Growth and Development of eCommerce: -

Technical standards requirement for ecommerce:-

i. Messaging, Multimedia, and information publishing and distribution
infrastructure- e-mail, OTP, HTTP, HTML, JAVA, WWW, VRML.
ii. Network infrastructure- Telecom, cable TV, wireless, VAN, WAN, LAN,
Intranet, Extranet, and EDI.
iii. Interfacing infrastructure- database, customers, and applications. (A device or
program enabling a user to communicate with a computer).
iv. What is Web Hosting-
v. Protocols- security and network protocol payments, authentication, encryption.
vi. Common business service infrastructure- Electronic payment facilities-NPCI-
directories/catalogues, smart card etc.
The development of computer science and communications science has laid a solid
foundation for e-commerce. The development of EDI, information security, emergence of
electronic fund transfer, legal guarantees for e-commerce etc. has lead to growth and
development of e-commerce. The origin and development of e-commerce can be discussed under
three heads:-
Phase 1 E-commerce based on EDI: - Paving the way for electric commerce was the
development of the Electronic Data Interchange (EDI) in the year 1960s’.
Electronic Data Interchange (EDI) is the computer-to-computer exchange of business
documents in a standard electronic format between business partners. (Examples: - remittance
information; OTP; shipping information etc.)
Computer-to-computer: - EDI replaced traditional mailing and faxing of documents with a
digital transfer of data from one computer to another. While email is also an electronic approach,
the documents exchanged via email must still be handled by people rather than computers.
Having people involved slows down the processing of the documents and also introduces errors.
Instead, EDI documents can flow straight through to the appropriate application on the receiver’s
computer (e.g., the Order Management System) and processing can begin immediately. A typical
manual process looks like this, with lots of paper and people involvement:
The EDI process looks like this — no paper, no people involved:
EDI allowed the transfer of data seamlessly without any human intervention.

Business documents: - These are any of the documents that are typically exchanged between
businesses. The most common documents exchanged via EDI- purchase orders, invoices, bill of
entry, bill of lading, import/export license, letter of credit, insurance certificate, test report
certificate, central excise documents, GST certificate, etc.
Standard format: - Because EDI documents must be processed by computers rather than
humans, a standard format must be used so that the computer will be able to read and understand
the documents. A standard format describes what each piece of information is and in what format
(e.g., integer, decimal, mmddyy). Without a standard format, each company would send
documents using its company-specific format and, much as an English-speaking person probably
doesn’t understand Japanese, the receiver’s computer system doesn’t understand the company-
specific format of the sender’s format.
 There are several EDI standards in use today, including ANSI, EDIFACT,
TRADACOMS and ebXML. And, for each standard there are many different versions,
e.g., ANSI 5010 or EDIFACT version D12, Release A. When two businesses decide to
exchange EDI documents, they must agree on the specific EDI standard and version.
 Businesses typically use an EDI translator – either as in-house software or via an EDI
service provider – to translate the EDI format so the data can be used by their internal
applications and thus enable straight through processing of documents.
Business partners – The exchange of EDI documents is typically between two different
companies, referred to as business partners or trading partners.
From the perspective of technology, the EDI uses VAN-network (value added network)
includes both hardware (mainly the network) and software (mainly software and standard of
EDI). For the sake of safety, most EDI were not transmitted by network until the 1990s’ but by
VAN.
Phase 2 E-commerce based on Internet: - EDI enjoys advantages and tremendous strength in
decreasing enormously the intensity, mistakes and costs to make and handle documents on the
one hand, and in improving efficiency to a large extent on the other hand. Therefore, it speeds up
the development of international business. However, the cost of VAN and EDI communication
system hinder the expansion of e- commerce based on EDI. Large organizations have been
investing in development of EDI since sixties. It has not gained reasonable acceptance until
eighties. EDI has never reached the level of popularity of the web-based ecommerce for several
reasons:
1. High cost of EDI prohibited small businesses and medium-sized companies from
participating in the electronic commerce;
2. Slow development of standards hindered the growth of EDI; and
3. The complexity of developing EDI applications limited its adaptation to a narrow user
base.
 The Internet and the Web: The Internet was conceived in 1969. The Internet could end up
like EDI without the emergence of the World Wide Web in 1990s. The Web became a popular
mainstream medium in a speed which had never been seen before. The web became a popular
because of development of information technology. Developments like WWW; URL, HTML
and HTTP led businesses that has always been outside of internet came into the realm and made
e-commerce a big hit in internet, which give impetus to the rapid development of internet.
Besides the availability of technical infrastructures, the popularity of the Web is largely
attributed to the low cost of access and simplicity. The Internet and the Web have overcome the
technical difficulty of EDI.
The mid-nineties to 2000’s saw major advancements in the commercial use of the Internet.
The largest online retailer in the world Amazon, launched in 1995 as an online bookstore. Brick-
and-mortar bookstores were limited to about 200,000 titles and Amazon, being an online only
store, without physical limitations was able to offer exponentially more products to the shopper.
Like Amazon, many companies made a big success by online direct marketing such as Dell,
google, Yohoo, Ebay etc.
Phase 3 E-concept e-commerce: - Since early 2000, people’s understanding has developed
from e-commerce to higher e-concept of e-commerce, and it is realized that e-commerce is in
fact the combination of information technology and commerce applications. Various patterns of
e-commerce such as B2B; B2C; C2C; B2G; G2C etc., have come into being by applying e-
concept.
The growing use of the Internet, tablet devices, and smart phones coupled with larger
consumer confidence will see that ecommerce will continue to evolve and expand. With social
media growing exponentially in recent years, the conversation between businesses and
consumers has become more engaging, making it easier for transactional exchanges to happen
online. Internet retailers continue to strive to create better content and a realistic shopping
experience with technologies like augmented reality. With mobile commerce gaining speed,
more users are purchasing from the palm of their hand.
E-commerce Entities: - An ecommerce entity is a facility or infrastructure that allows electronic
communication of goods and services. E-commerce entity can be a company, group or an
individual that does its business through internet or websites. For example; Amazon; Alibaba;
Flipkart; Ebay India; jabong; Myntra; Paytm etc.
Who is an ecommerce entity? An e-commerce entity is a company incorporated
under the Companies Act 1956 or the Companies Act 2013 or a foreign company
covered under the Companies Act, 2013 or an office, branch or agency in India
operating under FEMA regulations, owned or controlled by a person resident outside
India and conducting the e-commerce business.
Types of popular e-commerce entities:-
1. E-tailers entities
2. Manufacturer entities
3. Consumer led entities
4. Existing stores
5. Service providers
6. Financial entities
7. Informative entities
8. Second hand product entities
E-TAILING: - (The sale of goods to the public in relatively small quantities for use or
consumption rather than for resale). Electronic retailing means selling of retail goods and
services over the internet/online. Top e-tailers in India: - Amazon; Flipkart.com; jabong.com;
Myntra.com; Paytm etc.
Manufacturer: - The term Manufacturer-Direct, also known as Factory-Direct refers to a
business model in which the manufacturer sells its goods directly to the end user of the product.
Traditionally, most manufacturers have relied on distributor and partner relations for a major part
of their sales. While this has helped build a customer base and create brand awareness, it has also
resulted in a lack of direct engagement with customers. Thanks to Internet and the e-
commerce capabilities, the number of manufacturers that decide to go online and sell direct to
their customers without intermediaries, is increasing very fast. Thus, they are now skipping the
process of going to a retail outlet to sell to customers; instead they are selling directly to
customers by setting up an online store.
 The manufacturer direct business model has several advantages. Besides allowing a
manufacturer to skip over a retailer, advantages to the direct model include lower distribution
costs since products do not need to be shipped to a retail location first. This leads manufacturers
to allow for better pricing. Another advantage of the direct manufacturer business model is the
unique direct customer relationship, which previously lacked. It also allows manufacturers to
gain inputs and feedback from customers directly as opposed to relying on the retailer discussing
how the consumer was reacting to a product.
When speaking of the direct manufacturer business model, the reference company seems
to be Dell incorporated. Dell counts as an e-commerce pioneer and its strategy of selling over the
Internet – with no retail outlets and no middleman – has been as discussed, admired and imitated
as any e-commerce model. Prior to the innovations of Dell incorporated, computer manufacturers
relied on retail outlets to sell their computers and hardware. Dell incorporated allowed customers
to shop for computers directly from their website, adding customization options to purchases. In
early 2000, Dell began to redefine itself as the company that knows how E works. The Direct
model was augmented by e-commerce, as customers could easily compare, configure and buy
PCs online from the PC vendor, or place the order by phone. Customers could now choice and
control. “Buyers could click through Dell and assemble computer system piece by piece,
choosing components like hard drive size and processor speed based on their budgets and needs.
Consumer led entities: - Consumer to consumer, or C2C, is the business model that
facilitates commerce between private individuals. Whether it's for goods or services, this
category of e-commerce connects people to do business with one another. Consumer led entities
sites which are mostly controlled by its customers and their actions; buying, selling, deliveries
and promotions are all done by the customers. One interesting development of the Internet is the
emergence of consumer – led sites such as eBay, where the public can buy and sell their own
items through an auctioning system. EBay was founded by Pierre Omidyar in 1995, and became
a notable success story of the dot-com bubble. EBay provides marketplace and online auction
service used to buy and sell items. Sellers set up accounts, profiles and virtual stores based on the
chosen auction site's parameters, uploading product descriptions and digital photographs to
entice buyers. Buyers search and bid on available items within a prescribed timeline and opening
bid price. For example, you are searching for a satellite phone on eBay and you find it. You see
the current bid by other people and maximum bid so far is 15K. You think for seconds and then
enter your maximum bid say 16K. Now eBay will do the bid for you and the moment someone
out beats you eBay will let you know.
In EBay auction the seller determines guidelines such as a minimum bid he or she is willing
to accept. Browsing and bidding on auctions is free, but sellers are charged transaction fees for
the right to sell their goods on eBay. There are two kinds of transaction fees:
i. When an item is listed on eBay, a nonrefundable insertion fee is charged based on the
seller’s opening bid on the item.
ii. Once the auction is completed, a final value fee is charged. This fee generally ranges
from 1.25 percent to 5 percent of the final sale price.
Once the auction is finished, eBay notifies the buyer and seller via email. Completing the
transaction is then up to the seller and the buyer, and eBay collects its final value fee independent
of payment and shipment.
Existing stores: - are organizations which started off only as bricks, however with advancements
in technology they also know have a click meaning they are available to visit both online and
physically. They have now converted to selling online as well because there is more money and
profit in it. Bricks and clicks approach can allow the companies to enjoy both of the ways of
selling and also allows the buyers to buy both ways online and also traditional brick way. An
example would be Tesco
Service Provider: - In the highly globalized world of today, e-commerce has become a fad
among businesses and retailers all over the world. E-commerce has continuously been growing
and developing over the last few years, thanks to the increased usage of internet worldwide and
also the techno savvy generation of today. The businesses have a great scope to market their
products and services online and thus seek customer recognition and appreciation. In order to
present them in an impressive way to their customers and clients, businesses, companies and
retailers look for best e-commerce solutions provider companies that offer cost-effective and fine
quality services such as website designing, development of mobile applications, search engine
optimization, social media optimization, marketing and advertisement, content writing services
and a lot more like- Comparision- junglee.com;trivaga, Compatable with all major operating
system- Mac, Windows, Unix, Linux; Compatable with major browsers- fiorefox, opera,
Netscape, google, safari, Security- ssl, encryption etc. CSSChopper; Sparx IT Solutions;
HTMLPanda; 7Cloud Tech are some of the popular CSP in India.
Financial entities:- Any company which can be accessed via internet which involves the
exchange of money for banking, insurance, loans ad investment purposes comes under financial
entity. With a large unbanked population and rising smart phone usage, FinTech startups in India
are poised to carve a large mindshare and market share in the country. The government is doing
its part to move the country to a cashless society – the Reserve Bank of India issued payments
bank licenses to 11 entities in August 2015, and in 2016. Some of the popular financial tech
companies in India are:- Paytm; MobiKwik; BankBazaar; PolicyBazaar; FINO; ItzCash;
Mswipe; Ezetap etc. Alibaba-funded Paytm, the country’s leading mobile wallet in terms of
users has ten times the funding of its competitor – MobiKwik.
Informative entities: - In the age of internet, it’s hard to imagine studying, working, shopping or
even having a little “me-time” without browsing some websites. While search engines can help
you find the most suitable results based on search queries. It is a good idea to learn about some
informative websites that come handy now and then. Informative websites are those dedicated to
providing news and information for others. -Economic Times; Business Today; Live Mint:;
ICICI Direct; Equity Master; MoneyGyaan.com
Second hand products: A relatively recent development in online selling has been the inclusion
of second hand products. Amazon provides both new and used books, games and other goods.
eBay specialises in customers using the website to sell their own items. The OLX, Letgo and
OfferUp marketplaces facilitates buying and selling services and goods such as electronics,
furniture, household goods, cars and bikes to sell to their neighbors. Payments between buyer
and seller are made offline, so OLX does not have to deal with varying payment infrastructure
availability in each of its markets.