E-Commerce in India – A Study Based on Ambala & Karnal District

The industrial policies before and after 1991, all emphasized on the need of technology changes for the economic development. The introduction of liberalization, privatization, globalization & modernization in the new industrial policy also stressed on latest technological changes to face the competitiveness, domestically and internationally. It emerges the need of computers & internet. Technology change is the need of the hour. In today‘s busy world without advancement of technology, there are going to be failures everywhere so in the industrial or commercial sector, there was need of new thinking. The advent of internet has initiated an electronic revolution in the global business sector. The dynamic and flexible nature of this communication channel as well as its ambiguities reach has helped in leveraging a variety of business activities. New industrial intermediaries offering entirely new types of services have emerged as a result of innovative e-business models. The internet has emerged as one of the major distribution channels of Industrial products & services, in all over the world. Initially, industries promoted, their core capabilities, i.e. products, services, marketing through the internet. Then, they entered the e-commerce market as provider/distributor of their own products & services. The trend towards electronic delivery of products & services is accruing partly as a result of consumer demand and partly because of the increasing competitive environment in the global industry. The internet has changed the customers behaviour who are demanding more customized products! services at the lower price. Moreover new competition from pure online has put the profitability of even established business houses under pressure. However, very few business houses have been successful in developing effective strategies for full exploiting the opportunities offered by the internet. For traditional business to define what niche markets to serve and decide what to produce products/ services to offer, there is a need for a clear and concise internet commerce strategy.

The very concept of electronic commerce (also known as e-business or Internet commerce or on-line business or e-tailing) is getting prevalent in the technological and real parts of the world. In the jet age of computer and electronic technology the regular application of computing, wireless communication, networking etc. in the commerce field has brought a revolutionary change in the traditional way the business do. Today, e-commerce can serve consumers, businesses at home, allow uses to serve him/herself from anywhere one can transfer funds, purchase, sell provide service through the internet, it is technology that is making all this possible. Internet commerce has gained wide acceptance internationally and seems to be fast catching up with more and more transactions entering the fray. We know that this 21st century is computer century or we can say it is computer generation. E-commerce has been quick to adopt rapidly evolving electronic and telecommunication technologies to deliver and extensive line of value added products and services Reduced Cost. Lower product cycle time. Faster customer response. Improved service equality. E-commerce also applies to the use of internet network to search and relative information in support of human and corporate decision-making. E-commerce consists of electronic retailing (e-tailing), electronic data interchange (EDI) and electronic funds transfer (EFT).

Enabling credit card, smart cards, E-money and other payments along with EFT. It automates the conduct of business among enterprises, customers, suppliers & employees anytime, anywhere. Publicizing and advertising products & services. Generating orders for the products. Processing the order and delivering the products. Providing pre and post sale assistance to generate more sales. Maintaining and reporting inventory status. Fast, Efficient, reliable communication with customers and partners. E-commerce allows you to gather information from customers, while delivering a marketing and sales pitch through a web site.

Commercial activities are as old as the history of mankind in India. The only difference is that the ways of doing business are changed with the development of the country. In early days the people followed the barter system for the business. Business is the exchange of goods & services. ―Barter System‖ was that system in which the goods and services were exchanged with the Indian currency prevailing from time to time in the economy. But after the IInd world war the business scenario was totally changed as a result of Industrial revolution. The business have taken the form of companies. The people or entrepreneurs gathered for doing business having common purpose & common stock of wealth. To use the maximum production capacity new technologies were employed. At international level of e-business get the momentum during 1970. But in India it was 1991 when a new industrial policy was formed giving more liberalization, privatization to the companies, and also the globalization. Now the India entered the international market and MNCs from other countries earned to the Indian market. The business were computerized & the PC‘s became popular. The business were linked with the world wide web (www). With the introduction of Internet a new definition to business was given which is e-commerce popularly known as e-business, I- business, etc. The e-commercial activities are growing every year. According to a report by IDC (International Data Corporation) in 1999, over the next three years the ecommerce market in India is expected to grow dramatically. E-commerce will account for 575 $ million by financial year 2002-03, while internet users will reach more than 5 million, making it the fourth largest internet market in Asia. According to the Nasscom (National Association of Software and Service Companies), the e-commerce in India was $2.5 billion in 2002. The reasons for the growth of e-commerce is the low cost of personal computers, a growing installed base for internet use, and an increasingly competitive Internet Service Provider (ISP) market. This all has made the Indian fourth largest Internet market in Asia leading soon to the second most popular nation. According to a survey the rise of Indian Internet subscribers will ultimately depend on other proliferation of network computer & internet cable. Cyber cafes will also continue to provide low-coast access. The internet arm of textile grant, S. Kumar Group (SKG), is developing on extensive network of Internet Kiosks to facilitate e-commerce. Currently, the lion‘s share of current ecommerce revenues is generated from an every-expanding business to business (B2B) market. As in the united states, Business to Consumer (B2C) transactions have taken the form of on-line purchase of music, books,

a recent Mckinsey - Naccson report, it was estimated that some 80% of ecommerce in India over the next few years could be B2B if the correct environment were developed. The B2B market is expected to increase the greater investment in the Indian telecommunication infrastructure, and once intellectual property rights and legal protections for commerce over the Net are addressed. The first e-commerce site in India was rediff.com. It was one of the most trafficked portals for both Indian and non- residents Indians. it provided a wealth of Indian-related business news a reach engine, e-commerce and web solution services. The past 2 years have seen a rise in the number of companies embraling e-commerce technologies and the internet in India. Most e-commerce sites have been targeted towards the NRIs with gift delivery services, books, audio and video cassettes etc. Major Indian portal sites have also shifted towards e-commerce instead of depending on advertising revenues. The web communities built around these portal sites with content have been effectively targeted to sell everything from event and mouse tickets the grocery and computers. The major in this services being Rediff and the net and India plaza with started a shopping section after. Inspite of RBI regulation low internet usage e-commerce sites have popped up everywhere hawking things like groceries, bakery items, gifts, books, audio and video cassettes, computer etc. none of the major players have been deterred by the low PC penetration and credit card

E-commerce can became an integral part of our sales strategy while it is one of the cheapest medium to reach out the new markets, if implemented successfully, it offer a smart way of expansion & doing e-commerce attribute to the successful implementation to carefully understanding the products & services, customers and the business process, easy -to-use system to extend the business on the web. The e-commerce platform maximize its reach to the potential customers and provide them with a convenient, satisfying & secure shopping experience. The key factors that we focus on to build the online business includes:- Attracting potential customers. Providing Brand Identity. Building Trust Relationships. Providing easy-to-use interface. Maintaining security. The future of e-commerce is difficult to predict. The forces of that determine the web‘s winners & losers are just taking shape & technological advances could add even more uncertainty. On the downside, some experts predict that it will be increasingly difficult for the smaller companies to establish their presence. Publish companies and traditional brand name retailers have deep pockets and a name recognition that will make it difficult for smaller sites and mom and pop shops to attract customers, thereby forcing them to complete with the big boys. On The net, its one big neighbourhood, on the upside, nearly all experts believe that overall e-commerce will increase exponentially in coming years.

The main purpose is to study what is e-commerce and which type of facility is provided by e-commerce to the customers and producers and how it is helpful to increase the efficiency of consumers. For the attainment of this purpose study is proposed to revolve around the following specific objectives: To examine the various aspects of e-commerce like online trading, net trading, internet trading etc., & EFT etc. To study how e-commerce facilities are helpful for the customers. To examine the future growth pattern of e-commerce in the industries. To examine the extent of computerization for better performance in various trading operations. To examine the types of problems that are faced by the consumers! producers and present the opportunities available in E-commerce.

Due to the restricted time only companies i.e. Big Bazzar & LG India Pvt. Ltd. have been selected to examine the pattern of on-line distribution, physical delivery and EFT. But main emphasis is laid on on-line distribution & physical delivery. However, the results of the study can be generalized to have an idea about satisfaction level of the consumers and producers about online distribution and physical delivery. In India only 30 percent of the people (consumers) are aware of the use of e-commerce which mainly include upper and middle income groups. The study mainly focused the advantages and disadvantages accruing to the producers & consumers and the future growth of e-commerce in India. collection, analysis and dissemination of information for the purpose of assisting management in decision-making related to the identification and solution of problems and opportunities. The procedure followed at each stage are methodologically sound, well documented and should be planned in advance. That is why research methodology adopted for the study needs elaboration. While developing a program, one should be aware of the problem stated, information resources, administering of questionnaire, sample size to be taken etc., all these steps may put together under the heading Research Methodology‘- In planning a research project, each step should be planned in a thorough manner and then study should be undertaken. The present research work has been divided in the following section: Research Design. Sample Design. Data collection. Method of data analysis and interpretation. The sample size is 100 in which respondents are from LG Pvt. Ltd. and 50 respondents from Big Bazaar. In the present study, the hypothesis framed for the purposes tested statistically for their significance and to make comparison between the on-line delivery, physical distribution & EFT. Accordingly the chi-square test is used the hypothesis. Mathematically:-

X2 = E (O-E)2 /N

where, 0= Observed Frequency E= Expected Frequency N= Number of cells. E for each cell is calculated by Row total X column Grand Total This test is conducted at 5% level of significance. The calculated chi-square is compared with the table value at given degrees of freedom, where:- Df= (r-1) X (c-1) If the calculated value of chi-square is less than the table value then the derivation of the observed frequency from the expected frequency is considered to be significant and null hypothesis is accepted. However, if the calculated value of chi-square is more than the table value, the difference was considered to be significant and null hypothesis was rejected and the report had to be submitted within a given time period.

The ministry of commerce has set up on expert group to examine the existing laws & draft EC laws. The RBI had set up on expert committee to study the legal issues related to the introduction of EFT system in India. The recommendations of Shree Committee include the following bills:- Reserve Bank of India (EFT system) Regulations, 1996. Model Customer Agreement, defining terms and conditions of EFT existing in the RBI, EFT system. Amendment to the RBI Act, 1934 to promote and establish the EFT system. Amendment to the Bankers Books evidence Act, 1981 enlarging the definitions of records to include the bank‘s copy or microfilms, magnetic tape or any other form of electronic data retrieved mechanism. Now 1998: UNCTAD organised a conference on ‗Global Electronic Trading‘ in Lyons, France to create further awareness on these issues. Prime Minister‘s National Task Force on Information Technology & Software Development recommended the following: Internet access nodded will be opened by DOT and authorized ISPs at all district headquarters and local charging areas by 26th Jan 2000, as an interim measures and till nodes are provided in all local charging areas, access to nearest internet access nodes will be can local call rates with effect from 15th Aug.,1998 ISP5 will be responsible for ensuring that this facility is not misused for telephone traffics. Voice & Data communication is permitted for IT software development & IT services on dedicated or leased circuits but no telephone traffic is permitted. For setting up ISP operations by companies there shall be no license fee for the first five years & nominal license fee on one rupee after 5 years. The monopoly of the VSNL on international gateway for internet shall be withdrawn and authorized public/govt. organisation will be allowed to provide Internet Gateway access directly. Private ISPs are allowed to provide such gateways after obtaining

electricity boards, National Power grid corporation as well as ONGC, GAIL, SAIL will have rights to host a fibre optic backbone. Providing access to internet through the authorized cable to shall be permitted to any service provider without additional licensing. Data communication requirement for (EC) (EDI) shall be met by DOT in a liberal frame work by assigning the highest priority. DOT shall take suitable action to de-licence multimedia services, including FAX, provided by PCOs. Bar coding of every item sold in the country shall be made compulsory within 5 years period. A national policy on information security, privacy and Data Protection Act for handling computerized data shall be framed by the govt. within 6 months. Cyber infractions shall be addressed within the legal frame work by the Ministry of Law, Justice and Company Affairs. The Indian Telegraph Act of 1885, the Indian Post Office Act, 1888 and Indian Wireless Telegraphy Act, 1993 shall be suitable modified. The Last two years have seen a spurt in the growth of the use of e-mail and the internet within India. With the announcement of ISP policy & the recommendations of National IT Task Force set up by the Prime Minister, the segment of business communications using EC is poised for a quantum leap. The purpose of this paper is to describe the prospects & awareness of e-commerce on Indian context many publications have thrown light over the importance of Ecommerce and its prospects for Indian economy.

In order to understand the nature and characteristics of various respondents in this study, the information was collected and analyzed, according to certain socio-economic characteristics, these characteristics have invariably been used in the study gender, age, income level and occupation. This description shows that the respondents included in this survey belong to different backgrounds and this in turn, increase the scope of the study.

majority of the respondents i.e., 60 percent were males and 40 percent females. the same has been depicted in Fig. 1.1. Source : Primary Data.

It is evident from table 1.2 that of the total respondents, majority of the respondents i.e. 53% fall in the age-group of 26 to 45 and 29% are in the age group of 46 to 60 and 10% are above 60 years age and only 8% fall in the age group of 18-25 years. Thus, all the respondents belong to the active age group. Source: Primary Data

All respondents have been distributed into six income groups ranging upto Rs. 5000 to Rs. 50,000 and above. Table 1.3 exhibits that majority of respondents 30 % and 25% both are in income group 10,000 to 20,000 and 5,000 to 10,000 respectively. This shows that the main emphasis is laid on lower middle income class. And then 15%, 12% and 10% are from income level Rs. 20,000-30,000, Rs. 30,000-50,000 and Rs. 50,000 & above respectively.

Source: Primary Data.

Table 1.4 is concerned with the information regarding occupation structure of the respondents. Among 100 respondents, 50 percent are from service sector, 32 percent are from business, 8 percent are students and 10 percent constitutes the retired person and others. Thus, the respondents from different occupation group have been included in the study.

Source: Primary Data

As LG company & Big Bazaar owned a various types of deliveries, this is an attempt to find out the maximum no. of customers of maintained in the company through using E-commercial activities. It is clear from the table that 48 customers of LG + 47 customers of Big Bazaar are in the habit of using the EC for EFT and 17 customers of LG and 11 customers of Big Bazaar are using physical delivery and 6 of LG & 6 of Biz Bazaar are using on-line distribution. It means that large no. of customers of these two companies are using EFT as per the sample study of Karnal. Source: Primary Data. Statement: In there any difference in the starting of company operations between the companies. HO: There is no difference in the starting of operations between the two companies.

between the two companies. The data collected from respondents regarding starting of company operations is depicted in table 1.6.

Source: Primary Data According to the study, LG co. started operations exactly at scheduled time according to 48 respondents and 2 answered 10 minutes etc. Whereas in case of Big Bazar Co., 40 answered in favour of exactly at time, 9 appro. 10 minutes late and 1 approx 20 minutes late. When the above information was statistically tested using x2 test, it was found that the x2 value is (5.99) at 5% level of significance. So, we can conclude that there may be some difference in the starting of company operations in both the companies. So Ho is rejected and HI is accepted. Statement: Is there any difference in the closing of company operations between both companies. HO: There is no significant difference in the closing of companies operations between two companies. HI: There is a difference in the closing of companies operations between tow companies. The data collected regarding the closing of company operations from respondents are as follows: As shown, 20 respondents of both the companies gave answers in favour of scheduled time & 2 respondents from LG company answer in favour of approx. 10 minutes late, 3 respondents from Big Bazaar in favour of approx. 10 minutes late. 8 from LG & 9 from Big Bazaar in favour of approx. 20 minutes late and 20 from LG & 18 from Big Bazaar in favour of more than 20 mm. Late to provide better services to the customers. When the above information is statistically tested using x2 test it was found that calculated value of x2 (Zero) is less than the tabulated value of x2 (5.99) at 5% level of significance. Then HO is accepted & HI is rejected. Source: Primary Data Statement : Is there any difference in the quality of service provided by the companies. HO : There is no significant difference between the two companies. HI : There is difference in the quality of service between the two companies.

The table shows that out of 50 respondents of LG, 34 viewed in favour of quick, 9 very quick, 5 slow & 0 When the information is statistically tested using x2 test, it was found that calculated value of x2 (1.548) is less than the tabulated value of x2 (5.99) at 5% level of significance. Hence the null hypothesis is accepted and alternate hypothesis rejected. Thus, we can conclude that there is no significant difference in the quality of service provided by the companies. Statement: Are the respondents satisfied regarding online delivery of companies. HO: There is no significant difference in the satisfaction level with both the companies. HI: There is difference in the satisfaction level with both the companies.

As shown in table, out of 50 respondents of LG, 44 were fully satisfied & 6 were not satisfied. Out of 50 respondents from Big Bazaar, 48 were fully satisfied & 2 were against it. Source: Primary Data When the information is statistically tested using x2 test, it was found that the calculated value x2 (2.0174) is less that the tabulated value of x2 (3.84) at 5% level regarding on-line delivery. Statement: Is there any difference in e-commerce service provided by both companies. HO: There is no significant difference in e-commerce service provided companies. HI: There is difference in e-commerce services provided by the companies.

As shown in table, 42 respondents out of 50 of LG gave their answers in favour of quick and 8 in favour of vary quick. Out of 50 respondents of Big Bazaar, 39 Respondents answered quick and 11 very quick. It means the process of companies operations and the services provided by them have become quick. Source: Primary Data. When the above information is tested statistically using x2-test, it was found that the calculated value of x2 (0.586) is less than the tabulated value of x2 (3.84) at 5% level of significance. Hence, the HO accepted & HI rejected.

Opportunity for Retailers: A retailer can save his existence by linking his business with the on-line distribution. By doing so they can make available much additional information about various things to the consumers, meet electronic orders and be in touch with the consumers all the time. Therefore, E-Commerce is a good opportunity. Opportunity for Whole Saler/Distributer: In the world of E-commerce the existence of the wholesaler can

establishing contractors with reputed producers and linking their business with the on-line. Opportunity for Producers: Producers can take advantages of e-commerce by linking themselves with on-line, by giving better information about their products to the other links in the business chain and by a having a brand identity. Opportunity for People: As more people are getting linked with E-commerce, the demand for centres providing internet facility or cyber cafe is also increasing. Hence, the people who wish to take advantage of it can establish cyber and have their benefits.

The internet poses a range of risks and threats. Some of them are:- Security risk that may arise due to unauthorized access to a key information like accounting system, risk management system and portfolio management system. A breach of security could resulting direct financial loss to the consumers & businessmen. This also include internal risks like- leakage of information. Operational risks that may arise due to inaccurate Processing of transactions, non-enforceability of contracts, comprises in data integrity, data privacy and confident ability, unauthorized access to transactions etc. These risks may arise due to weaknesses in design, implementation and monitoring of sellers information system, inadequate technology, negligence by customers and employees, fraudulent activity by employees and hackers. Businessmen face the risk of wrong choice of technology, improper system, design and inadequate control processes. Technology, which is outdated, not scale or not proven, may lead to loss of business men‘s investment and risk its business. Legal risk arises when violation of laws, rules and regulations or prescribed practices takes place or when the legal rights and obligations of parties to a transitions are not well established. E-commerce extends the geographical search of buyers & sellers beyond national borders which may lead to cross- border risks like legal problems, regulatory risks, etc. The risk of unauthorized data alternation is real in an ecommerce environment, both when data is being transmitted or stored proper access control and technological tools to ensure data integrity is of utmost importance. The business environment must be technologically equipped to handle these risks. Reputational risk is the risk of getting significant negative public opinion, which may result in loss of product not working to the expectations of the customers, system deficiencies, security breach, etc. This may cause the buffers & sellers to discontinue the use of product! services. Many businessmen are forced to shut down its website as customers were able to access each other‘s accounts. Such type of cyber crimes demand global solutions. Though some progress has been made in this direction, a lot remains to be done.

The climax of Research Process is approached as one to draw conclusions & report findings. The whole investigation culminates and reaches final stage of during inferences that lead to conclusion as to course of actions. Some important conclusions regarding comparison of two comprise i.e. Big Bazaar and LG Electronics Ltd. On the basis of information collected through structured questionnaire are as follows:- There is no significant difference between the companies regarding their operations. Most of the respondents assert that company operations start in time and closes at scheduled time. Regarding the services provided after official hour, there is no such difference between the companies. Majority of respondents of both companies assert that services is provided after the official hour. Quality of Service provided by the companies is equal according to the respondents. The service is quick and fast. Respondents are satisfied regarding the EFT, on-line delivery & physical distribution. So, there is no difference between two companies regarding satisfaction level of customers. They are fully satisfied. The respondents are satisfied with the behaviours of company staff. According to them staff is helpful, encouraging, impersonal, polite but sometimes irritating and ignoring also. The companies are fully computerized; it reflects that respondents are aware of e-commerce activities of the companies. There is not much breakdown in the Internet facility of the companies. But there are some difference between the two companies on the basis of their structure. These are as under: The timings of Big Bazaar are 10:00 am to 10:00 pm as well as timings of LG are 9:30 am to The Big Bazaar deals in almost all the goods & services which can be the need of a person while LG deals in only electronic goods. It means big Bazaar provides more flexible shopping than LG. The show rooms of LG is almost in all the cities & town while the retail outlet of Big Bazaar are in big cities only & people are more familiar with LG and less with the Big Bazaar. The LG provides only physical distribution while Big Bazaar provides physical distribution & online deliver of CDs. It means the Big Bazaar e- commercial activities are more flexible.

The following suggestions can be given on the basis of the above study:- The terms e-commerce, e-business, e-tailing should be explained to the people in simple words by the employees appointed especially for this purpose. For making use of e-commerce facilities, the person should be educated & computer literate which is main problem in India. Larger population of India is in rural sector and they could not understand the concept. The adequate knowledge about these should be provided by the Government & Companies. The Companies should be helpful & encouraging so that the customer should not face any difficulties for their queries. The proper facilities for taking care of privacy on internet regarding credit card security & financial information should be provided by cybercafé & banks, etc. The issue of security is the biggest reason for people in using internet business. Its very much necessary to reassure the customers that the information they provide will not be misused & their privacy will be respected. In order to add value to the services offered, the industries have to efficiently & effectively utilize the technology with an eye on the cost of production and service offered.

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