an e-commerce report, by 2015, it may well surpass the U.S. In an astonishing illustration of its
online growth rate, China has added the equivalent of the entire population of France in internet
users in each of the last four years. It will add the equivalent of the entire population of Canada
as e-shoppers in each of the next four years. China is projected to rise from 145 million e-
shoppers today to 329 million by 2015.

3.6 KEY REASONS FOR THE SUCCESS OF E-COMMERCE

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•Shopping 24x7: E-commerce facilitates shopping anytime, anywhere and for almost anything
desired. Busy consumers prefer this to the restrictions of when a mall/shop is open and the need
to physically travel to a shop. Online business takes shopping a step further by taking itself to
the customer creating conveniences of shopping anywhere and at any time.

•Reduced operational cost: Since the entire business can be moved online, the need for
physical stores has become obsolete. Less infrastructural investment and associated labour costs
drives up the profit margin. The seller can then transfer this benefit to the customer in the form
of discounted pricing which boosts the appeal of online shopping.

•Easy to compare: It is far easier and quicker to compare prices of goods online, equipping the
customer with the information to decide the right price or terms for themselves. The comparison
is not restricted to items from a single seller, or a single region. One can explore products across
global markets via e commerce.

•Safe & secure: Customers can trust the process of going online and purchasing only when
transactions are fast, convenient and secure. A high degree of integrity is possible only when the
online electronic payment provider is reputable and trustworthy. In India, all payment
transaction providers are required to comply with the security requirements laid out by the
Reserve Bank of India making the system more robust and reliable.

•Increased reach for the merchant: Just as the customer finds them able to venture across
geographic markets, the merchant too is able to display his product to customers in new
territories. Market penetration also becomes far more achievable with e-commerce; it is possible
for a merchant in Mumbai to extend his reach to north-eastern cities or even rural villages that
are now connected by the online network.

•Social media trend: In India, with the increasing propensity of social media, businesses have
now begun to engage their customers on social networking portals such as Facebook.
Promotions, sales and new products are increasingly showcased through such channels and
mobile apps are now available that suggest products to users based on their profiles. These are

33
likely to be rapidly developing marketing channels for the future. Age their customers on social
networking portals such as Facebook. Promotions, sales and new products are increasingly
showcased through such channels
The e-commerce world is changing rapidly in the digitized world. These e-commerce
developments may have been accelerated by the global economic downturn which may be
driving consumers to find new ways of reducing their costs of living. The online channel offers
a clear value proposition for both merchants and consumers making it the most sought after and
exciting business model today

Factors affecting influence distribution and forms of global e-commerce

Stage Economic and Socio cultural Political legal Supranational

infra structure factors factors institutions
related factors
Internet adoption Per capita Literacy rate and The internet's UNDP-
GDP computer skill democratic introduction of
Nature the
incompatible internet in
with many countries
authoritarian
political
Availability of English structures GATS-
telephone and language skill competition
computer in telecom
sectors
Pricing structure Viewed as a Tariff and non ITA- reducing
tool of tariff barriers to the price of ICT
cultural ICT products.
imperialism in products

34
 some
Buying/selling Availability of Intellectual Redress UNCITRAL
online credit property mechanisms in model law
protection case of
problems in
online
transactions
Advertising and Operating speed Influence of Ban on some Products can be
searching phase of language and website in advertised and
symbols used on authoritarian searched
computer and
site visited and regimes globally on
modern size
purchase GTPN of
decision UNCTAD

Payment phase Penetration rate Forms of Governments' UNCTAD smart

of credit cards payment: concern on card
check, wire the outflow of
transfer, cash foreign currency.
on delivery
etc,
Delivery phase Delivery means Products stolen Tariff and non- Electronic
and some tariff delivery  free
infrastructure countries barriers of custom
duties in WTO
member

CHAPTER 4- CONCLUSION

35
 •There is a wide acceptance of e-commerce in world due to the internet facilities available.

•The countries such as India, Brazil, and China etc which are on the path of development are
using e-commerce for carry out various transactions.

•The e-commerce can surpass geographical limits and can prove to be worthy by reaching to
customers. It caters to the demands of both the national and the international market.

•The e-commerce can help in providing an edge to your rivals in the market as one can better
serve them globally.

•The Countries such as USA, Australia, Canada , UK etc are trying to come up with something
innovative which will change the current scenario.

•The countries are well aware of its benefits and are becoming more innovative in this field as
customers can easily select products from different providers without moving around physically
and it also help business to handle its resources well.

CHAPTER 5- RECOMMENDATION

36
 The most important factor that is necessary in growing E-Commerce in India -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. 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 "Proceed to Checkout" button.

Customer Reviews: Customer's trust for an online retailer will increase if the retailer offers an
ability to let customers share their positive as well as Negative reviews about products o
vendors.

Price Match Guarantee: A Price Match Guarantee (PMG) is a store policy which entitles a
customer to a refund of the Difference between the stores asking price and competitor’s price.

Well trained call centre: It is more impotent that the call centre agents be trained to
Have Good problem solving skills.

Fraud Protection: Not only should an online retailer ensure that the appropriate security
certificates are setup to Handle checkout related transactions.

Real time inventory updates: Retailers must invest in building automated capabilities
That keep an up to date record of how much inventory is available for all the their products

CHAPTER 6- LIMITATIONS OF STUDY

37
  All headings covered in the report are based on the information given by various sources
of secondary data. Thus there may be possibility having other important aspects being left
out or not taken into consideration
 Conclusion drawn may not be appropriate and reliable as the source of data collection is
secondary in nature like newspaper, articles, various books, web links, etc.
 Collection of data either from secondary source is not easy task
 Lack of touch and feel
 Internet access is not cheaper and is inconvenient to use for many potential customers
like one living in remote villages
 Breakdown of human relationships
 Time-foundation as report to be prepared in lesser time
 Lack of system security
 Not enough telecommunication bandwidth

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38
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