E-Commerce From India Context - Part 1/2

E-Commerce From India Context - Part 1/2

E-Commerce From India Context - Part 1/2

Posted on 1st Apr 2016 12:13:51 in General

By: Elamurugu Sundararaj

1. Types of E-Commerce

India's ecommerce market to breach $100 billion mark by FY20: Goldman Sachs – Report by Economic Times dated, 26 Oct 2015

More than $100M USD is pipelined as FDI especially for e-commerce based startups.

These sort of forward looking statements vary by every research and Finance firms but one common thing among all of them is that India E-Commerce Market is going to grow beyond any guesswork.

This paper attempts to analyze this budding business phenomenon from India context.


A more subtle definition is: Commercial transaction through a network enabled medium is known as Electronic Commerce.

A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.

Let us now look at various types transactions take place in the e-commerce market. They are basically classified based on usage and value perspective.

Types of E-Commerce

  • B2B: Business buying products / services from another business. Example: Manufacturing units to Dealers
  • B2C: Consumer buying products / services from Business. This form is becoming popular now after amazing success by Flipkart, Amazon etc
  • C2B (Consumer-to-Business) Consumers directly posting or publishing requirements in a network medium and the business bid for it. Example: Furniture requirement postings, Home purchase etc.
  • C2C: Consumer buying products / services from another consumer. Classifieds business for example, will fall into this category. Companies like MyHome-MyNeeds.com are operating in this business space.
  • M-Commerce: Mobile Commerce is the niche market which further facilitates the commercial transaction on the fly, since the business is done thru hand-held devices with wireless network. This takes all the above formats. People say it is a subset of e-commerce.

Government Participation

  • B2G: Government Tenders, Auction Notices are digitalized and business bid for them. This can bring transparency in Order Selection and Execution.
  • C2G: Government can directly reach citizen without any middlemen or offices to disperse its schemes, subsidiesm etc.

Above are major classification and people slice them further into various sub-categories just to bring in more clarity on the type of usage

2. Population Spread

This is the census data as of 2011 and geo analysis done by Forester Research.

census data-2011

As we look at the geo-spread, nearly 8% of India population, with each 5million people are living in the tier1 cities and much of e-commerce transactions happening here.

Approximately around 4% of population from 32 cities, with an average of 2.5 million each are participating in this market.

That sums up to the range of 25% to 30% of 1.2 billion people who are the active customers in e-commerce space.

As per the various Government initiatives and ease of buying, the reach and awareness are becoming more acute and faster.

3. Internet Usage

The data below represents the internet usage distribution. With much of focussed data analysis based on user interest, surfing style, gender and location, the market can customize the solution and instigate buying.

Internet usage

As we see, the usage is propationately increasing with the availability of high speed internet and with more smart phone usage. When the internet usage becomes more neutral and common, the e-commerce market will further strengthen up.

As per the projection given by TRAI, by 2020, there will be an estimated internet users of 600 million with minimum of 2MBPS data speed. This target seems to be quite realistic with the advent of 4G coming up and more users getting into smart phone spree.

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