Ecommerce in India – Regional cooperation

Information Technology Changes the global economy, making it a wired economy by changing
the priority of protection factors such as labour and capital, and information technology adaptation and
deployment. This calls for an information order for the Government and industry, increasing consumer
awareness by means of better education, calls for continuous lifelong education for better employability,
just building a cooperative community relationship within and outside a nation to share the global
market by means of free flow of talents, capital and goods and services within and across nations.
Taxation of e-commerce transactions is a very controversial issue, as transactions at different
levels may depend on resources situated in various countries. Similarly, any disputes related to
a transaction may span multiple countries.
It also calls for a better legal system and institutional reforms and information education for
knowledge and information – based society, better asset evaluation system, stringent privacy protection
laws and good regulatory legal framework for trade and finance to be conducted across the network.
Thus anytime, anywhere access, trade and do business and get information, calls for strengthening
information infrastructure enabling anyone to access high-speed communication services anywhere, at
any time.
To make e-commerce successful on regional level, we require mutual trust worthy environment.
All the countries are having independent and separate Legal Framework in place. To enable mutual
recognition of various countries Legal Framework, an International Legal Framework is necessary.
Electronic commerce security planning and management calls for identification of the users,
better risk assessment and evaluation, application specific security identification, better and appropriate network security policies, information resources protection, better security management policies,
retransformation and reskilling human resources in terms of identifying roles and responsibilities and
improving physical and environmental security.
The trans-border data flow also cause serious concerns about authorization control, better audit
trails, the country’s legal laws and secure technology restrictions for developing nations, calls for
supporting e-laws, better consumer education, better network management, cooperative regional and
multilateral agreements between nations.
The delivery mechanisms and transportation should be tuned with appropriate modernization of
clearing services of goods and products within and across the nations.

Legal and regulatory framework for e-commerce

Besides developing the e-infrastructure in the country through effective Telecom Policy measures,
the Indian government is taking appropriate steps as confidence building measures for the growth of
e-commerce. It has created the necessary legal and administrative framework through the enactment of
the Information Technology IT Act which combines e-commerce transactions and computer misuse and
frauds rolled into an Omnibus Act. While on the one hand it seeks to create the Public Key Infrastructure
(PKI) for electronic authentication through digital signatures, on the other hand, it seeks to build confidence
among the public that the frauds in the cyber space will not go unpunished. The Controller of Certifying
Authorities (CCA) has been put in place for effective implementation of the IT Act. The Act also
enables e-governance applications for electronic delivery of services to citizens.
The CCA acts as a regulator for the growth of e-commerce and e-governance. It is responsible
for the establishment of PKI the country through licensing of certifying authorities (CAs). For this
purpose, it has notified standards which are based on international standards as adopted by the International
Telecom Union, the Internet Engineering Task Force (IETF), Institute of Electrical and Electronics Engineers, Inc. (IEEE) and the Federal Information Processing Standards (FIPS) of the Government of
the United States. These standards range from specifying the high security modules for storing private
keys of the CAs to the public key certificates, the certificate revocation lists and the directory services.
Notable feature of the implementation in India is the creation of a panel of independent auditors who
would be responsible for auditing the technical and physical infrastructure of the CAs to ensure conformance
with the standards as also to ensure that the CAs comply with their certification practice statement.
There will be greater emphasis to ensure that the identity of individuals and businesses is verified as per
established procedures to create the required level of trust in electronic environment.
The CCA has established the National Root infrastructure which would be used for digitally
signing the certificates of all the certifying authorities. Beginning February 2002, four Certifying
Authority licence have been issued to operate under the Root. It is also setting up the National Repository
to store all the certificates issued by all the CAs in the country as required under the Information
Technology Act..

Players, procedures and problems

Private sector participation should be explored in e-developmental initiatives to ensure their
sustainability over the long run.
There are several B2B players. Satyam has developed an engine that can be used to develop
platforms for any industry. The biggest currently in operation is the steel industry TheSteelExchange,
auto companies, are coming together to form eax.com (auto exchange). Probably the biggest ‘internal
B2B’ player is Maruti, which already does a large part of their supply-chain side purchasing and
dealer-networking online.
Some other successful cases are: Hindustan Lever Ltd., General Motors and Godrej. The most
well known B2B e-commerce technology, such as i2 technology and CommerceOne, are yet to be
adopted by Indian corporates. These technologies are presently too expensive and may not result in any
return on investment due to lack of other infrastructure and services such as third party and fourth party
logistics in the country.
There is still a lot that the government can do, starting with resolving the inter-bank settlement
standards to enable online payments. Next could be to strengthen the telecom infrastructure (especially
in the last mile). Another important thing would be to recognize online contracts, which has now been
done in India.
Some of the barriers to e-commerce adoption in India include the following:
• Limited Internet access among customers and SMEs (current level of internet usage is low
among businesses and users)
• Poor telecom and infrastructure for reliable connectivity (Internet connectivity slow, access
costs are high and connections are unreliable)

• Multiple gaps in the current legal and regulatory framework
• Multiple issues of trust and lack of payment gateways (privacy of personal and business
data connected over the Internet not assured; security and confidentiality of data not in
place)

SMEs segment in India

In India, there are about 3.4 million small and medium enterprises which accounts for 42 per
cent of Manufacturing sector turnover and 35 per cent country’s exports. These SMEs employ over
17 million persons.
The SMEs segment in India is fast getting tacked by the larger companies, who are allays on the
lookout for new market avenues. Computer Associates – which has a healthy clientele among large
corporates – has huge plans to enter the security market comprising the Rs 10-Crore SME sector in
India, offering end-to-end security solutions to smaller players.
There is a huge unexplored market in India and the existing security offerings are scarce and
fragmented. Since the SME market is the largest spender on IT, it is the right time for an entry and also
because SMEs in India are under a great deal of pressure form the bigger customers to create a secure
e-biz infrastructure.
SMEs are increasingly seeing the benefits arising from e-commerce as expanded geographical
coverage giving them a larger potential market into which they can sell their products and services.
Some of the key industries that have high potential for early adoption of e-commerce are financial (stock
exchanges and banks), automobiles, retail, travel, IT and manufacturing.
For the SME sector, some of the concerns with e-commerce revolve around fear or eroding their
existing customer base and technical issues arising out of lack of computer expertise and the cost of
necessary hardware and software. These are some of the preview highlights of a survey conducted by
NASSCOM to determine the status of Internet and electronic commerce proliferation in India.

Ecommerce in India (Contd...)

With the regulatory framework (IT Act and Digital Signature) in place and improvement in
telecom infrastructure, increase in PC penetration could lead to a sizeable e-commerce transactions in
India in the next two years. In keeping with global norms, it is expected that business-to-business
transactions would continue to constitute a manor chunk of e-business transactions in India. Thus,
e-commerce is not just a western version.
The most talked about and well-endorsed feature of e-commerce is its global flavour. Evidently,
e-commerce has also started to show its true potential in India. While on one hand, India’s e-commerce
solutions are becoming a sought after commodity around the world, even e-commerce based businesses
are leaving their distinct marks of technology competitiveness, viable business model and entrepreneurship.
E-business can indeed emerge as a major opportunity for India. This acquires twin connotations of
e-commerce and e-business transactions from local businesses and a huge opportunity for software
exports to other countries by quickly joining the e-business bandwagon. India’s twin assets (the software
industry and rapidly restructuring industry sector) sector have been taken into consideration.
• As of September 2002, there was a PC base of 7.5 million PCs.
• More than 80 per cent of stand alone PCs sold during last two years were driven by the
need to access the Internet.
• Ninety one per cent of India’s corporate web sites are located overseas.
• Internet access continues to be most widespread amongst the 18-24 year age group. However,
all age groups have seen vast increases in access over the last 18 months. A significant
development is that almost 11 per cent of people over the age of 40 now access the Internet.
• Males continue to outnumber females in accessing the Internet at 77 per cent compared to
23 per cent. This has however increased from the ratio of 82:18 in June 1999.
• The Internet and e-commerce industry employs approximately 82,000 people. These include
web developers, web designers, system analysts, ISP infrastructure providers, marketing
staff, e-software professionals, etc. It is projected that by March 2003, the Internet and
e-commerce industry would employ over 300,000 people.
• India has about 1.6 million households connected to the Internet.
• Internet users on an average are estimated to be accessing the Internet for 6 hours a week.
The profile of Internet users in India is dominated by:
• The professional/corporate segment, which accounts for around 43 per cent of Internet
usage.
• Inching close behind is the student community represented by school and college goers.
This segment contributes close to 38 per cent of Internet surfers.
• Over half (59.2 per cent) use the Internet as an information resource, 11.3 per cent use it as
an educational tool and just under 8.2 per cent use it for entertainment.
• When asked what are the most frequently used services online, 73.4 per cent answered
e-mail, 77 per cent answered search engines and 23 per cent said they use it for downloading/
uploading software.

• Of the total Internet users, around 20 per cent own credit cards and around 14 per cent own
mobile phones.

E-commerce in India

The cutting edge for business today is e-commerce. Most people think e-commerce means
online shopping. But web shopping is only a small part of the picture. The term also refers to online
stock, bond transactions, buying and downloading software without ever going to a store. In addition,
e-commerce includes business to business connections that make purchasing easier for big corporations.
E-commerce is generally described as a method of buying and selling products and services
electronically. The main vehicle of e-commerce remains the Internet and the World Wide Web, but use
of e-mail, fax and telephone orders are also prevalent.
Electronic commerce is the application communication and information sharing technology among
trading partners to the pursuit of business objectives. E-commerce can be defined as modern business
methodology that address the needs of the organization, merchants and consumers to cut costs while
improving the quality of goods and services and speed of service delivery. E-commerce is associated
with the buying and selling of information, products, services via computer networks. A key element of
e-commerce is information processing.
The effects of e-commerce are already appearing in all areas of business, from customer service
to new product design. It facilitates new types of information based business processes for reaching and
interacting with customers-online advertising and marketing, online, order taking and online customer
service etc. It can also reduce costs in managing orders and interacting with a wide range of suppliers
and trading and trading partners, areas that typically add significant overheads to the cost of products
and services.
Gartner Group predicted in April 2001 that the B2B e-commerce in the Asian and Pacific region
will reach US$ 220 billion this year, which will be 24 per cent of the worldwide total. In the year 2000,
this figure was US$ 96.8 billion or 22 per cent of the worldwide total. In the year 2005, the Asian and
Pacific region will account for 28 per cent of the worldwide B2B e-commerce transactions, which itself
will grow to US$ 2.4 trillion (People’s Daily Online, 7 April 2001).
A recent report of eMarketer released in May, 2001 says that the number of Internet users in the
Asian and Pacific region will increase dramatically from 48.7 million in the year 2000 to 173 million in
the year 2004. It will then comprise more than 27 per cent of the global Internet user community
compared with 21 per cent in the year 2000. The same report estimates the number of Internet users in
India will be about 5.8 per cent of the total number in the Asia-Pacific region (eMarketer, 10 May 2001).
It is against this backdrop of the world at large and Asia-Pacific in particular that we have to
examine the developments in India. The Government of India has long recognized the need for development
of IT industry and information infrastructure as these are twin engines for growth of the economy.
Deeper penetration of IT applications in the economy, and in the society as a whole can help boost the
economy. E-commerce applications can make it easier for the country to better integrate with the global
markets, the e-marketplace. This has led the government, over the last few years to formulate liberal
policies for the development and growth of the IT industry.
The IT sector as a whole has grown at a compounded annual growth rate of about 30 per cent
every year for the last few years. The total production during the current year, i.e. 2001-2002 was
Rs 809 billion (US$ 17.3 billion), out of which software exports account for Rs 3,655 billion (US$
7.8 billion).

Contd....
 

Does your ecommerce business need social media marketing?

Most mornings, the moment you pick up your daily newspaper, you would find pamphlets announcing discounts or special packages from a local store. This kind of marketing tool is specific and direct. It is first of all targeted at the right buyers, because the local grocery store is certain to be your preferred shopping place to even a super bazar a few kilometres away. And then, the message is very clear –it lists out the items you would possibly be looking for.

So, if the same idea were to be replicated upon online shoppers, what would be the technique by which this would be carried out? This is exactly what social media marketing is all about. Now, which ecommerce business would like to be tucked in an obscure corner of the huge, sprawling world of the www? Isn’t it the primary aim of an ecommerce website to be seen and noticed? This has to be understood as the fundamental fact of an ecommerce business. When it is seen together with ecommerce being the medium through which it advertises itself; it becomes easier to answer the question asked in the beginning.

Why use the social media?

Asking if an ecommerce business needs social media marketing is like asking if the business wants to be known in the market or not. Let us go back to the previous paragraphs. Reaching out to customers is the raison d'être of a business. An ecommerce business that does not want to do this would do itself a service by shutting down shop. An ecommerce business has a wonderful opportunity to reach out to a global market, something a local store can never hope to. The importance of social media becomes even more pronounced when one considers this fact.

How does social media marketing help?

As we saw, the social media are the ones through which an ecommerce business can make its presence felt on the web. Social media marketing techniques help your business find a place and position on the web. It has tools such as analytics, which will help it find out where it stands in terms of ranking on the Net. Social media marketing also has tools such as search engine optimisation, which is aimed at taking your site to the top of search engine rankings.Another extremely important work it does is by linking to social networking sites like Facebook, Twitter and so on, which opens up your business to literally millions of users.

A vital exercise

Social media marketing also carries out another vital function. It connects your business to your customers like no other by using user reviews and ratings. It can build user communities and establish forums on which the products you deal with are discussed among users. This is perhaps the most effective marketing tactic. It should rate several notches above all other kinds of advertising, because no advertisement has as much impact as a positive user review. If you could get your social media marketing techniques to generate these, there is no better thing to happen to your business.

Does your ecommerce business have ears

Your first reaction to this title would perhaps be one of shock and awe. You would be thinking: Am I reading this right? Am I in the right place? Has the writer posted this article in an ecommerce space instead of in a medical one? Not to worry –you are very much in the right place and we are talking about a topic that very much relates to your business. In fact, it relates to the heart of your ecommerce business, which is all about listening to your customer.

Hearing your faceless customers?

This seems a little paradoxical. On the one hand, you are running a business in which you hardly ever get to see your customer. On the other, you are being exhorted to listen to what she says. How does an ecommerce business do this? Listening to the customer is not about getting her at your place and asking her what she feels about your ecommerce business. It is about gauging her likes and dislikes by closely following and discerning her buying patterns. This is what is meant by listening to your customer.

In this lies the secret of success in an ecommerce business. In fact, the secret to any business success is in providing what the customer wants; an ecommerce business has the unique opportunity of finding out the customer’s needs without ever getting intrusive or interfering. This is a unique chance to convert a potential challenge into an opportunity.

Go beyond routine work

Any ecommerce business that thinks of ecommerce as being a site on which it despatches received orders is short-sighted, to say the least. This is a banal, quotidian part of an ecommerce business. It is at best a process which in itself gets you nowhere. If you want to be successful at ecommerce, the critical point is in understanding your customer. This is what is meant by hearing her out. 

Be intuitive!

You can always ask your customer to take a survey and fill out a questionnaire to get a feel of what she feels. But come to think of it. Which customer would have the patience to fill out your forms? This is fine once in a way, and is preferably best done after the purchase is over, just as a means of finding out what she felt about the service. But hearing your customer is more than even this. This implies keeping an ear to the ground and perceptively and objectively analysing her every need. This does not happen overnight; it may take quite some time of being in the business to get a good grasp of the customer’s intimate needs, but is a practice any ecommerce business that wants to do well has to adapt. This is what is going to distinguish between a successful business and an also-ran.

Do you need professional help in designing your ecommerce website

Do you need professional help in building your ecommerce website?

In their enthusiasm to make something complex sound simple, the media seem to sometimes over simplify matters. For example, it is all too common to come across eye-catching slogans like “build your own ecommerce website in one day”, “say goodbye to ecommerce website designers” and so on. As someone who could be taking some nascent steps to starting an ecommerce business, you are sure to feel upbeat when you see enticing slogans like these.

Can you design an ecommerce website on your own?

Can you design an ecommerce website on your own? Is it as simple a task as made out to be on such ads? This is not to belittle or underplay your creative abilities; but designing and building an ecommerce website is much more than catchy designs and site ergonomics. It is a site on which you do business; it thus has to take care of all aspects of your online business. Your ecommerce website has to not only be aesthetic, but also effective. The most important element of your ecommerce website is the software programme that runs the system.

Shifting plan and priorities

The biggest drawback of trying to designing and building your website is that you often chalk out one plan, only to see it developing into another with the passage of time. You may have the best foresight about your business, and you may be a great programmer or have one working for your site; but the inherent nature of an ecommerce business is that requirements keep changing with time.

This makes it difficult to set a plan in stone and implement it. It is something like trying to build a house of one’s own. We may have the right plan; we may have the right ingredients, and we may have the best skills. But is it practical to build a house all on one’s own? By the time one item gets completed, another one crops up out of the blue. As that one is being attended to, a third or fourth or fifth issue springs up.

Leave it to them!

This is why it is not only important, but imperative to have the professional work done by professionals. They have the skills, the education and the experience for doing it. After all, it is their livelihood. The temptation of saving huge costs while designing and building a website may be great, but it is unadvisable to implement such critical aspects of your business on your own. You may end up incurring expenses that could be several times higher than what you set out to save.

Evaluate your ecommerce strategy

Evaluate your ecommerce strategy from time to time

In any business, it is vital to know where it is headed. It is necessary to take stock of the business situation from time to time. An ecommerce business is no different, because this business is prone to a lot of flux. In a business of this nature, it is all the more important to keep assessing where a business stands in relation to the market size, its customers’ preferences, and the outlook for the future of the business and so on.

The role of the website

What factors does an ecommerce business need to consider when it is strategising for the future?It has to be understood that whether a business is brick and mortar or click and mortar, the website is the most important element. It is what distinguishes an ecommerce business from a physical business; so, any decision concerning strategy for the business has to centre on the website. So, a business can make business strategies based on what use it intends to put its website to. The role the website has for your business should be the point from which you take decisions about your strategies.

Factors to consider

An ecommerce website could start by taking into consideration important questions of what the website is linked to. You may be running a website through which you may be trading in many products. Do you wish to expand the number, variety and geographical reach of these products? Do you intend to sell to the local market from your physical store keeping the website as a supplementary sales tool? These and many other related questions need to be addressed.

You could also consider what kind of image you would want your website to publicise about your business. If you are planning to make ecommerce the driving force of your business, you will need to project that. If you are selling through a franchisee or a set of franchisees, then you will have to reflect the design and other elements of your business through these sites.

The most important of all is what vision you have for your ecommerce business.  If you have decided to be in the ecommerce business for the long haul, you will need to chalk out a long-term plan for your business. You would have to decide how much of your resources you need to earmark for your ecommerce website. You will also be required to keep updating your websites to reflect the changes your business goes through. A sound ecommerce strategy is thus something a business has to arrive at after making a well-rounded consideration of the most important aspects of its website.