The Chartered Accountant • Journal of ICAI April 2022 • Vol. 70 • No. 10 • pp. 105–111 (Journal pp. 1277–1283)
E-Commerce

E-Commerce Strategies for New Businesses

SA

Prof. (Dr.) Shivani Arora

Academician & Author • Contact: eboard@icai.in

KP

Kaashvi Piplani

Researcher & Scholar • Contact: Kaashvi.piplani@gmail.com

Executive Synopsis: Pandemic Resilience & The E-Commerce Imperative

E-commerce in India grew exponentially during the COVID-19 pandemic, standing out as one sector that triumphed while the broader macroeconomy suffered extensive disruptions. The pace of technology adoption was unprecedented: mandatory lockdowns and two years of physical distancing compelled even historical laggards to embrace digital commerce. Driven by an unprecedented influx of venture funding, dynamic new enterprises are making their way into the commercial mainstream.

This exponential expansion requires Chartered Accountants to stay abreast of structural developments, regulatory shifts, and technical digital models to effectively advise emerging businesses. This paper combines an exhaustive literature and newspaper review with empirical qualitative text mining via NVivo 12 on Twitter discussions to delineate actionable growth strategies for new e-commerce entrants.

1

Literature Review: The Indian E-Commerce Boom & Unicorn Surge

During the pandemic, e-commerce platforms transformed from convenience portals into lifeline utilities—supplying daily groceries (Milkbasket) and life-saving medicines during lockdowns (Tata1mg). The health crisis rapidly accelerated adoption among first-time and elderly consumers (Coutinho, 2022).

54 Indian Unicorns (2021) +33 from 2020 • Hurun Research
15 E-Commerce Unicorns Ranked 3rd globally after US & China
$8.8 B VC Funding Across 143 Deals 31% of total Indian VC • 6.3x of 2020
140 M Online Shoppers (2020) 3rd largest globally behind China & US

Conceptual Demarcation: E-Commerce is a Subset of E-Business (Figure A)

While used interchangeably in common parlance, E-Commerce and E-Business represent fundamentally distinct scopes:

E-Commerce (Transaction Layer)

Specifically defined as the process of buying and selling products or services over digital networks and electronic media.

E-Business (Comprehensive Architecture)

The overarching enterprise framework encompassing all business processes conducted electronically: ERP systems, CRM, production planning, supply chain partner integration, internal employee communication, and customer care in addition to e-commerce (Arora, 2019).

The Chartered Accountant’s Advisory Mandate: The massive explosion in online transactions makes it vital for Chartered Accountants to guide entrepreneurs through entity registration, GST compliances, intellectual property rights (IPR), specialized digital bookkeeping, valuation, and cross-border taxation.

2

Market Catalysts and Government Policy Pillars

A. Massive Inflows into E-Commerce Drivers

  • Big Tech Inflows: Global giants—Meta/Facebook (Chaturvedi, 2021), Google, and Microsoft—have pledged multi-billion dollar capital investments towards India’s digital economy.
  • Google-Airtel Strategic Partnership: On February 1, 2022, Google invested $700 million in Bharti Airtel (alongside a broader $1 billion commitment) to build future-ready telecom infrastructure, expand 5G access, and eliminate smartphone adoption barriers (Phadnis, 2022; S. Team, 2022).
  • Surging Internet Penetration: Indian internet penetration surged from 21% in 2017 to 62% in 2021, with the pandemic driving 43 million first-time users online (Khanna, 2021).

B. Government Regulatory Architecture

Digital India Initiative

Launched in August 2014 with an initial commitment of INR 1 lakh crore, catalyzing digital infrastructure and accelerating mobile payments post-demonetization.

Draft National E-Commerce Policy

Balancing e-commerce growth with offline trader protection (CAIT demands); curbing predatory deep discounting and FDI rule evasions (Abrar, 2022). Ending predatory discounts protects new entrants from wafer-thin margins against deep-pocketed incumbents.

100% FDI in B2B & Marketplace

Permitting 100% FDI under the automatic route in B2B transactions and marketplace platforms provides immense fundraising headroom for early-stage start-ups (IBEF, 2021).

ONDC (Open Network for Digital Commerce)

Government-backed open network democratizing digital commerce, breaking proprietary platform monopolies and onboarding local retailers onto open e-commerce rails (Nandy, 2022).

Inclusion of Artisans and Rural Crafts

Statutory relief under the GST Act exempting craftsmen selling notified handmade goods from mandatory GST registration; national onboarding of rural products under the One District – One Product (ODOP) initiative; and official retail integration through the KVIC online portal (kviconline.gov.in) (IED, 2022).

3

Emerging Product Verticals & D2C Business Models

Online Pharmacies (e-Pharmacies)

Indian e-pharmacies accounted for 50 players and 14% of Asia-Pacific revenue in 2020. Projected to grow at an extraordinary CAGR of 40–45% compared to global CAGR of 15–20% (Chawla, 2021). Autonomous drone deliveries are emerging as the next frontier for emergency medicine logistics (Dedhia, 2022).

D2C Beauty, Wellness & Sustainability

Environmentally conscientious consumerism is surging. Mamaearth leveraged Facebook/Meta performance marketing to achieve massive organic skincare valuation (FB, 2021). Nykaa’s historic 100% premium IPO debut (Jain, 2021) and Sugar Cosmetics prove high customer appetite for differentiated lifestyle brands.

Quick Commerce (10–15 Min Delivery)

Pioneered by Blinkit (formerly Grofers) and Zepto, ultra-fast hyper-local delivery models are transforming daily staples and grocery distribution, forcing traditional neighborhood kiranas to digitize or partner.

Electric Vehicle (EV) Last-Mile Fleet

Last-mile delivery aggregators are partnering with EV manufacturers to lower unit economics and fulfill sustainability mandates, bolstered by state regulations like the Delhi EV delivery policy (Auto, 2022).

EdTech & Global Tutoring

Blended learning platforms (Coursera, Udemy) and boundaryless private tuition ecosystems allowing Indian educators to teach international students without heavy physical infrastructure investments.

Creator Economy & Storytelling

“Content is king.” Brand building via narrative storytelling across Instagram, YouTube, and podcasts, turning micro-influencers and home chefs into thriving commercial enterprises (O. Credit Team, 2021).

4

Empirical Findings: NVivo 12 Twitter Text Mining Analysis

To capture real-time market sentiment and strategic focus areas, qualitative text mining was conducted using NVivo 12 software. English-language tweets containing the keyword “online business” posted during the first week of February 2022 (418 tweets) were mined and analyzed to generate a Word Map (Figure 1) and Tree Map (Figure 2):

Core Keyword Frequency (n) Strategic Analytical Interpretation
business n = 442 Primary focal point of discussions across commercial and start-up communities.
online n = 431 Confirms the central transition from brick-and-mortar storefronts to digital channels.
digital n = 201 Represents the underlying technological infrastructure, digital marketing, and payment enablement.
skills n = 196 Emphasizes that digital and technical skills must be continuously acquired and upgraded to succeed.
books n = 108 Reflects the historical genesis of e-commerce (Amazon and Flipkart), remaining a staple online category.
creators n = 53 New businesses must be innovative content creators; stale, commoditized business models cannot compete.
economy / built n = 53 each Demonstrating that the macroeconomic fabric is being actively built, stabilized, and propelled by digital firms.
academics n = 27 Calls for academic institutions to bridge student gaps through incubation centers, internships, and live projects.

Conclusion & Strategic Roadmap for New Entrants

E-commerce did not merely survive the COVID-19 pandemic; it served as a catalyst for a structural economic transformation. This is validated by $28.8 billion in Indian VC inflows in 2021 and India hosting 15 e-commerce unicorns. The impending implementation of the National E-Commerce Policy and ONDC will re-level the playing field for small players by curbing predatory discounts. New entrants who combine unique product niches (wellness, organic goods, quick commerce) with data-backed digital marketing, continuous skill upgradation, and compliance rigor will capture substantial market share in India’s surging online economy.

The Chartered Accountant • April 2022 E-Commerce Strategies • Journal pp. 105–111

Bibliography & Authoritative References

  1. Abrar, P. (2022). Traders body CAIT asks govt for robust and unambiguous e-commerce policy. Business Standard News.
  2. Arora, Shivani (2017). E-Commerce. Taxmann Publishers, ISBN 978-93-86635532.
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  4. Chaturvedi, A. (2021). Facebook changes its name to Meta... India Today Technology News.
  5. Coutinho, A. (2022). VC investments jump 4 times to hit record $28.8 billion in 2021. Business Standard News.
  6. Dedhia, Z. (2022). Will drone delivery be the next big thing for pharma logistics in 2022? Aviation / India Transport and Logistics.
  7. FB. (2021). How organic skincare brand Mamaearth built a successful digital-first business using robust performance marketing and brand-building solutions from Facebook. Economic Times.
  8. Gallagher, L. (2017). The Inside Story Behind the Unlikely Rise of Airbnb. Knowledge@Wharton, University of Pennsylvania.
  9. IBEF. (2021). E-commerce in India: Industry Overview, Market Size & Growth. India Brand Equity Foundation.
  10. IED. (2022). Government takes several initiatives to enhance collaboration between small business and e-commerce platforms. India Education Diary.
  11. Jain, S. (2021). Nykaa makes bumper stock market debut; shares top Rs 2,200, rally 100% over IPO price. The Financial Express.
  12. Khanna, M. (2021). Trending stories on Indian Lifestyle, Culture, Internet Usage Report. Indiatimes.