E-COMMERCE AND TRADITIONAL COMMERCE- A COMPARATIVE STUDY Dr. Pavan Kumar Mittal
Assistant Professor Commerce, Renaissance College, Indore Dr. Arpita Mittal
Assistant Professor, S.J.H.S. Gujarati Innovative College, Indore
Abstract - Along with the traditional business method, E-commerce is also being used more and more in India. E-commerce means electronic commerce, by using internet goods and services can be exchange very easily and convenient. Through E-commerce high growth of economy but also some challenges facing by e -commerce, which removing very soon.
Provision has also been made for ecommerce in the consumer protection act 2019 so that consumers can get protection from any type of fraud that occurs through e-commerce.
Online shopping is concerned with e-commerce. The act of purchasing products or services over the internet is known as online shopping. Despite the advent of online shopping, the traditional shopping still prevails. But there has been a controversy as to which is better in comparison which the researcher himself has not been able to find. The survey, thus, conducted shows that people are not likely to use it every time but only prefer it sometime.
The dilate is still on the pros and cons of online shopping, type of e-commerce threats that society poses using online shopping and also its advantages over traditional Shopping.
Keywords- Online Shopping, e-commerce, Traditional Shopping, Traditional, Transaction, Liberalization, customize.
1 INTRODUCTION
Online shopping is a trade dealing with e- commerce. The act of purchasing products or services over the internet is known as online shopping. Online shopping has revolutionized the business world by making everything anyone could want available by the simple click of mouse button. But still people around are facing problems of the population are vexed by quality, time of delivery and defective items. An online store may also be called e-web store, e-shop, e-store, web-shop, online store, virtual store etc.
These are designed to enable customer to browse through products are services over mobile, tablets, computer etc.
In the beginning of civilization and development, human needs were simple and limited. People used to exchange goods with each other to satisfy their need and wants. Barter exchange system refers to directly exchange goods or service for other goods or service without using a medium of any kind of exchange, such as money, and then gradually increased the trade of monetary transaction.Monetary transaction is a system in which good and service is exchanged in the place of money .In 1991 the year of liberalization in Indian economy. the government has made some radical changes in its policies related to foreign trade, foreign direct investment,exchange rate, fiscal
discipline, free market access without any restriction,allow to established more privet companies and reduce government control etc. The new economic policy has been creating a more competition in the environment of economy as a mean to make more acceptable the productivity, transparency, consistency and efficiency in the economy.
As the internet is growing exponentially, companies are trying to attract buyers through it by selling their products online. The e-commerce has grown to such an extent that it attracts almost 80% of Indian population. The main reason is because of availability of different products, discount, less time and effort consuming, reaching to large number of people in lesser amount of time.
Sub-commerce is expected to grow by 400%. Ecommerce is a new business model and a new technological economic paradigm that has a profound impact on the economy and life. E-commerce can promote the transformation of production methods in enterprises and industries, making it possible for traditional manufacturing industries to achieve user centered small batch, multi-variety, zero- inventory‖ production, enabling retail and wholesale industries to use online shopping without physical stores.
1.1 Comparison of basic characteristics of Traditional Commerce & E- Commerce
Compared with traditional commerce, e- commerce has the following basic characteristics:
Fairness. In ecommerce, all companies are on the same starting line. In a sense, the smaller the company, the more opportunities it benefits from the network, because the Internet allows them to overcome capital, talent, and geographic constraints.
Virtuality. Because the interconnection has changed the traditional concept of space, there has been a virtual space or virtual society different from the actual geographical space.
Fast. Because of the
interconnection, economic activities have been characterized by rapid operation. Thanks to the interconnection, you can quickly search for any information you need and respond instantly to the market.
Global. Because of the interconnection, beyond the limits of national boundaries and regions, the economic activities of the entire world are closely linked. The rapid flow of information, money, goods and services has greatly contributed to the process of world economic integration.
After using e-mail marketing the innovation of Teleshopping in Indian economy. Tele marketing is direct marketing of goods and services for customer over the telephone, mobile or the internet. People can easily purchase good by using one phone call with advancement of technology in present, e- commerce is extended in such a way that it is becoming very popular in whole economy. E-Commerce means electric commerce or internet commerce. E- commerce means buying and selling of goods and services through internet, and the transfer of money and data to complete the sales. Government also promotes and makes policy to digital economy. The fast growing e- commerce market in the country and boost whole economy. In present various types of e- commerce like business to business e-
commerce, Business to consumer e- commerce, consumer to administration e- commerce.
Traditional commerce refers to the practice of selling products and services within a single industry and in some cases, within a specific geographical area.
Traditional commerce relies on operating business hours during a specific period of time and requires housing inventory or occupying a retail store. Traditional commerce often relies on face to face interaction with consumers and thrives based on word of mouth, networking and customer referrals for new and repeat business.
2 REVIEW OF LITERATURE
According to a statement by Amrish Rau, CEO of PayU India “Around 40 per cent of COD was driven by black money according to a study done two years ago.”
Demonetization cracked down the whip on black money forcing people to go digital. In fact, the first 2 months after Demonetization did see a decline in e- commerce growth in India as there was a reduction in sales. The cash crunch and cap on ATM withdrawal limits affected the buying capacity of majority of consumers, especially customers in tier-2 and tier-3 cities who are used to the payment mode of COD. Some of the online retailers had to temporarily suspend their COD payment option. Redseer Management, a research and advisory firm, projected in August 2016 that the e-commerce industry in India would see a growth of
$79.41 billion by 2020. But Demonetization managed to upset the numbers and the growth for 2020 is currently pegged at $47.45 billion.
1. (Raja & khan, 2020, pp. 697-709) In this article found that before green revaluation how was the rural marketing and after liberalization there were many changes in rural area marketing. Government also made several polices through which in rural area with traditional marketing, Ecommerce, investment, Agriculture training, Technology education, banking facility, green card for farmers, employment opportunities are given. In India 65% of population lives in rural
area. Rural marketing is assets of whole economy.
2. (Chaturveda,2017,pp.) In this article mention that Indian marketing structure divided into two parts rural and urban market. the study found that rural marketing boost the economy. company are investing in rural marketing and produce customized product, develop infrastructure in rural marketing and change the mindset of customer. The study found that the goal of rural marketing is consumer satisfaction instead of only profit maximization. With urban marketing, rural market is also playing a very big role in economy.
The study also found that the mass services in rural area.
3. (Khan,2016, pp. 19-22) In this article to study the E-commerce Industry will be leader with popularity in economy in upcoming year. Examine various challenges and solution in implementing e- business.
4. (Soni, 2017, pp. 390-392) The studies found that E-commerce market in India enjoy the phenomenal growth in the last year.
Development in E-commerce creating big opportunity for cross border trade. The internet is enabling small company to access global market unlike ever before.
Although the trends of E-commerce has been making rounds in 15 years.
5. (Panigrahi, Upadhyaya &
Raichurkar, 2016, pp. 15-22) In this article attempts to explain the concept of E-commerce, merits and demerits of E-commerce. Various trends of E-commerce and challenges before E-commerce and after E-commerce. However, at present juncture it has several limitation, legal and technical barriers in the development of E- commerce in India which could face away in year to came.
2.1 Advantages& Disadvantages of Traditional-Commerce
Advantages
Easy availability of products-All the required products which are important for daily routine can easily be obtained from the nearby stores and can be purchased easily.
Easy to approach- Less complications are concerned with traditional market. All that is to be done by the buyer is to visit the store of choice with a mode of payment.
Personal contact- Personal relationship increases as there is direct interaction between the customer and the retailer.
Preferable option for backward area- Due to unavailability of modern technology in backward areas;
people who live there choose to buy products in traditional way.
Regional products- Popular products of a particular area are easily available in traditional market.
Visibility of products- Consumers can actually touch and see the products they have chosen to buy until they are fully satisfied about the quality and quantity as well.
Credit availability-Since personal relationship and trust is usually built between consumer and retailer;
it is possible to buy products on credit in case of shortage of money.
Suitable for every social structure- Anyone, educated, undereducated or uneducated, can start business in a traditional market.
Perishable goods-Goods which are consumed in a shorter period of time (milk, fruits, vegetables, sweets) are available in traditional market.
Disadvantages
Limited geographical area- Due to complex structure of cities, there is limited space provided for market activities.
Less variety of products- As most of the retailers only sell popular or more marginal products, it is difficult to obtain different variety of products.
Time consuming and exhausting process-A lot of time and effort is required for actually going to the market and buying products which makes the purchase a time consuming and exhausting process.
Time bounded- A considerable amount of time is required in order to buy products, so time management becomes a rather important aspect to bring traditional market under consideration for the purchase.
Higher cost- As a hierarchy is involved in traditional market, the cost of productsis increased.
Weather dependent- The buying and selling of products depend on the weather, so market activities are difficult to execute in extreme weather.
Lack of global product- Since retailers sell biased products, global products are difficult to obtain in traditional market.
Limited mode of payment- Most of the retailers prefer cash over any other modes of payment. So, options for payment are limited for the consumer.
More corruption- Most of the retailers sell their products without generating proper bills and they do not pay any tax on the product which ultimately increases corruption.
2.2 Advantages & Disadvantages of Traditional-Commerce
E-commerce- Electronic commerce (ecommerce) is the marketing, buying and selling of merchandise or services over the Internet. It envelops the whole extent of online item and administration deals all the way. Internet business devices incorporate PC stages, applications, arrangements, servers and different programming positions produced by web based business specialist co-ops and obtained by shippers to increment online deals. Commerce facilitates the growth of online business. It is categorized as follows:
1. Online marketing 2. Online advertising 3. Online sales 4. Product delivery 5. Product service 6. Online billing 7. Online payment Advantages
Lower cost- Products can be ordered at any place which reduce the
transportation cost. For selling purpose, renting or buying a shop is not a necessity. It can be done from one’s home only.
Less time consuming-With the help of e-commerce, all products are available at one place and in just a few clicks which saves a lot of time of the consumer.
Suitable for startup-To start a business, loads of investment is needed but in e-commerce, less amount of money is required which is suitable for every class of society.
No geographical restrictions- There is a free entry and exits. Restriction in e-commerce is less as compare to other.
24x7 product availability- No specific time period is defined in e- commerce. Services are usually available at any time that pleases the consumer.
Variety of option for similar product- due to increase in the competition in the market every product has a similar substitute product. Which is not possible for the seller to keep all of them, but with the help of e- commerce many competitor sales their product at one place which increase the variety of the product.
Delivery at door step- The ordered products are delivered at the consumer’s house.
More discount- Due to reduction in intermediates, the cost of products also reduces which help the producer to sell their products at a lower cost by providing higher discount.
Easy to advertise-with the help of internet producer can easily promote their product on internet by providing all the information of the product. All the information is available regarding the product so customer can easily find their product, which help the consumer to increase the satisfaction.
Employment opportunities- From the starting point (placing the order) to the ending point (delivery of the product), a lot of manpower is needed. E-commerce helps to reducing unemployment.
Less corruption-In e-commerce, chances of corruption is nearly nil.
All the purchases done, comes with proper bills and the suitable taxes are paid, hence developing the economy.
E-payment options-A variety of modes of payment is available for the consumer making the purchase more consumer-friendly.
Return and replacement policy- Better return and replacement policies are available for the consumer. If the consumer is not satisfied with the product which is delivered, they can return or replace the product within a certain time period.
Product description-for buying any product there is a requirement of information regarding the product and their substitute product which help the consumer to find the best suitable product for them. E- commerce help to supply the information regarding the product.
Systematic process-The processes involved in ecommerce are quite systematic from placing the order till the delivery.
Disadvantages
Less visualization-Since the products being purchased are seen on just a screen and not in reality, the consumer is usually in doubt about the product.
Harder to deliver to backward areas- Delivery of products in rural areas is comparatively more difficult than it is in urban areas since the routes are not proper.
Unavailability of regional products- Many regional products are not available at commercial e-commerce.
Security and privacy breach- For online transfer of money, customers have to fill many debit card and credit card details and there is always a risk of information to be leaked.
Impersonal contact- There is lack of personal contact between seller and buyer, because many people do not buy product without any personal contact between seller and buyer.
Additional cost of delivery – Most of the times, seller charges additional
cost for the delivery of the product which increase the cost of the product.
3 RESEARCH METHODOLOGY
In this article based on secondary data all data collected from newspaper, articles, internet, books.
3.1 Finding
The study found that the use of e- commerce we can get good quality product at low price without go any were.The supply chain in e-commerce is not as long as in the traditional business, from producer to consumer,due to which the consumer had to pay a lot of extra cost in exchange for goods and services, but due to the small supply chain in e- commerce had to pay less amount. Goods and services are available at low cost.
Government made program and policy like National digital health mission launched by honorable Prime Minister Narendra modi on 15th august 2020.
Under this scheme health id card of every Indian will issued and they can avail the facility of treatment being done through digital medium in the hospital, Digital India scheme, Ghartakfiber scheme in Bihar on 31st of march 2021 to connect all rural area with high speed and quality optical fiber internet etc, to enhance e- business and digital economy in urban area and also rural area.
Table 1 show the total internet subscriber on 31st December 2020 in the country. On the basis of this data 745.1 millions peoples are broadband subscribers, out of this subscriber 22.29 millions are fixed line subscriber and 725.12 million wireless subscribers.
Table 1- Internet Subscribers as 31st December 2020 Segment Modes of Access Total
Fixed line Subscribers (in Millions)
Wireless Subscribers (in Millions)
Broadband 22.29 725.12 747.41
Narrowband 3.24 44.53 47.77
Total 22.54 769.64 795.18
Source: Telecom Regulatory Authority of India
Table 1.1 show the data of previous five year Fixed -line broadband subscriber in December 2015 there were 16.5 million subscribers and now there are 22.29 million subscribers. Fixed- line subscribers are constant previous presiding three years.
As the result says 65% people prefer traditional shopping over online shopping. People are more interested in high street marketing. These brands are available in online shopping too but it gives the satisfactory quality to buy from regional shops. Also sometimes the customer shopkeeper relations provide some chance of bargaining for customers.
50% of people consider it satisfactory and only 35% of people use online shopping.
Only a small part of the society takes part to buy things online. Some are not satisfied with the quality some say it good, some are satisfied and few say it be worst. If we analyses the graph we see that 43% people sale it good and same percentage of people said it satisfactory.
As the buyers are less so 5% of people mark it excellent. More than people are unsatisfied i.e. 9% of people mark it worst. That is why people are preferring to buy it from shops so that they can fully analyze feel the product quality. People face problems with fitting, size, color, look etc. Also people are facing problems with
the delivery options and return and exchange policy. It happens sometimes that delivery time is too late and customer has to wait for long time. Even the exchange and return takes much time.
For example if the pickup cannot be arranged the customer has to post it. 43%
of the society is concerned with return policy and 25% are concerned about delivery time. Also it happens that problem occurs with the online transactions. Only 11% of people go for online options rest 89% of people go for cash on delivery options. In past year we have seen many online scandals and fraud that some people face. Some people consider it problematic to use internet.
Most of the society people don’t know the use of internet. Also for years people are using these traditional ways and care not able to accept these new ways. Also the percentages of society using it are unhappy i.e.. 25% of people think that the sites and its features needs to be improved. Although the graph 55% people consider it satisfactory by a major part I.e.
20% are still unsatisfied. Thus we see that the people are unsatisfied and do not prefer it even don’t wish to suggest it to others too.
5 RESULT
E-commerce is becoming more and more popular day by day. But still there is a debate amongst the people about its advantages and disadvantages. So to get a clear view on this a survey was conducted among students, businessman, doctors, lawyers etc. People participated heartily to give their views. The results are as follows:
6 SUGGESTION
In presently e-commerce boosting the economy. There are many benefit as well as some challenges like security of products, quality of products, education, internet access, unemployment, stereotype thinking etc, effort should be made to rectify these shortcoming,as well as in rural area where people of youth who use more and more internet,social media,E-banking, E-learning. They should provide information related to this to more people and they should also be connected to the internet.
7 CONCLUSION
As to conclude results we see that people are still unhappy and consider it good for sometimes. People are suffering with its ill effects and are hostile. They prefers traditional ways over these new technologies. As the population is increasing the companies and market is growing day by day. People are thus posing threats of cheating, fraud, transactions, etc. Essentially people are not considering it really reliable and cannot fully depend on it for any purpose.
Thus we can clearly conclude that traditional shopping is better than online shopping.People life has become very simple and effective through e- commerce.
Economy of country has been progressing a lot due to the progress of e-commerce.
People are using digital medium in their day to day process except traditional method of commerce. More than half of the population in the country lives in village and they are moving towards digital economy very fast. Good quality of products and services can be compared through e- commerce at the least cost and also provides easy delivery of goods and return policy.
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