Mini Project

On

E- COMMERCE INDUSTRY

Submitted for partial fulfillment of award of

Master of Business Administration

Submitted by

RISHANS UPADHYAY
Roll No.: 2106070700040

Under the Supervision of

Mrs. SHWETA AGNIHOTRI

HOD

Dr. Virendra Swarup Institute of Professional Studies

 STUDENT DECLARATION

I “Rishans Upadhyay” hereby declare that the work which is being presented in this report entitled “E-

commerce Industry” is an authentic record of my own work carried out under the supervision of “Shweta

Agnihotri”. The matter embodied in this report has not been submitted by me for the award of any other

degree/ Diploma/ Certificate.

Name of Student :- Rishans Upadhyay

Date: 22 JULY 2022.
 ACKNOWLEDGEMENT

In submitting mini project assignment, I had to take the help and guideline of our faculty who deserve our

greatest gratitude. The completion of this assignment gave me much pleasure. I would like to show my

gratitude Mrs. SHWETA AGNIHOTRI for giving me a good guideline for assignment throughout

numerous consultations. I would also like to expand our deepest gratitude to all those who have directly and

indirectly guided me in completing this assignment.

DATE 23 JULY 2022

PLACE: KANPUR NAME OF STUDENT :- Rishans Upadhyay

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S.N TOPIC PAGE
NO.

1 Introduction 8-10

2 Impact of e-commerce 11-14

3 Challenges for e-commerce in India 15-16

4 Opportunities of e-commerce 16-17

5 The history of e-commerce 17-18

6 Market size of e-commerce in India 18-19

7 Conclusion 20-21

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 INTRODUCTION

E-COMMERCE

e-commerce refers to the purchase and sale of goods and/or services via electronic channels such as the
internet. E-commerce was first introduced in the 1960s via an electronic data interchange (EDI) on value-
added networks (VANs). The medium grew with the increased availability of internet access and the advent
of popular online sellers in the 1990s and early 2000s. Amazon began operating as a book-shipping
business in Jeff Bezos’ garage in 1995. EBay, which enables consumers to sell to each other online,
introduced online auctions in 1995 and exploded with the 1997 Beanie Babies frenzy.

Like any digital technology or consumer-based purchasing market, e-commerce has evolved over the years. As
mobile devices became more popular, mobile commerce has become its own market. With the rise of such sites
as Facebook and Pinterest, social media has become an important driver of e-commerce. As of 2014, Facebook
drove 85 percent of social media-originating sales on e-commerce platform Shopify, per Paymill.

The changing market represents a vast opportunity for businesses to improve their relevance and expand
their market in the online world. Researchers predict e-commerce will be 17 percent of U.S. retail sales by
2022, according to Digital Commerce 360. The U.S. will spend about $460 billion online in 2017. These
figures will continue to climb as mobile and internet use expand both in the U.S. and in developing markets
around the world.

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 Types of Ecommerce

Generally, there are seven main models of ecommerce that businesses can be categorized into:
 B2C.
 B2B.
 C2C.
 D2C.
 C2B.
 B2A.
 C2A.
Let’s review each type of electronic commerce in a bit more detail.

1. Business-to-Consumer (B2C).
B2C ecommerce encompasses transactions made between a business and a consumer. B2C is one of the
most popular sales models in the ecommerce context. For example, when you buy shoes from an online
retailer, it’s a business-to-consumer ecommerce transaction.

2. Business-to-Business (B2B).
Unlike B2C, B2B ecommerce encompasses sales made between businesses, such as a manufacturer and a
wholesaler or retailer. B2B is not consumer-facing and happens only between businesses.

3. Consumer-to-Consumer (C2C).
One of the earliest forms of ecommerce, consumer-to-customer ecommerce relates to the sale of products or
services between customers. This includes C2C selling relationships, such as those seen on eBay or Amazon.

4. Direct-to-Consumer (D2C).
A newer model of ecommerce, D2C refers to a business that sells products directly to the end customer
instead of going through a retailer, distributor or wholesaler.

One common example of D2C ecommerce is a subscription-based brand such as Netflix or Dollar Shave
Club.

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 5. Consumer-to-Business (C2B).
C2B reverses the traditional retail model, meaning individual consumers make their products or services
available for business buyers.

One example of a C2B ecommerce business is iStock, an online store where stock photos are available for
purchase directly from different photographers.

6. Business-to-Administration (B2A).
B2A covers the transactions made between online businesses and administrations. An example would be
the products and services related to legal documents, social security, etc.

7. Consumer-to-Administration (C2A).
C2A is similar to B2A, but instead, consumers sell products or services to an administration. C2A can
include online consulting for education, online tax preparation, etc.

Examples of Ecommerce

Of course, to run an ecommerce business, you have to have something to sell.

But unlike brick-and-mortar businesses, ecommerce retail can take on a number of forms, with transactions
involving a variety of products and services.

Let’s dive into three examples of what you can sell online:

Sell physical goods.

Think of your favorite clothing, home decor or electronics brand — these are all prime examples of selling
physical goods online.

Physical goods are any tangible products that can be bought and sold in-store or online. Most often, these
types of ecommerce businesses will be either B2C or D2C brands, but even some B2B vendors are also in
the physical goods category.

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 Sell digital goods.
Whether you’re a seasoned online merchant or an aspiring entrepreneur, digital products are a promising
avenue for selling online.

Digital products can come in the form of digital files such as templates and tools or online classes, or they
can be downloadable products such as printable artwork, music or infographics.

Sell services.
Selling services entails offering a specialized service, such as freelance writing, influencer marketing or
online coaching in exchange for compensation.

Many service-based businesses are B2B, however some B2C brands, such as Fiverr, offer online services as
well.

Growth of Ecommerce

Ecommerce has come a long way since the CompuServe launch in 1969.
Driven by changes in technology and global circumstances, ecommerce is growing and shows no sign of
stopping.

 Sales in online stores are expected to reach 22% of global retail sales by 2023, compared to 14.1%
in 2019.
 It is estimated that by 2024, digital wallets will account for over half of total ecommerce payment
volumes.
Amazon will account for 39.5% of all US retail ecommerce sales in 2022, or nearly $2 in $5 spent online.

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 The Impact of Ecommerce

The impact of ecommerce is far and wide, rippling from small businesses to global enterprises.Here we’ll
highlight some of the major ways ecommerce has shaped the retail landscape.

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 Large retailers are forced to sell online.

For many retailers, the growth of ecommerce can expand their brands’ reach and positively impact their
bottom lines. But retailers who have been slow to embrace the online marketplace are the ones facing the
biggest challenges.

In February 2019, online sales narrowly surpassed general merchandise stores for the first time, including
department stores, warehouse clubs and supercenters. And since Amazon Prime took away the price of
shipping, more consumers are comfortable with online shopping — which means larger retailers have little
choice but to go digital.

Ecommerce helps small businesses sell directly to customers.

For many small businesses, ecommerce adoption can be a slow process. However, those who embrace it
may discover that ecommerce can open doors to new opportunities.

Slowly, small business owners are launching ecommerce stores and diversifying their offerings, reaching
more customers and better accommodating those who prefer online/mobile shopping.

However, with ecommerce sales growing by the year and one in four small businesses still lacking an
online store, there remains a prime opportunity for entrepreneurs to gain a competitive edge and expand
their businesses online.

B2B companies start offering B2C-like online ordering experiences.

With 90% of B2B customers expecting B2C-like digital experiences, B2B companies must work to improve
their customer experiences online to catch up with B2C companies. This includes creating an omnichannel
experience with multiple touchpoints and using data to create personalized relationships with customers.

Ecommerce solutions can allow self-service, provide more user-friendly platforms for price comparison and
help B2B brands maintain relationships with buyers, too.

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 The rise of ecommerce marketplaces.

Online marketplaces have been on the rise since the mid-1990s with the launch of giants we know today,
such as Amazon, Alibaba and others.

Amazon in particular is known for its unique growth strategy that has helped them achieve mass-adoption
and record-breaking sales. By offering a broad selection and extreme convenience to customers, they’ve
been able to quickly scale up through innovation and optimization on-the-go.

But Amazon doesn’t do this alone. In the fourth quarter of 2021, 56% of Amazon’s paid units were sold by
third-party sellers (i.e. not Amazon).

Supply chain management has evolved.

Survey data shows that one of ecommerce’s main impacts on supply chain management is that it shortens
product life cycles.

As a result, producers can present deeper and broader assortments as a buffer against price erosion. But this
also means that warehouses may see larger amounts of stock in and out of their facilities.

In response, warehousers may offer the following value-added services to help make ecommerce operations
more seamless and effective:

 Separation of stock/storage for online vs. retail sales: Calculate forecasts and replenish stock
separately for online and in-store in order to achieve more accurate results.
 Different packaging services: Choosing the right pick-and-pack software can help businesses ship
orders quickly and accurately.
 Inventory/logistics oversight: Following best practices for inventory management is key to
managing stock levels.

New jobs are created.

Ecommerce employment is set to increase by 32% in 2022, overshadowing the 28% growth documented in
2021. In addition, according to the U.S. Bureau of Labor Statistics, computer jobs are projected to increase
by 13.4% over the 2020–30 decade — which is 5.7 percentage points faster than the 7.7% average for all
occupations.
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 Customers shop differently.

Ecommerce is revolutionizing the way modern consumers shop.Today, we know that there are at least 2.14
billion digital buyers, which is 27.6% of the 7.74 billion people in the world. And by 2025, Statista
projects there will be 291.2 million online buyers in the U.S. alone.

Social media lets consumers easily share products to buy online.

Today, ecommerce shoppers can discover and be influenced to purchase products or services based on
recommendations from friends, peers and trusted sources (like influencers) on social networks like
Facebook, Instagram and Twitter.

Many social media platforms now offer ecommerce features, such as in-app checkout, shoppable posts and
“Buy Now” buttons that take users directly to a brand’s product page.

Global ecommerce is growing rapidly.

In 2021, over 2.14 billion people worldwide were estimated to shop online, up from 1.66 billion global
digital buyers in 2016.

Chinese ecommerce platform, Taobao, is the largest online marketplace with a gross market value (GMV)
of $711 billion. For context, To mall and Amazon ranked second and third with $672 billion and $390
billion GMV in annual third-party global market value respectively.

With so many ecommerce platforms, marketplaces and digital solutions available, there are practically no
limits for merchants looking to sell online, which makes it easier than ever for businesses to go global.

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 Challenges for ecommerce in India

1. Indian customers return much of the merchandise they purchase online

Ecommerce in India has many first time buyers. This means that they have not yet made up their mind
about what to expect from ecommerce websites. As a result, buyers sometimes fall prey to hard sell. But by
the time the product is delivered, they demonstrate remorse and return the goods. Though consumer
remorse is a global problem, it is all the more prevalent in a country like India, where much of the growth
comes from new buyers.

Returns are expensive for ecommerce players, as reverse logistics presents unique challenges. This
becomes all the more complex in cross-border ecommerce.

2. Cash on delivery is the preferred payment mode

Low credit card penetration and low trust in online transactions has led to cash on delivery being the
preferred payment option in India. Unlike electronic payments, manual cash collection is laborious, risky,
and expensive.

3. Payment gateways have a high failure rate

As if the preference for cash on delivery was not bad enough, Indian payment gateways have an unusually
high failure rate by global standards. Ecommerce companies using Indian payment gateways are losing out
on business, as several customers do not reattempt payment after a transaction fails.

4. Internet penetration is low

Internet penetration in India is still a small fraction of what you would find in several western countries. On
top of that, the quality of connectivity is poor in several regions. But both these problems are fast
disappearing. The day is not far when connectivity issues would not feature in a list of challenges to
ecommerce in India.

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 5. Feature phones still rule the roost

Though the total number of mobile phone users in India is very high, a significant majority still use feature
phones, not smartphones. So, for all practical purposes this consumer group is unable to make ecommerce
purchases on the move. Though we are still a couple of years away from the scales tipping in favor of
smartphones, the rapid downward spiral in the price of entry-level smartphones is an encouraging sign. I
expect that the next few quarters will witness announcements of new smartphones in India at the $30-40
price point. That should spur growth in smartphone ownership.

6. Postal addresses are not standardized

If you place an online order in India, you will quite likely get a call from the logistics company to ask you
about your exact location. Clearly your address is not enough. This is because there is little standardization
in the way postal addresses are written. Last mile issues add to ecommerce logistics problems.

7. Logistics is a problem in thousands of Indian town

The logistics challenge in India is not just about the lack of standardization in postal addresses. Given the
large size of the country, there are thousands of towns that are not easily accessible. Metropolitan cities and
other major urban centers have a fairly robust logistics infrastructure. But since the real charm of the Indian
market lies in its large population, absence of seamless access to a significant proportion of prospective
customers is a dampener. The problem with logistics is compounded by the fact that cash on delivery is the
preferred payment option in India. International logistics providers, private Indian companies, and the
government-owned postal services are making a valiant effort to solve the logistics problem. If someone
could convert the sheer size of the problem into an opportunity, we might soon hear of a great success story
coming out of the Indian logistics industry.

8. Overfunded competitors are driving up cost of customer acquisition

The vibrancy in the Indian startup ecosystem over the past couple of years has channeled a lot of
investment into the ecommerce sector. The long-term prospects for ecommerce companies are so exciting
that some investors are willing to spend irrationally high amounts of money to acquire market share today.

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 Opportunities of E-commerce

Ecommerce has many different advantages — from faster buying to the ability to reach large audiences 24/7.

Let’s take a look in detail at some of the top perks ecommerce has to offer.

Faster buying for customers.

For customers, ecommerce makes it possible to shop from anywhere, any time.

That means buyers can get the products they want and need faster without being constrained by operating
hours of a traditional brick-and-mortar store.

Plus, with shipping upgrades that make rapid delivery available to customers, even the lagtime of order
fulfillment can be minimal (think Amazon Prime Now, for example).

Companies can easily reach new customers.

Ecommerce also makes it easier for companies to reach new, global customers. An online store isn’t tied to
a single geographic location — it’s open and available to any and all customers who visit it online.

With the added benefits of social media advertising, email marketing and SEO (search engine optimization),
brands have the potential to connect with massive target audiences who are in a ready-to-buy mindset.

Lower operational costs.

Without a need for a physical storefront (and employees to staff it), ecommerce retailers can launch stores
with minimal operating costs. And those that run a dropshipping business can even minimize upfront
investment costs.

As sales increase, brands can easily scale up their operations without making major property investments or
hiring a large workforce — this means higher margins overall.

Personalized experiences.
With the help of automation and rich customer profiles, you can deliver highly personalized online
experiences for your ecommerce customer base.

Showcasing relevant products based on past purchase behavior, for example, can lead to higher average
order value (AOV) and make the shopper feel like you truly understand their unique needs.

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 Access to New Technologies.
With a physical store alone, you may find your options are limited when it comes to innovation. However,
as the ecommerce ecosystem continues to mature and improve, your business will have access to the latest
technologies to help streamline business processes.

With a variety of apps and integrations at your fingertips, you’ll be able to improve workflows, better
execute your marketing strategy and improve the overall shopping experience.

Although modern ecommerce is increasingly flexible today, it still has its own setbacks.

Here are some of the downsides to ecommerce retail.

Limited interactions with customers.

Without being face-to-face, it can be harder to understand the wants, needs and concerns of your
ecommerce customers.

There are still ways to gather this data (surveys, customer support interactions, etc.), but it may take a bit
more work than talking with shoppers in person on a day-to-day basis.

Technology breakdowns can impact ability to sell.

If your ecommerce website is slow, broken or unavailable to customers, this may impact your ability to
make sales. Site crashes and technology failures can damage relationships with customers and negatively
impact your bottom line.

No ability to test or try on.

For customers who want to get hands-on with a product (especially in the realm of physical goods like
clothing, shoes and beauty products) before adding it to their shopping cart, the ecommerce experience can
be limiting.

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The History of Ecommerce: A Timeline

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 MARKET SIZE OF E-COMMERCE IN INDIA

The Indian online grocery market is estimated to reach US$ 26.93billion in 2027 from US$ 3.95 billion in
FY21, expanding at a CAGR of 33%. India's consumer digital economy is expected to become a US$ 1
trillion market by 2030, growing from US$ 537.5 billion in 2020, driven by strong adoption of online
services such as e-commerce and edtech in the country.

According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.

With a turnover of $50 billion in 2020, India became the eighth-largest market for e-commerce, trailing
France and a position ahead of Canada.

Propelled by rising smartphone penetration, launch of 4G network and increasing consumer wealth, the
Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion in 2017.

After China and the US, India had the third-largest online shopper base of 140 million in 2020.

Indian consumers are increasingly adopting 5G smartphones even before roll out of the next-gen mobile
broadband technology in the country. Smartphone shipments reached 169 million in 2021 with 5G
shipments registered a growth of 555% year on year in 2021. Indian consumers are increasingly adopting
5G smartphones even before roll out of the next-gen mobile broadband technology in the country.
Smartphone shipments reached 150 million units and 5G smartphone shipments crossed 4 million in 2020,
driven by high consumer demand post-lockdown. According to a report published by IAMAI and Kantar
Research, India internet users are expected to reach 900 million by 2025 from ~622 million internet users in
2020, increasing at a CAGR of 45% until 2025.

For the 2021 festive season, Indian e-commerce platforms generated sales worth US$ 9.2 billion Gross
Merchandise Value (GMV), a 23% increase from last year’s US$ 7.4 billion.

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 India’s ecommerce transactions surged by 77% in 2020 transactions from tier 2 and tier 3
cities experiencing21 with the highest growth ever.
 India's ecommerce festive season sales clocked in a gross merchandise value of US$ 9.2 billion
an increase of 23% compared 2020.
 The Indian ecommerce sector is ranked 9 the world, according to Payoneer th in crossborder
growth in report. India’s cross border ecommerce is expected to grow at 17.3% by 2022.
 India's quick commerce saw a 500% YoY growth in delivery in January 2022. Indian ecommerce
is projected to increase from 4% of the total food and grocery, apparel and consumer electronics
retail trade in 2020 to 8% by 2025.
 As of February 15, 2022, the Government eMarketplace ( GeM ) portal served 9.04 million
orders worth Rs. 193,265 crore (US$ 25.65 billion) to 58,058 buyers from 3.79 million registered
sellers and service providers.
 India spending on online commerce, (%) (Jan 2020 35%3% 21%20% 19% 17%Sep 2020) 17% 8%
▪ India's consumer digital economy is expected to become a US$ 1 trillion market by 2030, growing
from US$ 8590 billion in 2020, driven by strong adoption of online services such as e edtech in
the country.

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 Conclusion

 India e-commerce will reach US$ 99 billion by 2024, growing at a 27% CAGR over 2019-24,
with grocery and fashion/apparel likely to be the key drivers of incremental growth
 In 2022, the Indian ecommerce market is predicted to increase by 21.5%, reaching US$ 74.8
billion.

 India’s e-commerce market is expected to reach US$ 350 billion by 2030, with grocery
and fashion/apparel likely to be its key growth drivers.

 For the 2021 festive season, Indian e-commerce platforms generated sales worth US$ 9.2
billion gross GMV (Gross Merchandise Value).

 E-commerce sales is expected to increase at a CAGR of 18.2% between 2021 and 2025 to
reach Rs 8.8 trillion (US$120.1 billion).
 Online penetration of retail is expected to reach 10.7% by 2024, versus 4.7% in 2019
 India had the third-largest online shopper base of 150 million in FY21, which is expected to be
350 million in FY26.
 India’s digital sector is expected to increase multi-fold and reach US$ 1 trillion by 2030
 Through its ‘Digital India’ campaign, the Government of India is aiming to create a trillion-
dollar online economy by 2025.

 The Indian online grocery market is estimated to reach US$ 26.93 billion in 2027 from US$
3.95 billion in FY21, expanding at a CAGR of 33%.

 With a turnover of $50 billion in 2020, India became the eighth largest market for e-
commerce, trailing France and a position ahead of Canada.

 According to NASSCOM, despite COVID-19 challenges/disruptions, India's e-commerce

market continues to grow at 5%, with expected sales of US$ 56.6 billion in 2021.

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