M.com Part 1 (Semester 2)
E- COMMERCE
Q.1. Explain roadmap of e-commerce in India.
ANS: On the back of growing internet penetration and evolving consumer mindset the e-commerce space has touched new heights. The market was initially limited to print media dominated classified services. It has now expanded to include the new internet-focused business models. Example - Group buying and social commerce.
The evolution of e-commerce in India can be broadly divided into two phases based on the emergence of various sub-segments. Furthermore distinct developments define each of these phases.
Phase 1 1996 - 2005
In 1995, India witnessed the launch of internet (via dial up) in 6 cities. The introduction of Internet in India marked the beginning of the first phase of e-commerce in the country. The economic liberalisation after the launch of the reforms in 1991 attracted MNCs and brought about the growth of the IT industry.
The implementation of liberalisation policy has led to the demise of the license regime, high taxes and import restrictions, as well as facilitates the growth of SMEs. The IT industry and SMEs were the early adopters of internet. This led to the emergence of B2B and matrimonial portals in 1996. In 1997, the job portals were launched for the job searches.
B2B Directory:
India's first online B2B directory was launched in 1996. The liberalization of the country's international trade policies was the key factor that accelerated the growth of B2B online portals. It enabled buyers and sellers to easily connect with their global counterparts.
Online Matrimonial:
In 1996, the first online matrimonial portal was launched in India. A concept unique to India, online matrimonial portal transformed the perception about matchmaking process from “marriages are made in heaven" to “marriages are made in cyber space." Such portals have now evolved to cater to various segments of the population such as NRIs, widows or Widowers, divorcees and other special groups.
Online Recruitment:
India's online recruitment industry took shape in 1997. The growth of service sector, following the launch of economic reforms in 1991, resulted in the creation of additional jobs. In this background, internet proved to be an efficient medium that allowed employers and job seekers to connect. Prior to job portals weekly government magazines such as 'Employment News' and newspaper notifications were the primary means for employers and job seekers to interact.
Although online businesses had begun to develop in the late 1990s, the supporting ecosystem had not been put in place. The first phase of ecommerce in India was characterized by Low internet penetration, a small online shopping user base, low internet speed, low consumer acceptance of online shopping and inadequate Logistical infrastructure. Thereafter, the IT downturn in 2000 led to collapse of more than 1000 e-commerce business in India. This led to muted activities in the cyber space in India between 2000 and 2005.
Phase 2 (from 2006 till date)
The entry of Low Cost Carrier (LCCs) in the Indian Aviation Sector in 2005 marked the beginning of the second wave of e-commerce in India. Travel emerged as the largest segment. People started relying on the Internet to search for information and to book tickets. As a ripple effect, the success of the online travel segment made consumers comfortable through the medium, thus leading to the development of online retail.
Online Travel:
The decision of LCCs to sell their ticket online and through third parties enabled the development of Online Travel Agents (OTAs). Prior to the entry of LCCs in 2005-06, air travel was considered a luxury meant only for the rich and for corporate travels. LCCs change the scenario by making travel affordable for a large number of people. Their own website partnered with OTAs to distribute the tickets online and, thus, contain costs. The Indian Railway had already implemented the eticket booking initiatives by the time LCCs commenced their online ticket booking schemes.
Online Retail:
The growth of online retail was partly driven by changing urban consumer lifestyle and need for convenience of shopping at home. This segment developed in the second wave in 2007 with the launch of multiple online retail websites. New businesses were driven by entrepreneur who looked to differentiate themselves by enhancing consumer experience and establishing a strong market presence.
Group Buying:
Starting in 2010, the group buying and the daily deals models became the 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. This group has attracted investments from venture capital funds.
Social Networking:
The social networking was actively used by organisation to reach out to customers. Social networking has gone on to become an integral part of people's lives. Initially used for staying connected with friends, social networking websites have now become a dominant force in any company's digital strategy. Termed as social commerce, it is the key avenue for E-Commerce players to reach out to target customers. Companies of started establishing their presence in the social media space for branding activities, connecting with customers for feedback and Advertising new products.
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