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Monday, August 26, 2002

India in the midst of e-commerce revolution
Gunmala Suri

IN the series of latest developments that marked the progress of technology is the World Wide Web (WWW). On par with the earlier discoveries such as fire, steam engine and the proliferation of telephone lines, the WWW ushers many revolutionary changes relating to how human beings communicate, educate, entertain and the way how they carry on businesses. This marks a new era in the history of human race.

Traditionally, shopping or buying has been a personalised behaviour was made on the floor of a store. The advancements in the information technology are redefining the business frontiers.
What is e-commerce? Commercial transaction over an electronic medium is known as e-commerce. It is nothing but business done through the Internet facility. It is defined as every type of business transaction in which the participants (i.e. suppliers and end-users) prepare or transact business or conduct their trade in goods and services electronically. It includes the use of technology (electronic) to support or conduct any business practices (commerce).

In simple words e-commerce is a process of two or more parties making business transaction via computer and some type of network. The scope of e-commerce is very wide covering all forms of electronic processes.

The process of purchasing a product electronically is conceptually similar to the process of purchasing a product from the physical store. In business-to-business transactions the purchaser shifts the purchasing from a physical store to a virtual store on the Internet. The purchaser browses an online catalogue, selects the product and tells the merchant system that product is acceptable and he is ready to purchase it. Then the merchant system tells the purchaser to select the payment instrument. He may opt for any kind of e-money including credit card. The underlying technologies involved in e-commerce are Internet and EDI (electronic data interchange). The Internet needs no explanation. However, EDI may be defined as application to application transfer of documents through computers in a standard format. These formats look like standard forms and highly structured. It is a safe and fast method and can be applied at various layers of business processes such as ordering, acceptance, custom clearance, manufacturing delivery etc. EDI is effective in reducing the cost and implementing efficiency. It is estimated that 95 per cent of 1000 fortune companies are using it.

Some hurdles that one faces during e-commerce transactions are:

(a) The existing legal framework in several countries is not properly placed to encounter the challenges of the digital age. They need to adopt a global approach to ensure uniformity in statutory and administrative instruments.

(b) There is need to bring out cyber laws that recognise the validity of electronic transactions.

(c) To take full advantage of global e-commerce, there is need for full-convertibility of rupee. In India, at present, rupee is fully convertible on current account only but not on capital account.
(d) There are more problems in case of dealings relating to knowledge business.
Security of the transactions depends upon the certification by a trusted third party, preferably a government body. Global e-commerce requires the establishment of Global Certification System.
Since transactions through so many computers between buyer and seller, no transaction is secure. Credit card numbers and other sensitive information could be easily stolen. The tampering of information could be prevented through a process of encryption.

India is currently in the midst of an e-commerce revolution. A survey conducted by Indian market research bureau (IMRB) revealed that only 20 per cent of 318 Indian corporations were currently implementing e-commerce in their operations. The total volume of e-commerce transactions in India was worth Rs. 450 crore in 1999-2000.

Nasscom survey reveals that e-business transaction in India is expected to go up to Rs. 40,000 crore in 2003-2004. E-commerce phenomenon is globally acceptable and India is no exception. It alters traditional concepts of time and space. More and more businesses are turning to the Net to expand their reach, uncover new markets, to reduce labour and cost. An Indian company with minimum investment can tap the entire world market.