Background of E-commerce and Social Media Tech in India

Globalization and technology are two major drivers behind such drastic reformation and innovation in the business model. Technology alone has created a wave of disruption across the business ecosystem; a whole new industry circling around technology has been created in the last couple of decades. One such industry, which has shown the maximum growth and utilized all the avenues of technology and its platform, is the e-commerce industry (Gori & Silvestri, 2018). The e-commerce industry in simple words can be understood as a platform which facilitates buying and selling of product or service from the web. Globally, the e-commerce sales have been categorized in the B2B and B2C category, the B2B category sales stood at USD 2.3 trillion whilst the B2C sales stood at USD 7.7 trillion. The market is showing solid growth and potential and is expected to grow by 236% until 2021. The e-commerce industry has been ably supported by the social media technology or platform which acts as an enabler to its sales, marketing, after sales and relationship building support (Li, Fredrick & Gereffi, 2018).

                                                                         

                                                                                      (Source: Kumari, Anita & Nagaria, 2018)

Drawing from the introduction which serves as the preamble for the report, the purpose of the assignment here is ascertained the issues involved using the social media technology in developing nations in order to build the business internationally. The report will highlight the background of the industry in the fastest growing developing economy India, and will understand its current business and technology landscape. The report will also discuss in depth about the impact on the e-commerce business due to the social media technology and its implication for the managers. The report in comprehensiveness provides a complete analytical discussion revolving around the growth in social media technology impacting the e-commerce industry and the business internationally.

                                                                        

In the Indian sub-continent e-commerce and social media more and less follow a similar pattern in terms of growth and adoption. Over the last few years, social media platforms grew at a rapid pace, the e-commerce ably leveraged the platform to match up with the growth in social media technology. E-commerce which in the Initial years had only a couple of players like E-Bay and Amazon, showed strong growth especially after Amazon took its journey to the stars. The e-commerce industry in the very present day is extremely crowded and new companies are being created every single day. These companies are leveraging the social media technology to achieve a competitive advantage and outsmart any competition (Yousef, 2018).

Current Business and Technology Landscape

A snapshot of E-commerce industry and Social media platform growth and future projection will give an overview of the industry in the 1.33 Billion densely populated countries. The current business and the technology landscape is highly rewarding and progressive which is a harbinger of good times for the e-commerce company, technology, Indian society, Community and the entire economy(Narayan & Heggde, 2018).

 

The market estimated to reach USD 200 Billion by 2026 from USD 38.5 billion in 2017.	Growth of Internet penetration in India from just 4% in 2007 to 35.03% in the year 2017, with a CAGR of 24.23 %. The internet population as of 2017 stands at 64.84 in Urban areas and close to 21% in rural areas. Out of the total population of 444 million, 295 million are active internet users as of 2017.
	Over 196 million people as active social media users and the figure is expected to reach at 370 million by 2019.
	Facebook and Youtube have maximum penetration of 30% each in the Indian ecosystem
	Followed by WhatsApp, Instagram,  Snapchat, Twitter, Linked In, Pinterest and many more.
	Drivers of social media platform are Big data analytics, storytelling, content creation and promotion, engagement and conversation.
	Adds fuel to the fire created by the e-commerce Industry by acting as a catalyst.

(Source: Khan & Sharma, 2018)

The above table clearly reflects the growth e-commerce industry is showing in India. Investments are pouring in from the western and north eastern parts of the world as the market is showing strong resilience and growth. The same has been ably supported by the technology of social media platforms which is ensuring increased sales and promotions for the e-commerce sector. Thus, social media ecosystem acts as an enabler for the growth and penetration of e-commerce industry (Heggde & Shainesh, 2018).

The section here will use PESTLE framework to assess the issues, positives and the overview of the industry in Indian sub-continent.

PESTLE analysis is a macro environmental strategic framework which analyses the industry according to the external factors impacting the e-commerce industry in India.

                                                 

India is the largest democracy and most definitely one of the fastest growing developing economies. The company stands at 5^th place in terms of GDP replacing France at the present. The political climate of India is favourable and in the last couple of decades there has been no disturbance in its Politics. The government through its Make in India program and Start-up India is giving opportunity and facility to the start- up founders and entrepreneurs. Additionally, the government is drawing the interest of investors and focussing on e-commerce for the development of the economy (Jha & Bhattacharyya, 2018).

India at present is growing at a rate of 7.7%, which is fairly good. The economy stands at USD 2.848 trillion with Per capita income at USD 2134. The purchasing power parity of India is growing steadily, owing to the growth shown by various industries and in the employment rate and the salaries of the employees. All these factors imply that the India with its huge population have significant purchasing power to be a beneficiary of the e-commerce industry, and support the growth of it(Kabakova & Plaksenkov, 2018).

India is a young country, the average age in India stands at 26 years. This shows that along with high diversity in India, the country has a huge population falling in Millennial (16-33 years) categories who are the drivers of the e-commerce industry. A big plus point here is that population is keeping up with the current trends in the market and is not scared to shop online. The likes and preferences of the Indian customers are driven by the social media platform which expands their learning and knowledge (Gardere, Sharir & Maman, 2018).

Issues with the E-commerce Industry in India

India has the resources and capabilities which would make the country a superpower in the coming decade. Social media penetration in India stands at 64% in urban cities and 21% in rural areas. This has been ably supported by various innovation and further development of the technology to boast the e-commerce and the tech ecosystem. India is a home to millions of tech enthusiasts who are experimenting with technology and coming up with better ways to improve the lives of people. Thus, the tech ecosystem is conducive for e-commerce business in India. The only issues surfacing are the data security and data breach, over which the country has to take stringent measures (Mittal & Kumar, 2018).

India has Competition Commission of India which regulates the industry and keeps a close tab on the practicing which can adversely impact the local businesses. As far as e-commerce industry is concerned, the government is giving various benefits for promotion and sustenance of the industry. The legal factors are helpful in the way that it would help in counterfeiting fake product which can tarnish the image and reputation of the industry (Khan  & Sharma, 2018).

India as a country is much polluted, and the country is undergoing several reforms to safeguard, protect the environment and reduce the CO2 impact on the country.  The e-commerce industry does not participate in any activity which adds to the already polluted environment, this is a big plus point. However, it has been advised to the e-commerce companies to expedite their efforts in creating recyclable packaging material(Sinha, 2018).

Thus, these are some of the issues faced by the e-commerce industry. The need of the hour is to deploy economies of scale and scope and pass on the benefits to the end customers.

Social media before the launch of Facebook was clouded by players such as MyFriend, Friendster, Orkut and others, these social media platforms used average technology and was primarily used for the purpose of talking with friends. Mark Zuckerberg In the year 2004 came up with Facebook, based on the new algorithms, indexing and tech features which were never ever used. Ever since, the social media platforms have taken the world by a storm and are acting as an enabler towards the contribution and growth of the e-commerce industry(Diminin et. al., 2018). Some of the features which describe the tech in comprehensiveness and give an understanding of the platform are as follows:

PESTLE Analysis

The companies earlier to the Facebook era failed to create an impact, because they had limitation, and they were not futuristic in their approach. Social media uses the technology which makes communication extremely engaging and pulls the people to the giant platform. The biggest ability of this is to strike a two way communication with the users. The tech platform which uses the architecture and infrastructure to ensure that its two way communication is seamless is the biggest advantage for the tech(Chung et. al., 2018).

The present business day is very demanding, companies want to dive into the head of the customers and understand and know everything about them. They want to map the journey of the customers and place their product accordingly. This can only be possible if the companies can engage in two way communication, which has been provided by the social media platforms.

Social media platforms are in vogue even in the business ecosystem, due to the unique element of engagement and conversation it has for its customers and clients. Social media platform by virtue of providing an environment where people can organically engage in conversation with each other serve great value to the e-commerce industry.

Businesses use the social media platform to build a connect with the customers and get access to their unfiltered feedback.  The technology and its infrastructure provide the opportunity for businesses to expand and grow by leaps and bounds(GIbreel, Alotaibi & Altmann, 2018).

Another big reason behind the growth of tech in social media is the provision of choosing the customer the company wants to target. Besides giving this option, the tech goes even beyond this and can give plenty of insight on the behavioural targeting of the customers. Social media platforms leverage the technology to analyse the Behavior of the users on the platform, this is then mapped to their purchasing patterns. The final outcome of customer profiling is facilitating the data to the brand which would help in increasing their sales.

Hadn’t been the technology in place, specific profiling and targeting would have been next to impossible.

Besides these there are some other capabilities such as the real time tracking, big data analytics, segmenting the customers, content creation, customer footprint and many more which makes the technology over which the social media platforms are built extremely invincible(Chong et. al., 2018).

The section will discuss the impact the Social media technology can have on the e-commerce industry.

Gone are the days, when the customers were at the mercy of their peers, friends and family to consume some knowledge on the product, services or to make their purchasing decisions. Internet technology has ensured that anything to everything the customer would like to know is available on the web. The most important component of web being the social media ecosystem thus can be used to promote and market the product and services which will gain sufficient traffic due to increased penetration. This ensures high sales for the e-commerce industry(Chang et. al., 2018).

Big data analytics can be understood as breaking down vast amount of data (Data Mining) and generating insights which would help the business to better market and sell the product and also to identify any lacunae in its current practice. The technology has enabled the business to analyse their huge piles of data and give them qualitative and quantitative information. For instance, if an individual surfs for a product somewhere on the web, there are high chances that the same person would organically see the ad of the product or service on the social media platform or some other on web. This thus ensures top of the mind recall for the customers who helps in increasing the sales and building awareness(Yousef, 2018).

The era of 90s and 20s was filled with offering discount in the stores, of which the customers were not even aware due to limited media vehicles and presence of technology. This is not the same anymore, the brands know the exact location of the customers and they even have a good understanding of the customer in terms of his behaviour, emotion, buying habits and many more. A new stream of revolution which has come up due to advancement in technology is content creation and distribution(Lim & Ayyagari, 2018).

Content is the buzzword and every company is investing to build inorganic content, gather organic content, collect content from various social media platforms and over web and use it to influence the customer to make their purchasing decision. This, might sound some out of the box thinking, but in actual it is just application to the decade old technique of buying the product or service by gathering information from the peers, friends or family.

These are some of the impact the technology has over the growing e-commerce industry which facilitate increased sales and high brand awareness resulting in the sustainability of the company and the overall industry.

Conclusion and Strategy Forward

E-commerce which connects the buyers with the sellers has simplified the lives of the individual and has given them the peace and the opportunity to shop anything from any part of the world by just a click. The e-commerce industry is growing in size and posting solid numbers, which implies the wave of disruption in the offline business ecosystem. In order to manage the present growth and to even make it grow exponentially, the need of the hour is to invest in technology, use social media platforms to generate engaging content for the consumers and provide values for the internet buyers. It is the value perceived and realized by the customers, who would make them a loyalist of e-commerce and command then devoted attention. Social media technology acts as a catalyst for the growth and penetration of e-commerce industry in the Indian subcontinent and all over the globe.

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