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E- Commerce in India
Electronic commerce
(or e-commerce) encompasses all business conducted by means of computer
networks. Advances in telecommunications and computer technologies in
recent years have made computer networks an integral part of the
economic infrastructure. More and more companies are facilitating
transactions over web. There has been tremendous competition to target
each and every computer owner who is connected to the Web. Although
business-to-business transactions play an important part in e-commerce
market, a share of e-commerce revenues in developed countries is
generated from business to consumer transactions. E-commerce provides
multiple benefits to the consumers in form of availability of goods at
lower cost, wider choice and saves time. People can buy goods with a
click of mouse button without moving out of their house or office.
Similarly online services such as banking, ticketing (including
airlines, bus, railways), bill payments, hotel booking etc. have been of
tremendous benefit for the customers. Most experts believe that overall
e-commerce will increase exponentially in coming years. Business to
business transactions will represent the largest revenue but online
retailing will also enjoy a drastic growth. Online businesses like
financial services, travel, entertainment, and groceries are all likely
to grow.
For developing
countries like India, e-commerce offers considerable opportunity.
E-commerce in India is still in nascent stage, but even the
most-pessimistic projections indicate a boom. It is believed that low
cost of personal computers, a growing installed base for Internet use,
and an increasingly competitive Internet Service Provider (ISP) market
will help fuel e-commerce growth in Asia’s second most populous nation.
Amongst the Asian nations, the growth of e-commerce in India between
1997 and 2003 was highest in India. Cridit Lyonnais forecasts that India
will have 30 million Internet users by 2004 and that the potential
Internet market will reach 47 million households in 2005. According to a
McKinsey-Nasscom report by the year 2008, e-commerce transactions in
India are expected to reach $100 billion. Indian middle class of 288
million people is equal to the entire U.S. consumer base. This makes
India a real attractive market for e-commerce. To make a successful
e-commerce transaction both the payment and delivery services must be
made efficient. There has been a rise in the number of companies' taking
up e-commerce in the recent past. Major Indian portal sites have also
shifted towards e-commerce instead of depending on advertising revenue.
Many sites are now selling a diverse range of products and services from
flowers, greeting cards, and movie tickets to groceries, electronic
gadgets, and computers. With stock exchanges coming online the time for
true e-commerce in India has finally arrived. On the negative side there
are many challenges faced by e-commerce sites in India. The relatively
small credit card population and lack of uniform credit agencies create
a variety of payment challenges unknown in the United States and Western
Europe. Delivery of goods to consumer by couriers and postal services is
not very reliable in smaller cities, towns and rural areas. However,
many Indian Banks have put the Internet banking facilities in place for
the up coming e-commerce market. The speed post and courier system has
also improved tremendously in recent years. Modern computer technology
like secured socket layer (SSL) helps to protect against payment fraud,
and to share information with suppliers and business partners. With
further improvement in payment and delivery system it is expected that
India will soon become a major player in the e-commerce market.
While many companies,
organizations, and communities in India are beginning to take advantage
of the potential of e-commerce, critical challenges remain to be
overcome before e-commerce would become an asset for common people.
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