PROJECT REPORT ON “E-COMMERCE”
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E-commerce or Electronic commerce, is the purchasing, selling and exchanging of goods and services over computer network. These business transactions occur either as business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business
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PROJECT REPORT ON “E-COMMERCE”
- 1. 1 PROJECT REPORT ON “E-COMMERCE” SUBMITTED BY: GROUP – 7 Amrendra Kumar Anand Jitendra Kumar Sahu Shashwat Shukla Manish Chauhan Bhawna Batra Aadarsh Shaw Ankit Goyal Onkar Singh UNDER THE GUIDANCE OF (Prof VINAY CHIRANIYA) IILM GRADUATE SCHOOL OF MANAGEMENT ACEDEMIC YEAR – (2016-18)
- 2. 2 ACKNOWLEDGEMENT We express our sincere thanks to our project guide “Prof. Vinay Chirania”. Coordinator at IILM Graduate Schoolof Management who has been guiding Forceto our project “Report on E-Commerce & M-Commerce”. We are also thankful to our all professors for their Support and encouragement in finding out the appropriate data for this Project report, without their thankless support and efforts, making this project would have been impossible for us. We would also thanks the whole respondent who provided us the best knowledge and for their help and cooperation throughout the project. On Behalf of all the team members of the project (GROUP 7).
- 3. 3 INDEX (TABLE OF CONTENTS) SR.NO CONTENT PAGE NO 1. INTRODUCTION 4 2. THE GROWTH STORY 5 3. INDUSTRY STATUS 6 4. FINANCIAL ACTIVITY 7 5. BUSINESS MODEL/TRENDS 8 6. SWOT 9 7. FUTURE EXPECTED 10 8. PORTER’S 5 FORCES MODEL 11 9. DEMONITIZATION EFFECTS 12 10. FDI 12 11. NEWS THIS YEAR 13 12. CONCLUSION 14
- 4. 4 E-COMMERCE INTRODUCTION E-COMMERCE E-commerce or Electronic commerce, is the purchasing, selling and exchanging of goods and services over computer network. These business transactions occur either as business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. The terms e-commerce and e-business are often used interchangeably. The term e-tail is also sometimes used in reference to transactional processes for online shopping. E-commerce is conducted using a variety of applications, such as email, online catalogs and shopping carts, EDI, File Transfer Protocol, and web services. This includes business-to-business activities and outreach such as using email for unsolicited ads (usually viewed as spam) to consumers and other business prospects, as well as to send out e-newsletters to subscribers. More companies now try to entice consumers directly online, using tools such as digital coupons, social media marketing and targeted advertisements. M-COMMERCE M-Commerce or Mobile commerce is the buying and selling of goods and services through wireless handheld devices. It is a process of paying of paying for services using a mobile phone. It enables users to access the Internet without needing to find a place to plug in. The emerging technology behind m-commerce, which is based on the Wireless Application Protocol (WAP), has made far greater strides in Europe, where mobile devices equipped with Web-ready micro-browsers are much more common than in the United States. It includes: Financial services, which includes mobile banking (when customers use their handheld devices to access their accounts and pay their bills) as well as brokerage services, in which stock quotes can be displayed and trading conducted from the same handheld device Telecommunications, in which service changes, bill payment and account reviews can all be conducted from the same handheld device Service/retail, as consumers are given the ability to place and pay for orders on-the-fly Information services, which include the delivery of financial news, sports figures and traffic updates to a single mobile device. This report has attempted to showcase the current state of the E- Commerce & M-commerce landscape in India. The industries key driver’s and challenges suggests effort which will help E-Commerce companies accelerate and sustain growth. We hope you find this report interesting and look forward to your suggestions. On behalf of (group 7)
- 5. 5 E-COMMERCE The Growth Story of E-Commerce in India Started in India in the year with the introduction of B2B portals in 1996, now E-Commerce is all set to become one of the successful medium for business transactions. Between 2000 and 2005: The first wave of E-Commerce in India was characterized by small online shopping user base, low internet penetration, slow internet speed, low consumer acceptance of online shopping and inadequate logistics infrastructure. Thereafter, the IT downturn in 2000 led to the collapse of more than 1,000 E- Commerce businesses in India. Following this, there was muted activity in the space in India between 2000 and 2005. Between 2005 and 2010: There were basically two major transitions that took place that aided in the build of E- Commerce story in India. They were: Online Travel: The entry of Low Cost Carriers (LCCs) in the Indian aviation sector in 2005 marked the beginning of the second wave of e-Commerce in India. The decision of LCCs to sell their tickets online and through third parties enabled the development of Online Travel Agents (OTAs). They developed their own websites and partnered with OTAs to distribute their tickets online. The Indian Railways had already implemented the e-ticket booking initiative by the time LCCs started their online ticket booking schemes. Online RE-Tail: The growth of online are E-Tail was partly driven by changing urban consumer lifestyle and the need for convenience of shopping at home. This segment developed in the second wave in 2007 with the launch of multiple online are E-Tail websites. New businesses were driven by entrepreneurs who looked to differentiate themselves by enhancing customer experience and establishing a strong market presence. 2010 onwards: Group buying: Starting in 2010, the group buying and daily deals models became a sought after space for entrepreneurs in India, emulating the global trend. Group-buying sites have seen a significant rise in the number of unique visitors and membership. Social Commerce: It is a key avenue for E-Commerce players to reach out to target customers. Companies have started establishing their presence in the social media space for branding activities, connecting with customers for feedback and advertising new product launches.
- 6. 6 E-COMMERCE INDUSTRY STATUS B2B Mobile Commerce Mobile commerce growth isn’t limited to B2C; it’s happening in B2B as well. Usablenet recently reported that 16% of B2B sites are already being visited by mobile users. In another survey, Usablenet found that 78% of B2B companies believe mobile is the future of online commerce. Half of those surveyed already had a mobile commerce channel in place, and 75% planned to offer mobile commerce by the end of 2014. IT industry analyst Gartner Group predicts that mobile commerce is an untapped growth opportunity for B2B marketers, who have so far been lagging their B2C counterparts in terms of generating revenue from mobile. B2B marketers generate only 19.4% of revenue from mobile, while B2C generates 22.6%. But several B2B companies are leading the way, showing what the possibilities are. SEGMENTS: Below are the industry segments that have shown a major growth during last few years – Online booking for travelling E-retailing Financial services Key Developments in the sector More business coming from smaller towns – E-Commerce is increasingly attracting customers from Tier 2 and 3 cities, where people have limited access to brands but have high aspirations. Enhanced shopping experience – Besides general online shopping, customers are also shopping online for weddings and festivals, thanks to wider range of products being offered and aggressive advertisements Exclusive partnerships with leading brands - Over the year or so, there has been a trend of exclusive tie-ups between E-Tailers and established boutiques, designers, and high-end lifestyle and fashion brands. Expanding the product basket - There is a recent trend of relatively newer products such as grocery, hygiene, and healthcare products being purchased online. Similarly, lingerie and Indian jewellery has also been in great demand among customers outside India.
- 7. 7 E-COMMERCE FINANCIAL ACTIVITY India's e-commerce market was worth about $3.9 billion in 2009, it went up to $12.6 billion in 2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-commerce market is travel related. According to a study conducted by the Internet and Mobile Association of India, the e-commerce sector is estimated to reach Rs. 211,005 crore by December 2016. The study also stated that online travel accounts for 61% of the e-commerce market. By 2020, India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion e-commerce. Online apparel sales are set to grow four times in coming years Investments in the E-Commerce sector With the new government being elected, business confidence has significantly improved. In 2015-16, investors aggressively funded the E-Commerce sector due to strong growth prospects. Apart from the traditional online formats of retail and lifestyle, newer online business segments such as classifieds, real estate, grocery and healthcare were also tapped. The E- Commerce businesses will continue to attract investor interest. Several of India’s blue-chip PE firms, which previously avoided investing in E-Commerce, are now looking for opportunities in the sector. The focus is mainly on ancillary service providers—companies involved in support functions ranging from delivery, logistics and payments—with investments largely driven by the relatively lower valuations and smaller amounts of capital required.
- 8. 8 E-COMMERCE BUSINESS MODEL BUSINESS TO BUSINESS (B2B) BUSINESS TO CONSUMER (B2C) CONSUMER TO BUSINESS (C2B) CONSUMER TO SONSUMER (C2C) BUSINESS TO EMPLOYEE (B2E) Other types of E-commerce: GOVERNMENT TO GOVERNMENT (G2G) GOVERNMENT TO EMPLOYEE (G2E) GOVERNMENT TO BUSINESS (G2B) BUSINESS TO GOVERNMENT (B2G) GOVERNMENT TO CITIZEN (G2C) CITIZEN TO GOVERNMENT (C2G) TRENDS IN 2016-17 THE CONSUMER Completing most shopping via multiple devices. THE DEVICE Smart phone shopping continues to gain ground. THE SELLING Expect more big online shopping days THE MARKETING Shifting from device focus to people focus. THE ADVERTISING Ads is becoming more relevant and non-intrusive. THE SERVICE Instant delivery service is becoming common.
- 9. 9 E-COMMERCE E-COMMERC SWOT Less capital intensive. High growth rate. Has confidence of their investors. Concentration on customer satisfaction, logistics & distribution. Variety of payment option. COD not successful as anticipated. Customer are still not comfortable with online payments. It takes time to build confidence among the customers. Limited memory. M-Commerce security & privacy risk. Increasing internet penetration. Targeting the younger customer. Favorable government regulation. Entry of Google in online e-book & movies market. Too much competition in every product category. Small screen size of Mobile terminals.
- 10. 10 E-COMMERCE FUTURE EXPECTED The Future of E-commerce E commerce is largely about execution. But for anyone involved in the E-commerce game, it is an environment that is constantly changing and upgrading as technologies improve and companies battle against each other to win a greater share of the pie. The future of E-commerce is uncertain, but some things remain constant – delivery times will improve, customer service will get increasingly better, and product selection will become ever greater. Delivery Drones Perhaps one of the most exciting developments in E-commerce is to see drone delivery. Drones will in the future allow companies to deliver packages much more efficiently and quickly, with delivery times of just 60 or even 30 minutes from order entirely plausible. Drones will be sent out from distribution centers and travel directly to the delivery addresses provided, at significantly lower cost and logistical hassle than at present. Amazon, among others, are already seriously close to making this a reality across the entirety of their business, and it seems tha t others will be clambering to follow suit as quickly as possible. Curation & Pay Monthly Models Product Curation and pay monthly models are likely to continue to form an increasing part of the future of E- commerce. People don’t want to buy generic products from retailers – Amazon is cheaper and quicker. But they do want to buy curated products, lifestyle products, and E-commerce packages where retailer’s product knowledge and expertise can create an altogether more enjoyable, rounded experience. “THE NEW ERA OF PAYMENTS”
- 11. 11 E-COMMERCE PORTER’S 5 FORCES MODEL Threats of new entrants: This threat relates to the ease with which a new company or a company in different product area can enter a given trade sector. Typically, barriers to entry are capital, knowledge or skill. IT/EC can be a barrier for new entrants, for instance, where competing businesses have heavily invested in EDI and are using the same, their investment would act as a barrier for new businesses to enter that trade sector. Bargaining power of buyer: It is increased. The cost of producing and distributing a product should be less than the price it can bring in the market in order to be profitable. Number of competitors and the supply of a product are the two major factors that determine bargaining power of the buyers. A buyer is in a strong position to bargain for low price if there are many competitors and/or the supply of the product in the market is in surplus. Bargaining power of supplier: It is reduced due to increase in the competition. The products existing in this industry are sold by many firms. In case of products like Books, DVD’s and CD’s the bargaining power of suppliers is low. Businesses try to find more favorable terms from their own suppliers. If supply of raw material is plentiful and/or there are many suppliers, the supply can be procured at a low price. Otherwise, position is more favorable to the supplier having more bargaining power. Competition between existing players: Competition among businesses is to get more buyers and trade at a price that produces an acceptable profit. If there are many players of the same size, capacity and strategy having little difference between their product/service, then there is fierce competition among them as regards the price of the product/service. Even a small change in the price of the product/service can be crucial for the business. Threats from substitution: It is increased. This threat arises when a new product is available that provides the same function as existing product/service. For example, cotton fiber was, in the past, replaced by synthetic fiber, and glass bottles were substituted by plastic ones.
- 12. 12 E-COMMERCE DEMONITIZATION EFFECTS ON “E-COMMERCE” IN INDIA Smartphone usage has grown at an explosive pace in recent past. It was expected to grow even faster with demonetization and entry of new service providers such as Reliance Jio. Over the past four years, mobile wallet transactions have jumped from Rs10 billion (60 mn transactions) in 2012-13 to over Rs490 billion (600 mn transactions) in the year 2015-16. ”With ever-increasing Internet and mobile penetration and the recent demonetization event, India is all set to witness a massive surge in the adoption of digital payments in the recent future,” With the ban on Rs500 and Rs1000 currency notes, E-Commerce players were forced to stop “cash-on-delivery” payment modes on their site. These E-Commerce companies stopped receiving old denomination notes of Rs 500 and Rs1000 notes and paid more emphasis on other means of digital payments. The demonetization move has hurt the E-Commerce conversions of various companies from Flipkart to Zomato, which is a food discovery and delivery portal with other companies that mainly generate revenues through hard cash that accounts for around 60-70% of total orders. With fall in CoD orders, demonetization has led to jump in digital payment options for making online transactions. As per the FDI policy contained in the consolidated FDI policy circular 2015’ (FDI policy) as amended from time to time, FDI up to 100% under automatic route is permitted in Business to Business (B2B) e-commerce. No FDI is permitted in Business to Consumer (B2C) e-commerce. FDI is permitted in Business to Consumer only in following circumstances: A manufacturer is permitted to sell its products manufactured in India through retail. A single brand retail trading entity operating through brick and motar stores is permitted to undertake retail trading through e-commerce. NOTES: 100% FDI under automatic rule is permitted in market place model of e-commerce. FDI is not permitted in inventory based model of e-commerce.
- 13. 13 E-COMMERCE NEWS YEAR “2016” India to Overtake US as World's Largest E-Commerce Market in Less Than 2 Decades. The Indian e-commerce market is set to overtake the US and become the second largest in the world in less than two decades, going head-to-head with China for the numerous position. Flipkart plans to move into groceries. The e-commerce market is expected to grow exponentially with emerging markets leading the charge - particularly India, where the segment is predicted to mature by 28 percent per year from 2016 to 2020. Earlier in 2016, Flipkart-owned fashion portal Myntra bought rival Jabong for $70 million to create India's largest online fashion retailer. Demonetisation Helped Clock Triple-Digit Growth, “Amazon India Says”. When demonetisation was announced, Amazon had switched off cash-on-delivery (COD) for 48 hours because it was very important for them to allow their logistics team to move from one compliant world to the new compliant world. Since then, they have allowed their customers to benefit from loading up their Amazon balance so that they can shop in a fruitful manner.
- 14. 14 E-COMMERCE CONCLUSION Mobile is become the important need for lifestyle now a days. They value convenience and have a lot of things that people want to do. They are comfortable with E-Commerce and willing to transact over the mobile to simplify their lives and optimize their times. Day by day E-Commerce and M-Commerce playing very good role in online retail marketing and people using the technology day by day increasing all over the world. M-Commerce is the term for making business transaction using mobile devices. There are already several existing M-Commerce applications and services nowadays that have been very helpful to us. Applications and wireless devices promise to evolve together, each driving the introduction of innovation and powerful features in the other. The opportunities is much beyond mobile bill payments and can include all forms of transactions that the consumer faces today. The M-Commerce need to develop synchronized value added contents, synthesized business models that go together with emerging technology, which can create key mobile features and serve as drivers of the growing market demand. The disadvantage are not possible to avoid. If we have enough management on risks, we may really get a lot more advantages from E-Commerce. The advantage are surely teasing and we will enjoy such easy transaction this days. “Thus in the future, instead of buying bananas in a grocery store, you could go pick them off a tree in a virtual jungle”