RAAK COLLEGE OF ENGINEERING AND TECHNOLOGY

DEPARTMENT OF INFORMATION TECHNOLOGY

SOFTWARE PROJECT MANAGEMENT
UNIT-I
Introduction to e-Commerce: Framework – Architecture - Benefits of e-Commerce -
Anatomy of e-Commerce applications- e-Commerce applications, e-commerce in India.

1. Introduction to E – Commerce
1.1Definition
 The buying and selling of products and services by businesses and consumers through an electronic
medium, without using any paper documents.
 E-commerce is widely considered the buying and selling of products over the internet, but any
transaction that is completed solely through electronic measures can be considered e-commerce.
 E-commerce is subdivided into three categories: business to business or B2B (Cisco), business to
consumer or B2C (Amazon), and consumer to consumer or C2C (eBay). Also called electronic
commerce.
 E-commerce is usually associated with buying and selling over the Internet, or conducting any
transaction involving the transfer of ownership or rights to use goods or services through a computer-
mediated network. Though popular, this definition is not comprehensive enough to capture recent
developments in this new and revolutionary business phenomenon. A more complete definition is: E-
commerce is the use of electronic communications and digital information processing technology in
business transactions to create, transform, and redefine relationships for value creation between or
among organizations, and between organizations and individuals.
1.2 E – Business
 E Business (e-Business), or Electronic Business, is the administration of conducting business via the
Internet. This would include the buying and selling of goods and services, along with providing
technical or customer support through the Internet. E-Business is a term often used in conjunction with
e-commerce, but includes services in addition to the sale of goods.
 In e-business, on the other hand, ICT is used to enhance one’s business. It includes any process that a
business organization (either a for-profit, governmental or non-profit entity) conducts over a computer-
mediated network. A more comprehensive definition of e-business is:
 “The transformation of an organization’s processes to deliver additional customer value through the
application of technologies, philosophies and computing paradigm of the new economy.”
Three primary processes are enhanced in e-business:
1. Production processes, which include procurement, ordering and replenishment of stocks; processing
of payments; electronic links with suppliers; and production control processes, among others;

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 2. Customer-focused processes, which include promotional and marketing efforts, selling over the
Internet, processing of customers’ purchase orders and payments, and customer support, among others;
and
3. Internal management processes, which include employee services, training, internal information-
sharing, video-conferencing, and recruiting. Electronic applications enhance information flow between
production and sales forces to improve sales force productivity. Workgroup communications and
electronic publishing of internal business information are likewise made more efficient.
1.3 Features of E-Commerce
E-Commerce provides following features :
 Non-Cash Payment − E-Commerce enables use of credit cards, debit cards, smart
cards,Electronic fund transfer via bank's website and other modes of electronics
payment.
 24x7 Service availability − E-commerce automates business of enterprises and
services Provided by them to customers are available anytime, anywhere. Here 24x7
refers to 24 Hours of each seven days of a week.
 Advertising / Marketing − E-commerce increases the reach of advertising of products
and Services of businesses. It helps in better marketing management of products /
services.
 Improved Sales − Using E-Commerce, orders for the products can be generated
anytime, anywhere without any human intervention. By this way, dependencies to buy
a product Reduce at large and sales increases.
 Support − E-Commerce provides various ways to provide pre sales and post sales
Assistance to provide better services to customers.
 Inventory Management − Using E-Commerce, inventory management of products
Becomes automated. Reports get generated instantly when required. Product inventory
Management becomes very efficient and easy to maintain. Communication
improvement − E-Commerce provides ways for faster, efficient, reliable
Communication with customers and partners.

1.4 Traditional Commerce v/s E-Commerce

Sr.No Traditional Commerce E-Commerce

1. Heavy dependency on Information sharing is made

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 information exchange from easy via electronic
person to person. communication channels
making little dependency on
person to person information
exchange.

2 Communication/ Communication or transaction

transaction are done in can be done in asynchronous

synchronous way. Manual way. Electronics system

automatically handles when to
intervention is required for
pass communication to
each communication or
required person or do the
transaction.
transactions.

3 It is difficult to establish A uniform strategy can be

and maintain standard easily established and maintain

practices in traditional in e-commerce.

commerce.

4 Communications of In e-Commerce or Electronic

business depends upon Market, there is no human

individual skills. intervention.

5 Unavailability of a uniform E-Commerce website provides

platform as traditional user a platform where al l

commerce depends heavily information is available at one

place.
on personal
communication.

6 No uniform platform for

information sharing as it E-Commerce provides a
depends heavily on universal platform to support
personal communication. commercial / business activities
across the globe.

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 1.5 Ecommerce Advantages
E-Commerce advantages can be broadly classified in three major categories:
 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society
Advantages to Organizations
 Using E-Commerce, organization can expand their market to national and
international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers and suitable business partners
across the globe.
 E-Commerce helps organization to reduce the cost to create process, distribute,
retrieve and manage the paper based information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organization to provide better customer services.
 E-Commerce helps to simplify the business processes and make them faster
and efficient.
 E-Commerce reduces paper work a lot.
 E-Commerce increased the productivity of the organization. It supports “pull”
type supply management. In “pull” type supply management, a business
process starts when a request comes from a customer and it uses just-in- time
manufacturing way.
Advantages to Customers
 24x7 support. Customer can do transactions for the product or enquiry about
any product/services provided by a company anytime, anywhere from any
location. Here 24x7 refers to 24 hours of each seven days of a week.
 E-Commerce application provides user more options and quicker delivery of
products.

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  E-Commerce application provides user more options to compare and select the
cheaper and better option.
 A customer can put review comments about a product and can see what others
are buying or see the review comments of other customers before making a
final buy.
 E-Commerce provides option of virtual auctions.
 Readily available information. A customer can see the relevant detailed
information within seconds rather than waiting for days or weeks.
 E-Commerce increases competition among the organizations and as result
organizations provides substantial discounts to customers.
Advantages to Society
 Customers need not to travel to shop a product thus less traffic on road and
low air pollution.
 E-Commerce helps reducing cost of products so less affluent people can also
afford the products.

E-Commerce has enabled access to services and products to rural areas

as well which are otherwise not available to them.
 E-Commerce helps government to deliver public services like health care,
education, social services at reduced cost and in improved way.
E-Commerce - Disadvantages
E-Commerce disadvantages can be broadly classified in two major categories:
 Technical disadvantages
 Non-Technical disadvantages
Technical Disadvantages
 There can be lack of system security, reliability or standards owing to poor
implementation of e-Commerce.
 Software development industry is still evolving and keeps changing rapidly.
 In many countries, network bandwidth might cause an issue as there is
insufficient telecommunication bandwidth available.
 Special types of web server or other software might be required by the vendor
setting the e-commerce environment apart from network servers.

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  Sometimes, it becomes difficult to integrate E-Commerce software or website
with the existing application or databases.
 There could be software/hardware compatibility issue as some E-Commerce
software may be incompatible with some operating system or any other
component.
Non-Technical Disadvantages
 Initial cost: The cost of creating / building E-Commerce application in-house
may be very high. There could be delay in launching the E-Commerce
application due to mistakes, lack of experience.
 User resistance: User may not trust the site being unknown faceless seller.
Such mistrust makes it difficult to make user switch from physical stores to
online/virtual stores.
 Security/ Privacy: Difficult to ensure security or privacy on online
transactions.
 Lack of touch or feel of products during online shopping.
 E-Commerce applications are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for many
potential customers like one living in remote villages.

1.6 E-Commerce or Electronics Commerce business models

 E-Commerce or Electronics Commerce business models can generally categorized
in following categories.
 Business - to - Business (B2B)
 Business - to - Consumer (B2C)
 Consumer - to - Consumer (C2C)
 Consumer - to - Business (C2B)
 Business - to - Government (B2G)
 Government - to - Business (G2B)
 Government - to - Citizen (G2C)
Business - to - Business (B2B)
 B2B business model sells its product to an intermediate buyer who then sells
the product to the final customer. As an example, a wholesaler places an order
from a company's website and after receiving the consignment, sells the
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 end product to final customer who comes to buy the product at wholesaler’s
retail outlet.
o B2B implies that seller as well as buyer is business entity. B2B covers large
number of applications which enables business to form relationships with their
distributors, resellers, suppliers etc. Following are the leading items in B2B e-
Commerce.
 Electronics
 Shipping and Warehousing
 Motor Vehicles
 Petrochemicals
 Paper
 Office products
 Food
 Agriculture
Key technologies
Following are the key technologies used in B2B e-commerce −
 Electronic Data Interchange (EDI) − EDI is an inter organizational exchange
of business documents in a structured and machine process able format.
 Internet − Internet represents World Wide Web or network of networks
connecting computers across the world.
 Intranet- Intranet represents a dedicated network of computers within a single
organization
 Extranet − Extranet represents a network where outside business partners,
supplier or customers can have limited access to a portion of enterprise
intranet/network.
 Back-End Information System Integration − Back End information systems are
database management systems used to manage the business data.
Business - to - Consumer (B2C)
 In B2C model, business Website is a place where all transactions take place
between a business organization and consumer directly.
 In B2C Model, a consumer goes to the website, selects a catalog, orders the
catalog and an email is sent to business organization. After receiving the order,

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 goods would be dispatched to the customer. Following are the key features of
a B2C Model
 Heavy advertising required to attract large no. of customers.
 High investment in terms of hardware/software.
 Support or good customer care service
 Consumer Shopping Procedure

Following are the steps used in B2C e-commerce −

A consumer
 Determines the requirement.
 Searches available items on the website meeting the requirement.
 Compares similar items for price, delivery date or any other terms.
 Gives the order.
 Pays the bill.
 Receives the delivered item and review/inspect them.
 Consults the vendor to get after service support or returns the product if not
satisfied with the delivered product.
Consumer - to - Consumer (C2C)
 Website following C2C business model helps consumer to sell their assets like
residential property, cars, motorcycles etc. or rent a room by publishing their
information on the website. Website may or may not charge the consumer for
its services. Another consumer may opt to buy the product of the first
customer by viewing the post/advertisement on the website.
Consumer - to - Business (C2B)
 In this model, a consumer approaches website showing multiple business
organizations for a particular service.
 Consumer places an estimate of amount he/she wants to spend for a particular
service. For example, comparison of interest rates of personal loan/ car loan
provided by various banks via website. Business organization who fulfills the
 Consumer’s requirement within specified budget approaches the customer and
provides its services.
Business - to - Government (B2G)
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  B2G model is a variant of B2B model. Such websites are used by government
to trade and exchange information with various business organizations. Such websites
are accredited by the government and provide a medium to businesses to submit
application forms to the government.

Government - to - Business (G2B)

 Government uses B2G model website to approach business organizations.
Such websites support auctions, tenders and application submission
functionalities.
Government - to - Citizen (G2C)
 Government uses G2C model website to approach citizen in general. Such
websites support auctions of vehicles, machinery or any other material. Such
website also provides services like registration for birth, marriage or death
certificates. Main objectives of G2C website are to reduce average time for
fulfilling people requests for various government services.

1.7 Differentiating between E-business Categories

E-Auction
 E-Auction is an online negotiation tool. The supplier with the lowest bid will win the
auction. However, it is important to note that business will not always be awarded
based on lowest bids only, quality and service level are also important selection
criteria. 
 The non-price factors will - in most cases - be incorporated in the e-Auction so the
winner of the e-Auction will also win at least part of the business.
Benefits of an e-Auction
• Transparent process
 It will be clear to participants why they won/lost the e-Auction. 
 Participants will receive real-time market information.
 Contracts can be awarded faster. 
 Time saving compared to face-to- face negotiations.
E-Banking

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  E-banking or Online banking (or Internet banking) are same terms it allows
customers to conduct financial transactions on a secure website operated by
their retail or virtual bank, credit union or building society.
The common features are as under;
• Transactional (e.g., performing a financial transaction such as an account to account
transfer, paying a bill, wire transfer... and applications... apply for a loan, new
account, etc.) 
 Electronic bill presentment and payment - EBPP
 Funds transfer between a customer’s own checking and savings accounts, or to
another customer’s account
 Investment purchase or sale
 Loan applications and transactions, such as repayments of enrollments
 Non-transactional (e.g., online statements, check links, co-browsing, chat)  Bank
statements
 Financial Institution Administration
 Support of multiple users having varying levels of authority
 Transaction approval process
 Wire transfer
E-Commerce
 E commerce (electronic commerce or EC) is the buying and selling of goods and
services on the Internet. In practice, this term and e-business are often used
interchangeably. For online retail selling, the term e-tailing is sometimes used.
Aspects of e-commerce include:
 E-tailing or "virtual storefronts" on websites with online catalogs. 
 The gathering and use of demographic data through Web contacts. 
 Electronic Data Interchange (EDI), the business-to- business exchange of
data. 
 Email, instant messaging and social networking as media for reaching
prospects and established customers. 
 Business-to- business buying and selling. 
 The security of business transactions. 
E-Directories

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  E-Directory maintains a hierarchical database of information about network
resources within a global enterprise, including networks, users, subgroups,
servers, volumes and printers. Users log in to the network, and e Directory
determines their access rights. In its early development it was known as Novell
Directory Services (NDS).
 When eDirectory was NDS, it supported the X.500 structure, but not all of the
protocols. With the addition of software from Nexor Limited, e Directory
could query X.500 directories in governmental agencies and other
organizations.
E-Engineering
 e-Engineering is an answer for growing globalization of manufacturing, sourcing and
engineering. In the world of ever increasing speed, competition, treats and
opportunities, it’s a tool to conduct a business better, faster and more efficiently every
day. This is exactly the goal of e-Engineering: to help run a business according to the
highest global standards and best practices, by providing with up-to- date, leading-
edge industrial Web applications and customized needs fulfillment.
E-franchising
 A form of online selling or promoting products or services in continuing contractual
relationship with other businesses operating under the franchisor’s trade name and
usually with the franchisor’s guidance, in exchange for a fee. Its growing popularity of
online ordering for almost everything except groceries, e franchising is only going to
increase in popularity. WSI is a well-known company with a history of success and
embraces questions from potential franchisees.
 E-learning
the delivery of a learning, training or education program by electronic means. E-
learning involves the use of a computer or electronic device (e.g. a mobile phone) in
some way to provide training, educational or learning material.
 E-mailing 
o A system for sending and receiving messages electronically over a
computer network, as between personal computers. In detail electronic
mailing is the transmission of messages over communications
networks.

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 o The messages can be notes entered from the keyboard or electronic
files stored on disk. Most mainframes, minicomputers, and computer
networks have an e-mail system. Some electronic-mail systems are
confined to a single computer system or network, but others have
gateways to other computer systems, enabling users to send electronic
mail anywhere in the world.

E- Marketing
 E-Marketing, web-marketing, online-marketing, digital marketing, Search
Engine Marketing (SEM) or internet marketing also referred to as i-marketing,
is the marketing of products or services over the Internet. It can be defined as
Achieving marketing objectives through applying digital technologies. By
using a company’s web site in conjunction with online promotional techniques
such as search engine marketing, interactive advertising, e-mail marketing and
partnership arrangements (affiliate marketing) with other web sites.
E- Supply Chain Management
 E-Supply Chain Online exchanges the management of upstream and
downstream relationships with the suppliers and customers to deliver superior
customer value at less cost to the supply chain as a whole.
E-Trading
 Electronic trading, sometimes called e trading, is a method of trading securities
(such as stocks, and bonds), foreign currency, and exchange traded derivatives
electronically. It uses information technology to bring together buyers and
sellers through electronic media to create a virtual market place. NASDAQ,
NYSE Arca and Globex are examples of electronic market places.

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2. Electronic Commerce Framework
 E-Commerce application will be built on the existing technology infrastructure
 A myriad of computers
 Communication networks
 Communication software
 Common business services for facilitating the buying and selling process
 Messaging & information distribution as a means of sending and retrieving
information
 Multimedia content & network publishing, for creating a product & a means to
communicate about it
 The information superhighway- the very foundation-for providing the high
way system along which all e-commerce must travel
 The two pillars supporting all e-commerce applications & infrastructure
 Any successful e-commerce will require the I-way infrastructure in the same
way that regular commerce needs
 I-way will be a mesh of interconnected data highways of many forms
Telephone,wires,cable TV wire
 Radio-based wireless-cellular & satellite
 Movies=video + audio
 Digital games=music + video + software
 Electronic books=text + data + graphics + music + photographs + video
 In the electronic „highway system‟ multimedia content is stores in the form of
electronic documents
 These are often digitized

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  On the I-way messaging software fulfills the role, in any no. of forms: e-mail,
EDI, or point-to-point file transfers
 Encryption & authentication methods to ensure security
 Electronic payment schemes developed to handle complex transactions
 These logistics issues are difficult in long-established transportation

3. Architectural frame work of E-comme rce:

A Frame Work is intended to define and create tools that integrate the information
found in today’s closed system and allow the development of E-commerce
applications.

Architectural framework should focus on synthesizing the diverse resources already in

place incorporation to facilitate the integration of data and software for better use and
application.

The E-commerce applications architecture consists of 6 layers of functionality or

services. They are

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  Application Services
 Brokerage Services
 Interface support layer
 secure messaging & EDI
 Middleware, structured document interchange.
 Network infrastructure and providing communication services.

4. Anatomy of E-Commerce applications

 E-Commerce applications are:
1. Multimedia Content for E-Commerce Applications
2. Multimedia Storage Servers & E-Commerce Applications
i. Client-Server Architecture in Electronic Commerce
ii. Internal Processes of Multimedia Servers iii. Video Servers & E-Commerce
3. Information Delivery/Transport & E-Commerce Applications
4. Consumer Access Devices

 Multimedia Content for E-Commerce Applications

• Multimedia content can be considered both fuel and traffic for electronic commerce
applications.
• The technical definition of multimedia is the use of digital data in more than one
format, such as the combination of text, audio, video, images, graphics, numerical
data, holograms, and animations in a computer file/document.

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 • Multimedia is associated with Hardware components in different networks.
• The Accessing of multimedia content depends on the hardware capabilities of the
customer.

Possible components of Multimedia

 Multimedia Storage Servers & E-Commerce Applications:

• E-Commerce requires robust servers to store and distribute large amounts of digital
content to consumers.
• These Multimedia storage servers are large information warehouses capable of
handling various content, ranging from books, newspapers, advertisement catalogs,
movies, games, & X-ray images.
• These servers, deriving their name because they serve information upon request,
must handle large-scale distribution, guarantee security, & complete reliability
i. Client-Server Architecture in Electronic Commerce
• All e-commerce applications follow the client-server model.
• Clients are devices plus software that request information from servers or interact
known as message passing.
• Mainframe computing , which meant for “dump”.
• The client server model, allows client to interact with server through request-reply
sequence governed by a paradigm known as message passing.

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 • The server manages application tasks, storage & security & provides scalability-
ability to add more clients and client devices (like Personal digital assistants to Pc‟s.
See in fig.

ii. Internal Processes of Multimedia Servers

• The internal processes involved in the storage, retrieval & management of
multimedia data objects are integral to e-commerce applications.
• A multimedia server is a hardware & software combination that converts raw data
into usable information & then dishes out.
• It captures, processes, manages, & delivers text, images, audio & video.
• It must do to handle thousands of simultaneous users.
• Include high-end symmetric multiprocessors, clustered architecture, and massive
parallel systems.
iii. Video Servers & E-Commerce
The electronic commerce applications related to digital video will include
1. Telecommunicating and video conferencing
2. Geographical information systems that require storage & navigation over maps
3. Corporate multimedia servers
4. Postproduction studios
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 5. Shopping kiosks.
• Consumer applications will include video-on-demand.
• The figure which is of video–on demand consist video servers, is an link between the
content providers (media) & transport providers (cable operators)
Information Delivery/Transport & E-Commerce Applications
• Transport providers are principally telecommunications, cable, & wireless industries.
Transport Routers
Information Transport Providers Information Delivery Methods
• Telecommunication companies long-distance telephone lines; local telephone lines
• Cable television companies Cable TV coaxial, fiber optic & satellite lines
• Computer-based on-line servers Internet; commercial on-line service providers
• Wireless communications Cellular & radio networks; paging systems
Consumer Access Devices
Information Consumers Access Devices
• Computers with audio & video Personal/desktop computing capabilities
Mobile computing
• Telephonic devices Videophone
• Consumer electronics Television + set-top box Game systems
• Personal digital assistants (PDAs) Pen-based computing, voice-driven
5. E-Commerce Consumer applications:
People needs entertainment on demand including video, games, news on-demand,
electronic retailing via catalogs etc.
• Currently now we are taking the video on-demand.
• Why most companies betting heavily on this?
1. 93 million homes have television
2. Americans spend nearly half their free time watching television
3. Every evening, more than one-third of the population is in front of a television
4. Sight, sound, and motion combine to make television a powerful means of
marketing
1. Consumer Applications and Social Interaction:
• Lessons from history indicate that the most successful technologies are those that
make their mark social
• In 1945, in U.S no one had TV. By 1960 about 86percent of households did

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 • Now contrast with Telephone. Bell invented the telephone in 1876 and by1940, 40%
of
U.S. households and by 1980 about 95-98 percent of households connected
• Penetration was slower for Telephone than for TV because of the effort needed to set
up the wiring infrastructure
The impact of both was good on business, social, consumer behavior and
entertainment habits
Radio began in 1960, and by 1989, almost 3 decades later, just 319 radio stations
followed the news format
In 1994, their number exceeded 1000
What do Consumers really want?
1. They want quality and cost of service
2. If a new system requires more steps to do essentially the same things, consumers
may resist it
3. Some people fit that mold, but most of public prefers to lay back and just watch
television and let someone else do the work of figuring out the sequence of television
programming

What are Consumers willing to spend?

1. According to the video on-demand, consumers get the cable bill at basic charge
they will buy
2. If it is doubled they will not buy and at the service provider economics will
increased then network operators might look to advertises to fill the gap
Delivering products to Consumers
1. Packing and distribution must be considered
2. Blockbuster video collects the information and shows the typical consumer
3. Spends $12 a month on home video expenditures
4. Go to video store to select video on limited budget and has time to kill
5. Only periodically expends a large sum of money
Consumer Research and E-Commerce
Consumer opinion about interactive television is
46% be willing to pay
39% want video phone calls
63% would pay for movies on-demand
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 57% would pay for Television shows on-demand
78% said their worry about it is that they will pay for something that they previously
received free of charge
64% are think it make it harder for viewers to protect privacy
41% are tell that it is too confusing to use
Changing business Environment
1. The traditional business environment is changing rapidly
2. Many companies are looking outside and within to shape business strategies
3.These activities include private electronic connections to
customers,suppliers,distributors,industry groups etc
4. The I-superhighway will expand this trend so that it allow business to exchange
information.
E-Commerce and the retail Industry
1. Conditions are changing in the “new economy” with respect to the retail industry
2. Consumers are demanding lower prices, better quality, a large selection of in-
season goods.
3. Retailers are filling their order by slashing back-office costs, reducing profit
margins, reducing cycle times. buying more wisely and making huge investments in
technology
4. Retailers are in the immediate line of fire and were first to bear the brunt of cost
cutting
Marketing and E-Commerce
1. E-commerce is forcing companies to rethink the existing ways of doing target
marketing and even event marketing.
2. Interactive marketing is in electronic markets via interactive multimedia catalogs
3. Users find moving images more appealing than still image and listening more
appealing than reading text on a screen
4. Consumer information services are a new type of catalog business
Inventory Management and Organizational Applications
1. With borders opening up and companies facing stiff global competition
2. Adaptation would include moving to computerized, “paperless” operations to
reduce
3. Once targeted business process is inventory management, solutions for these
processes go by different names
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 4. In manufacturing industry they‟re known as just-in-time inventory systems, in the
retail as quick response programs, and in transportation industry as consignment
tracking systems
Just-in-Time (JIT) Manufacturing
It is viewed as an integrated management system consisting of a number of different
management practices dependent on the characteristics of specific plants
2. The first principle is elimination of all waste (time,materials,labour & equipment)
3. The following management practices are focused factory, reduced set-up times,
group technology, total productive maintenance, multifunction employees, uniform
workloads, IT purchasing,kanban total quality control & quality circles
Quick Response Retailing (QR)
1. It is a version of JIT purchasing tailored for retailing
2. To reduce the risk of being of out of stock, retailers are implementing QR systems
3. It provides for a flexible response to product ordering and lowers costly inventory
levels
4. QR retailing focuses on market responsiveness while maintaining low levels of
stocks
5. It creates a closed loop consisting of retailer, vendor, & consumer chain,& as
consumers make purchases the vendor orders new deliveries from the retailer through
its computer network
6. E-commerce in India

 India has an internet users base of about 450 million as of July 2017, 40% of the
population. Despite being the second-largest user base in world, only behind China
(650 million, 48% of population), the penetration of e-commerce is low compared to
markets like the United States (266 million, 84%), or France (54 M, 81%), but is
growing at an unprecedented rate, adding around 6 million new entrants every
month. The industry consensus is that growth is at an inflection point.
 In India, cash on delivery is the most preferred payment method, accumulating 75%
of the e-retail activities. Demand for international consumer products
(including long-tail items) is growing much faster than in-country supply from
authorised distributors and e-commerce offerings.
 In 2015, the largest e-commerce companies in India
were Flipkart, Snapdeal, Amazon India, and Paytm.

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 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. [7] According to Google India, there
were 35 million online shoppers in India in 2014 Q1 and was expected to cross 100
million mark by end of year 2016.[8] CAGR vis-à-vis a global growth rate of 8–10%.
Electronics and Apparel are the biggest categories in terms of sales.
 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.
 According to a study done by Indian Institute of eCommerce, 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.
 India's retail market is estimated at $470 billion in 2011 and is expected to grow to
$675 Bn by 2016 and $850 billion by 2020, – estimated CAGR of 10%.According
to Forrester, the e-commerce market in India is set to grow the fastest within the
Asia-Pacific Region at a CAGR of over 57% between 2012–16.
 As per "India Goes Digital",a report by Avendus Capital, the Indian e-commerce
market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online
travel constitutes a sizable portion (87%) of this market today. Online travel market
in India had a growth rate of 22% over the next 4 years and reach Rs 54,800 crore
($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600
crore (US$800 million) in 2011 and estimated to grow to Rs 53,000 crore ($11.8
billion) in 2015.
 Overall e-commerce market had reached Rs 1,07,800 crores (US$24 billion) by the
year 2015 with both online travel and e-tailing contributing equally. Another big
segment in e-commerce is mobile/DTH recharge with nearly 1 million transactions
daily by operator websites.
 A new sector in e-commerce is online medicine, selling complementary and
alternative medicine or prescription medicine online. There are no dedicated online
pharmacy laws in India and it is permissible to sell prescription medicine online
with a legitimate license.

22 DEPARTMENT OF INFORMATION TECHNOLOGY- RAAKCET

  Online sales of luxury products like jewellery also increased over the years. Most of
the retail brands have also started entering into the market and they expect at least
20% sales through online in next 2–3 years.

Infrastructure

 There are many hosting companies working in India but most of them are not
suitable for eCommerce hosting purpose, because they are providing much less
secure and threat protected shared hosting. eCommerce demand highly secure,
stable and protected hosting. Trends are changing with some of eCommerce
companies starting to offer SaaS for hosting web stores with minimal one time costs.
 India has got its own version of Cyber Monday known as Great Online Shopping
Festival which started in December 2012, when Google India partnered with e-
commerce companies including Flipkart, HomeShop18, Snapdeal, Indiatimes
shopping and Makemytrip. "Cyber Monday" is a term coined in the USA for the
Monday coming after Black Friday, which is the Friday after Thanksgiving
Day.Most recent GOSF Great Online Shopping Festival was held during Dec 10 to
12, 2014.
 In early June 2013, Amazon.com launched their Amazon India marketplace without
any marketing campaigns. In July 2014, Amazon had said it will invest $2 billion
(Rs 12,000 crore) in India to expand business, after its largest Indian rival Flipkart
announced $1 billion in funding.
 In June 2016, Amazon agreed to invest another $3 billion to further pressure rivals
Flipkart & Snapdeal Amazon has also entered grocery segment with its Kirana now
in bangalore and is also planning to enter in various other cities like Delhi, Mumbai
and Chennai and faces stiff competition with Indian startups.A large proportion of
traffic towards e-commerce sites is driven by coupon sites.
 The spread of e-commerce has led to the rise of several niche players who largely
specialize their products around a specific theme. As many as 1,06,086 websites are
registered daily and more than 25% are for niche businesses.
 During 2014, Royal Enfield sold 200 bikes of special series Online.
 Online apparel is one of the more popular verticals, which along with computers and
consumer electronics make up 42% of the total retail e-commerce sales.

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 Niche online merchandising brands like Headbanger's Merch, Redwolf and No
Nasties partner with and even help sustain independent musicians. [Some established
brands like Arvind are now creating clothing lines just for the e-commerce markets.
 Some of the bigger online retailer like VoxPop Clothing have secured multiple
rounds of funding, the last round raising $1 million from Blume Ventures in 2014.
 As these niche businesses get popular, they are slowly getting acquired by the big
players. BabyOye was acquired by Mahindra Retail, part of the $17
billion Mahindra Group.
 Ekstop was acquired by the Godrej Group to complement their offline chain of
Nature's Basket stores.

24 DEPARTMENT OF INFORMATION TECHNOLOGY- RAAKCET