GROUP 6 Ravi Prakash Yadav

Ajey Singh

Manjeet Bhatoya

Suganya Kandasamy

P Ritwik

Prateek Singh

Sandeep K P

Yog Raj Maira

Ganesh Kumar

Md. Moin Afaque

ShriHarsha N

Rippan Dullet

Sathish M C

eCommerce : Opportunities & Challenges

The eCommerce Space

GOODS

• General B2C Retailing: Flipkart, Amazon, Snapdeal

• Segment Specific B2C Retailing: Eg. Myntra, Jabong, UrbanLadder, HealthKart

• B2B: mSupply, Tolexo, Molgix

• B2G: Government eMarket(GeM)

SERVICES

• Travel & Tourism: Eg. MakeMyTrip, Oyo rooms

• Healthcare: Protea

• Education: Edukart

• FinTech: PayTm, Mobiwik

Scale and Scope

Globally

• In 2016, retail e-commerce sales worldwide amounted to 1.86 trillion US dollars

• e-retail revenues are projected to grow to 4.48 trillion US dollars in 2021

• Estimated 19% of retail sales in China occurred via internet

India’s Domestic eCommerce

• Online retail sales have doubled in India during the period 2010 – 2015

• India expected to be the fastest growing market for the period of 2016-2021

• Indian e-Tail growth potential – $23bn in 2016 to $68 bn by 2020

International eExports

• Roughly 11% of China’s goods exports are through eCommerce. Alibaba group leading from the top.

• As per estimates of FIEO, there are about 2 lakh Indian B2C exporters marketing & selling through websites and eCom platforms

Growth Factors

Increasing internet penetration with Bharat Broadband & ‘Digital India’ efforts – 243 mn users in 2015; 75% users in 15-34 years

Growing middle class (15 to 140M from 2005-25) comfortable with online shopping

Traditional brick & mortar retail constrained by positioning of the stores, space, limited market reach

Rising Income levels means more diversity in consumption basket

Reducing costs of smartphones, tablets

Snapshot of current eTail ecosystem

Domestic eCommerce: Some Positive Examples

As many as 20 lakh women homemakers are reselling various lifestyle and clothing products using WhatsApp & Facebook. Business worth about $8-9 billion in gross sales per year. Projected to grow to $48-60 billion in size by 2022

China's e-commerce giant, Alibaba, has pioneered rural e-commerce through its rural arm, Taobao, claiming this has created 280,000 rural jobs in 2014 alone.

In India eCommerce can be great boost to Khadi & Village Industries

eCommerce Exports - Some Positive Examples

Taushif Ansari Leather garment exporter based out of the slums of Dharavi, Mumbai. He employs 5 craftsmen, sells 150-170 jackets a month & makes Rs 60,000 to Rs 70,000 in profit

Santosh Grover started her gems and silver jewellery company, House of Gems. She earns Rs 2 lakh a month by selling to international clients through eBay

Surendra Nangia Retired Navy Commander. He is selling through eRetail sites & exporting dental tools to Korea & Switzerland

Opportunities in e-Commerce space

Employment

Every job in e-commerce industry creates 3-4 jobs in downstream industries

E-Tail expected to create ~1.45 million employment opportunities by 2021

Inclusion

70 % of the online sellers expected to come from smaller towns by 2018-19

20% of total online sellers are women

Entrepreneurship

63% of the e-commerce ventures by first time entrepreneurs

72% of start-up founders are less than 35 years old;

9% are women

Opportunities in e-Commerce space

e-Commerce impact on employment

Opportunities in e-Commerce space

e-Commerce impact on SMEs in India

Challenges in Domestic eCommerce

Challenges faced by platform owners

Challenges faced by aggregators

Challenges faced by logistics service providers

Challenges faced by merchants

Challenges in Ecommerce Exports

Logistics providers like DHL Express have pointed out the tremendous paperwork and procedures involved in courier exports from India

Foreign Trade Policy benefits and tax breaks (like GST refund) available for routine exports are not available for eCommerce exports

Issues with international payments. Most payment gateway want inventory to be stocked before providing international payment options

Policy Level Issues in eCommerce Exports

In India international courier dispatches are governed by Courier Imports & Exports (Clearance) Regulations of CBEC. The classification and the paperwork is not easily understood

Only Courier agencies which are authorized by Customs are allowed to ship abroad. The process to become an ‘Authorized Courier’ is complicated. It has created a monopolistic market for the logistics providers.

Only 13 ports where eCom clearance is allowed. Only 2 ports are slated to have an online clearance process.

The tax refunds are not made available in most cases. This process should hopefully be simpler after the introduction of GST.

Payment gateways are not available for international cards because of possibilities of fraud. RBI does not have a broad policy to address such issues

Foreign Trade Policy Incentives are only available to a select list of items. Benefits under Chapter 4 and 5 of the Foreign Trade Policy are not available for courier exports.

eCom Services, for example online educational certifications, can have a market abroad. No special incentive for such service exports under ‘Service Export from India Scheme (SEIS)’

eCommerce Payment Systems

The e-commerce ecosystem is rapidly evolving thanks to advances in online payment processing and electronic payment technology, as well as the willingness of almost all merchants to accept credit cards online. The speed and simplicity with which cyber-mediary accounts can be established and used have contributed to their widespread use, although the risk of abuse, theft and other problems—with disgruntled users frequently accusing the mediaries themselves of wrongful behaviour is associated with them

Fraud

Cross-border

transactions

Card data

security

Multi-currency

Technical integration

Issues in eCommerce Payment Systems

INITIATIVES TAKEN BY GOVERNMENT