Concept of ecommerce

The Internet has created a new economic ecosystem, the e-commerce marketplace, and it has
become the virtual main street of the world. Providing a quick and convenient way of
exchanging goods and services both regionally and globally, e-commerce has boomed. Today, ecommerce has grown into a huge industry with US online retail generating $175B in revenues in
2007,[1] with consumer-driven (B2C) online transactions impacting industries from travel
services to consumer electronics, from books and media distribution to sports & fitness. With
more than 70% of Americans using the Internet on a daily basis for private and/or business use
and the rest of the world also beginning to catch on, e-commerce's global growth curve is not
likely to taper off anytime soon. However, the US recession has taken its toll on online sales.
Although early 2008 estimates by Forrester Research were very strong with 2008 revenues
upwards of $204B (a 17% growth rate),[2] 2008 holiday sales showed the first decrease in the last
7 years. Research by ComScore shows sales declining by 1% for the first 49 days of the holiday
season.[3]
In the last decade, many startup e-commerce companies have rapidly stolen market share from
traditional retailers and service providers, pressuring these established traditional players to
deploy their own commerce websites or to alter company strategy in retaliation. This effect is
most pronounced in travel services and consumer electronics. According to comScore, online
leisure travel bookings reached about $51B in 2005, or 44% of all online sales, which were
around $122B in the same year. Roughly 30% of all travel bookings currently occur online.
Consumer electronics, which includes the purchase of digital cameras, mobile phones, and home
PC's, accounted for nearly $26B of worldwide e-commerce sales occurring in 2006, according to
the NPD Group. As traditional brick and mortar firms continue to lose market share to ecommerce players, they will likely see continued declines in their revenues, operating margins,
and profits. It is important to note that most e-commerce players are at a competitive advantage
to retailers. They have lower operating expenses and better inventory management due to
operating in a virtual commerce environment. For example, Amazon.com (AMZN) has revenue
per employee of nearly $850k while its retail counterpart, Best Buy (BBY), generates revenue
per employee of only $270k. Clearly, e-commerce vendors will have the most to gain if they
successfully disrupt retail customer acquisition, disintermediate distributors/resellers, and underprice retail establishments. As a consequence of e-commerce vendor gains, financial transaction
processors and parcel shipping companies are among ancillary vendors who will gain.

Advantages and Disadvantages of Ecommerce

The invention of faster internet connectivity and powerful online tools has resulted in a new
commerce arena Ecommerce. Ecommerce offered many advantages to companies and
customers but it also caused many problems.

Advantages of Ecommerce

Faster buying/selling procedure, as well as easy to find products.

Buying/selling 24/7.

More reach to customers, there is no theoretical geographic limitations.

Low operational costs and better quality of services.

No need of physical company set-ups.

Easy to start and manage a business.

Customers can easily select products from different providers without moving around
physically.

Disadvantages of Ecommerce

Any one, good or bad, can easily start a business. And there are many bad sites which eat
up customers money.

There is no guarantee of product quality.

Mechanical failures can cause unpredictable effects on the total processes.

As there is minimum chance of direct customer to company interactions, customer

loyalty is always on a check.

There are many hackers who look for opportunities, and thus an ecommerce site, service,
payment gateways, all are always prone to attack.

The Five Different Types of E-Commerce

E-commerce is the process of buying and selling of various products and services by
businesses through the Internet. It deals various kind of business concern, from retail site
of the consumer, which includes auction. The main focus is to concentrate on business
substitutes involving goods and services between various corporations.

E-commerce is the purpose of Internet and the web to Conduct business but when we
concentrate on commercial deals among organizations and individuals demanding
selective information systems under the guarantee of the firm it accepts the form of ebusiness. Nowadays, the word e is hitting momentum. If youre looking to get into this
business, one of the fore most thing you have to have is a Virtual Private Cloud Hosting
keeping the traffic in mind and respecting customers valuable time.

There are primarily five types of e-commerce models:

Business to Consumer (B2C)

B2C stands for Business to Consumer as the name suggests, it is the model taking businesses and
consumers interaction. Online business sells to individuals. The basic concept of this model is to
sell the product online to the consumers.
B2c is the indirect trade between the company and consumers. It provides direct selling through
online. For example: if you want to sell goods and services to customer so that anybody can
purchase any products directly from suppliers website.
Directly interact with the customers is the main difference with other business model. As B2B it
manages directly relationship with consumers, B2C supply chains normally deal with business
that are related to the customer.

Business to Business (B2B)

B2B stands for Business to Business. It consists of largest form of Ecommerce. This model
defines that Buyer and seller are two different entities. It is similar to manufacturer issuing goods
to the retailer or wholesaler. Dell deals computers and other associated accessories online but it
is does not make up all those products. So, in govern to deal those products, first step is to
purchases them from unlike businesses i.e. the producers of those products.
It is one of the cost effective way to sell out product through out the world
Benefits:

Encourage your businesses online

Products import and export

Determine buyers and suppliers

Position trade guides

Consumer to Consumer (C2C)

C2C stands for Consumer to

Consumer. It helps the online dealing of goods or services among people. Though there is no
major parties needed but the parties will not fulfill the transactions without the program which is
supplied by the online market dealer such as eBay.

Peer to Peer (P2P)

It is a discipline that deal itself which assists people to instantly shares related computer files and
computer sources without having to interact with central web server. If you are going to
implement this model, both sides demand to install the expected software so that they could able
to convey on the mutual platform. This kind of e-commerce has very low revenue propagation as
from the starting it has been tended to the release of use due to which it sometimes caught
involved in cyber laws.

m-Commerce

It deals with conducting the transactions with the help of mobile. The mobile device consumers
can interact each other and can lead the business. Mobile Commerce involves the change of
ownership or rights to utilize goods and related services.

4 Reasons E-Commerce Is Set To Boom In India

E-Commerce is one of the most exciting spaces for todays global online community, and Indias
young startup economy is along for the ride. In the less than three months of 2011, Indian VCs
have already invested over $50 million in seven e-commerce companies, a 400 percent increase
over the same period just last year.
However, e-commerce in India has a long road ahead, and e-commerce infrastructure and best
practices are in their infancy. Indias 7 to 9 percent Internet penetration lags far behind the 30 to
40 percent China and Brazil enjoy, and while Indias estimated 100 million Internet users still

comprise the third largest online population, the total Indian e-commerce market was
approximately 3 percent of the U.S. market last year ($6.7 billion versus $227.6 billion).
Within these great challenges lie great opportunities, and the maturation of Indias e-commerce
ecosystem is no different. A recent report by the Internet and Mobile Association of India
reveals that Indiaa e-commerce market is growing at an average rate of 70 percent annually,
and has grown over 500 percent in the past three years alone. Here are four reasons that ecommerce is set to boom in India, after years of false starts:
1. Critical mass of Internet users: With more than 100 million Internet users, the country is
beginning to achieve a critical mass of users who are familiar with web services. In addition,
over the past few years, relatively sophisticated online travel agents (OTAs), such as
MakeMyTrip which started turning these initial Web users into Web consumers have
dominated Indian e-commerce. While these OTAs have accounted for up to 80 percent of Indian
e-commerce in the past, industry giants such as eBay and the new crop of e-tailers expect to
participate more heavily in this conversion of Web users to Web consumers, with an estimated 70
percent growth in Indian e-commerce for 2011.
2. Rising middle class with disposable income: Throughout Indias short history, the country
has been a land of haves and have-nots. However, with the rise of small and medium
enterprises, foreign direct investment, and Indias own powerful multinational corporations
creating millions of new jobs, a new generation of globally-minded Indian consumers has been
created. These consumers are spread across the country. Furthermore, access to many global and
domestic brands is limited to major metropolitan regions, such as Delhi, Mumbai, and
Bangalore. Therefore, this growing middle class is increasingly turning to e-commerce as the
primary outlet for sophisticated consumer products and services.
3. Payment gateways & logistics: One of the largest challenges to e-commerce in India is the
lack of infrastructure to support new businesses. Logistics companies have been notoriously
unreliable, and complex interstate regulations mean that interstate logistics and paperwork is
more like international customs. Additionally, Indians have an aversion to credit cards only an
estimated 2 percent of the nation has a credit card. However, the new breed of domestic logistics
companies recognize the importance of reliable delivery and technology investment, and a
number of new payment gateway companies such as CC Avenue have sprung up to service the
growing e-commerce ecosystem. Alternative payment methods such as netbanking and cash on
delivery are now mandatory offerings for leading e-commerce platforms and can drive as much
as 75 percent or more of transactions, and sophisticated technical integrations make the
experience seamless.
4. User Experience: Of course, the primary driver for e-commerce anywhere is the user
experience. Customers prefer a trusted relationship with an e-commerce brand, and the
conveniences and reliability of e-commerce businesses have to outweigh the benefits of
traditional retail outlets. Because there have been a relatively small number of successful
consumer Internet companies in India, there has been less competitive pressure to force
implementation of global best practices. However, as the number of e-commerce companies has
grown, companies have started to place more emphasis on investing in the user experience. Best

practices that have driven e-commerce globally are now a key focus of successful Internet
companies, including merchandising, customer service, user interface design, and guaranteed
delivery and return policy. In this competitive drive to differentiate via user experience, the
ultimate winner is the Indian online consumer.