The rise of e-commerce and its subsequent impact on the Indian retail market

Online shopping has been gaining widespread popularity not only in India, but in most parts of the world. And as such, it becomes inevitable for merchants and traders to predict this sudden surge in growth rate.
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The rise of e-commerce and its subsequent impact on the Indian retail market International Journal of Management (IJM) Volume 7, Issue 7, November–December 2016, pp.271–275, Article ID: IJM_07_07_029 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=7 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication THE RISE OF E-COMMERCE AND ITS SUBSEQUENT IMPACT ON THE INDIAN RETAIL MARKET Sijoy Syriac B. Tech, ECE, VIT University, Vellore, India Dr. Raghuram J Associate Professor, VIT University, Vellore, India ABSTRACT Online shopping has been gaining widespread popularity not only in India, but in most parts of the world. And as such, it becomes inevitable for merchants and traders to predict this sudden surge in growth rate. With various e-commerce giants investing in the Indian market and MNCs recognizing this potential, it is safe to say that the online revolution has already begun. But what are the various elements that play a part in shaping the future of online shopping? Through this research, we bring to light the various factors that have affected the online market in other countries (mainly U.K., Turkey and Pakistan) as well as India and the measures taken and bills (mainly, GST bill) passed by the Govt. of India that would invariably affect the future of online shopping in India. Key words: GST, Retailing, Technology Cite this Article: Sijoy Syriac and Dr. Raghuram J, The Rise of E-Commerce and its Subsequent Impact on the Indian Retail Market. International Journal of Management, 7(7), 2016, pp. 271– 275. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=7 1. INTRODUCTION The potential for growth in online shopping in India is enormous. There are many factors that can substantiate this. India has the second largest number of internet users in the world just after China [1]. The Govt. of India’s concept of ‘Make in India’ has only fueled this spurge in growth. With 3,100 startups in 2014 to a projection of more than 11,500 by 2020, India boasts of the world’s fastest growing startup ecosystem [2]. The country’s population pyramid is expected to ‘bulge’ across the 15-34 age bracket over the next decade, increasing the working age population from approx. 761 million to 864 million during 2011-2020[3]. Electronic payment is also steadily growing with a number of startups facilitating this, like PayPal and Paytm. Another factor is the collaboration of the Govt. of India with MNC’s such as Google and Microsoft to set up free Wi-fi’s at railway stations across the country. They also intend to extend internet services to rural areas. In order to tap this predicted growth in online market, sellers need to understand the nature and the factors affecting the consumer behavior. Thus it becomes increasingly important for companies to shift their marketing focus from the traditional four P’s of marketing to the four C’s of social mainly content, connecting, community and curating. This paper will help in better understanding of the nature of the Indian online market. http://www.iaeme.com/IJM/index.asp 271 editor@iaeme.com Sijoy Syriac and Dr. Raghuram J 2. PURPOSE OF STUDY It is quite obvious that online shopping has become a trend among the Indian consumers. But how long can it sustain? In the long run, what are the factors that would affect the buying behavior of a consumer? How should a seller keep up with the growing trends in the market? Through this research, we intend to bridge the gap between the present and the future of online shopping in India. 3. LITERATURE REVIEW The internet has always been a fountain of infinite opportunities and growth potentials. Online shopping is one such product that has emerged from the ever growing need for innovation. An unprecedented growth has been recorded in online marketing since 1991. Globally, the number of websites increased from 23,000 in 1995 to just around 1 billion in 2016 (Amalesh Sharma, 2011) [6]. Online shopping is a relatively new concept to the Indian mass but has been hugely successful in penetrating right into the roots of the Indian market. In the UK, the internet has penetrated to 84.1% of its total population. So the opportunities and growth of online shopping is undoubtedly huge. Moreover, the e-commerce in UK takes 10% of the total sales, forcing companies to take e-commerce seriously. In Turkey, 44.4% of the total populations use the internet on a regular basis. According to the Turkish Statistical Institute, 21.8% of the internet users bought products and services over the internet in 2012. This percentage has since only been increasing at a steady rate. The main purpose being convenience, price advantage and access to a wide range of products. (Seda Yoldas, 2011) [10] In the Indian context, various factors come into play that affects the mentality of the customers before purchasing online. A recent study showed that the product warranties and certification of the websites are key determinants. Many researchers have agreed on the fact that cognitive abilities differ in cultures like India that are still developing. These abilities are likely to expand over time, making the marketplace more elaborate and diverse. (Arun, Xavier, 2012) [7] Factors in work life that affects the behavior of consumers have been identified by Smith and Rupp (2003) [8]. Some of these are marketing effort, socio- cultural influence, emotional factor, psychological and privacy factors, the purchase and post decisions. According to a survey in Pakistan online shopping is getti ...