Online Retailing on high in India and
Biz India News
Biz Policy Updates
Business Idea of the Month
StartBizIndia Discussion Platform
Upcoming Business Summit
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Start online Retailing Business in India : Part of e-Bizwire of StartBizIndia
1. Industry of the Month
“Online Retailing in
India”
eBizWire
Vol . I Issue. V, June 2012
Insight
Biz India News 2
Biz Policy Updates 3
Online Retailing on high in India 4-7
Business Idea of the Month 7
StartBizIndia Discussion Platform 8
Upcoming Business Summit 9
Contact us 10
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2. Biz India News Headlines
• Twenty five foreign direct investment (FDI) proposals worth Rs 2,973.40 crore AIF III Mauritius' FDI proposal
(US$ 530.46 million), including that of AIF III Mauritius to bring in FDI worth Rs among 25 cleared
1,000 crore (US$ 178.38 million), have been approved by the Government of India
on 30th May, 2012.
• On 29 May, 2012, Ranbaxy Laboratories Ltd has got approval from the US Food
th Ranbaxy gets US FDA nod for
and Drug Administration (USFDA) to launch Absorica, an acne treatment drug in acne treatment drug
the US market. "Absorica is a milestone in our commitment to serve the
dermatology community and will be the flagship brand for Ranbaxy's specialised
dermatology sales force.
• The Government of India is promoting a pharmaceutical cluster with an Centre promoting pharma cluster
investment of Rs 66.16 crore (US$ 11.98 million) at the Petroleum, Chemicals, in coastal AP
Petrochemical Investment Region (PCPIR) in coastal Andhra Pradesh (AP) on
th
28 May, 2012. The State ranks first in manufacturing of bulk drugs and hence the
push further, according to Mr M Gopinath, Regional Joint Director General of
Foreign Trade.
• International cash and carry chains in the retail sector plans to expand in India. India expansion on for global
Walmart, the US$ 446 billion American retail giant, which operates cash and carry cash & carry chains
outlets in India in a 50-50 per cent joint venture (JV) with the Bharti Group,
expects to open 12 to 15 wholesale outlets in 2012.
Japan likely to be a partner in
• Japan External Trade Organization (JETRO), an arm of the Ministry of Economy,
national manufacturing policy:
Trade and Commerce, wants to be a partner country while promoting India's
JETRO India chief
manufacturing policy, which aims at creating 100 million jobs and enhancing the
country's share in the gross domestic product (GDP) to 25 per cent in 10 years.
• The Government of UK has expressed keen interest to invest in some big projects UK looking to invest in select
in the information technology (IT), healthcare, infrastructure and education sectors sectors in Kerala
in Kerala, according to Mike Nithavrianakis, British Deputy High Commissioner in
Chennai
• India has signed the gas sale purchase agreement (GSPA) for the Turkmenistan- Tapi agreement set to expand
Afghanistan-Pakistan-India (Tapi) gas pipeline, which upon completion would India's gas basket
diversify its gas basket. Within five years, the country would have access to
imported natural gas, in addition to imported liquefied natural gas (LNG) and
th
domestic sources, including coal bed methane gas on 24 May, 2012
• The Free Trade Agreement (FTA) between India and Switzerland is expected to
India, Switzerland may conclude
be concluded by the end of 2012, according to Rolf Frei, Consul General of
FTA by year-end
Switzerland for India. "The agreement will give a significant boost to bilateral trade
rd
between India and Switzerland," Frei added on 23 May, 2012. The two-way trade
expanded from US$ 7 billion in 2005-06 to US$ 35 billion in 2009-10
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3. Biz Policy Updates Legal Headlines
• The present provisions of Foreign Exchange Management Act, 1999 does not Transfer of Funds from Non-
allow the funds in the NRO account to be transferred into NRE Account. With a Resident Ordinary (NRO)
th
view to ease the provisions for individuals, The RBI on 7 May, 2012 has allowed account to Non-Resident
External (NRE) Account
NRI to transfer their funds from the NRO account to NRE account within the
overall ceiling of US $ 1 million per financial year.
• Where the individual wants to remit the amount outside India for miscellaneous Release of Foreign Exchange for
purpose he can remit upto USD 5000 without submission of any document Miscellaneous Remittances
including Form A2 (declaration form) rather only simple letter containing names
and the addresses of the applicant and the beneficiary, amount to be remitted and
the purpose of remittance, is required to be submitted with AD.
Now, with a view to further liberalize the documentation requirements, the limit for
foreign exchange remittance has been raised from USD 5000 to USD 25000 with
immediate effect from the issue of circular No. 118 issued by RBI on May 07,
2012. So, the individual can remit upto USD 25000 without submission of any
document with Authorised Dealer
• As per the extant provisions ECB proceeds can be utilized for Foreign exchange External Commercial Borrowings
expenditure as well as for Rupee expenditure. Vide A.P. (DIR Series) Circular No. (ECB) Policy - Utilization of ECB
52 dated November 23, 2011, it became mandatory to bring the ECB proceeds in proceeds for Rupee expenditure
India which is to be utilized for Rupee expenditure.
Now, as per the Circular No. 119 issued by Reserve Bank of India on May 07,
2012, and on a review of the policy it has been decided that at the time of availing
Loan Request Number (LRN) from RBI, borrowers are required to give bifurcation
of the utilization of the ECB proceeds towards foreign currency and rupee
expenditure in Form 83.
• On 8 May, 2012, RBI has come up with circular for limiting the timeline for
th Investment by FIIs in commodity
exchanges under automatic
investment by FII in Commodity exchanges and creating liquidity. route
Under the Erstwhile FDI Policy, foreign investment by FDI and FII together
allowed in commodity exchanges up to 49% under the approval route. Within this
cap of 49%, FDI investment is allowed up to 26% and FII investment under
portfolio investment scheme (“PIS”) is allowed up to 23%. With the change in the
policy, DIPP has now removed the condition of seeking prior approval of FIPB
before any investment by FIIs into commodity exchanges. However, the FDI
investment in commodity exchanges would continue to be under the approval
route.
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4. “What is driving E-commerce
adoption in small towns of
India?”
Online Retailing On High in India
Rising Living Standards
India's Information Technology (IT) and information technology enabled
services (ITeS) segments are aligned in a way that the growth in one avenue Increased Awareness
has ripple effects on another. The IT & ITeS industry, as a whole, is the
mainstay of Indian technology sector as it has driven growth of the economy Greater Wireless
in terms of employment, revenue generation, standards of living etc and has Internet Access
played a major part in placing the country on the global canvas areas.
Lack of goods offline
In the recent times, it has been seen that emergence of internet retailing and e retail channels
commerce is driving the growth of number of online shoppers resulting in
more and more number of internet retail companies being attracted towards Improving Online
Indian Markets. There are about 17 million online shoppers in India and the Availability
number is projected to grow over three times in the years to come.
The online shopping trend is not just restricted to mass market shopping, but
New Payment options
also extends to luxury goods, the fastest growing segment. However, the
online market still continues to be dominated by shoppers looking for
premium, affordable products at the cheapest prices.
Demographics of Internet
The digitally-enabled environment is fast changing consumer shopping habits. Market
Starting the Online Store-----
• Total Internet users with
over 121 million as of
Find a niche market and products that can make a profit selling online
December 2011
Identify the gap in the market • Much of the tech savvy
Obtain the Domain Name population is now buying
Find genuine wholesale vendors online though the
Design the website as attractive as you can numbers lag far behind
Obtain Payment Gateway at your website neighbor China
Market your store through Multiple traffic sources and get customers • Almost 75% of India’s
in the door without spending a dime Internet users are under
the age of 34
Convince your customers to buy once they land at your website
• Large number of mobile
Sell goods online and earn huge profit users access data
services
Legal Steps to start the online Business: • Women are increasingly
important presence
• List out the different Business Entities i.e. Company (Private or Public online- 20-22% of India’s
Limited)/ LLP Internet Users are
• Compare and Choose the Best Suitable Business Entity Women
• Incorporate and register your Business Entity with the Registrar • Top 10 products bought
online are Books,
• Obtain Income Tax Registrations such as PAN, TAN, Service Tax,
Electronic goods,
and Sales Tax. Railway tickets,
• Make sure that you apply for the Sales Tax Number if in case you are accessories, Apparel,
selling goods online Gifts, Computer, Airline,
• Hire Legal consultant to draft legal agreements, website policy and Music, Movies
terms & conditions
Source: Nasscom
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5. Advantages of doing Business
Online Retailing On High in India Online in India
Other things to be kept in mind: Costs
• Arrange a web designer for designing your web portal to sell goods One of the biggest advantages
• Tie up with the vendors/ distributors for sourcing the goods of doing business online is the
• Tie up with the courier agencies savings that can be achieved
by both consumers and
• Employ the Delivery staff to deliver goods
businesses. Reducing gas
• Protect your Brand name by registering the Trademark, Patents, etc. consumption, paper use and
employee time are just some
Milestones to run a successful online Business: of the cost-saving benefits e-
commerce provides.
Proper guidance and education are the two points from where aspiring Maintaining websites is getting
entrepreneur can run a successful online business. For any start ups, a less expensive with tools
BUSINESS PLAN allows you to gain a better understanding of your available that anyone with a
business idea, of your industry structure, competitive landscape; this will computer can easily learn to
give a confidence in proceeding ahead in the business successfully use.
So if you’re ready and have gained considerable business sense, here Reach
are the top touch points about starting your own business. Online trading easily goes
global through the Internet.
Starting A Business with extensive Market Research Reaching customers around
the world is possible through
This is a wrong statement that starting your own business has to be the Internet, while markets
expensive and chancy attempt. Also, it is true that many of the open for a worldwide
audience. Payments are
successful entrepreneurs have self-funded their startups by putting in
automatic through secure
huge debts; it definitely does not have to be that way. credit card services and online
payment services such as
Many of the e commerce sites have witnessed that the fact is that you PayPal.
can earn huge profits within a span of a year or two from your online
store! And afterall, we are blessed with great Google tools on Internet, Flexibility
starting your own online business is as inexpensive and risk free as Rarely can a business keep its
ever provided you have already analyzed the gap in the market i.e. doors open 24 hours a day,
MARKET RESEARCH. Online Business means reaching the large seven days a week. When
doing business online, there
size of market and reaching large number of customers. And, this is
are no time restraints.
one of the most remarkable aspects of running an online business Businesses can reach
rather than a traditional retail store is that you can reach hundreds of customers at any time. Small
millions of potential customers 24 hours a day, 7 days a week. The business owners, often
best part about opening a store online is that your business will overwhelmed by the time
continue to grow as word of mouth travels about your store and you constraints they face during
become further entrenched in the search engines. the day, can conduct business
with vendors and clients after
hours. Students looking to
Designing a Attractive Website further their education can
attend classes when its
Despite people are Internet Savvy, still they are not aware of convenient, providing a huge
market for online training.
designing and launching the business website.
Source: ehow
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6. Online Retailing On High in India
So, what if you are not that tech savvy, there are freelancers/ web
designers available in the market to which you can outsource your
assignment of designing and launching website division at reasonable
charges for the designed simple templates.
Time Constraint
To open an online store is all about doing a little bit each day and
setting your sights on your long term goals. If you were to start an
online store today, you should be willing to devote at least 3 hours a
week if you are serious about starting your own business. division at
Online Shopping portals
reasonable charges for the designed simple templates. in India
Starting the Business will make sure you stay motivated. Talk to the
existing Entrepreneurs, bounce your ideas, and share your thoughts
in a highly supportive environment. So, don’t just think, implement the
same, remind yourself of your real dreams again and again which will
motivate you to start early and gain early.
Sourcing the Products to sell
Finding products to sell by using the search engines and the Internet
is difficult to do. Why? It’s because the Internet is full of scammers
and middlemen who pretend to be wholesalers and are just waiting
to cleave you off. In fact, looking online for products to sell using the
search engines is probably the worst way to find wholesale vendors
for your online store.
The truth is that most wholesalers don’t advertise online and rarely
advertise at all. They don’t advertise because they don’t want every
little mom and pop store contacting them to ask to sell their products.
Instead, most wholesalers only want to deal with legit, honest
businesses that can sell in sufficient volumes. So, the best way is to
survey the wholesale markets physically and source the goods from
there through different vendors. There is a option to procure goods
from existing importers, distributors and suppliers. And, retail the
goods online. You may opt for affiliate schemes with similar business
Marketing the Online Store
Initially there is no need to have large marketing budget. In fact, there
are many effective methods of marketing and advertising that are
absolutely free. You can very well achieve a high search ranking for
your website in your targeted niche by inserting key words related to
your business on your website. Have your presence at Social
Networking websites like at Facebook, Google+, Twitter, blogs and
many more.
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7. Online Retailing On High in India
Big numbers
Internet retailing is emerging as an entirely new avenue to be explored.
According to estimates made by an industrial body, India's online retail
industry is anticipated to surge to Rs 70 billion (US$ 1.43 billion) by 2015 from
Rs 20 billion (US$ 405.93 million) as broadband is becoming increasingly
accessible and internet penetration is increasing. Another report by Avendus
Capital Pvt. Ltd states that e-tailing would become a Rs 53,000 crore (US$
10.76 billion) market by 2015 from the current Rs 3,600 crore (US$ 731
million). ent, this sector is capable of maintaining the growth momentum in the
future.
Source: ibef
Business IDEA OF THE Month
Online General Store:
Do you want to own an online Shop? If yes, then, go ahead with
starting online business in India. These days’ people are so busy
in their lives, that they don’t have time to go out for shopping daily
needs. Online businesses have an advantage over businesses in
the real world. They all have 13 inch monitors as our windows to
the customer. The idea is to start an online daily needs store like
online Big Bazaar including grocery products, bathing products,
etc.
Online Business is need of the hour as more than 60% of the
online shoppers planned to buy even more on Internet in the
coming year. Also, the maximum number of online shoppers is
females. So, you have many options to start this business. But
before starting, keep in mind that, naming the business is very
important before starting the business and marketing strategy is
also important. The e-commerce model also saves the
administrative costs. However, just like starting a physical shop,
online shop also demands the entrepreneur passion and high level
of optimism.
All you have to do is planning, excellent marketing approach
including SEO tool, 24 / 7 presence, timely delivery of products,
transparency and customer satisfaction. And there are high
chances to have your presence globally if you have updated
information at your portal. You can appoint dedicated personnel for
managing the web portal. Make sure that you get associated with
paypal or payment merchant for receiving payments online.
Always remember, “Doors for online business never close”
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8. StartBizIndia Discussion Platform
What do I need to do, if I wish to start an IT consulting business in
India?
Just like before starting any business, you have many questions to ask,
like whether the business will be profit earning objectives or non profit
objectives, be it a short term or Long Term, who will be the owners, which
business entity to choose, which business entity is best suitable to my
business, how to save tax, etc. Also, you'll need to determine if you'll be
providing these services through an online platform or offline. And, it
matters that what will be the location of the business taking in
consideration different number of facts like the tax incentives, and which
form of business entity will best serve your needs. In brief, there are
number of things to work out before starting the business like working on
the Market Research, draft Business Plan, planning the best location to
open at, may be as per the tax incentives offered in different states in
India, registering the Company with the Registrar of Companies, obtain
the business licenses, comply with the FEMA Act, recruitment of IT
consultants and other personnel, register with Intellectual Property Rights
and then, you are ready to move ahead and do the business legally.
Can a foreign national invest in IT Industry in India through LLP as
the Business Structure?
Yes, a Foreign National can invest in LLP subject to FIPB Approval.
LLPs with FDI will be allowed, through the Government approval route, in
those sectors/activities where 100% FDI is allowed, through the automatic
route and there are no FDI-linked performance related conditions.
By FDI-linked performance related conditions, it is meant that in sectors,
where conditions like minimum capitalization etc are prescribed like
development of Townships, NBFC, even though 100% FDI is allowed
under automatic route, LLP’s will not be allowed to bring FDI with the
approval of Government of India. Since, FDI in IT sector is 100% allowed,
so, a foreign national can invest in LLP with the objective to do business
in IT sector.
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9. Upcoming Business Summit
National
SME Conclave – Meet Your Bankers
• SME Conclave- Meet
Associated Chambers of Commerce and Industry of India (ASSOCHAM) is Your Bankers
organizing a Seminar on “SMEs Conclave - Meet Your Bankers” on 19th
June, 2012 at Hotel Chancery Pavilion in Bangalore. The seminar will focus • Indo-German SME
on the SME business opportunity in India which can be seen in possibly every Pavillion
sector - Financial Services, Telecom, Education, Automobiles, Media, Food,
Real Estate, Pharmaceutical, Textile & Garments, Retail, IT and ITes, Agro
and Service sector and so on making India a hub for best small business
opportunity in various segments.
th
Date: 19 June, 2012
Venue: Hotel Chancery Pavillion, Bangalore
Indo-German SME Pavillion
It is a platform for Indo-German small and medium sized businesses to show-
case their products/ processes/ ideas/ ideology/ company image in line with
the central theme.
nd
Date: 22 June, 2012
Venue: Palace Ground, Bangalore
The India Show Inter National
With the rising aspirations of the Indian industry to expand its global horizons
and with Africa fast positioning itself as a promising business and investment • The India Show
destination, "The India Show" is an excellent opportunity for Indian and
African business community to showcase their best. A three day event, this
important business platform provides you ample of opportunities to network
with the key stakeholders like policy makers, captains of industry, financial
institutions and business solutions providers.
th th
Date: 9 July 2012 to 11 July 2012
Venue: ACCRA, Ghana
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10. Contact Us
Visit us at
Neha Seth
neha@indiacp.com
D: +91.11.40622239
A Venture of
Shipra Paul D- 38, Ist Floor, South Extn. Part I New Delhi –
110049
shipra@indiacp.com
T: 40622200 F: 91.40622201
D: +91.11.40622246 E: info@startbizindia.com
Disclaimer:
This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of this paper have
been developed for the new startups. The author and the Company expressly disclaim all and any liability to any
person who has read this paper, or otherwise, in respect of anything, and of consequences of anything done, or
omitted to be done by any such person in reliance upon the contents of this paper.
For more info on Business setup visit www.startbizindia.in
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