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Essay on E-Commerce: Meaning, Advantages and Disadvantages

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❶A Flash Sales e-Commerce Website is a B2C type business model where the website sells the products directly to the end customers.




In order that consumer may visit particular website, sellers have to advertise about their website so that consumer may visit the website. The consumer decides which websites have to be visited and after getting the information from various sites he makes a choice and decides which one should be purchased.

He then places an order intimating the mode of payment which is generally through credit card or e-banking and advise the bank where he has credit card to debit the amount to his account. After the seller realizes the amount for the goods order he dispatches the goods. In most of the cases whole process takes couple of minutes and goods reaches the consumer within half an hour to one hour if he is a local consumer, it is claimed so by sellers.

In India in this business Rediff dot com is most popular and sells products worth Rs. The consumer has number of advantages and convenience and therefore the system is becoming popular. Consumer has wider choice not from his town or country but also round the globe unless there are import restrictions. Customized or personalized product and service. For instance if some lady wants a bra of exact size, her size can be measured through internet and stored and she will be supplied bra of her requirement.

In case of purchase, one is not required to go from store to store to see the products to collect their details, prices etc. Sitting at home he gets all the required information and that too very fast without spending much time.

Website can be opened any time. In physical sales place and distance is also a problem which is no problem in e-commerce because one can see sites all over the world without moving out of the house. Goods are available at cheaper price because there are lot of economies of space, rent, interest to the seller Further, he manages with much lesser number of outlets and cost of marketing is reduced.

The net enables suppliers to introduce and promote new markets and new products to meet the needs of individual buyers.

Long distance, travelling and delays, pollution all are avoided because one has not to travel to the shop. Suppliers, competitors and customers come under one roof through internet websites and massive exhibition of various items is possible. As yet sales of apparel, food products is largely small percentage of total e-business.

For instance in the maximum ownership of internet was 50 percent in USA, in other countries it varied between 1. There is a big problem in on-line payment. It is with regard to time and legality of order to complete the transaction.

As yet satisfactory system of payment has not been developed by banks and financial institutions in large number of countries. The electronic signatures acceptance has been legalized by large number of countries but still many more have to take steps in this direction. Further, there are great chances of fraud in-spite of all the precautions. Thus small suppliers cannot get business through internet. The market is restricted to high income and educated population who own and know the use of internet.

Thus in poor, illiterate or less educated countries it has limited access. Sometimes there could be flood of orders for any particular product which makes problem of timely supply to consumer. Online retail industry is important to suppliers because it acts as one of the channel to sell the products.

So, in this industry the supplier power is low. Customers can buy products from a wide range of retailers, distributors, auctioneers, directories, search engines, etc and hence the competition is intense.

A Study on Indian E-Commerce Industry 27 Various factors such as price, product selection and services influence the purchasing decision of customers. E-commerce companies frequently engage in price-based competition to woo buyers, which limits their ability to raise prices.

In the payments business, there is competition from sources such as credit and debit cards, bank wires, other online payment services as well as offline payment mechanisms including cash, check, money order or mobile phones.

Considering the entry of newer players such as Apple Pay and Alibaba, the competition is expected to heighten in the online payments space.

Competition is very high in this industry with so many players like Flip kart, Myntra, Jabong, Snap deal, Amazon, India plaza, Homeshop18 etc. There is no additional cost incurred to set up any physical stores and locations. In addition, traditional established physical stores can easily move into online retailing and bring with them their substantial consumer base. These stores such as Target or Wal-Mart, already enjoy economies of scale, have recognizable brands and a strong supply chain.

So they do pose strong competition to Amazon. That said, the threat from brand new entrants remains low as it would be nearly impossible for a new company to match the cost advantages, economies of scale and variety of offering as Amazon. These advantages will deter most brand new entrants to the market. Substantial Economies of Scale Ecommerce like Amazon works with over 10, vendors and boasts an impressive 75 percent repeat purchasers. Its market capitalization is substantially ahead of its nearest competitors.

A Study on Indian E-Commerce Industry 28 First Mover Advantage As the pioneer online retailer, Amazon , flip kart has the necessary brand awareness and credibility as a strong reliable presence in the market.

Massive product Variety Way beyond a bookstore now, Amazon. This means that there is a strong supplier base relationship that cannot be replicated. In addition, as a bookseller and a provider of other entertainment channels such as movies, videos and music, ecommerce has established relationships with publishers, producers, movie studies and music producers which are not easy to form and replicate.

The e-commerce market is characterized by low barriers to entry. It is relatively easy for newer players to enter the market and start selling products. Newer players require significant marketing budgets to compete on a large scale and this restricts entry of newer players to an extent. The online payments market has relatively higher barriers to entry as there is intense competition between established players; additionally, security is a paramount during online payments and hence newer players which do not have the necessary brand recognition will find it difficult to attract new customers.

So, this means foreign companies can come and start their own online retail companies. All you need is to tie up with suppliers of products and you need to develop a website to display A Study on Indian E-Commerce Industry 29 products so that customers can order products, and a tie up with online payment gateway provider like bill desk. Industry is going to experience an exponential growth rate. So, obviously no one wants to miss this big opportunity. The unique characteristic Amazon has is the patented technology such as 1-Click Ordering , which differentiates them from other possible substitutes.

Therefore, Amazon does not have absolute competitive advantage on their product offerings, but they definitely have the advantage when it comes to the quality of customer service and convenience provided. There is no technology that can substitute the Internet so far in the market.

Even, analog signal that use to send the television signal or radio signal are not the main threat. The main substitute that exists is the brick and motor store, which they change or move their place to be on the Internet. Therefore, the e-commerce industry has low threat of substitutions.

The analysis of these factors becomes very important for a company operating in that particular industry for the growth and sustenance. E-commerce has introduced many changes in the Indian consumers and customers. However, e-commerce in India has also given rise to many disputes by the consumers purchasing the products from e-commerce websites. In fact, many e-commerce websites are not following Indian laws at all and they are also not very fair while dealing with their consumers.

Allegations of predatory pricing, tax avoidance, anti competitive practices, etc have been levelled against big e-commerce players of India. As a result, disputes are common in India that is not satisfactorily redressed. This reduces the confidence in the e-commerce segment and the unsatisfied consumers have little choice against the big e-commerce players.

At a time when we are moving towards global norms for e-commerce business activities, the present e-commerce environment of India needs fine tuning and regulatory scrutiny. It is obvious that e-commerce related issues are not easy to manage.

E-commerce disputes resolution is even more difficult and challenging especially when Indian Courts are already overburdened with court cases. Of course, establishment of e-courts in India and use of online dispute resolution ODR in India are very viable and convincing options before the Indian Government. Many Indian stakeholders have raised objections about the way e-commerce websites are operating in India. These websites are providing deep discounts that have been labeled as predatory by offline traders and businesses.

Further, Myntra, Flipkart, Amazon, Uber, etc have already been questioned by the regulatory authorities of India for violating Indian laws. Laws regulating ecommerce in India are still evolving and lack clarity. Favorable regulatory environment would be key towards unleashing the potential of ecommerce and help in efficiency in operations, creation of jobs, growth of the industry, and investments in back-end infrastructure.

Furthermore, the interpretation of intricate tax norms and complex inter-state taxation rules make ecommerce operations difficult to manage and to stay compliant to the laws. With the wide variety of audience the ecommerce companies cater to, compliance becomes a serious concern. Companies will need to have strong anti-corruption programs for sourcing and vendor management, as well as robust compliance frameworks. It is important for the E-Commerce companies to keep a check at every stage and adhere to the relevant laws, so as to avoid fines.

Myntra, Flipkart and many more e-commerce websites are under regulatory scanner of Enforcement Directorate ED of India for violating Indian laws and policies. There are no taxation laws for these websites so the products are being sold at huge discounts in these sites.

Some of the major causes not keeping taxation laws over ecommerce are that the government is not having proper knowledge about the structure of industry and the limitations that has to be given to the e commerce industry and what are the rights that should be given to them for selling the product Security of the information provided during the online transaction is a major concern. Mass usage of internet: Current India internet users are millions.

The total no of users are expected to be millions in just 3 years. The internet usage in cities has been increased rapidly. Increased aspiration levels and availability The aspiration of the Indian youth and middle class while the coming year will be even more promising both for the consumer as also the entrepreneurs, with average annual spending on online purchases projected to increase by 67 per cent to Rs 10, from Rs 6, per person. In , about 40 million consumers purchased something online and number is expected to grow to 65 million by with better infrastructure in terms of logistics, broadband and Internet ready devices will be fuelling the demand in ecommerce.

The industry has been hoping that the government would at least review a partial opening of the sector to FDI. So there is a positive response from the international e commerce industry that is trying to enter into India.

But on the other side the small e commerce companies are finding it difficult because may face difficulty in the future when the MNC e commerce companies enter India. Supply chain and the productivity growth The most important impact of ecommerce is maintained supply chain and the productivity of the products. Simply put, e-commerce has altered the practice, timing, and technology of business-to-business and business-toconsumer commerce.

It has affected pricing, product availability, transportation patterns, and consumer behavior in developed economy in India.

Business-to-business electronic commerce accounts for the vast majority of total e-commerce sales and plays a leading role in supply chain network. In , approximately 21 percent of manufacturing sales and A Study on Indian E-Commerce Industry 36 From the moment the online order is placed to when it is picked, packed, and shipped, every step in the process must be handled efficiently, consistently, and cost-effectively.

In ecommerce, the distribution center provides much of the customer experience. The typical e-commerce consumer expects a wide selection of SKU offerings, mobile-site ordering capability, order accuracy, fast and free delivery, and free returns. Understanding how online consumers shop and purchase across channels is critical to the success of online fulfillment.

More consumers are browsing the Internet for features and selection, testing products at brick-and-mortar stores, acquiring discounts through social media, and then purchasing the product online through the convenience of their mobile device. These companies have fulfillment facilities established and information technologies in place to manage orders with speed and efficiency, doing it well and profitably.

But to many distribution executives, online fulfillment poses a significant challenge to their existing knowledge, experience, and resources. A customer can see the relevant detailed information within seconds rather than waiting for days or weeks. Advantages to the society: Cloud computing in e commerce: It is called the third phase of the internet.

The second phase brought the user to the World Wide Web, where he had access to millions of websites. In the third phase everything is in the cloud, both data and software. There are several types of cloud computing, of which Software-as-a-Service is probably the best-known. The ability to lower costs, accelerate deployments and respond quickly to market opportunities and challenges are just a few reasons why so many IT leaders are leveraging cloud based e commerce applications.

Given the variety of solutions, IT leaders must research their options carefully in order to select the one that best meets their needs. Following are the top four impacts of cloud computing on e-commerce applications and steps IT leaders should take during their evaluation process.

However, whatever cloud computing solution they select, the application will need access to customer data, product data, fulfilment systems and other operational systems in order to support e-commerce. Cue the IT team. A Study on Indian E-Commerce Industry 39 Consumerization of the online customer experience requires closer scrutiny of e commerce: While many B2C companies use e-commerce platforms for direct sales, B2B organizations are also leveraging them to add transactional capabilities to their informational sites.

Cloud solution providers CSPs that focus solely on creating retail models are often not well-versed in B2B requirements which can be more complex. IT leaders have an unprecedented number of CSPs from which to choose. Usage of bandwidth for E-commerce: Transmission capacity of a communication channel is a major barrier for products that require more graphical and video data.

For this e commerce companies need higher bandwidth than usual. These all depend on the no of the customers visiting websites, the type of the products the e commerce industry is selling and the location at which the online users are mostly visiting the website.

These all are some of the factors that affect the usage of bandwidth. Web processing is also some of the key factors that make e commerce industry to run. Another key factor is: High cost of developing, purchasing new software, licensing of software, integration into existing systems, costly e business solutions for optimizations.

Benefits of using cloud computing over E-commerce: Cloud computing enables online store owners to use the same platform and use the same functionality. That means that new features can be made available to A Study on Indian E-Commerce Industry 40 everyone with a simple modification.

Moreover, the maintenance is taken care of centrally, which means that store owners can rely on a stable platform. In many cases this is the most important reason for companies to choose cloud computing. A company can activate an ecommerce application five times faster and sell directly through a platform that is managed remotely. Cloud computing makes a company more elastic and able to respond to seasonal changes or sudden increases in demand due to special promotions.

Many cloud computing suppliers have been certified so more security can be guaranteed to customers. The explosive growth of cloud ecommerce will lead to more data exchange between the clouds.

Suppliers will offer more and more possibilities to add features to their clouds for users, partners and others. Subscriber Growth Rate 3.

Percentage of Mobile Visits 6. At the same time, there is an intense competition in ecommerce space, especially among the top 3 players. This money is being burned to acquire new customers, offer discounts and pump up products on offers. At the same time these sites are losing money, the quantum of loss these ecommerce players have incurred for every Rupee spent is displayed in the below figure.

A Study on Indian E-Commerce Industry 43 The revenue figures above are not the price of products sold GMV , as these are all marketplaces, and their revenues come from commissions they get from sellers or listing fees that they charge to list the products on their site.

GMV or Gross Merchandize Value represents the price of products sold and net revenues are just a fraction of that. Flipkart leads the race with net revenue of crore followed by Amazon at However, when it comes to losses, Flipkart leads by a much bigger margin and their loss for stands at Rs.

Comparatively, Amazon losses are pegged at Rs. The figure below shows the loss each player incurs for every rupee in net revenues. This cannot be judged as a low performance by the players as after a certain time when they gain major part of market. Every product they sell would be a profit for them.

By the end of year they have acquired 22 million registered users and handles 5 million shipments every month while Snapdeal was founded in the year and has 20 million registered users by the end of year Snapdeal has acquired customers in a quicker pace when compared to Flipkart, but this cannot be considered to be low performance shown by Flipkart, because when they founded e- retail in India, the people were not much familiar to e-commerce and online purchasing at that period.

The jump is from an average of around Rs 42 crore financial year Flipkart had clocked Rs crore for the 12 months ended March 31, In the year the number of daily orders has hit 25, mark or seventeen orders per minute , a five-fold rise after the company clocked 5, orders a day for the first time in May Flipkart first clocked 1, orders a day in March The eretailers are investing to build strong technology and marketing platforms that will allow them to accelerate their growth on mobile Shopping online through smartphones is expected to be a game changer shortly.

In the year there were nearly million smartphone users in India. Affordability of smartphones is leading to the growth in mobile Internet users, hence generating fresh consumer base for the online players. Mobile Internet users in India are estimated to be million compared to million users using Internet on their personal computers. Snapdeals 60 percent of Snapdeals orders are coming over mobile in the end of year It is growing really fast. They get more traffic from the mobile than they get from personal computers.


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In the e – commerce internet provides information about goods and services “It is” a way of conducting imaging and executing business transactions and services through elec­tronic media and net working in computers and communication net work, websites, e-mail are resorted.

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e-commerce essaysElectronic commerce, also known as e-commerce, has developed rapidly in the last few years. In this paper, I will talk about the advantages along with the disadvantages of e-commerce. E-commerce consists of many things. People today are aware of the common phrase. E-commerce Essay Words | 11 Pages. E-commerce Explain what is meant by the term ‘E-commerce’. It is the conducting of business communication and transactions over networks and through computers. As most restrictively defined, electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital.

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Unlike most editing & proofreading services, we edit for everything: grammar, spelling, punctuation, idea flow, sentence structure, & more. Get started now! E-commerce Explain what is meant by the term ‘E-commerce’. It is the conducting of business communication and transactions over networks and through computers. As most restrictively defined, electronic commerce is the buying and selling of goods and services, and the transfer of funds, through digital communications.