E-Commerce Industry in India

India has an internet user base of about 137 million as of June 2012. The penetration of ecommerce is low compared to markets like the United States and the United Kingdom but is growing at a much faster rate with a large number of new entrants.] The industry consensus is that growth is at an inflection point. Unique to India (and potentially to other developing countries), cash on delivery is a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash on Delivery. Similarly,direct imports constitute a large component of online sales. Demand for international consumer products (including longtail items) is growing much faster than in-country supply from authorised distributors and ecommerce offerings. Market size and growth India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14 billion in 2012. About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis--vis a global growth rate of 810%. Electronics and Apparel are the biggest categories in terms of sales. Key drivers in Indian e-commerce are:

Increasing broadband Internet and 3G penetration. Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers Busy lifestyles, urban traffic congestion and lack of time for offline shopping Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs Increased usage of online classified sites, with more consumer buying and selling secondhand goods[10] Evolution of the online marketplace model with sites like eBay, Infibeam, and Tradus. The evolution of ecommerce has come a full circle with marketplace models taking center stage again.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by 2016 and $850 Bn by 2020, estimated CAGR of 7%. According to Forrester, the ecommerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 201216. As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank specializing in digital media and technology sector, the Indian e-commerce market is

estimated at Rs 28,500 Crore for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel market in India is expected to grow

at a rate of 22% over the next 4 years and reach Rs 54,800 Crore in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore in 2011 and estimated to grow to Rs 53,000 Crore in 2015. Overall e-commerce market is expected to reach Rs 1,07,800 crores by the year 2015 with both online travel and e-tailing contributing equally. Another big segment in ecommerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites like Airtel.in, Vodafone.in and third party sites like paytm.com,rechargeitnow.com

E-Commerce models

There are mainly five types of e-commerce models: Business to Consumer (B2C) - As the name suggests, it is the model involving businesses and consumers. This is the most common e-commerce segment. In this model, online businesses sell to individual consumers. When B2C started, it had a small share in the market but after 1995 its growth was exponential. The basic concept behind this type is that the online retailers and marketers can sell their products to the online consumer by using crystal clear data which is made available via various online marketing tools. E.g. An online pharmacy giving free medical consultation and selling medicines to patients is following B2C model. Business to Business (B2B) - It is the largest form of e-commerce involving business of trillions of dollars. In this form, the buyers and sellers are both business entities and do not involve an individual consumer. It is like the manufacturer supplying goods to the retailer or wholesaler. E.g. Dell sells computers and other related accessories online but it is does not manufacture all those products. So, in order to sell those products, it first purchases them from different businesses i.e. the manufacturers of those products. Consumer to Consumer (C2C) - It facilitates the online transaction of goods or services between two people. Though there is no visible intermediary involved but the parties cannot carry out the transactions without the platform which is provided by the online market maker such as eBay. Peer to Peer (P2P) - Though it is an e-commerce model but it is more than that. It is a technology in itself which helps people to directly share computer files and computer resources without having to go through a central web server. To use this, both sides need to install the required software so that they can communicate on the common platform. This type of e-commerce has quite low revenue generation as from the beginning it has been inclined to the free usage due to which it sometimes got entangled in cyber laws. m-Commerce - It refers to the use of mobile devices for conducting the transactions. The mobile device holders can contact each other and can conduct the business. Even the web design and development companies optimize the websites to be viewed correctly on mobile device

Supply chain in e-commerce

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