E-Commerce Industry Opportunities

OPPORTUNITY IDENTIFICATION

E-Commerce Industry

IDENTIFYING MARKET OPPORTUNITY

E-COMMERCE INDUSTRY: BRIEF OVERVIEW

Electronic commerce, commonly known as e-commerce, is a type of industry where buying and selling of product or service is conducted over electronic systems such as the Internet and other computer networks. With the evolution of internet and broadband systems this industry is one of the fastest growing industry. Various segments of this industry overlap with segments of other industries such as electronic funds transfer, electronic data interchange, inventory management system, online transaction processing, supply chain management etc. There are two broad categories that operate in e-commerce space. First category includes dedicated ecommerce entities. This include Flipkart, e-bay etc. Second category includes firms which supplement their retail business with selling goods via computer network. This include businesses like Dell, Samsung, Croma, etc.

There are certain key factors which are driving the growth of e-commerce in countries like India.

1. Internet Usage - The use on internet in India has grown steadily over the past decade. In 1990 the number of internet users were India were negligible. As per TRAI report (The Indian Telecom Services Performance Indicators January-March 2013) this figure was 164.81 million at the end of March 2013 with a growth of 0.28% compared to previous quarter.

2. Mobile phones - There has been a significant growth in users of mobile phones in India. The users are now viewing mobile as not just a call sending and receiving device but as a tool which helps them in transactions over the computer network. As per TRAI report the number of mobile subscribers in India were 867.80 million at the end of March 2013. The growth was 0.36% quarter on quarter. Out of the total internet users 143.20 million users accessed internet on their mobile phones. This amounted to 86.89% of total internet users.

3. Value for money - The consumers have become more aware of the value which they will get for the money they spend. Consequently they are more inclined towards doing more research on finding the best price. So e-commerce sites that offer high value for less price are bound to prosper.

METHOD AND REASONS: CONSUMPTION CHAIN METHOD

For identifying marketing opportunity we have chosen the consumption chain method. The reasons for choosing are that the entire process from consumer deciding to buy a product via internet to delivery of product to post delivery services can be broken down into distinct steps. We can then assess each of this step to identify marketing opportunity in each phase.

METHODOLOGY FOLLOWED AND OPPORTUNITY IDENTIFIED

As a first step we identified the various steps involved in doing a business transaction over the internet. Once these steps were recognised we tried to discuss what value additions can be implemented in each of these steps.

The sectors we identified where value addition could be achieved were as follows

* Consumer need - There are a number of products in which the retail shops still hold a stronghold for the simple reason that these products are either not available on e-commerce sites or people are not aware about specific e-commerce sites which sell these product. To counter these problems e-commerce sites can add these products to their existing list of categories. Also dedicated product sites need to advertise their business on larger scale so that more people become. Sites like onlineprasad.com (pooja items and temple offerings from top temples), socialheart.in (dedicated site for selling handicrafts made by NGOs) etc. need to invest more in branding and advertising.

* Interaction level - An important different between physical retail shops and e-commerce sites is the level of interaction. In physical retail shops one can interact with the shopkeepers to know the various details of the product. They can resolve any queries which they have about the product then and there. However this is not easily possible on e-commerce sites. The option