A Sustainable Business Scenario in 2060 in India - Example

Table of content

1. Introduction3

2. Sustainability challenges in current industry in India3

3. Trend analysis of future industry5

4. Creating sustainability scenario in 20608

5. Timeline for moving forward in a right track9

6. Conclusion10

Reference list11

Appendices12

• 1. Introduction

Analysis of the Indian market for the industry of e-commerce is effective to develop more understanding about the recent issues and challenges that the current businesses face. There are several issues and challenges related to social, environmental and economic which can adversely affect the business during successful expansion (DesJardins, 2016). Throughout the essay, it is required to discuss about the current issues for identifying the strategies, through which the businesses in e-commerce industry can secure sustainable growth in near future. The essay is useful to develop appropriate business scenario for sustainable development after 45 years ahead in 2060. After identifying social and environmental challenges, it is important to provide innovative solutions through which the organisations can run the business ethically by maintaining social and environmental responsibilities. The aim of this essay is to analyse current scenario and plan for innovative strategies which help to grow faster in the near future. There are several challenges that are faced by the e-commerce organisations and the issues are for environmental limitations, technological changes and socio-political challenges in the country, India. The plan of conducting the essay is to use analytical tools for acknowledging complex issues, risks and uncertainty as well as future business opportunities.

• 2. Sustainability challenges in current industry in India

E-commerce industry in India is rapidly increasing and it is a new way of transacting information, products and services through online business activities. Computer and telecommunication network helps to cover a wide range of business and provide proper information and products to the customers worldwide. E-commerce helps to provide service 24 hours available for 7 days, focuses on customer relation and their requirements and helps to manage proper transactions, brand value and data audit for successful expansion of the business (Afshar Jahanshahi, Zhang and Brem, 2013). E-commerce industry in India faces several issues such as absence of cyber laws, lack of privacy and security, payment and tax related issues, virus problems and infrastructural issues. Internet is the backbone of e-commerce and there are 5% population who have proper infrastructure for accessing e-commerce. Penetration rate is low and e-commerce remains far away from the general public. It is difficult for the e-commerce organisations to reach 1.2 billion people across 37 million households in 5000 towns and over 6, 04,374 villages in India (Afshar Jahanshahi, Zhang and Brem, 2013).

Figure 1: Issues and challenges in e-commerce industry in India

(Source: DesJardins, 2016)

Both the cost and internet users are low due to inequality income distribution and low literacy rate. One of the great challenges is absence of cyber laws for regulating transaction through online. Though the organisations use new technology and creativity, there stills lacks proper regulations for cyber crimes and for this the organisations face some issues such as privacy, intellectual property rights, content regulations and data protection. Furthermore, tax infrastructure is complex in India and for that the e-traders are not beneficial. Digital illiteracy and consumer psychological issues further raise more challenges for the e-commerce industry in India (Afshar Jahanshahi, Zhang and Brem, 2013). Virus problem is another big issue which hamper smooth transaction of information, technology, products and service form the e-commerce traders to the consumers. There are also some issues related to environment as e-commerce industry has great impacts on global warming, energy, resources and pollution. Wireless internet technology increases emission of green house gases contributing global warming and high radiation also has harmful effects on the public’s health.

Thus, the e-commerce industry in India faces several issues related to industry standards, environmental issues, government laws and legal hassle, economic, political and social influences. Managing logistics is also another issue which further imbalances Foreign Direct Investment (FDI) norms, uncertainty, inefficient holding of infrastructure, intellectual property rights and lack of efficiency in warehouse tax planning (DesJardins, 2016.). Inefficient anti-corruption framework of India, tax technology, legal exposure in agreements, FEMA controversies and regulations and cyber law compliance adversely affect smooth business activities of the e-commerce organisations.

• 3. Trend analysis of future industry

There are several e-commerce organisations in India such as Flipkart, Jabong, ebay, Myntra, Snapdeal, and Amazon etc which are rapidly increasing due to high market growth. India is growing rapidly in e-commerce and the industry is successful to retain more than 300 million people towards online shopping.

Figure 2: E-commerce sales in India

(Source: Afshar Jahanshahi, Zhang and Brem, 2013)

Various websites of the e-commerce organisations provide variety of goods and services and information facilitate more potential to grow from $125 billion to $260 billion by 2045-25 (Deshmukh, Chhangani and Thampi, 2016). Indian e-commerce industry also provides more services such as credit card, net banking, phone banking and debit card. However, the main challenge of the e-commerce industry in India is people’s belief in touch and feel product concept and people in India are not comfortable with online money transaction. Current trend of the industry can be developed through the analytical tools named PESTLE and SWOT analysis which helps to identify current factors in external market and internal opportunities and strengths of the e-commerce industry.

• PESTLE analysis:

The external environment of the e-commerce industry can be understood through PESTLE analysis which can be described below (Refer to appendix 1):

• Political:

Resistance against foreign retailers and corporate tax benefits helps to influence more development in the e-commerce industry in India. Government in India support rising penetration level of the internet users and thus government support and policies helps to secure future sustainable development of the industry. As a democracy country, the present government of India motivate more growth in the e-commerce industry through technology up gradation and building customer loyalty (Sila, 2013).

• Economic:

Booming Indian economy and increasing spending power of the people contributes more profit and growth in the industry. High fuel price and buying facility of the e-commerce increase internet users approximately 10 times in the last 6 years. Gross Domestic product (GDP) of India is increasing rapidly and the monetary and fiscal policies of the country helps to run the businesses smoothly. E-commerce revenue is increasing by five times from $1.6 billion in 2012 to $8.8 billion in 2016 (Bolton and Landells, 2015).

• Social:

Better comfort level and trust of the internet users enhance more online shopping and in the recent years, literacy rate is increasing contributing more internet users. Differentiated products and services of different brands attract more women and teenagers toward the facility of e-commerce and rising population of youth are the primary target of the e-commerce companies. Demographic structure of India fosters more growth in the industry by ensuring high brand awareness and customer’s loyalty.

• Technological:

Increasing penetration rate of broadband and wireless internet enhances the industry to be technologically updated for satisfying the customers. The rising number of population for mobile shopping as well as internet users facilitates more growth in the industry in India (Notten, 2015). Appropriate management of e-commerce and privacy in net banking and other facilities of money transaction help to build customer loyalty.

• Legal:

International Technology Act 2000 manages online issues and ensures cyber laws for reducing the issues related to security and protection. Legal system of India involves compliance with other laws such as penal code and Contract law. Online shopping also involves compliances with banking and financial norms for successful transaction of money. Perry4Law Techno Legal Base (PTLB) ensures that all the entrepreneurs and owners under e-commerce industry need to do proper diligence before opening e-commerce websites (Grewal, 2014). Furthermore, e-commerce websites in India ensures data protection, privacy protection, cyber security, and confidentiality maintenance and data security for smooth business activities.

• Environmental:

Environmental issues are rising daily for excess use of electricity, internet and wireless causing emission of unnecessary radio waves, pollution and strangling cables. Moreover, advertisement through billboards leads to exploitation of paper. ISO 14004:2004 provides all the guidelines to the e-commerce companies for managing environmental impacts of the business activities and provide positive environmental footprints in the society (Mahajan and Agarwal, 2015).

• SWOT analysis:

SWOT analysis helps to explore the existing strength and weaknesses of the industry and upcoming opportunities and threats of the e-commerce industry (Refer to appendix 2). The strengths of the e-commerce industry are low barriers and overhead cost and the managers in e-commerce industry in India are successful in direct customer communication. The e-commerce organisations sell niche products which help to foster more growth by retaining more customers towards the brand. The weaknesses of the e-commerce industry are government rules and regulations, search engine unpredictability and high customer expectations. Active internet users in India are still low and low penetration further raises issues in the e-commerce industry (Dzever and Jaussaud, 2016). Accordingly, India still believes that it is better to buy products after physical exhibition of the products and these buying practices further affect Indians to use the strategy of e-commerce effectively.

Global exposure is the main opportunity of the Indian e-commerce industry. Accordingly, the managers and employees in this sector provides 24×7 services to their customers which are another opportunity to expands the business and retain more loyal customers (Doyle, McEachern and MacGregor, 2015). Increasing network among the companies inside and outside of India provides more opportunity to grow faster and become a reputed organisation (Peršič, M. and Peršič, A., 2016). Cash on delivery system make 60% more profit and it will help to improve customer loyalty and interest towards utilising e-commerce facility. Direct selling is important threat in this industry an on the other hand, future legislations and chance of hacking raise security issues. Furthermore, less scope for implementing innovations and creativity is another threat of this industry.

• 4. Creating sustainability scenario in 2060

In order to make the e-commerce business sustainable and secure future development in the industry in India, there need proper strategies for the organisations. Situation analysis helps to explore the recent scenario of the e-commerce industry in India and the brands that face competition in the market. Future business strategies and other strategic planning will help the brand and the recommendations can be described further, which can foster growth also after 45 years in 2060. The organisations need to develop company website in easier way such that the customers can access it easily. This will help the customers to choose the products and services as per their benefits and preferences more easily. More social media interaction is also a necessary step for the brands which needs to be implemented for improving customer loyalty, seeking proper customer feedback and making the organisation feasible and reliable as well as it helps to reduce social issues by ensuring more community involvement. In order to improve business, the organisations need to manage warehouse and reduce resource wastage for successful expansion of the business without any environmental issues.

• 5. Timeline for moving forward in a right track

The time table for sustainable growth of e-commerce industry in India can be developed further:

Figure 3: Time table for sustainable development, in 2060

• 6. Conclusion

Through situation analysis of the e-commerce industry in India, it is possible to explore the issues and challenges of the industry in the recent years. The issues are environmental, social and political which adversely affect the business of e-commerce. The PESTLE and SWOT analysis of the industry further help to identify recent situation and also provides a scope to make effective strategy for successful development in 2060. In order to secure sustainable development of the business and gain effective competitive advantage, the recommendation are appropriate such as quality website, more community involvement through social media, cooperation at workplace and technological advancement. Moreover, investment on recycling resources helps to reduce negative impacts of the business on environment and secure future sustainable growth in India.

• Reference list

Afshar Jahanshahi, A., X. Zhang, S. and Brem, A., 2013. E-commerce for SMEs: empirical insights from three countries. Journal of Small Business and Enterprise Development, 20(4), pp.849-865.

Bolton, D., and Landells, T., 2015. Sustainable business development. Business Strategy & the Environment, 24(7), p604-616. 

Deshmukh, S.P., Chhangani, A.Z. and Thampi, G.T., 2016. Public Policies to Facilitate Higher Penetration of E-Commerce and M-Commerce in India for Higher Productivity. Productivity, 56(4), p.332.

DesJardins, J., 2016. Sustainable development. Business ethics Quarterly, 26(1), pp.117-135.

Doyle, T., McEachern, D. and MacGregor, S., 2015. Environment and politics. London: Routledge.

Dzever, S. and Jaussaud, J. 2016. China and India: Economic Performance and Business Strategies of Firms in the Mid 1990s. London: Springer.

Grewal, D.S., 2014. Entrepreneurship in Information Technology. Progress in Science in Engineering Research (PISER) Journal, 2, pp.304-310.

Mahajan, P. and Agarwal, M., 2015. Exploring the Potential of E-Commerce in the Digital Age: Challenges and Opportunities for Commerce Education. IUP Journal of Information Technology, 11(4), p.46-59.

Notten, P. V., 2015. Scenario development: a typology of approaches. [Online] Available at: < http://www.oecd.org/site/schoolingfortomorrowknowledgebase/futuresthinking/scenarios/37246431.pdf> [Accessed 27 April, 2016]

Peršič, M. and Peršič, A., 2016. Special Issue. Management: Journal of Contemporary Management Issues, 21(1), pp.207-225. 

Sila, I., 2013. Factors affecting the adoption of B2B e-commerce technologies. Electronic Commerce Research, 13(2), pp.199-236.

• Appendices

Appendix 1: PESTLE Analysis

(Source: Bolton and Landells, 2015)

Appendix 2: SWOT Analysis

(Source: Dzever and Jaussaud, 2016)