ADVANTAGES AND CHALLENGES OF E-COMMERCE CUSTOMERS AND BUSINESSES: IN INDIAN PERSPECTIVE

Abstract

E - Commerce allows consumers to electronically exchange goods and services with no
barriers of time or distance. Electronic commerce has expanded rapidly over the past five
years and is predicted to continue at this rate, or even accelerate. In the near future the
boundaries between "conventional" and "electronic" commerce will become increasingly
blurred as more and more businesses move sections of their operations onto the Internet. The
e-commerce industry in India is growing at a remarkable pace due to high penetration of
internet and sophisticated electronic devices. However, the recent growth rate of e-commerce
in India is far lagging behind than other developed countries. The advantages of e- commerce
are convenience, Time saving, Options, Easy to compare, Easy to find reviews, Coupons and
deals, Increasing customer base, Rise in sales, 24/7, 365 days, Expand business reach,
Recurring payments made easy, Instant transactions. There are many big problems and
challenged on the way of an online merchant. Factors like safety and security of online money
transaction being the biggest problem along with others have curbed the smooth expansion of
the online industry in the country.

Full text

[Franco et. al., Vol.4 (Iss.3: SE): March, 2016] ISSN- 2350-0530(O) ISSN- 2394-3629(P)
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Management
ADVANTAGES AND CHALLENGES OF E-COMMERCE CUSTOMERS
AND BUSINESSES: IN INDIAN PERSPECTIVE
Dr. C. Eugine Franco *1, Bulomine Regi. S 2
*1 HOD of Commerce, St. Xavier’s College (Autonomous), Palayamkottai, INDIA
2 Ph.D Research Scholar (FT), Commerce Research Center, St. Xavier’s College (Autonomous),
Palayamkottai, INDIA
ABSTRACT
E - Commerce allows consumers to electronically exchange goods and services with no
barriers of time or distance. Electronic commerce has expanded rapidly over the past five
years and is predicted to continue at this rate, or even accelerate. In the near future the
boundaries between "conventional" and "electronic" commerce will become increasingly
blurred as more and more businesses move sections of their operations onto the Internet. The
e-commerce industry in India is growing at a remarkable pace due to high penetration of
internet and sophisticated electronic devices. However, the recent growth rate of e-commerce
in India is far lagging behind than other developed countries. The advantages of e- commerce
are convenience, Time saving, Options, Easy to compare, Easy to find reviews, Coupons and
deals, Increasing customer base, Rise in sales, 24/7, 365 days, Expand business reach,
Recurring payments made easy, Instant transactions. There are many big problems and
challenged on the way of an online merchant. Factors like safety and security of online money
transaction being the biggest problem along with others have curbed the smooth expansion of
the online industry in the country.
Keywords:
e-commerce, electronic commerce, advantages, challenges.
Cite This Article: Dr. C. Eugine Franco, and Bulomine Regi. S, “ADVANTAGES AND
CHALLENGES OF E-COMMERCE CUSTOMERS AND BUSINESSES: IN INDIAN
PERSPECTIVE” International Journal of Research – Granthaalayah, Vol. 4, No. 3: SE (2016):
7-13.
1. INTRODUCTION
Electronic commerce or ecommerce is a term for any type of business, or commercial
transaction, which involves the transfer of information across the Internet. It covers a range of
different types of businesses, from consumer based retail sites, through auction or music sites, to
business exchanges trading goods and services between corporations. It is currently one of the
most important aspects of the Internet to emerge. Ecommerce allows consumers to electronically

[Franco et. al., Vol.4 (Iss.3: SE): March, 2016] ISSN- 2350-0530(O) ISSN- 2394-3629(P)
Impact Factor: 2.035 (I2OR)
Http://www.granthaalayah.com ©International Journal of Research - GRANTHAALAYAH [7-13]
exchange goods and services with no barriers of time or distance. Electronic commerce has
expanded rapidly over the past five years and is predicted to continue at this rate, or even
accelerate. In the near future the boundaries between "conventional" and "electronic" commerce
will become increasingly blurred as more and more businesses move sections of their operations
onto the Internet.
Business to Business or B2B refers to electronic commerce between businesses rather than
between a business and a consumer. B2B businesses often deal with hundreds or even thousands
of other businesses, either as customers or suppliers. Carrying out these transactions
electronically provides vast competitive advantages over traditional methods. When
implemented properly, ecommerce is often faster, cheaper and more convenient than the
traditional methods of bartering goods and services. Electronic transactions have been around for
quite some time in the form of Electronic Data Interchange or EDI. EDI requires each supplier
and customer to set up a dedicated data link (between them), where ecommerce provides a cost-
effective method for companies to set up multiple, ad-hoc links. Electronic commerce has also
led to the development of electronic marketplaces where suppliers and potential customers are
brought together to conduct mutually beneficial trade.
2. E-COMMERCE ADVANTAGES FOR CUSTOMERS
Convenience: Every product is at the tip of your fingers on the internet, literally. Type in the
product you are looking for into your favorite search engine and every option will appear in a
well-organized list in a matter of seconds.
Time saving: With e-commerce there is no driving in circles while looking and digging in hopes
of finding what you need. Stores online offer their full line as well as use warehouses instead of
store fronts—products are easy to locate and can be delivered to your door in just days.
Options, options, and options: Without driving from store to store the consumer can easily
compare and contrast products. See who offers the best pricing and have more options to choose
from. While a physical store has limited space, the same store on the internet will have full stock.
Easy to compare: Side by side comparisons are readily available and easy to do. When
products are placed online, they come with all the specifics, and they want you to compare them
with others, know they have the best options and come back for more!
Easy to find reviews: Because the competition is high, companies’ online want you to look at
other consumer reviews. Good and bad reviews are on every site, not only can you see if the
product is liked, you can also see the reasons behind the thumbs up or down.
Coupons and deals: With every online business wanting you, more and more coupons and deals
can’t be avoided, which are totally great for customers. With major sites that act as department
store, you may find items up to 80% off. Take advantage of the competition and find the best
price available.

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3. E-COMMERCE ADVANTAGES FOR BUSINESSES
Increasing customer base: The customer base is every business’s main concern, online or off.
When online, a business doesn’t have to worry about getting the best property in town, people
from around the world have access to their products and can come back at any time.
Rise in sales: By not managing a storefront, any business will have more sales online with a
higher profit margin. They can redistribute money to make the consumer shopping experience
faster and more efficient. While being available to international markets, more products will sell.
24/7, 365 days: If it’s snowing and the roads are closed, or it’s too hot and humid to even step
outside in the summer, or a holiday that every store in town closes, your online business is open
for consumers 24/7 every day of the year. The doors never close and profits will keep rising.
Expand business reach: A great tool on the internet is…translation! A business online does not
have to make a site for every language. With the right marketing, every consumer around the
globe can find the business site, products and information without leaving home.
Recurring payments made easy: With a little research, every business can set up recurring
payments. Find the provider that best suits your needs and billing will be done in a consistent
manner; payments will be received in the same way.
Instant transactions: With e-commerce there is no more waiting for the check to clear or a 30-
day wait for certain other types of payment. Transactions are cleared immediately or at most two
to three days for the money to clear through the banking system.
4. E-COMMERCE DISADVANTAGES FOR CUSTOMERS
Privacy and security: Before making instant transactions online, be sure to check the sites
certificates of security. While it may be easy and convenient to shop, no one wants their personal
information to be stolen. While many sites are reputable, always do your research for those with
less than sufficient security.
Quality: While e-commerce makes everything easily accessible, a consumer cannot actually
touch products until they are delivered to the door. It is important to view the return policy
before buying. Always make sure returning goods is an option.
Hidden costs: When making purchases, the consumer is aware of the product cost, shipping,
handling and possible taxes. Be advised: there may be hidden fees that won’t show up on your
purchasing bill but will show up on your form of payment. Extra handling fees may occur,
especially with international purchases.
Delay in receiving goods: Although delivery of products is often quicker than expected, be
prepared for delays. A snow storm in one place may throw off the shipping system across the
board. There is also a chance that your product may be lost or delivered to the wrong address.

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Need access to internet: Internet access is not free, and if you are using free wifi, there is the
chance of information theft over an unsecure site. If you are wearing of your public library, or
cannot afford the internet or computer at home, it may be best to shop locally.
Lack of personal interaction: While the rules and regulations of each e-commerce business is
laid out for you to read, there is a lot to read and it may be confusing when it comes to the
legalities. With large or important orders, there is no one you can talk to face to face when you
have questions and concerns.
5. E-COMMERCE DISADVANTAGES FOR BUSINESSES
Security issues: While businesses make great efforts to keep themselves and the consumer safe,
there are people out there that will break every firewall possible to get the information they want.
We have all seen recently how the biggest and most renowned business can be hacked online.
Credit card issues: Many credit card businesses will take the side of the consumer when there is
dispute about billing—they want to keep their clients, too. This can lead to a loss for e-commerce
business when goods have already been delivered and the payment is refunded back to the
consumer.
Extra expense and expertise for e-commerce infrastructure: To be sure an online business is
running correctly, money will have to be invested. As an owner, you need to know transactions
are being handled properly and products are represented in the most truthful way. To make sure
you get what you need, you will have to hire a professional to tie up any loose ends.
Needs for expanded reverse logistics: The infrastructure of an online business must be on
point. This will be another cost to the business because money will need to be invested to ensure
proper handling of all aspects of buying and selling, especially with disgruntled consumers that
want more than a refund.
Sufficient internet service: Although it seems that everyone is now on the internet all the time,
there are still areas in which network bandwidth can cause issues. Before setting up an e-
commerce business, be sure your area can handle the telecommunication bandwidth you will
need to run effectively.
Constant upkeep: When a business has started as e-commerce, they must be ready to make
changes to stay compatible. While technology grows, the systems that support your business
must be kept up to date or replaced if needed. There may be additional overhead in order to keep
data bases and applications running.
6. CHALLENGES OF E-COMMERCE IN INDIAN BANKS
The e-commerce industry in India is growing at a remarkable pace due to high penetration of
internet and sophisticated electronic devices. However, the recent growth rate of e-commerce in
India is far lagging behind than other developed countries. There are many big problems and
challenged on the way of an online merchant. Factors like safety and security of online money

[Franco et. al., Vol.4 (Iss.3: SE): March, 2016] ISSN- 2350-0530(O) ISSN- 2394-3629(P)
Impact Factor: 2.035 (I2OR)
Http://www.granthaalayah.com ©International Journal of Research - GRANTHAALAYAH [7-13]
transaction being the biggest problem along with others have curbed the smooth expansion of the
online industry in the country. Although, major portion of e-business sectors have affected by the
below mentioned challenges but still there are few online giants like Makemytrip.com,
flipkart.com, Snapdeal.com who have overcome the challenges and represents the perfect growth
trends of e-commerce in India.
Source: https://media.licdn.com/
Poor Knowledge and Awareness: When it comes to ratio of internet consumers, scenario is not
so admirable one. Majority of Indian rural population are unaware of internet and it uses.
Surprisingly, most of internet savvies or urban population are also suffering from poor
knowledge on online business and its functionalities. Very few are aware of the online corruption
and fraud and thus darkness still exists. A reliable survey reveals that 50% of Indian online users
are unaware of the solution of online security.
Online Transaction: Most of Indian customers do not possess plastic money, credit card, debit
card and net banking system, which is one of the prime reasons to curtail the growth of
ecommerce. Nevertheless, in recent years, some of the nationalized banks have started to issue
debit cards to all its account holders. This is undoubtedly a positive sign for Indian online
entrepreneurs.
Cash on Delivery: Cash on Delivery (COD) has evolved out of less penetration of credit card in
India. Most of Indian E-commerce companies are offering COD as one of mode of payment for
the buyers. 30%-50% of buyers are also taking advantage of this mode of payment while making
purchase of any product and service over internet. COD has been introduced to counter the
payment security issues of online transaction, but this mode has been proving to be loss and
expensive to the companies. It is seen that majority of the customers denied to make the payment
at the time of delivery of the product. Hence, companies tend to lose the sale along with product
transit fees. In order to curb the problem of COD, online companies should take some judicial
steps; otherwise basic logic behind the ecommerce business will be at risk.

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Impact Factor: 2.035 (I2OR)
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Online Security: In case of startup and small business, Business owners are ignoring the
importance of authentic software due to budget constraints. They are even failing to take the
initial steps to secure and protect their online business through installation of authentic protection
services like antivirus and firewall protection, which indeed a crucial step for successful online
business players. In India, maximum number of business entrepreneurs used unauthorized
software in their server, which usually does not come with upgraded online security. Such
pirated software leaves room for virus, malwares and Trojan attacks and it is highly risky task to
make online transactions in the systems, which may disclose or leak sensitive details of credit
cards and online banking of the users. These kinds of droopiness should be banned in Indian
ecommerce sectors. Affiliation to SSL certificate should be imposed as a mandatory action for
every owner.
Logistics and Shipment Services: In India, logistics and courier services required lots of
improvement. While, perfect and strong logistics service is one of the key reasons behind the
success of any online company, India is lagging far behind in this sector as most of the town and
small villages are still not covered under serviceable area of many of the courier and logistic
companies. Ecommerce is hampered in a big way owing to the limited services offered by the
courier service companies.
Tax Structure: Tax rate system of Indian market is another factor for lesser growth rate of e-
commerce in India in comparison to other developed countries like USA and UK. In those
countries, tax rate is uniform for all sectors whereas tax structure of India varies from sector to
sector. This factor creates accounting problems for the Indian online business companies.
Fear factor: Fear of making online payment is a universal psychological factor of Indian
customers. With the spread of knowledge on online transactions and its reliability, some
percentages of customers have overlooked this fear and they are fearlessly engaging themselves
in online shopping. But still, majority of customers are not aware of online transactions and its
security. They often reluctant to disclose their credit card and bank details and preferred to stay
away from online world of shopping.
‘Touch and Feel’ factors: Indian customers are more comfortable in buying products
physically. They tend to choose the product by touching the product directly. Thereby, Indian
buyers are more inclined to do ticketing and booking online in Travel sectors, books and
electronics. Companies dealing with products like apparel, handicrafts, jewellery have to face
challenges to sell their products as the buyers want to see and touch before they buy these stuffs.
7. CONCLUSION
Today’s digital marketing world, e-commerce plays a vital role in buying behaviour of customer.
The e-commerce industry in India is growing at a remarkable pace due to high penetration of
internet and sophisticated electronic devices. However, the recent growth rate of e-commerce in
India is far lagging behind than other developed countries. There are many big problems and
challenges on the way of an online merchant. Factors like safety and security of online money
transaction being the biggest problem along with others have curbed the smooth expansion of the
online industry in the country.

[Franco et. al., Vol.4 (Iss.3: SE): March, 2016] ISSN- 2350-0530(O) ISSN- 2394-3629(P)
Impact Factor: 2.035 (I2OR)
Http://www.granthaalayah.com ©International Journal of Research - GRANTHAALAYAH [7-13]
8. REFERENCE
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[3] Dr.S.P.Bansal ,“Job satisfaction among bank employees. A study of public sector of
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[4] https://media.licdn.com/mpr/mpr/shrinknp_800_800/aaeaaqaaaaaaaaitaaaajdvlotzlymnil
ty3ztatndq4zs04mtgxlwm3n2fhywnhm2mxyw.jpg
[5] http://www.enkivillage.com/e-commerce-advantages-and-disadvantages.html
[6] http://www.networksolutions.com/education/what-is-ecommerce/