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Net sales on an uptrend

As more and more consumers experience the convenience of shopping on the Net, companies and service providers are cashing in on the trend says Vishwanath Kulkarni.

A REVOLUTION, based on the largest communications network, the Internet, is happening in the world -- it is e-business, which has become the buzzword in the corporate and industry circles.

It goes without saying that e-business represents a fundamental change in the way the world does business. And e-business is not about an organisation simply creating a corporate website. It is about organisations using the Internet to work more efficien tly.

The Internet offers companies the ability to conduct their existing business using a fundamentally new business model, to expand globally and to enter completely new markets. And even the companies have realised that e-commerce is where business is.

It has eliminated traditional entry barriers and created efficient markets where prices can be easily compared.

Faced with a resulting increase in competitive and margin pressure, e-businesses must leverage Internet technologies to streamline business processes and integrate their suppliers and partners to deliver products and services more efficiently to customer s.

Every e-business has a direct relationship with its customers and can differentiate itself by offering personalised products and distinctive customer service. Offering value-added services seems to the most happening activity for companies that have e-en abled themselves. Since Internet customers are only a click away from switching and e-businesses that manage customer relationship distinctively have a significant competitive advantage.

E-commerce largely consists of four segments -- business to business (B2B), business to consumer (B2C), consumer to consumer (C2C) and consumer to business (C2B). However, the whole gamut of e-commerce includes not only B2B, B2C, C2C and C2B but also the customer relationship management (CRM), supply chain management (SCM) and business intelligence through data warehousing and even virtual enterprises.

The B2B segment, as the name itself suggests is mainly focussed on a particular business or industry whereas the B2C

is focussed on individual customers. Currently the B2B segment commands the biggest volume of the business that takes place on the net whereas the B2C segment is still in infancy. It is estimated that nearly 80 per cent of all the transactions that take place on the net are in the B2B segment.

The examples of B2C include rediff.com, fabmart.com, zipahead.com, stylecountry.com whereas the examples for B2B include Indiamarkets.com, IPFOnline.com, matexnet.com, commodityindia.com etc.

The Internet has not only revolutionised the way business is being done but has also impacted other segments such as education, healthcare etc. Various portals focussing on education have come up in the last several months. Portals such as egurucool.com , schoolteacher.com aim to help the students and supplement their classroom lessons.

According to the recently released findings of Nasscom (National Association of Software and Service Companies), the apex body of the Indian IT Industry, the volume of e-commerce transactions in India was about Rs. 450 crores during 1999-2000. Of this, R s. 50 crores came from the retail Internet or B2C transactions and the B2B segment transactions contributed nearly Rs. 400 crores.

Compared to the global trend, the Rs. 450-crore business transactions that took place over the Internet may seem negligible. However, considering the fact that the absence of a regulatory framework to support the e-commerce in India, the value of e-trans actions seems impressive. The potential for e-commerce transactions in India seems immense.

The Nasscom survey to evaluate the e-commerce potential in India forecasts that e-business transactions in the country are expected to touch Rs. 3,500 crores in 2000-01 and Rs. 15,000 crores by 2001-02, in tune with the global growth and keeping in view the fact that the regulatory framework would be in place with improvement in telecom infrastructure and an increase in the personal computer penetration.

As per the survey Internet connections have grown in India from a meagre 0.002 million connections as on August 15, 1995 to around 0.95 million as on March 31, 2000. The number of users has also gone up considerably from 0.01 million in August 1995 to 3. 25 million as on March 31, 2000.

The Nasscom projections say that the Internet connections and the number of users are expected to reach the magic figure of six million and 16 million respectively, by March 31, 2003.

The survey also predicted that by 2003, India's active Internet population would spend close to 1.4 per cent of its total regular household spending through Internet purchases by 2003. Regular streams would increasingly be aligned with emerging global mo del, the survey said.

With the spread and usage of Internet as part of daily life set to grow by leaps and bounds, it is opportune time for the traditional brick and mortar companies to go the click and mortar way. While there has been concern over the present state of affair s with regard to facilitating and supporting e-commerce in India, the software industry and the user segment are putting together their resources for adopting e-business strategies.