E-COMMERCE IN INDIA

E-commerce, its benefits, barriers, emerging technologies and future scenario.

In India e-commerce is still in its nascent stages. It is at the information distribution and order soliciting stage with players still experimenting with online payment systems.  But even as e-commerce matures it also has its own issues and problems with security and legal issues being areas of major concern.  While security concerns can be managed, the legal aspects are still being addressed.  But one undeniable fact is that new avenues have opened up. 

Current Situation in India

The rate of technology adoption inIndia is pretty poor.  Survey reveals that only 20% of Chief Information Officers (CIOs) in corporate India are trying to use e-Commerce to some extent in one way or the other with 80% still to take the leap.  But another promising finding says that 21% of CIOs claim to have already implemented ERP, EDI and Internet in their companies, while another 31% is planning to do so in the next one to two years.  In India, the Internet is being primarily used for communication purpose with 78% using it for e-mail, 44% using it for FTP and 48% using it for website monitoring.  84% use their company websites for advertising purposes, while 38% claim to be selling products or services through websites. Fifty-eight percent of Indian CEO's rated e-commerce as crucial to their growth strategy, anticipating that it would contribute over 17 percent in annual yearly turnovers within the next five years, and enable Indian companies to access international markets.

There have also been a few success stories of Indian companies embracing e-commerce. CitiAlert, Citibank’s pilot mobile-commerce initiative has 1500 new customers everyday with 50,00,000 alerts sent to customers every month. This has been rated as the No 1 mobile-banking application by the Asia Bankers Journal report for June 2001. Billjunction Payments Ltd. – a Network company, which is part of ICICI Venture Ltd, has a pilot project going on in Bangalore in collaboration with BSNL, KPTCL, Airtel, Spice Telecom, LIC and MobiLink which enables online bill presentment and payment. Mantra Online provides PKN (Personal Key Number) service to provide secure payment services on the net.

Benefits of e-commerce

In a survey, over 50% voted for the following as major benefits - Improved customer service, Increased productivity, Access to international markets and Cost reduction. These are just a few of the benefits of e-commerce.

Barriers

With teledensity currently at just two telephones per 100 people, the information infrastructure and the poor quality of the last mile connection are considered to be major impediments in India. In addition, a lack of awareness of technology and benefits, low employee skill levels, and the absence of a regulatory framework to ensure the legality of e-commerce transactions are slowing the uptake of technology in India. Of the households surveyed, only 26 percent of PC-owners were aware of e-commerce, with the majority of them indicating that they would not prefer to make purchases online unless quality and delivery could be guaranteed.

Emerging Technologies

At NATCOM 2001, the annual conference of the Indian Institute of MaterialsManagement, held recently in Chennai, speakers shared their views on 'Emerging technologies in e-commerce' or better still as a few speakers put it 'Enabling technologies in e-commerce'. The technologies that are emerging and spoken about are indeed enabling new and more exciting opportunities for businesses.

Dr Chandrasekhar, Vice President, E-Business, Tata Consultancy Services, said that adopting new technology should not be a 'big bang approach' but is all about taking small steps.  Small companies which wanted to adopt new technologies should take small steps otherwise if the effort fails, the huge investment may go waste. He also spoke about the impact of Extensible Markup Language (XML) in Supply Chain Management in the Indian scenario.  XML would become the standard format for definition of data and soon be popular like HTML.  Hyper Text Mark up Language is one of the most popular format for presentation of data.  XML has been around for the last three years now and is being adopted by a growing number of organisations every day.  It facilitates easy exchange of data within and across organisational boundaries.  The combination of web services and XML has been the most hyped about since the web itself.  It is expected to have the greatest impact on SCM and give a great thrust to Business-to-Business e-commerce.

Adoption of newer technologies is to connect all systems in one company to other systems of other companies.  In the Indian scenario different technologies are used in corporate networks. In this context a standard international platform that would allow importers, exporters, banks, customs and shippers to talk to each other seamlessly would be a dream come true. A scenario of business without bureaucracy, commerce without costly discrepancies can be made possible through a technology such as Bolero.net, said Dr. Chandraskehar.

Customers have estimated that through bolero.net processing time for trade documents could be cut from up to 25 days to just under 24 hours. And time saved is money saved too. Bolero.net, a joint venture between the international banking and logistics communities aims to remove paper from the trading environment. It will provide a secure, guaranteed service for the exchange of electronic trade documents, and is designed to ultimately become a globally accepted standard. Electronic trading systems that currently exist are generally restricted to one particular company, industry or trading community. In short, bolero.net is a system which binds everyone together and is maintained by a trusted third-party arbitrator.

Towards Leveraging a networked economy

Dr P Balasubramaniam, Senior Vice-President, Infosys said companies should evolve a business strategy to leverage the networked economy by asking themselves these questions - "What is our ambition?, How is this going to be managed? What areas of the business are we going to work on? What level of Functionality are we expecting? What kind of Experience are we looking at? WhatTechnology and how do we get started? How is this investment justified? Who’s the Audience?" Business Domain Competency and Technology Expertise according to him play a vital role in minimizing the risk associated with Project, Technology and Business.

Future Scenario

Dr P Balasubramaniam, spoke about the possible domination of m-commerce over e-commerce.  'Mobile commerce' seems slated to overtake e-commerce, since mobile phones have a far better penetration than the Internet and the PC.  The penetration of mobile phones is higher than that of PCs with 300 million PCs versus 450 million mobile phones and the figure is slated to touch one billion by 2003.  Wireless Application Protocol (WAP), Wireless Markup Language (WML) and Wireless Transfer Protocol (WTP) are also fast becoming popular.  He also spoke about the future state of the manufacturing enterprise. Application complexity would be hidden by a single, unified, collaborative interface. Workflow Engine would allow cross-functional, cross-application workflow. Knowledge Management tools would be leveraged for better organisational knowledge and learning.

Dr Chandrasekhar spoke of possible scenarios in the future, where warehousing and store systems would be integrated with transportation resulting in fleet visibility, driver and dispatch productivity, store communications and management reporting. There would be far greater collaboration on the supply chain or web moving beyond pre-defined document exchange to chatting online, making decisions on supply and shipment at public exchanges.

A survey by Global Information Infrastructure Commission (GIIC) puts the e-commerce market size in India between Rs 25,000 crore to Rs 50,000 crore two years from now for B2B and between Rs 4,200 crore to Rs 16,800 crore for B2C. All said and done e-commerce is not a potential anymore, it is a reality and it is here to stay.  It has challenged the conventional wisdom of how businesses are run and has leveled the competitive landscape.

E-Commerce, a definite yes for Indian Industry.

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