PROJECT

ON
E-COMMERCE IN GLOBAL SCENARIO

Submitted in partial fulfillment of the requirements for MBA

programme of Guru Gobind Singh Indraprastha University, Delhi

PREFACE

E-commerce as anything that involves an online transaction. E-

commerce provides multiple benefits to the consumers in form of
availability of goods at lower cost, wider choice and saves time. The
general category of e-commerce can be broken down into two parts:
E-merchandise: E-finance. E commerce involves conducting business
using modern communication instruments: telephone, fax, e-payment,
money transfer systems, e-data interchange and the Internet. Online
businesses like financial services, travel, entertainment, and groceries
are all likely to grow. Forces influencing the distribution of global e-
commerce and its forms include economic factors, political factors,
cultural factors and supranational institutions.

It has an impact over the economy of many countries among which

India is on the top of that list. It has named as new gold rush in e-
commerce. E-commerce has many reasons that why it is very crucial
in developing the country . For the study we have taken several parts
of the world such as North America , Latin America , Europe , Middle-
East , Africa and South Asia ,and Australia. E-commerce has an intent
to bring some transformation in the society and that’s the reason its
essential for the B2B and B2C commerce .

SCOPE OF STUDY

This study being “desk analysis" contains views of various writers and
researchers of E-commerce. This study includes the global trends
including India as a major source of E-commerce , increasing use of
e- commerce in developing nations , reasons behind success of e-
commerce as an industry , the use of e-commerce in global sourcing ,
advantages of E-commerce and several more topics being covered
under the project analysis. The use of e-commerce in various
countries and their influence over the people or citizens of that country
is remarkable.
 RESEARCH OBJECTIVES

The study is focused on achievement of following objectives:

 To assess the latest trend in e-commerce globally.
 The impact of growth of e-commerce.
 To analyse the latest global scenario of e-commerce.
 The impact of growth on overall economy.
. EXECUTIVE SUMMARY
The Internet is dramatically expanding opportunities for business-to-
business (B2B), Business-to-consume ( B 2 C ) e -commerce
transactions across borders. For B2Ctransactions especially, the
Internet sets up a potential revolution in global commerce: the
individualization of trade. It gives consumers the ability to conduct a
transaction directly with a foreign seller without traveling to the seller’s
country. While this could be done in the past by post, telegram,
phone, or fax, such sales were relatively rare because the consumer
had to know in advance where to make contact and what to buy.
The Interne t al lows sellers to put their storefronts, in the form of
Web pages, in front of consumers all over the world. Technology has
expanded t h e consumer marketplace to an unprecedented
degree, and it will change the way we think about trade. The
implications of this for economic development, globalization, and
cultural exchange are immense . This creates opportunities for
both consumers and small enterprises that must not be
squandered. But for all the potential of global e-commerce, there are
countless vexing policy questions to be worked out, any one of which
can threaten the viability of this nascent form of trade. All of the
Internet issues being debated in the United States—consumer protect
ion, data privacy, taxation, content regulation, copyright, spam,
technology deployment , and many more—need to be resolved at the
international level as well .
 However, unlike the United States ,which has a federal
government and a constitutional guarantee of free trade, global
ecommerce faces two additional serious complications: no central
international authority to make the rules and regulations and no
uniform commitment to global free trade . Moreover, conducting
electronic commerce across national border s adds many more
policy issues to the mix—jurisdiction, customs duties, import and
export restrictions , intellectual property licensing, and more—that
are only now being examined.

TABLE OF CONTENTS

Acknowledgement
Preface
Scope of the study
Objectives
Executive summary
I.Introduction of the topic
 Research methodology
II.Conceptual Framework
 Global trends in E-Commerce
 E-commerce in India
 E-Commerce in Global Sourcing Scenario.
 Security concern in e-commerce
 E-commerce: A Boon for the Current Economic Downturn
 Key Reasons for success of e-Commerce
 Factors affecting Distribution and form of Global e-commerce.
o Internet Adoption.
o Buying and selling online.
o Advertisement and searching phase.
o Payment phase
o Delivery phase.
 Brief review of literature on e-commerce.

III.Summary & Conclusion

References

CHAPTER-I
INTRODUCTION

E-commerce (electronic commerce or EC) is the buying and selling of

goods and services on the Internet, especially the World Wide Web. In
practice, this term and a newer term, e-business, are often used
interchangably. For online retail selling, the term e-tailing is sometimes
used

Electronic commerce is generally considered to be the sales aspect

of e-business. It also consists of the exchange of data to facilitate the
financing and payment aspects of business transactions.

E-commerce can be divided into

 E-tailing or "virtual storefronts" on Web sites with online catalogs,

sometimes gathered into a "virtual mall"
 The gathering and use of demographic data through Web
contacts
 Electronic Data Interchange (EDI), the business-to-business
exchange of data
 E-mail and fax and their use as media for reaching prospects
and established customers (for example, with newsletters)
 Business-to-business buying and selling
 The security of business transactions

Today Ecommerce is an integral part of business because of various

reasons like:
 Ease of use & Accessibility all across the globe

 Great variety & easy compassion of products from different

vendors
  Trusted payment channels

 Shopping can be done sitting in the convenience of home

shopping, hence it is less time consuming.

It is therefore very important for any new entrepreneur to understand

the significance of E-Commerce and should know how to utilize this
tool for the growth and development of business.

So, whether you have an existing business or launching a brand new

business, whether the volume of your business is large or small, you
can always generate profit by demonstrating your products or services
online, thereby acquiring a large amount of viewer exposure. In
concise, buying and selling will result in profits and returns.

There are so many factors which makes e-commerce to come to the

fore front in today's world. Saving precious time involved in business
transactions is really a prominent factor. Like for instance, net banking
makes it easy to carry out money and baking transactions in a break
neck speed as compared to the real banking scenario. This asserts
the fact that Ecommerce is beneficial to both business and consumer
wise as payment and documentations can be completed with greater
efficiency and reliability. Another important factor determining the flow
of whole business is connectivity. Connectivity is very important for
both consumers and business. Ecommerce provides better
connectivity for all the potential candidates all over the globe, thus
helping in enhancing the business without any geographical barriers.
From the view point of the customer, Ecommerce is a good platform
for hassle free shopping by sitting in your home. The customer can
browse through all the products and services available and can review
and compare the prices of the similar products available in the online
space.

In global market scenario, the emergence of Ecommerce as a

forerunner has opened up various windows of opportunities for a
variety of online companies and investors. More and more resources
are being directed into electronic securities, internet facilities, business
plans and new technologies due to the boom in the space of E-
commerce. As a result various new markets have emerged from
Ecommerce itself giving a boost to the global market.

Research Methodology
Sources of Data
For having the detailed study about this topic, it is necessary to have
some of the secondary information, which is collected from the
following:-Books, Websites and Newspapers. So in this basically
secondary data is used in collecting the information. The sources of
data are:

Websites:

 Wikipedia
 Wikinvest
 India-commerce

Newspapers:

 Hindustan Times

Type of Study

The research design or type of study specifies the methods and

procedures for conducting a particular study. The type of research
design applied here are “Descriptive” and “Desk Analysis” as the
objective is to have knowledge about the ecommerce in global
Scenario. Descriptive study means situation, but not
the causal linkages among its different elements.
Descriptive studies (such as a cross-sectional study) help in
generating hypothesis on which further research may be based. Desk
analysis is to Gather and analyze information, already available in
print or published on the internet.
 CHAPTER-II

CONCEPTUAL FRAMEWORK

Global trends in E-commerce

 Government programs are a significant vehicle for c-commerce

implementations
 Retail, grocery and logistics industries are the most active in
encouraging trading partners to implement EDI
 Small and medium sized companies demand flexible integration
solutions
 European companies focus on core competencies and outsource
technology to consulting groups
 High percentage of first time implementers seek to achieve full
integration
 Organizations are seeking a scalable, reliable system that is
easy to deploy and manage
 Software needs to be capable of handing different business
processes and must integrate with existing IT investments

As social media, app stores and global availability become standard,

many companies are looking to enhance the online customer
experience. And while retail and other transactions via Internet are
customary, more than ever companies are simplifying the ways in
which customers interact with their website and ultimately make online
purchases. Here are eight trends happening right now in global e-
commerce that seek to enhance the user experience:

 Micro-payments – Among the most revolutionary changes in

the coming months—not years—is the use of micro-payment
systems from a variety of financial firms, e.g., Paypal, Visa,
WesternUnion, among others, including banks. This trend is
facilitated by the W3C working group that approved these
protocols and technical standards for the interworking. These
systems will change not only how we carry money but how we
value money and think about purchases. (Consider how a
purchase of $4.99 feels in a mobile app store vs. at Dunkin'
Donuts.) Payment systems that make it easier to buy online,
coupled with mobile technologies will accelerate the usage of
global e-commerce applications.
 Mobile technologies – More people access the Internet on their
mobile devices than on any other device. We are rapidly
approaching the time (if we are not already there) where designs
must be created for the mobile Web first, and for the desktop
second. Mobile technologies facilitate comparison shopping;
with the advent of barcode reader apps and price-comparison
databases, a consumer could snap a bar code in Walmart and
quickly reference product reviews and prices on walmart.com (or
 compare prices with Walmart competitors). Mobile technologies
also facilitate impulse buys – especially with the advent of micro-
payments tied to the mobile device. Just recently, Starbucks
customers can not only place an order with their Smartphone,
but also make a purchase.
 Social media – As Facebook has become the most visited site
on the Web, the role of social media, including Facebook and its
local clones such as Twitter, is increasingly important. Social
media sites increasingly act as points of entry to e-commerce
sites, and vice versa, as e-commerce sites build rating, loyalty
and referral systems tied to social media. Group buying (e.g.,
Groupon) is also gaining mainstream ground, with many "deal of
the day" sites competing for an increasingly savvy consumer
base, but improvements lie ahead as the social aspects and user
experience are refined.
 Fulfillment options – I believe that users will want to have
multiple fulfillments and return options when interacting with a
vendor: ship to address, courier, pick-up in store, return to store,
etc. Having many fulfillment options is how customers view their
overall customer experience. Some companies have made a
business proposition online by being exceptional in service to the
online channel (e.g., Zappos).
 Global availability – Increasingly, consumers want the
availability to buy products from foreign sites and have them
delivered locally. Thus, currency and customs will be of growing
 concern to many online retailers. Along with this, there will be
concerns with local privacy laws and restrictions on related data
collection and storage.
 Localization – While the trend is to globalize, what’s often more
important is to localize. User Centric’s research clearly shows
that sites that ‘feel’ local – with proper imagery, language,
time/date, weights/measures, currency, etc. – resonate far more
than sites that seem culturally distant or sterile.
 Customizability – Consumers want control, and want to be able
to design the details of the items they purchase.
 Time-based availability – Some of the hottest and most
successful sites are those that have a time-critical response
component. Sites like Groupon, Gilt and others capitalize on the
perception of limited-time availability. Creating a sense of
urgency drives traffic and purchase behavior.

Business models across the world also continue to change drastically

with the advent of eCommerce and this change is not just restricted to
USA. Other countries are also contributing to the growth of
eCommerce. For example, the United Kingdom has the biggest e-
commerce market in the world when measured by the amount spent
per capita, even higher than the USA. The internet economy in UK is
likely to grow by 10% between 2010 to 2015. This has led to changing
dynamics for the advertising industry
Amongst emerging economies, China's eCommerce presence
continues to expand. With 384 million internet users, China's online
shopping sales rose to $36.6 billion in 2009 and one of the reasons
behind the huge growth has been the improved trust level for
shoppers. The Chinese retailers have been able to help consumers
feel more comfortable shopping online. eCommerce is also expanding
across the Middle East. Having recorded the world’s fastest growth in
internet usage between 2000 and 2009, the region is now home to
more than 60 million internet users. Retail, travel and gaming are the
region’s top eCommerce segments, in spite of difficulties such as the
lack of region-wide legal frameworks and logistical problems in cross-
border transportation. E-Commerce has become an important tool for
businesses worldwide not only to sell to customers but also to engage
them.

Asia Pacific

Chinese and Korean online consumers are the most prolific online
shoppers m the Asia Pacific region with 95 percent of Internet users
intending to make a web purchase in the next six months.Conversely,
over one fourth of online consumers In Hong Kong (27%) and
Thailand (26%) and one fifth of residents in Japan. New Zealand,
Indonesia and Australia do not plan an online purchase m the
upcoming months. Koreans who shop online are most likely to buy
books, cosmetics, clothing/accessories/shoes and groceries via the
Internet in the next six months. While connected Chinese also favor
books and clothes. 40 percent plan to make an electronic purchase
online. Web-savvy Malaysians like online shopping for booking travel,
with airline tickets and hotel/tour reservations the top picks. More
online Australians intend to purchase event tickets and non-
downloadable videos/DVDs/games than any other in the region. And
one fifth of online Indian shoppers plan to buy non-downloadable
music.

Total online spending as a percentage of total monthly spending

vanes by country with Chinese and Korean online consumers
allocating the most via the web than any other in the region. Online
consumers in New Zealand. Australia, Malaysia and Hong Kong
allocate the least.

Europe
Intention to shop online in Europe is high—79 percent of online
European consumers plan to purchase products or services via the
Internet in the next six months. Online consumers in Norway and
Great Britain show the greatest propensity with almost 90 percent
planning a web purchase in the near future. More online residents of
Estonia & Croatia and Latvia indicate they would not be making any
online purchases in the next six months than in the rest of Europe
(42%. 41%. and 41%. Respectively)
More than half of online Austrians who shop via the web plan to buy
books, while online Germans and Czechs intend to turn to the Internet
for clothing and shoes more than any other online shoppers in the
region .Future online purchases for Norwegians are likely to include
a vacation or a show as indicated by their strong intent to purchase
travel aid event tickets More than one third of online Brits plan to
purchase DVDs and games online. while connected Greeks indicate a
preference for electronic equipment and computer hardware. Web-
savvy Israelis seek the Internet to purchase electronic equipment
more than any other item and are the least likely in the region to
purchase clothing or shoes online.

North America

Half of online Americans favor sites for stores that can only be
shopped online and the majority of Canadian web shoppers are split
between a preference for online-only sites (31%) and those that have
traditional physical stores (19%) the list of products and services that
are favored by American and Canadian online shoppers is almost
identical. Books, clothing and airline tickets are the items most likely
tagged for online purchase in the next six months. One-third of online
Canadians say they don’t plan on making an online purchase in the
next six months, which is more than the one-fifth of connected
Americans who said the same. In fact, 28 percent of online Canadian
consumers indicate that they have never shopped online compared to
15 percent of Americans.
When selecting the top three sources to guide decisions, online
product reviews are useful to 42 percent of American and 40 percent
of canadian web shoppers. Online reviews are most important when
buying consumer electronics, cars and software and when
researching cars. Electronics and travel.

Latin America

Connected Brazilians are the most prolific online shoppers in the

region with 84 percent planning to make an online purchase in the
next six months. The items that top the list are books, electronic
equipment. Computer hardware and DVD5/games. Conversely, online
Colombians are the least likely shop online in the near future—3 6
percent indicate they have no plans to shop virally in the next six
months and more than one-fifth indicate they have never shopped
online.

Electronic equipment tops the list for planned online purchases for 34
percent of Venezuelan web shoppers followed by airline tickets (27%)
and computer hardware (21%). Surprisingly, books—which typically
tops the list for most online shoppers—was favored by only 18 percent
of online shoppers in this country.

Online purchase intent in Mexico is evenly divided among the top

eight products and services: books (3 0%), electronic equipment
(25%). tours/hotel reservations (24%) event tickets and music (22%),
computer hardware (21%) clothing and video/dvd1s/games (18%).
Also equally distributed is the choice of sites that connected Mexicans
prefer when shopping online.

Middle East / Africa / Pakistan

Shopping online Is the most underdeveloped In the Middle East, Africa

and Pakistan region. Almost half (47%) of online consumers indicate
they have never made an online purchase—the highest percent of any
other region in the world. Of those connected consumers who have
online access, one-third say they do not plan on making a purchase in
the next six months.

The most popular products and services for planned online purchase
across the M EAP region are books (29%), airline tickets/reservations
(24%) and electronic equipment such as TV’S and cameras (23%).
Other popular planned online picks for South Africans are event
tickets (33%) and non-downloadable music (26%). Online residents of
the United Arab Emirates intend to book travel (27%) and buy clothing
(25%). Web-savvy Pakistanis will look online to buy computer
hardware (25%) and clothing (18%), although they also lead the
region saying they do not plan on making an online purchase in the
next six months (38%).

Social media is not yet playing much of a role in influencing

consumers’ purchasing online,, but Saudis are most likely to use such
sites to help make buying decisions. While the majority on online
consumers in the region is not more Likely to share a negative rather
than a positive experience online, Egyptians and Saudis are more
Likely than any other in the region. Online reviews and opinions were
most Important when buying and researching cars, software and
consumer electronics

E-commerce in India

New Gold Rush in E-commerce in India

Kunal Bahl, founder- CEO of e-commerce site Snapdeal.com bought
out eSportsbuy.com for an estimated of Rs.50 crores.
Bahl has 20–million (Rs. 100 crore) stash for acquisition-significant
because Snapdeal is itself a startup-but a rich on. It has raised Rs.52
million from ventures funds.

Bahl is not alone who is scouting for potential suitor. In February this
year aggressively online shopping site Flipkart.com acquired rival
Letsbuy.com. Early last year, US-based social buying site Groupon
acquired India’s SoSasta.com and renamed it as Crazeal.com.

And so it seems that e-commerce is not about customers buying

goods. It is about firms shopping for others. Industry trackers say
leading sites are gobbling up rivals to build size, or acquiring customer
niches either to add product segments or to get technologies that help
efficient operations.

In the game in which future share issues are on the radar for bigger
players, the smaller ones often prefer to cash out than be crushed in
lonely pursuits in an aggressively competitive game.

At stake is a huge market will growing potential because India has 900
million mobile phones, with a big chunk of that growing up from voice
talk to Internet, wile the current Web user base at more than 100
million is in itself a significant number.

Industry estimates say India’s e-commerce market will zoom from the
current Rs.51000 crore to Rs.10,20,000 crore in revenues by 2020.
The race lead to buyouts-often at the cost of profitability.
“At present sites are falling over each other to offer deep discounts,
but you do not survive only through discounts. This only creates a
disloyal discount shopper who moves from one site to another in
search of the cheaper deal,” said Mahesh Murthy , managing partner
of investment firm Seefund Advisors. Murthy added that sites without
a credible differentiation strategy and loyal customers base would
bleed-and will be up for grabs.

Experts say acquisition of other sites is also a good strategy to built

brand and broaden a loyal customer base. Snapdeal.com snapped up
eSportsbuy.com to get access to its large catalogue of sports and
fitness products. Flipkart.com started out with books, added cameras
and mobile handsets and then got Letsbuy.com to acquire muscle in
electronic goods, while Groupon’s buyout was to enter India.

“There in no room for newer players in the general category but there
is space for niche category players,” he said. This has been observed
by Prashanth Prakash, partner at Accel partners, which has invested
in Flipkart.com.

Private enquiry is doing a huge amount of work backstage. Venture

capitalists say they more than doubled the funding level in e-
commerce over the past year, and the average size of investment has
ranged from Rs.20 to 40 million.
However, having a deep pocket is no guarantee to success. “Money
can only delay your death. The only key to survive is to have a
credible differentiation strategy,” Murthy said.

Size is not everything, but could help if investors have a sense of

timing. “As the e-commerce companies grow and get brand loyalty the
valuations are expected to increase even further. It will be the time
when we can offload our stake, for hefty profits,” a venture capitalist
with significant stake in leading e-commerce site.

Hundreds of Internet startups went bust in 2000 and 2001 in the

“dotcom bubble” and comparing the current e-commerce rush to that
may not be farfetched said Shailen Amin, co-founder and CEO of
footwear sites Bestylish.com.

“There are a lot of guys in this business who don’t have a retail
background. They are form either consulting or technology. So one
should ask if they are really qualified to run e-retail businesses.”

In the world where old-fashioned retail meets high-technology and

innovative management, the winners could well be those who
understand dimensions.

What the consolidation?

 High operational costs affect profit margins.

  Most e-commerce sites compete on deep discounts, which
hit their margins.
 Some firms feel the time is right to cash in on brand,
customer base.
 Private equity (PE) and venture capitalists (VC) are eyeing
safe exit while e-commerce ventures are still profitable.

What makes a Long-Term Player?

 Loyal customer base, fundamentally strong business models,

clear product/service differentiation.
 Deep pockets to tide over initial gestation period.

Challenges for E-Commerce Sites

 Low customer loyalty

 High returns rates on cash-on-delivery
 High cost of customer retention

State of Play

 Acquiring site is a good way to built brand, broaden loyal

customer base and add categories.
 The companies that are selling have real valuations, real
transactions and real customers, and are not based on eyeballs.

E-commerce companies in India offers the most tangible and finest e-

commerce solutions, provide high end e-commerce solution taking
utmost care of the privacy and security of the e-commerce website. E-
Commerce service includes shopping carts, database programmers,
graphic design services, graphics, e-business, Flash designs etc.

Top ten e-commerce companies in India

 20North.com:

This website offers variety of products like electronics ,books ,music

,movies ,car accessories. The site also offers lucrative deals. Log onto
the site to shop. Happy Shopping!!!

 99labels.com:

This site offers many fashion and luxury brands at good prices. Check
this site for more brands .

 Dealsandyou.com:

This site offers various kinds of deals be it holidays, shirts etc. Also
this site gives heavy discounts on regular basis that cab be profitable
for the shoppers. Browse this site for more.

 Fashionandyou.com:
This site also is a great place to shop and that too sitting at home.
Also this site declares sale and heavy discounts almost every day.
Sign Up today to get more deals.

 Flipkart :

This site offers various kinds of products and that too at one place.
Mobile, its accessories , books, camera and laptop accessories. and
many more things are available on this site. One can find deals for
home appliances also that are available at affordable prices. Check
this site

 Indiangiftsportal:

This is known for providing gifts for various occasions like birthdays
,anniversary, wedding, bhai dooj, diwali and many more .Also flowers,
cakes ,chocolates and many more things are offered by this site.
Browse it today to send gifts to your loved ones.

 MagazineMall:

This company specifically deals in magazines and one can get

magazines of different and unique categories like
Gardening/Housekeeping, lifestyle, fashion, luxury, current
affairs and many more.
  Bindaasbargain:

Here new deal comes everyday at 10 am and it is India's first One

Deal A Day online shopping site.Check out the site for new deal.
Happy Shopping

 Buytheprice.com:

The site offers Mobiles, Computers, Cameras, Home Appliances ,Life

style, Audio and Video and much more. Variety of products are
available under each category.

 Perfume2order:

It has categories like Perfumes for Men, Perfumes for Women,

Deodorants & Deo Stick, Perfume Gift Set, Designer Wallet & Belts,
Flowers, Handbags & Clutches, Sunglasses and many more things.
E-commerce in Global Sourcing Scenario

What Is E-commerce And How Does It Augments Global Sourcing?

E-commerce or electronic commerce, as it is popular, allows domestic
as well as international trade over the Internet. The advent of E-
commerce is boon for global sourcing and import and export. The
boost to global sourcing and import/export through E-commerce is
because of its to conduct online marketing, monitoring supply chain
and monetary & data transaction in a dependable manner.

Evolution of E-commerce with Global Sourcing?

It is hard to tell whether import/export volume has swelled because of
E-commerce but sure it made global sourcing easier to monitor with its
evolutionary phases. Three decades ago, it facilitated fund transfers-
albeit electronically besides facilitating exchange of POs and invoices
in international trade. Electronic teller machines are the recent
manifestations now overtaken by internet creditcard processing and
endorsement of unsigned invoices even in international trade.

Why is E-commerce Popular in International Trade and Import/Export?

Looked at from both import and export traders' perspective,
international trade is easier conducted electronically. Here are the
points why present international trade depends much on E-commerce.
  Quick and ease of setting up E-commerce storefronts for both
global sourcing as well as import/export.
 Automatic running off of an import and export outfit without
having to recruit many staff.
 Global sourcing agents/companies can evaluate/list
import/export vendor Online.
 Software assisted documentation for each global sourcing and
import export transaction
 Ability to handle multiple, quick and secure data and money
transaction crucial to international trade, simultaneously

In international trade, global sourcing happens to be one of the chief

aspects of import and export business. Global sourcing is an integral
part of B2b scenario and has essentially transformed world economies
as well as boosted business in a great way. Nonetheless, it is also
giving great transformation to the work culture around the globe with
China playing a lead role in global sourcing. Nevertheless, it is also
transforming work cultures around the world silently with China
business playing a major role.

Being an extension of open market dynamics, global sourcing

facilitates the export and import of goods to be in the reach of several
small and medium enterprises in different countries. In this b2b
scenario, E-commerce plays an active role in the global sourcing
where the business houses are putting in deep efforts and reaping the
benefits. In this rally of export and import, traders happen to claim the
share of the pie in global sourcing.

E Commerce & Global Sourcing

 Global sourcing is one of the widely known strategies of ensuring
smooth business and access to markets in a cost effective
manner. In such a scenario, E-commerce has brought in a new
transformation. It has added to advantages like removing the
barriers of time zones, differences in costs, geographical
locations etc. This has resulted in a major push in development
in infrastructure, technology and several other sectors across the
globe. As we see, E commerce is driving the export and import
and propelling the economic growth of numerous developing as
well as developed nations. Business strategies are becoming
easy to execute and business houses are having a wide range of
options from where they can make their choices.
 E-commerce has made the path of business smoother and has
facilitated not only in lower cost, but also resulted in procuring
material from places where there is specialization. Moreover,
business negotiations are easier and decisions are quicker due
to this boon. Driving the import and export business in this global
sourcing scenario has opened new frontiers for higher growth.
The ease in supply chain is one of the best advantages that has
come from e-commerce in the global sourcing scenario.
  China, a major player in the global sourcing scenario has reaped
several benefits in the e-commerce enabled era. The use of
internet has facilitated trade and boosted it at an immense rate.
Business from all over the world has been bagged by this
country in spite of the competitive market. Chinese traders have
minted fast money and are still running in that race.

Security concerns in Global Sourcing

E-commerce is not without security concerns, loss/misuse of
encrypted data which are still being seriously being viewed by
import/export operators before engaging in international trade
electronically. The truth is E-commerce providers employ SSL (Secure
Sockets Layer) to encrypt data/money (remember banks) transfer
from your desktop to your clients'. You can say, E-commerce is
secure for both import/export operators as well as global sourcing
agents alike.

E-commerce has arrived on the global sourcing scene as both import

and export and international trade partners are accepting it. Despite its
growing stature and popularity E-commerce is still thriving in retail
sector domestically and the international trade needs to cover a long
distance before it catches up. Another reason for import/export
operators' leaning towards E-commerce is the growing costs of delays
in processing POs and invoices through traditional methods which
render global sourcing useless.

E-commerce: A Boon for the Current Economic Downturn

E-commerce: A Boon for India

By the end of 2011, the e-commerce market in India had clocked
close to Rs 50,000 cores. It is interesting to consider whether the
global economic downturn may have negatively impacted the growth
of e-commerce or possibly accelerated it as consumers look to new
online channels which can often deliver greater value than traditional
stores.

Today, even though there are less than 10 million internet users who
are actually engaging in e-commerce activities, there are about 150
million internet users in India or around 75 million households that
are ready for e-commerce.

The growing reach in terms of internet connectivity to the interiors of

India coupled with the positive experiences of end consumers when
buying online beyond the metros and big cities are key drivers of the
e-commerce boon in India. Businesses in even the smallest towns and
villages are becoming increasingly aware of e-commerce and are
excited by the growth potential.
The growing penetration of e-commerce along with positive consumer
experiences is reflected in a trend towards higher value online
purchases. Today, consumers across urban India are confident
enough to make purchases that exceed Rs 20,000-25,000. Earlier, the
same shoppers stayed in the Rs 2,000-5,000 ranges. According to
one study almost 57% of business for e-commerce product sites came
from tier I, tier II and tier III cities while the eight metros accounted for
the remainder 43%. The same pattern was visible in the service sites
too, with tier I, tier II and tier III cities contributing 54% of revenue
versus 46 % by the eight metros.

According to a report by the IAMAI, the current e-commerce market in

India is around US$ 10 billion. But with different levels of adoption, the
market has the potential to grow anywhere between US$ 70 billion –
US$ 150 billion under one scenario and at another level it can grow
between US$ 125 billion – US$ 260 billion by 2024-25.

E-commerce: The world over

Globally, the scenario is much the same. Brazil, one of fastest growing
economies in Latin America, is seeing considerable growth. According
to a recent report, it estimates business-to-consumer (B2C)
ecommerce, including both retail e-commerce and online travel sales,
will total to $18.7 billion in 2012, a growth of
21.9% over the previous year. Brazil will account for more than half of
the total B2C e-commerce sales in Latin America through 2013,
thanks in large to its huge populace and growing number of online
buyers.

Retail e-commerce itself in the U.S.is predicted to grow at 17% and it

will likely account for $200 billion in sales in 2012 , according to a
presentation at a popular forum. Retail e-commerce totalled $48.2
billion during the third quarter of 2011; an increase of 13.7%
compared with the third quarter of 2010, according to estimates from
the U.S. Census Bureau. 2011 also saw the European online market
boom despite the floundering euro. Germany’s online trade increased
17% in 2011 to €21.48billion compared to 2010, crossing the €20
billion mark for the first time, outstripping traditional mail order sales
by 10%. A similar growth rate of 10% to 15% is expected in 2012.

In the global scenario, China is fast emerging as the biggest player in

e-commerce. According to an e-commerce report, by 2015, it may well
surpass the U.S. In an astonishing illustration of its online growth rate,
China has added the equivalent of the entire population of France in
internet users in each of the last four years. It will add the equivalent
of the entire population of Canada as e-shoppers in each of the next
four years. China is projected to rise from 145 million e-shoppers
today to 329 million by 2015.
Key reasons for the success of e-commerce
 Shopping 24x7: E-commerce facilitates shopping anytime,
anywhere and for almost anything desired. Busy consumers
prefer this to the restrictions of when a mall/shop is open and the
need to physically travel to a shop. Online business takes
shopping a step further by taking itself to the customer creating
conveniences of shopping anywhere and at anytime.

 Reduced operational cost: Since the entire business can be

moved online, the need for physical stores has become obsolete.
Less infrastructural investment and associated labour costs
drives up the profit margin. The seller can then transfer this
benefit to the customer in the form of discounted pricing which
boosts the appeal of online shopping.

 Easy to compare: It is far easier and quicker to compare prices

of goods online, equipping the customer with the information to
decide the right price or terms for themselves. The comparison is
not restricted to items from a single seller, or a single region.
One can explore products across global markets via e
commerce.

 Safe & secure:Customers can trust the process of going online

and purchasing only when transactions are fast, convenient and
secure. A high degree of integrity is possible only when the
 online electronic payment provider is reputable and trustworthy.
In India, all payment transaction providers are required to comply
with the security requirements laid out by the Reserve Bank of
India making the system more robust and reliable.

 Increased reach for the merchant: Just as the customer finds

them able to venture across geographic markets, the merchant
too is able to display his product to customers in new territories.
Market penetration also becomes far more achievable with e-
commerce; it is possible for a merchant in Mumbai to extend his
reach to north-eastern cities or even rural villages that are now
connected by the online network.

 Social media trend: In India, with the increasing propensity of

social media, businesses have now begun to engage their
customers on social networking portals such as Facebook.
Promotions, sales and new products are increasingly showcased
through such channels and mobile apps are now available that
suggest products to users based on their profiles. These are
likely to be rapidly developing marketing channels for the future.

The e-commerce world is changing rapidly in the digitized world.

These e-commerce developments may have been accelerated by the
global economic downturn which may be driving consumers to find
new ways of reducing their costs of living. The online channel offers a
clear value proposition for both merchants and consumers making it
the most sought after and exciting business model today

Factors affecting influence distribution and forms of global e-

commerce

Stage Economic Socio Political Supranation

and infra cultural legal al
structure factors factors institutions
 related
factors
Internet Per capita Literacy The UNDP-
adoption GDP rate and internet's introduction of
computer democratic the
skill Nature internet in
incompatible many
with countries
authoritarian
political
Availability English structures GATS-
of telephone language competition
and skill in telecom
computer sectors
Pricing Viewed as Tariff and ITA- reducing
structure a non tariff the price of
tool of barriers to ICT products.
cultural ICT
imperialis products
m in some
Buying/sellin Availability Intellectual Redress UNCITRAL
g online of credit property mechanisms model law
protection in case of
problems in
 online
transactions
Advertising Operating Influence Ban on Products can
and speed of of some be advertised
searching language website in and searched
computer
phase and authoritarian globally on
and modern
symbols regimes GTPN of
size
used on UNCTAD
site visited
and
purchase
decision
Payment Penetration Forms of Government UNCTAD
phase rate of payment: s' concern smart card
credit cards check, on
wire the outflow
transfer, of foreign
cash currency.
on
delivery
etc,
Delivery Delivery Products Tariff and Electronic
phase means and stolen non- tariff delivery free
infrastructur some barriers of custom
 e countries duties in
WTO member

Brief Literature Review

In present scenario E-Commerce is playing very essential role in the
online business. Although it is one of the best & cheapest intermediate
for reaching out to new customers in the online market, if e-commerce
implemented effectively, it also offers a smart way of doing online
business & expanding it more.
An online business eCommerce podium is planned & implemented to
make the most of its reach to potential customers and provide them
with a convenient, satisfying & protected shopping experience.
Advantages of E-Commerce to the Online Business
 E-Commerce helps to Increase the sales revenue to the business
 Business people can spend less money and earn high profits with
e-commerce
 It is very Easier to scale up online
 Easily we can track the segment of customers who are happy with
purchasing goods through online
 Avoid losing sales to competitors who are online
 Instantaneous global sales presence in quick time
 We can Operate the business in 24 *7 basis
 Easily we can increase our business customers
 We set up shop anywhere in the world, self-governing of
geographical locations
 Inexpensive way to turn your Web site into a revenue center
 Reduce Customer Support costs via e-mail marketing & customary
newsletters
 We can create customized mailing list
 Easily we can drive free traffic to the website
 Instantly we can develop our business across the internet by using
various e-commerce strategies
 Customers can easily buy their products by using different
payment gateways
 Develop more shopping carts by using e-commerce
 We can easily promote our business website by using various
promotional activities such as Search Engine Optimization, Pay
Per Click Management, Email Marketing, Social Media
Optimization, Online Banner Advertisement, Online Branding and
Affiliate Management etc

B2C - business to consumer

In the Australian context B2C (business to consumer) trading

activity has been slow to take off as at first consumers had
doubts about the security of credit card transactions.

Initial B2C trading focused on music CDs, software and books -

items which were compact and easily shipped and where prices
could be slashed once the retailer's cut was taken out of the
margin. The Amazon book store would be a good example of
this. These products pushed the perimeters of the market out for
goods bought on-line.

Books and CDs are relatively generic products. A CD bought in

the US will have the same music and quality as one bought
locally (the exception is the cover art) and so there is no doubt in
the consumers mind exactly what the product is. This is not the
case with clothing, where sizes can confuse the purchase
decision... and where tactile senses figure strongly in the
purchasing decision.
Ebay has really transform purchasing behaviour on the web.
Many people have made their first ecommerce transaction on
Ebay. Many people sell on Ebay too, given raise to the work-
from-home/drop shipping model of ecommerce.

Interestingly though B2C transactions of previously localised or

hard to find products can be extremely strong. If you have a
unique product that is highly relevant to a niche audience, you
are likely to do very well on the web.

Although sales are increasing rapidly on the Internet, the volume

of turnover figures continue to fail short of industry estimates. But
as retail web sites become more navigable and privacy policies
are displayed, more people will be drawn to Net-based
purchasing by lower prices and convenience.

B2B - business to business

On the Internet, B2B (business to business) is the exchange of

products or services between businesses rather than between
businesses and consumers.

Although early interest centered on the growth of retailing on the

Internet, forecasts are that B2B revenue will far exceed B2C
revenue in the near future.
According to studies published in early 2000, the money volume
of B2B exceeds that of B2C by 10 to 1. Over the next five years,
B2B is expected to have a compound annual growth of 41%.

Payment Gateways

Both PayPal and Paymate offer credit card to bank account

payments. Using one of these services you can invoice a
customer, they can pay on Paymate and the funds will be
deposited in your bank account ... less a transaction fee.

Unlike a credit card merchant facility you will not have ongoing,
minimum monthly fees... and the transaction fee is better than
what most card companies offer small merchants. Additional
these service are being backed into other ecommerce sites and
shopping carts. Ebay for example uses Paypal to process some
payments.

The Rise and Rise of Auction Sites

Auction sites such as Ebay and TradeMe have done an

enormous amount to get ordinary people involved in online
trading. Today many Ebay merchants are establishing their own
web sites to avoid Ebay and Pay Pal fees. They have learnt
about how to present their product in their Ebay store and what
issues are important to their customers in purchasing their
product and now they are ready to start their own web site.
Security

On the Internet, security is handled by passing "keys" between

Internet server and client browser. When entering a secure site
your browser is passed a public key by which transactions
between you and the web server are encrypted. The servers key
is always kept private.

On your web site security can be handled two ways - depending

on your budget. You can "piggyback" on someone else's "key" or
you can register and pay for your own key or SSL certificate
at Thwate or Verisign.

Generally today businesses who host web sites offer access to a

secure server and you can use their server and secure certificate
for less than if you registered and paid for your own key.

However the person browsing your site will notice the URL
change to one they do not recognise - or trust. This may put your
customers off (although there is no evidence of this). Therefore
one of the advantages of buying your own key would be to have
a URL for your secure pages that is consistent with the rest of
your site.

Presently, in Australia, Verisign may sell you a key for over $800
while foreign ecommerce providers like Instant SSL can sell it for
$150. Although Verisign will argue that their key comes with a
range of value add benefits, the bottom line is the product, i.e.
the key, is the same.

CHAPTER-III
SUMMARY AND CONCLUSION
 There is a wide acceptance of e-commerce in world due to the
internet facilities available.
 The countries such as India, Brazil, and China etc which are on
the path of development are using e-commerce for carry out
various transactions.
 The e-commerce can surpass geographical limits and can prove
to be worthy by reaching to customers. It caters to the demands
of both the national and the international market.
 The e-commerce can help in providing an edge to your rivals in
the market as one can better serve them globally.
 The Countries such as USA, Australia, Canada , UK etc are
trying to come up with something innovative which will change
the current scenario.
 The countries are well aware of its benefits and are becoming
more innovative in this field as customers can easily select
products from different providers without moving around
physically and it also help business to handle its resources well.
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 Laudon Kenneth C., Traver Carol Guercio (2008) , E-commerce
– Business , technology , society ,New Delhi ,Pearson Education

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 Hindustan Times