1.

Project Synopsis

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1.1 Introduction of Problem
E-Commerce sites have now been around for over 20 years, (amazon started their first online
bookstore in 1995) but these platforms have never been as big as they are now. With
changing times, tides and technology E-Commerce has grown to be present across devices
and product niches. As E-Commerce platforms grew, customer segmentation strategy became
the thing create better engagement. This is based on the fact that you need to first understand
a customers age, gender, demographic and more before you communicate with them.

Currently E-Commerce industry is using traditional replenishment and merchandising

systems that cant analyze large volume of unstructured data and determine product attributes
or hidden trends both in real time and dynamically.

1.2 Theoretical Perspective

Artificial Intelligence offers new ways of analyzing large number of data and helping
retailers to engage with their customers on a new level and create better customer experience.
For online stores, achieving a personalized customer experience is key to their success. It
helps online stores to create virtual buying assistants.

Artificial Intelligence in E-Commerce will impact the productivity metrics such as increased
transactions, customer retention, increased customer loyalty and satisfaction. By providing E-
Commerce with improved understanding and human touch, the E-Commerce Industry will be
laid bare to extraordinary efficiency, consumer knowledge and automation.

The convergence of Artificial Intelligence in E-Commerce poises a rich industry on the

precipice of a complete and utter transformation, one that will change the way we buy and
sell online. Artificial Intelligence capabilities and applications are attempting to solve real-
world issues that E-Commerce industry is facing. So this thesis will have a depth study about
why E-Commerce value chains are shifting towards Artificial Intelligence and how AI is
making huge impact on online marketplaces.

1.3 Research Objective:

To identify impact of artificial intelligence in E-Commerce industry.
To analyze how Marketing Automation plays a vital role to increase Sales Revenue
through website in E-Commerce industry.
To determine why marketing associates from E-Commerce industry are shifting
towards Artificial Intelligence.
To compare Revenue of E-Commerce player before implementing Artificial
Intelligence and after implementing Artificial Intelligence.

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 To analyze how much cost is to be taken to implement Artificial Intelligence for
online players
To determine, implementing Artificial Intelligence is feasible in terms of ROI or not?

1.4 Methodology
This should describe in detail the steps followed in completing the study. The research
tools/instruments being used (Questionnaire and Structured Interviews) and the sample size
and composition. The sources of primary and secondary data must be stated.

Study design: The study is the exploratory research method.

Setting: The research study is conducted in Ahmedabad

Duration of study: The study would approximately take two and half months.

Sample size: There is no sample size as the research is secondary

Sampling technique: No sampling technique is used as the research is secondary.

1.5 Data Collection Methods

As this is a secondary research the tools used would be Websites, Magazines, Newspapers,
Annual Reports and etc.

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2. Introduction of Industry & Company:

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 2.1 Overview of E-Commerce Industry:
The E-Commerce Industry is comprised of companies that produce and sell software to
businesses and corporations of all sizes. The wide range of products and services offered
work to improve and expand customers information technology (IT) capabilities, by
enhancing such internal tasks as inventory management, tracking purchases, and operations
management.

Although the Value Line page for an E-Commerce stock appears in our standard format, it
is important to focus on certain key factors to gain a better understanding of the company
and its shares. The current and future prospects of the economy also play a prominent role
when analyzing these equities. In addition, new product releases are continuous, with many
companies providing similar offerings and services. Thus, stiff competition, enhanced by
merger and acquisition activities, is present.

Introduction of an E-Commerce Industry:

The term E-Commerce was coined back in the 1960s, with the rise of electronic commerce
the buying and selling of goods through the transmission of data which was made
possible by the introduction of the electronic data interchange. Fast forward fifty years and
E-Commerce has changed the way in which society sells goods and services.

E-Commerce has become one of the most popular methods of making money online and an
attractive opportunity for investors. For those interested in buying an E-Commerce
business, this article serves to provide an introduction to E-Commerce, covering the reasons
for its popularity, the main distribution models and a comparison of the major E-Commerce
platforms available.

What is E-Commerce?
E-Commerce and online shopping are often used interchangeably but at its core E-
Commerce is much broader than this it embodies a concept for doing business online,
incorporating a multitude of different services e.g. making online payments, booking flights
etc.

E-Commerce has experienced rapid growth since its humble beginnings with E-Commerce
sales projected to grow to 434.2 billion USD by 2017. The power of E-Commerce should
not be underestimated as it continues to pervade everyday life and present significant
opportunity for small, medium and large businesses and online investors. You dont need to
look far to see the potential of E-Commerce businesses. Amazon, for example, which set
the standard for customer-orientated websites as well as a lean supply chain, has been seen
to sell in excess of 426 items per second.

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Why Do People Buy Online?

1. Lower Prices: Managing an online storefront is far cheaper than an offline, brick
and mortar store. Typically less staff are required to manage an online shop as web-
based management systems enable owners to automate inventory management and
warehousing is not necessarily required (as we discuss later). As such, E-Commerce
business owners can afford to pass operational cost savings on to consumers (in the
form of product or service discounts) whilst protecting their overall margin.
Furthermore, with the rise of price comparison websites, consumers have
more transparency with regard to prices and are able to shop around, typically
purchasing from online outlets instead.

2. Accessibility and Convenience: Unlike many offline stores, consumers can access
E-Commerce websites 24 hours a day. Customers can read about services, browse
products and place orders whenever they wish. In that sense, online shopping
is extremely convenient and gives the consumer more control. Furthermore, those
living in more remote areas are able to order from their home at a touch of a button,
saving them time travelling to a shopping centre.

3. Wider Choice: For the past twenty years, the growth of online shopping has to a
large extent been based around increased choice. With an almost endless choice of
brands and products to choose from, consumers are not limited by the availability of
specific products in their local town, city or country. Items can be sourced and
shipped globally. Interestingly, one recent study found that consumers are actually
starting to become frustrated by E-Commerce sites that offer too much choice.
Whichever way you look at it though, more choice has likely been a good thing over
the long term.

Naturally E-Commerce has significant benefits for the consumer, but it has also been useful
for businesses too. Next, we look at some of the reasons why businesses have been quick to
race into the space.

Why Do Businesses Sell Online?

1. Higher Margins: Setup costs and ongoing operational costs such as rent, heating,
electricity, warehousing (if operating a drop-ship model) and inventory management
are often significantly reduced or otherwise eliminated. Further, customer service
and other administrative tasks can be automated or outsourced at a relatively low-
cost. As such, higher margins can usually be achieved when selling via an online
store compared to operating an offline business.

2. Scalability: With a brick and mortar business, the owner is often limited by the
amount of people who can physically be in the store at any one time. There is no
limit when trading online. Running an E-Commerce business means tapping into a
truly global market. Furthermore, online platforms enable rapid scaling. With the
emergence of social media and content marketing as well as the option of generating
traffic and conversions through pay-per-click (PPC), expanding into new regions or

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 markets can happen quickly. A great example of this in practice is Choxi, a business
that experienced 1,023% growth in revenue in just one year.

3. Consumer Insight / Technology: E-Commerce businesses typically collate a

tremendous amount of customer data. With every element of consumer behavior
being tracked, E-Commerce business owners are able to understand, tweak and
improve the customer shopping experience for customers making data-led
decisions to increase conversion rates and sales. With technology rapidly evolving,
it is important that online retailers use tools such as Google Analytics correctly to
understand their customers buying habits, unlocking insight from this data presents
a unique advantage, not available to offline stores. Those who leverage the right
systems and technology can see their businesses grow extremely quickly.

Having understood the benefits of running an E-Commerce business, its time to turn
attention towards the different types of E-Commerce businesses available.

Overview of E-Commerce Fulfillment Models

There are three main fulfilment models associated with E-Commerce that dictate the role of
the retailer as well as the way in which a product is stored and distributed to the end user.
These models have a significant impact on the operational characteristics of the
business and its day-to-day running as well as the overall operating margin. The three main
models are:

1. Dropshipping Model

In a dropshipping model, the E-Commerce business takes no physical possession of the

items on sale. The store owner does not keep products in stock and there is no inventory
held. Instead, orders are sent directly to the manufacturer, who is responsible for storing the
items and shipping them to the customer. In this sense, the merchant never sees or
touches the products, which has some unique advantages over adopting a more traditional
order fulfilment model.

2. Traditional Order Fulfillment Model

Buying wholesale is arguably closest to the traditional offline retail model. In effect, the
business owner (retailer) acquires stock directly from a wholesaler at a discounted rate,
applies a margin onto each product and decides to deliver to consumers directly.

Benefits of Dropshipping vs. Traditional Order Fulfilment:

Eliminates Inventory Risk: One of the biggest drawbacks of running an offline

retail business or a non-dropship E-Commerce business is the fact that generally
speaking inventory has to be acquired upfront. Naturally, buying stock costs money
and with no 100% guarantee of being able to sell it, there is an inherent risk to the
business owner. Drop-shipping however, does not generally require any upfront
investment in inventory.

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 Less Time / Lower Ongoing Costs: Shipping products requires a certain amount of
owner and staff time. Time will be required to not only order stock but manage
it, ensuring optimal stock control at all times to avoid turning away orders, all of
which can be avoided with a drop-shipping model. Instead, the owner can be free to
use this time to manage the overall strategy of the business and to ensure sales
objectives are being met.

Product Flexibility: If dropshipping, as a retailer, you have the flexibility to try out
new product lines in your online store and sales channels which enables business
owners to go to market more quickly an attractive proposition if looking to
secure market share for a unique E-Commerce value proposition.

Whilst there are numerous advantages to the drop-shipping model, there are also some
drawbacks that require careful consideration:

Benefits of Traditional Order Fulfilment vs. Dropshipping Model:

Lower Cost of Goods Sold (COGS): It is well-documented that a stocking retailer

pays less than a drop-shipping retailer for the same stock-keeping unit (SKU). As
such, E-Commerce business owners should look to weigh up the potential for fixed
cost savings against the impact of a reduced margin on each SKU sold. Further,
when scaling a drop-ship E-Commerce business, the business tends not to benefit
from economies of scale, in the same way that a non-drop ship business would. The
marginal costs of employing a drop-ship model are the same whether 100 products
or 10,000 products are sold.

Inventory Management: Naturally, being in control of stock control allows you

to know when you are running out and need to reorder in order to fulfil customer
demand at that particular point in time. Running a drop-shipping business
means high reliance on suppliers, who have to be relied upon to uphold inventory
best practice and communicate their inventory levels in a timely manner.

Brand Control: Whilst drop-shipping may seem like the easier option when
considering E-Commerce fulfilment, it is not without its drawbacks. Missing items,
low quality or damaged products are likely to occur and this is your responsibility,
as the merchant to adequately resolve. Further, the choice of suppliers who drop-
ship can be limited, reducing the scope to potentially diversify your product offering
(from the outset and in the future). If adopting a traditional model, you can set
delivery standards and design all elements of customer service.

3. Outsourced Fulfilment Model

The retailer may wish to market products from a supplier that does not provide a
dropshipping service. If the retailer wants to avoid end-to-end fulfilment (like the
traditional model), then a hybrid approach can be adopted using a fulfilment house. In
this model, companies such as Shipwire are commissioned to handle the product side of the

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business, on behalf of the retailer. Generally, speaking, they are responsible for collecting
products from the supplier, holding the product at their distribution centers, all packaging
as well as onward order fulfilment (to the customer). This service comes at a cost
minimum fees, return fees and setup fees are commonplace and should be fully weighed up
beforehand.

Dropshipping vs. Traditional Order Fulfilment Summary

Dropshipping is a great option to have, particularly when starting out with an E-Commerce
business. Cash flow management is easier and there is a reduced burden on the
workforce associated with fulfilment. That said, wholesale offers the longer-term benefits
of higher margins and allows greater scope for building a truly differentiated brand. If a
product is high-margin, an outsourced fulfilment route is possible, but should be fully
evaluated.

Key Factors:
When analyzing an E-Commerce company, one needs to focus on a few key metrics. First,
since members of this industry are constantly introducing new products and services,
research & development plays a prominent role. Accordingly, heavy investment in R&D,
ranging from 10%-15% of revenue, is a characteristic of note. If a company scrimps on
R&D, it will likely rapidly lose customers and market share. Second, a companys financial
position should be closely monitored. Debt can often help fund operations and R&D, but if
it is used too liberally, interest and repayment requirements may hamper operations and
profits instead. The strength of a companys balance sheet should be given careful attention
before taking a position in an E-Commerce stock; an average debt to total capital ratio for
the industry is 30%. Lastly, most E-Commerce companies incur large stock-based
compensation expenses, which can often cause steep share losses from one quarter to the
next. It is important to factor in share-based compensation in an investment analysis, since
those companies that post related losses may prove more risky than profitable competitors.

The Economy
Although many industries struggle during weak economic periods, E-Commerce
companies, overall, fare relatively well. Typicallly, during lackluster economic times, most
corporations aggressively seek cost-cutting strategies. As such, they are often eager to
upgrade their IT capabilities, which usually leads to improved operations and expense
reduction. Thus, E-Commerce companies can receive large orders during lean economic
times, and a few may even post record revenue and profits. In addition, several companies
within this group derive a good percentage of their profits from outside the U.S., which can
help them weather domestic challenges.

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Competition
Industry players often offer similar products and services, leading to an aggressive fight for
customers and market share. In addition, most in the E-Commerce space must directly
compete with IBM, Microsoft, Cisco, and other IT giants, who can often offer customers
more services at lower prices. Thus, it is difficult to determine which E-Commerce
corporations will become, and remain, successful from one quarter to the next. This
competitive dynamic can lead to inconsistent revenue and profit streams from year to year.
Not surprisingly, then, a number of stocks within this group carry low scores for Earnings
Predictability. To repeat, E-Commerce companies should invest heavily in R&D, targeting
new software offerings at customers needs in order to better compete with larger
competitors.

This industry also possesses low barriers to entry. Indeed, new companies offering a quality
suite that is well received can take a sizable bite out of another firms existing business.
This industry continues to grow at a rapid rate. With more and more corporations focused
on improving their IT capabilities and bolstering their presence on the Internet, this group
should continue to achieve record revenue and profits over the next several years. However,
discovering which companies will perform well over that time frame has become very
difficult.

Mergers & Acquisitions

M&A activities play a major role in the E-Commerce space. Microsoft, IBM, and other
large players are constantly seeking new technologies that can bolster their product
offerings and market reach. In many cases, it is cheaper for them to purchase smaller firms,
rather than internally fund the development of software suites. For instance, this appears a
part of Microsofts current strategy. Thus, E-Commerce companies are constantly getting
picked up by the larger players. Indeed, during weak economic periods, their stock prices
are usually down from previous highs, and the IT giants are likely to be active on the
acquisition front searching for bargains. In turn, when the economy is performing well,
financing can usually be procured under favorable terms, which can also fuel purchases
despite higher valuations. In sum, E-Commerce companies are often acquisition targets,
and rumors of a purchase can lead to wide swings in stock prices. That, along with
inconsistent revenues and profits from one quarter to the next, causes most E-Commerce
stocks that are covered in the Value Line Investment Survey to possess Below Average
ranks (4 and 5) for Safety, and low scores for Stock Price Stability.

Investment Considerations

A great number of factors can impact an E-Commerce company and its corresponding
stock. In our view, investors will be best served if they focus on E-Commerce corporations
that have a strong commitment to R&D, a healthy balance sheet, and a history of successful
products. However, the majority of these equities are risky, so conservative investors may
want to remain on the sidelines.

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2.2 History and trend of Industry

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The History of E-Commerce: How Did It All Begin?
By definition, E-Commerce or electronic commerce, is the buying and selling of products
or services via the Internet. For many Americans, E-Commerce is something we participate
in on a daily basis, like online bill payment or purchasing from an e-tailer.

Nowadays the thought of living without E-Commerce seems unfathomable, complicated

and an inconvenience to many. It wasnt until only a few decades ago that the idea of E-
Commerce had even appeared.

E-Commerce was introduced 40 years ago and, to this day, continues to grow with new
technologies, innovations, and thousands of businesses entering the online market each
year. The convenience, safety, and user experience of E-Commerce has improved
exponentially since its inception in the 1970s. This article will address some of the key
players and milestones of E-Commerce.

E-Commerce Timeline:

1960-1982
Paving the way for electric commerce was the development of the Electronic Data
Interchange (EDI). EDI replaced traditional mailing and faxing of documents with a digital
transfer of data from one computer to another.

Trading partners could transfer orders, invoices and other business transactions using a data
format that met the ANSI ASC X12, the predominant set of standards in North America.

Once an order is sent, it is then examined by a VAN (Value-Added Network) and finally
directed to the recipients order processing system. EDI allowed the transfer of data
seamlessly without any human intervention.

Michael Aldrich, an English inventor, innovator and entrepreneur is credited with

developing the predecessor to online shopping. The idea came about during a stroll with his
wife and Labrador when Aldrich lamented about their weekly supermarket shopping
expedition. This conversation sparked an idea to hook a television to their supermarket to
deliver the groceries. Immediately after the discussion Aldrich quickly planned and
implemented his idea.

In 1979 Aldrich connected a television set to a transaction processing computer with a

telephone line and created what he coined, teleshopping, meaning shopping at a distance.

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1982-1990

It was apparent from the beginning that B2B online shopping would be commercially
lucrative but B2C would not be successful until the later widespread use of PCs and the
World Wide Web, also known as, the Internet. In 1982, France launched the precursor to
the Internet called, Minitel.

The online service used a Videotex terminal machine that was accessed through telephone
lines. The Minitel was free to telephone subscribers and connected millions of users to a
computing network.

By 1999, over 9 million Minitel terminals had been distributed and were connecting
approximately 25 million users in this interconnected network of machines. The Minitel
system peaked in 1991 and slowly met its demise after the success of the Internet 3 years
later. Eventually, in 2011, France Telecom announced its shutdown of the Minitel service
system. Sadly, it had not become what it had hoped to be, the Internet.

90s To Present
In 1990 Tim Berners Lee, along with his friend Robert Cailliau, published a proposal to
build a Hypertext project called, WorldWideWeb. The inspiration for this project was
modeled after the Dynatex SGML reader licensed by CERN.

That same year, Lee, using a NeXTcomputer created the first web server and wrote the first
web browser. Shortly thereafter, he went on to debut the web on Aug. 6, 1991 as a publicly
available service on the Internet. When Berners Lee decided he would take on the task of
marrying hypertext to the Internet, in doing that, the process led to him developing URL,
HTML and HTTP.

When the National Science Foundation lifted its restrictions on commercial use of the NET
in 1991, the Internet and online shopping saw remarkable growth. In September 1995, the
NSF began charging a fee for registering domain names. 120,000 registered domain names
were present at that time and within 3 years that number grew to beyond 2 million. By this
time, NSFs role in the Internet came to an end and a lot of the oversight shifted to the
commercial sector.

The 1992 book, Future Shop: How Technologies Will Change The Way We Shop And
What We Buy, provided insight and predictions on the future of consumerism. An overview
of the book explains:

For hundreds of years the marketplace has been growing more complex and more confusing
for consumers to navigate. Published in 1992, long before the Internet became a household
word. Future Shop argued that new information technologies, combined with innovative
public policies, could help consumers overcome that confusion. A prescient manifesto of

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the coming revolution in E-Commerce, Future Shops vision of consumer empowerment
still resonates today.

From the beginning, there were many hesitations and concerns with online shopping but the
development of a security protocol the Secure Socket Layers (SSL) encryption
certificate by Netscape in 1994 provided a safe means to transmit data over the Internet.
Web browsers were able to check and identify whether a site had an authenticated SSL
certificate and based on that, could determine whether or not a site could be trusted.

Now, SSL encryption protocol is a vital part of web security and version 3.0 has become
the standard for most web servers today.

Online E-Commerce Megastores

The mid-nineties to 2000s saw major advancements in the commercial use of the Internet.
The largest online retailer in the world Amazon, launched in 1995 as an online bookstore.
Brick-and-mortar bookstores were limited to about 200,000 titles and Amazon, being an
online only store, without physical limitations was able to offer exponentially more
products to the shopper.

Currently, Amazon offers not only books but DVDs, CDs, MP3 downloads, computer
software, video games, electronics, apparel, furniture, food, and toys. A unique
characteristic of Amazons website is the user review feature that includes a rating scale to
rate a product. Customer reviews are now considered the most effective social media tactic
for driving sales. The company attracts approximately 65 million customers to its U.S.
website per month and earned revenue of
34.204 billion in 2010. In 2001, Amazon.com
launched its first mobile commerce site.

Another major success story of the dot com

bubble was Ebay, an online auction site that
debuted in 1995. Other retailers like Zappos
and Victoria Secret followed suit with online
shopping sites; Zappos being a web only
operation.

Also in 1995, was the inception of Yahoo

followed by Google in 1998, two leading search
engines in the US. These successful web
directories began their own E-Commerce subsidiaries with Google Shopping and Yahoo!
Auction, in following years.

Global E-Commerce company, PayPal, began its services in 1998 and currently operates in
190 markets. The company is an acquired bank that performs payment processing for online

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vendors, auction sites, and other commercial users. They allow their customers to send,
receive and hold funds in 24 currencies worldwide. Currently, PayPal manages more than
232 million accounts, more than 100 million of them active.

As more and more people began doing business online, a need for secure communication
and transactions became apparent. In 2004, the Payment Card Industry Security Standards
Council (PCI) was formed to ensure businesses were meeting compliance with various
security requirements.

The organization was created for the development, enhancement, storage, dissemination
and implementation of security standards for account data protection.

The growing use of the Internet, tablet devices, and smart phones coupled with larger
consumer confidence will see that E-Commerce will continue to evolve and expand.

With social media growing exponentially in recent years, the conversation between
businesses and consumers has become more engaging, making it easier for transactional
exchanges to happen online. Internet retailers continue to strive to create better content and
a realistic shopping experience with technologies like augmented reality.

E-Commerce Industry Outlook 2016

Most shopping journeys will be multi-device

Half of all E-Commerce transactions are already made using multiple devices. As that
figure crosses the 50% mark in 2016, retailers will need to redesign the online buying
experience for this new reality. Multiple device users are also 20% more likely to complete
their purchase on mobile than the average user.

Implication - Retailers will need to redesign their online buying experience to reflect the
fact that the majority of users visit them via multiple devices. Campaigns must be activated
on all devices and all properties fully tagged to leverage mobile and desktop.

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 Smartphone shopping will continue to gain ground

Mobile is now the first screen for the majority of consumers, especially as larger
smartphone screens make mobile shopping more convenient. Smartphones account for over
40% of E-Commerce transactions in Japan and South Korea. Smartphone share is steadily
catching up with tablets in the UK, Germany, France and Russia.

Implication As an increasing share of transactions happens on smartphones, retailers

need to prioritize their mobile app strategy and optimize their mobile buying experience.
While on tablets people can use websites that aren't mobile-optimized, on smartphones its
crucial to have either a mobile-optimized website or an app.

Expect more big online shopping days with even bigger sales

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In the U.S., Cyber Monday remained the E-Commerce Spending on Shopping Holidays
biggest online shopping day of the year with $3bn in sales, according to Adobe. Singles
Day (Nov 11) celebrated in China was the world's biggest online shopping day of the year,
with Alibaba alone reporting sales worth $14.3bn, a 60% increase from last year. These big
online shopping days will get even bigger in 2016.

Implication Retailers will need to rebalance their online and in-store strategies for these
big shopping days. Brick and click retailers should expect more traffic online than in-store
on the years biggest sales peaks.

Retailers will see a high web influence on their in-store sales

As the majority of consumers now research online before visiting a store, understanding a
shoppers prior online activity is vital for retailers. According to Google, 8 out of 10
shoppers with a smartphone are using it inside the store to help them shop, even though
most later purchase at the POS (point of sale). Retailers are starting to get a better view of
the customers shopping journey by connecting with them via their app, and/or by using
beacons and technologies to match the customer email ID or loyalty program at the POS.

Implication As retailers invest in these technologies, they must make sure that they also
have the expertise and operating resources in place to manage customer interaction in real -
time.

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 Marketing will shift from device-focused to people-focused

Only a handful of companies are able to effectively leverage customer data across devices
and platforms today. Even with probabilistic and deterministic matching now possible,
most retailers still struggle with tracking cross-device sales and customers movement
across apps and browsers. In 2016, marketers will prioritize their spend to enable them to
understand how consumers are moving across devices, platforms and publishers to consume
information. Consequently, we will start to see more evidence of true people-focused
marketing.

Implication - Consumers don't think about their media consumption by device, browsing
environment, or by publisher in a silo; therefore, neither should marketers. B2C
organizations need to restructure their marketing teams to fully understand consumer intent
and to look beyond the walled gardens.

Ads will become more relevant and non-intrusive

The annoying pop-ups, overlays and pre-roll ads are on the way out, especially on mobile.
Consumers expect non-intrusive ads and personalized content, and advertisers must deliver.
Ad-blocking will also accelerate the move toward non-intrusive ad formats. The good
news? According to Adblock Plus, 75% of users dont mind receiving non-intrusive ads.

Implication Shifting to non-intrusive and relevant ads will help advertisers to achieve
genuine engagement with consumers, and lead to higher conversions.

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 4. Instant delivery services will become common
Order fulfilment will be a big focus for retailers in 2016, with many offering delivery
options to match Amazons Prime Now service. Both online and brick and click retailers
will be trying this strategy through specialized third parties like Instacart. Faster delivery at
lower charges will also drive growth of cross-border shopping as consumers wont mind
buying from other countries to save money.

Implication Retailers offering same-day delivery or even faster will enjoy a

significant competitive edge in 2016. This trend will also drive a lot of advertisers to adopt
the in the moment style of advertising to drive conversions.

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2.3 Latest Trends of E-Commerce Industry:
India is a massive E-Commerce marketplace now with every age group comfortably
transacting online more often preferring shopping online instead of visiting offline stores
for a bigger gamut of choices and offers. The West shops online 10X more than India, but
then India has the worlds 2nd largest number of smartphones and growing!

E-Commerce industry is growing at an astounding rate in India and is expected to account

for 1.61% of the global GDP by 2018. The Asia-Pacific region is currently the largest E-
Commerce market in the world, surpassing Europe. While China continues to lead the race,
the Indian E-Commerce Industry isnt far behind. According to a report by Forrester, India
is set to become the fastest growing market in the Asia-Pacific region with an expected
growth rate of over 57% between 2012-2016.

To better understand the Indian market, we at Sokrati put our mining caps on and started
digging data from across 100+ retailer clients, through 1.4+ million purchases, from over
2+ million transactions. A first of its kind in India, this study is unique in its findings about
the booming Indian E-Commerce industry. Online marketers of every size are benefiting
from these findings, with the stats adding up to assist their online success stories.

Real Time Customization: A Dynamic Shopping Experience That Adapts

To the Shopper in Real-Time
Just as search results differ from one person to the next, 2017 will see the emergence of an
online shopping experience that is unique to each consumer. Each shopper will have access
to unique content: product recommendations and add-ons chosen based on their
preferences, geographic location, market trends, demographic group, past purchases, and
brand interactionsall completely automatically. Even better, their next visit will be
entirely different because it will be based on the previous one and on the merchants current
promotions.

While this could seem a little intrusive, the opposite is actually true: no more weird
recommendations that seem to come out of left field. With platforms like Monetate,
Magento 2, or Sitecore, theyll be replaced with relevant recommendations and search
results that are based on the customers recent online activity and brand interactionslike
walking into a store where the salespeople know your name and what you like.

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For example:

LOREAL PARIS:

L r al Paris has designed five diagnostic tools:

skincare, cosmetics (face and eyes), haircare, and hair
color. These beauty diagnostics, typically operated on a
mobile device, allow consumers to try on different
shades of make-up, scan their hair color, etc.

Not only can consumers use these tools to play with

different looks in real time, but the data collected during
each session allows for an unprecedented level of
personalization of communications and interactions, not
to mention ultra-customized discount coupons, which
can have a major influence on purchasing decisions.

Data-As-A-Service and E-Commerce: Endless Aisles and the Perfect Fit

If 92% of Internet users regularly read product reviews and comments from other buyers,
its because uncertainty is a huge obstacle to online purchasing. The more information there
is available about a product (pictures, reviews, descriptions, specifications, etc.), the less
reluctant people will be to buy it online. However, constantly refreshing the informati on on
each individual product on a website is a near-impossible task for any merchant who
doesnt have esque resources.

In 2017, many retailers will start working with data aggregators that compile data on
millions of products: pictures, descriptions, price comparisons, specifications, UPC codes,
reviews, and comments. There are even aggregators that contain data on millions of pieces
of clothing that can be used to suggest the perfect size! A merchant will be able to link its
site to these databases to automatically update product information. Say goodbye to
uncertainty and to poor product descriptions!

For Example:

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True Fit

In the clothing and footwear industry, several brands and retailers are using the TrueFit data
aggregator, which currently works with over 400 clothing and shoe brands to provide
shoppers with the perfect-sized garment based on their current wardrobe and
measurements.

GFK Etilize

Etilize is a product information aggregator specialized in home electronics

that and provides structured and standardized data on nearly 2 million
products. A retailer can synchronize its website with Etilizes database to
almost instantly broaden its service offering and to ensure the validity of the
information on each product including product images, owner manuals,
specs, dimensions; even the manufacturers links to compatible accessories.
Product information is available in 20 languages adapted for 30 countries.

Bye-Bye Wallet: The Beginning of the End for the Wallet and Cash
Consumers these days can already make many purchases and transactions without ever
taking out their wallets. The upgrades to consumers mobile devices and merchants point-
of-sale systems will spell the end of the traditional wallet for many people in 2017,
especially since mobile payments will be possible using more than just a smart phone
watches, rings, and other devices and wearables will now be connected and capable of
making payments. Merchants would be wise to set themselves up to accept these new
payment methods as soon as possible.

For Example:

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 Kit and Ace

Kit and Ace stores, sellers of

minimalist and technical apparel, do
not accept cash payments and have
no actual cash registers. Each one of
their 54 locations, including 23 in
the U.S. and 10 in Canada, is
equipped to accept mobile and
credit card payments, but no actual
money.

Visa Card

During the Rio Olympic Games, VISA gave its sponsored athletes a payment ring that
allowed them to make purchases at some 4,500 points of sale at the Olympic venues by
tapping the NFC-enabled ring on the payment terminals.

The Snapchat-Ization of Shopping: Real-Time Commerce in a Hyper-

Localized Era
Gen Y and Z consumers are hooked on the instant communication and unique experiences
made possible by mobile technologies, RFID, NFC, and geolocation. In parallel, analytics
will shift from the Web to the street; from the computer to the individual.

Merchants can now rely on sensorsstationary technology that can detect nearby devices
and itemsto enhance their offer and create real-time happenings for which the
experience, content, or promotion is available only to the people who are there at the time.
Retailers are no longer selling only products and services, they are providing experiences
and interactions, a fact that major brands will exploit in increasingly innovative ways.

For Example:

Sail

Canadian outdoor retailer SAIL decided to test Facebooks new local features by designing
a Drive-to-store campaign which was entirely initiated on digital platforms. Finally able to
measure the in-store impact of a digital campaign, SAIL ran an A/B test and by the end of
the campaign, noted that nearly 58% of the customers in the store with a Facebook account

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had seen and/or interacted with the campaign, a big first step towards the hyper-localization
of interactions between the brand and its customers.

Walgreens

The Walgreens app allows users to renew their prescriptions by scanning the bottle or box,
but more than that, the app changes when customers are NEAR a store and then again when
theyre IN the store, offering exclusive features in each situation, leveraging the context
aware features made possible by mobile. The largest pharmacy chain in the United States
is pulling out all the stops and taking full advantage of mobile technology to make life
easier and better for its customers.

Predictive Analysis: Accurately Predicting the Customers Next Purchase

Predictive analysis is a technology thats quickly gaining popularity with merchants. By
exploiting the massive amount of data (Big Data) collected through interactions and
customer profiles or personas, merchants can use predictive analysis to better understand
consumers purchasing habits, preferences, and, yes, even their next purchases, based on
the behavior of other customers with similar profiles.

This technology, available on certain E-Commerce platforms (AgilOne, Emcien, Windsor

Circle, Rich Relevance, etc.), promises to be very lucrative for retailers, but even more so
in the B2B sector, where orders are larger and sales cycles are often more laborious.

For Example:

Davids Tea

Agil ne helped DAVIDsTEA realize that a new customer who didnt return within 30 days
was lost. By segmenting their customers by purchase type and creating a sampling for each
group, the company was able to optimize its email communications in order to confirm
purchasing trends in advance, in some cases doubling their regular conversions by offering
the right customer (1) the right product (2) in the right way (3) and at the right time (4).
They are able to predict their consumers behavior and adjust their offer seasonally. The
analytical approach led to an increase in the number of new customers who make a second
purchase within 30 days.

The Uber-Ization of Shipping: Smaller Stores, Local Drop-Off Points and

Same-Day Delivery
While the big box model continues to lose ground, E-Commerce, and especially online
retail orders, continues to grow, bringing with it both challenges and opportunities related
to logistics and delivery. In 2017, many consumers will receive their first same-day
delivery, whether at home, at work, or at a drop-off point of their choosing.

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Many stores will now operate out of smaller spaces, which will serve as showrooms, fitting
rooms, or drop-off points. Customers will be able to order the product they want after
having seen it and touched it.

For Example:

Amazon

Amazon offers free same-day delivery with any purchase over $35 to its Prime members
in 27 cities across the United States. In Canada, same-day delivery is now available in
Toronto and Vancouver.

Walmart

In addition to working on same-day delivery agreements with Uber and Lyft, Walmart is
even exploring the idea of having a customer who makes an in-store purchase drop off
another customers order on his way home.

Walmart is also investing in smaller stores in order to expand its reach. It would make
sense for these stores to become delivery points for online purchases where customers
could also pick up everyday essentials like paper towels, dish soap, perishable foods, etc.

Unified Commerce: Merging Commerce with E-Commerce

Unified commerce is the next logical step in the omni-channel strategy (see last years E-
Commerce trends): the centralization of IT infrastructures. Instead of adding a digital
storefront to the in-store infrastructure, merchants will instead integrate their stores
(physical or digital) into a centralized infrastructure.

With platforms such as Magentos Commerce rder Management (MC M), which
centralizes all systems and gives access to them in real time, retailers can now offer
consumers an unprecedented amount of freedom. The timing of this development couldnt
be better, with consumers now expecting to be able to search for, interact with, purchase,
receive or pick up, and return products wherever and whenever they want. Theyll spend
their money with merchants who will let them make purchases whenever its convenient for
them, and not the other way around.

The consumer doesnt see a difference between an online store, a physical store, and
interacting with a company on Facebook; hes dealing with a whole brand and not just its
parts.

-Charles Desjardins, Absolunet associate

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For Example:

Frankfurt Airport

Frankfurt Airport, which sees 61 million passengers every year, introduced a technological
infrastructure that unifies all of its merchants into a centralized shopping experience. This
allows the customer to pre-order from any duty-free store or combination of stores and/or
airport restaurant while still in the air, on site, in a taxi on the way to the airport - even the
day before travelling. More impressive still is that the new infrastructure is compatible with
the many technological platforms and ERP systems that were already place.

Disintermediation: Buyers Want To Deal Directly With Brands

Millennials want to deal directly with the brands, so its only natural that the relationship
between end users and brands is becoming less circuitous. These same brands and
manufacturers will pull out all the stops to make the sale with the end user (Direct-to-
consumer or D2C), to the detriment of their traditional distribution channels, the
distributors and merchants.

Conversely, distributors and merchants will attempt to cement their relationship with the
customer by becoming indispensable and by offering added value: warranties,
complementary services and, of course, independence from the brands. This trend, called
disintermediation, will take hold in both B2C and B2B commerce, where automated
processes and CRM systems are being used more than ever to maintain relationships and to
simplify the ordering process.

For Example:

AliExpress

AliExpress, the B2C marketplace of Chinese giant Alibaba, allows manufacturers to deal
directly with end buyers all over the world thanks to a standardized E-Commerce and
logistics platform.

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Hello, ARTIFICIAL INTELLIGENCE: Consumers Will Interact With
Artificial Intelligence And theyll Love It!
In 2017, many consumers will have their first interaction with a chatbot, a fully automated
chat agent that will answer their questions and act as the first point of contact with the
brand. A chatbot increases the number of platforms on which a brand can transact by
offering guided, interactive browsing at all times.

Chatbots will soon become as commonplace as automated phone systems, only much more
interactive and interesting. At the same time, store sales staff will become more important
than ever, as theyll be increasingly involved in the online experience.

What are the potential impacts of a chatbot on E-Commerce?

Live chat users spend an average of 5%-30% more. The buyer conversion rate is 5 to 10
times higher following a chat session.

2.4 Development in E-Commerce Industry [Globally]:

International Retailing Business is highly competitive and volume driven industry. Retail
Companies find the need to focus on building Customer relationship and loyalty with
existing customers as much as looking at extended market development.

Market Development and market penetration in case of Retail comes largely from
extending and building new product portfolios and embarking on multi channel strategies.
Internet and E Commerce have added a new dimension to the marketing strategies of retail
companies.

Increasing Market Presence

E Commerce as a platform for market development is in its nascent stages especially in the
fashion retail segment as well as grocery segment. Retailers hereto are extending online
shopping to their existing customers as an add on facility rather than targeting new markets.
Retailers like Tesco and Sainsburys are currently pursuing multi channel sales strategy
where in they have established the Stores or the high street as well as mail order sales
channels.

With offering of online sales services, they are able to offer a convenient way of shopping
to their existing customers and may be able to swing a few customers from competition too.

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Developing New Markets

The potential that E commerce provides to the Retail industry is to establish themselves in
new emerging markets through online selling. Amazon has created history by providing
online sales globally and targeting the new markets besides its UK & US markets. Online
selling enables Retail firms to start selling in new markets with negligible operational,
selling and distribution costs as compared to setting up an establishment in the new region.

New Market Development - Essentials

However harnessing new and emerging markets through E Commerce needs to be driven
strategically by the Companies with complete understanding of the platform and the local
needs. The companies need to reach out to customers in their own languages. Be it in
Europe or in China, the customers are likely to shop online when they find the website
translating the information into their language. To be able to address the specific local
market, the Retail companies would need to be compliant with local tax and legal
regulations. Product development would need to be done in accordance with the local
flavour and culture of the market.

Though retailing services can be offered by the Companies online across the globe, they
would need to customize the features and processes to suit local or regional markets. E
Commerce can be pursued as a independent strategy by the Companies to take advantage of
the global platform that the technology provides. Pursuing such a strategy would need the
Company to be very strong in marketing and build adequate operational capability to
service the global customers. At this stage it is quite possible that the management faces the
challenge of focussing on traditional marketing strategy as well as pursuing the new global
e commerce strategy, leading to compromises or spin off of E commerce business into
purely plug and play online selling.

Currently the volume generated through E Commerce being miniscule compared to

traditional sales channels, the Retail Companies have not yet arrived at the stage where they
need to set up separate entity to pursue E Commerce strategy independently. However it is
quite possible that we might find intermediaries and dealers establishing pure online trading
platform to offer multiple retail brands on their website. Virtual world is expanding fast and
providing new business opportunities for those who understand E Commerce and are able
to harness the potential.

In 2016, total retail sales across the globe will reach $22.049 trillion, up 6.0% from the
previous year. eMarketer estimates sales will top $27 trillion in 2020, even as annual
growth rates slow over the next few years, as explored in a new eMarketer report,
Worldwide Retail E-Commerce Sales: The eMarketer Forecast for 2016 (eMarketer PR
customers only).

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eMarketer includes sales across all retail channels in its estimates for total retail sales. This
includes sales from E-Commerce retailers and transactions that occur over consumer-to-
consumer (C2C) platforms such as eBay and other auction sites; and sales by motor vehicle
and parts dealers and by gas stations. Travel, event ticket and restaurant sales are excluded
from eMarketers forecast.

eMarketer has lowered its projections for overall retail sales since its previous forecast in
December 2015, mainly due to low oil prices and negative currency effects. The US dollar
has risen against most major currencies, and as a result the value of retail sales denominated
in US dollars is down across all markets in eMarketers forecast. Persistent low oil prices
also continue to have a profound effect on retail sales value in countries where gasoline
takes up a large share of retail sales, including the US, the UK, Canada, France, Singapore
and others.

Retail E-Commerce saleswhich

include products and services (barring
travel, restaurant and event ticket sales)
ordered via the internet over any
devicewill reach $1.915 trillion in
2016, accounting for 8.7% of total retail
spending worldwide. While the pace of
growth for overall retail sales is subdued,
the digital portion of sales continues to
expand rapidly, with a 23.7% growth rate
forecast for 2016.

eMarketer expects retail E-Commerce

sales will increase to $4.058 trillion in
2020, making up 14.6% of total retail
spending that year.

Retail E-Commerce Sales Worldwide, 2015-2020 (trillions, % change and % of total retail
sales)

Asia-Pacific will remain the worlds largest retail E-Commerce market throughout the
forecast period, with sales expected to top $1 trillion in 2016 and more than double to
$2.725 trillion by 2020. The region will also see the fastest rise in retail E-Commerce sales,
climbing 31.5% this year. Expanding middle classes, greater mobile and internet
penetration, growing competition of E-Commerce players and improving logistics and
infrastructure will all fuel E-Commerce growth in the region.

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 The bulk of retail E-Commerce will
come from China, where sales are
expected to reach $899.09 billion this
year, representing almost half (47.0%)
of all such sales worldwide. While there
is plenty of opportunity for growth,
parts of Asia-Pacific are still faced with
challenges. In Southeast Asia in
particular, E-Commerce still represents
only a fraction of total retail sales. An
underdeveloped digital payments
infrastructure and a weak logistics
framework have made these markets
unprepared to handle high volumes of
E-Commerce orders and have kept E-
Commerce at a nascent stage.

Retail E-Commerce sales in North America will rise 15.6% this year to reach $423.34
billion, maintaining the areas status as the worlds second largest regional E-Commerce
market. The region will see consistent double-digit growth through 2020, fueled by
increased spending from existing digital buyers, expansion into new categories such as
grocery, and growing mcommerce sales.

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Development in E-Commerce Industry [Nationally] :
India might have only 300-odd million Internet users, out of its total population of 1.3
billion. But this has not stopped online commerce from establishing itself in the country.
For any other industry, it takes decades of effort to have companies that are worth billion
dollars. But in India, out of the nine startup unicorns, four are horizontal online
marketplaces. And despite the recent shutdowns and funding crunch affecting the startup
ecosystem, digital commerce has established itself. The latest study by the Internet and
Mobile Association of India (IAMAI) has, in fact, found that at a CAGR growth rate of
about 30 percent between December 2011 and December 2015, Indian digital commerce
stands at Rs 1,25,732 crore. The report estimates that it will hit Rs 2,11,005 crore this year.
However, online shopping comes only after online travel, which is valued close to Rs
76,396 crore.

Highlights from the study

Online retail has grown by 57 percent since December 2014; electronics goods and
fashion contribute close to 49 percent of overall spend in e-tail. Horizontal
marketplaces is the clear winner. In 2015, $9 billion flowed into Indian startups,
with ShopClues, Flipkart, Snapdeal and Paytm bringing in a fourth of the amount. In
fact, Indian online commerces big daddy Flipkart gets highest sales from mobile
phones and electronic categories. Fashion, however, is where vertical players shine:
Flipkart-owned Myntra, Rocket Internet-backed Jabong, and well-funded players
like Wooplr, Voonik, and Limeroad are playing on a huge customer base.

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 According to the report, apparel and footwear sale has grown by 52 percent, from
Rs 4,699 crore in December 2014 to Rs 7,142 crore in December 2015. This
segment is expected to reach Rs 72,639 crore by end of 2016. Investments in this
sector support this claim lingerie seller Zivame, fashion marketplace Limeroad,
and fashion social network Roposohad raised $40 million, $30 million, and $20
million respectively in 2015 alone. Offline sellers like Shoppers Stop have, in fact,
launched their own online platforms to face this competition.

With the Indian smartphone market having grown by 100 percent in 2015, hotel
booking has also seen annual growth of 165 percent. There is good news for hotel
aggregators: with rise in tourism, the Federation of Hotels & Restaurants
Association of India estimates that India needs another 1.8 lakh rooms by 2020.
Hotel aggregator OYO Rooms announced profitability recently. Curiously, there
was no mention of online rental commerce, logistics, or online furniture sellers in
the report.
The report states that 48 percent of shoppers have looked for information online in
apparels, footwear and mobile categories; but 18 percent of them purchased offline.
Also, 76 percent shoppers still prefer to pay by cash-on-delivery (CoD), which the
e-tailers have been trying to fight off, with incentives like easy EMIs and additional
discounts for online payments, as the logistics costs are through the roof for CoD.
However, credit cards and even Internet itself is yet to penetrate the India outside
the metros.

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Ambiguous future
Despite the impressive numbers, scepticism around E-Commerce is still alive and for good
reason. The Indian E-Commerce industry is still far from making profit. In fact, Flipkart
was devalued by 27 percent by Morgan Stanley and later another 15 percent by T Rowe
Price recently. They are valued at less than $10 billion, from $15 billion in 2015. A few
weeks ago, online restaurant discover platform Zomato was devalued by 50 percent, to
$500 million, by HSBC. As much as these companies say there is no funding crunch, it is
an open secret that most biggies are struggling. A Livemint report recently stated that
Flipkart and Snapdeal in fact are stagnant and seeing a fall in sales. The latter is also
scaling down regional operations now.

Marketplaces hiking their commission from sellers is proof of the distress they are in.
Jabong which has been facing severe fund crunch recently cut down on its low-margin
brands, and Myntra had to migrate back to desktop after its app-only strategy cut down its
revenue.

Yet, none of this has stopped bigger players from entering the sector Aditya Birlas
ABOF, Reliances AJI Life, Tata Groups Tatacliq, - all the titans have been making their
presence felt. Amazon, which had already invested $2 billion in India since they entered the
market in 2013, is investing another $3 billion now. Tata Group also made its first
investment in an E-Commerce firm recently in online jewellery platform Caratlane.

Some cynicism, however, is inevitable; cost of customer acquisition has discouraged Future
Group Head Kishore Biyani from taking a leaf out of their competitors book. But the
expansion of Central Mall and Big Bazaar going online show that they are taking
competition from online marketplaces seriously.

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Online commerce will drive 25 percent of organised retail and will be of GMV $60 billion
by 2020, according to a study conducted by Google and A.T. Kearney. Besides, foreign
investors like Japans Soft Bank and Chinas Alibaba, HNIs like Ratan Tata are also
waking up to the online opportunities by investing in about 50 startups, a majority of them
in E-Commerce, including Snapdeal, Bluestone, Kaaryah, Paytm, Urban Ladder, Zivame. If
the numbers are true, it certainly looks like Indian E-Commerce is maturing.

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2.5 Major Players in the E-Commerce Industry [Globally]

1. Amazon
Amazon is a pioneer in online retailing. Amazon started and grew in the late 1990s.

Sometimes criticized for utilizing Gross merchandise value and market share in overall
industry as opposed to profits, Amazon.com shocked everybody to demonstrate its first net
benefit in 2001. Amazon collected National Retailer Federations award Retailer of the
year in 2013.

It was likewise included among main 10 worldwide brands in the main 500 worldwide
brands 2015 list by a driving industry source gaining practical experience in brand
valuation. Amazon was positioned among the main three US retail marks in the main 50 US
retail marks 2015 rundown discharged by the same source. The organization offers items in
different classes through its e-business site www.amazon.com in the US. The online
organization helps Amazon to turn its stock quickly and diminish its stock administration
cost what's more, subsequently offer stock at nearly low costs.

Broadening product offering and reinforcing specialized stage through key acquisitions
Amazon has been growing its business operations and items. In 2009, the organization
obtained Zappos.com, an online attire, footwear and adornments retailer.

In September 2015, AWS aquired Elemental Technologies, one of the main suppliers of
programming based video arrangements

The organization's emphasis on item extension will empower it to increase its noteworthy
piece of the pie. The fortifying of its specialized stage will help Amazon decrease its
working cost and make strides in operational proficiency and permit it to offer more esteem
to its clients. Amazon has ruled the quickly developing electronic book market for as far
back as couple of years through its tablet gadget, Kindle. Inside nine months of its dispatch,
Kindle Fire represented 22% of the US tablet deals.

Revenue: $ 107000m

2. JD.com
JD.com or Jingdong Mall, earlier 360buy, is a Chinese electronic business organization
headquartered in Beijing.

It is one of the biggest B2C online retailers in China by exchange volume, and a noteworthy
contender to Alibaba-run Tmall and has become one of the leading E-Commerce players
worldwide. Its English site, for overall delivery, propelled on October 18, 2012, and the
organization was established by Liu Qiangdong in July 1998, and its B2C stage went online
in 2004.

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It began as an online magneto-optical store, yet soon expanded, offering hardware, cell
telephones, PCs, and so forth. Jingdong Mall changed the area name to 360buy.com in June
2007, and to JD.com in 2013.

Online money related administrations are a huge open door for Chinese innovation
organizations. One of the biggest Chinese e-business organization, JD.com, brought $1
billion up in new subsidizing for its buyer fund auxiliary, JD Finance.

JD Finance gives various online money related administrations to buyers, new businesses,
and organizations in China. In September 2011, 360buy was named Best Employer of
2011: Company Most Suitable to Work for in China in the Fortune magazine. (Chinese
Edition).In August 2011, 360buy was on the List of Model E-Commerce Companies by
the Ministry of Commerce

JD.com, China's second greatest E-Commerce organization behind Alibaba, has reported
superior income development in the most recent three months of 2015 as volume deals on
its stages hopped even with China's monetary slowdown. Chinese E-Commerce site JD.com
is set to extend its online-to-offline (O2O) operations under a proposed US$200 million
merger between its JD Daojia conveyance business and Dada Nexus, territory China's
biggest crowdsourcing delivery platform. Once the arrangement is finished this second
quarter, Beijing-based JD.com will possess 47.4 for every penny of the consolidated
business O2O delivery platform for retailers.

Revenue:$ 27888m

3. Macys
Macy's, initially R. H. Macy and Co. (adapted as Macy's), is a mid-range chain of retail
establishments claimed by American partnership Macy's, Inc.

Macy's is known for its specialty in pop culture and the assorted qualities of its stock.
Contenders incorporate Belk, Bon-Ton, Dillard's, Kohl's, JC Penney, Boscov's and Sears.
Macy's has directed the yearly Macy's Thanksgiving Day Parade in New York City since
1924 and has supported the city's yearly Fourth of July firecrackers show subsequent to
1976.
Macy's website has tried to gain better Insight Into Customers behavior with Predictive
Analytics from SAP. Macy's promotes its leader store on Herald Square as the biggest store
on the planet, even after the record was really softened up 2009 by the biggest store of
Shinsegae situated in Busan, South Korea. Its leader store covers right around a whole New
York City piece, highlights around 1.1 million square feet of retail space, incorporates extra
space for workplaces and capacity, and serves as the endpoint for Macy's yearly
Thanksgiving Day parade. It is evaluated that the estimation of Herald Square is under $3
billion to more than $4 billion. Starting 2015, Macy's is the biggest US retail chain
organization by retail deals and is the fifteenth biggest retailer in the United States per
revenue.

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Revenue: $ 27079m
4. Walmart
Walmart is an American multinational retail enterprise that works a chain of hypermarkets,
markdown retail establishments and supermarkets.
Headquartered in Bentonville, Arkansas, the organization was established by Sam Walton
in 1962 and consolidated on October 31, 1969. As on 2016, Walmart has 11,527 stores and
clubs in 28 nations, under a sum of 63 banners, and with its growing operations, it is also
one of the biggest E-Commerce players across the world.
Amid 2015, Walmart put billions to stay important in the e-business diversion, as indicated
by Fortune. Walmart opened first E-Commerce fulfillment centre in 2015 at Atlanta GA.
Wal-Mart made waves a week ago when it reported it was shutting 154 U.S. stores and
another 115 over the globe.
It's an "uncommon retreat" for the retail organization on its home turf, as a Wall Street
Journal feature read. What's more, it's a further flag that E-Commerce shopping is turning
out to be all the more a focal point for Wal-Mart.
Wal-Mart has been dedicating more assets to E-Commerce. Alongside Amazon and other
eminent tech heavyweights, it's one of the top organizations posting employments for
programming engineers for applications.
Walmart redesigned its portable application and put resources into the satisfaction of online
basic supply orders, permitting clients to place orders online and afterward get their staple
goods at a close-by store an administration now accessible in 150 Walmart stores in 20
markets as of February 2016.
Walmart reported in October that it had connected to the FAA for authorization to test
ramble conveyance with automatons from China, another move unmistakably intended to
set the organization against Amazon, which is building up its own particular automatons for
delivery purposes. In December, Walmart declared its own Walmart Pay versatile
installment framework and its own publicly released cloud administration, OpenOps, an
other option to Amazon Web Services. Walmart additionally acquainted an adversary with
Amazon Prime called Shipping Pass, accessible to choose invitees last June. The
administration offers boundless 3-day conveyance and costs just $50 a year.
Revenue: $13500m
5. Alibaba
Alibaba is China's biggest E-Commerce platform, which has been doing incredible business
in the online market.

Transactions on Alibaba's various sites has been increasing steadily, which is more than
many E-Commerce players combined, which shows the incredible position of the company
in the E-Commerce industry. Alibaba executes about 80% of Chinas E-Commerce
transactions and it is still continues to grow at a fast rate.

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Alibaba turned Singles Day into a shopping holiday Alibabas consumer shopping
websites reported sales of $14.32 billion (up 60% from 2014) in transactions on just one
day; more than the total sales made online on Black Friday and Cyber Monday in the US.
The Alibaba Group runs online marketplaces which include -
Alibaba.com their primary marketplace and a business-to-business (B2B) platform for
wholesale trade
Tmall a business-to-consumer (B2C) marketplace similar to Amazon
Taobao a consumer-to-consumer (C2C) marketplace similar to eBay,
Alipay an online payment system
Alibaba is the world's largest retailer as of April 2016 On 5 September 2014, the
gatheringin an administrative recording with the US Securities and Exchange
Commissionset a US$60-to $66-per-offer value range for its planned first sale of stock
(IPO), the last cost of which would be resolved after a global roadshow to gage the
speculator enthusiasm for Alibaba shares to shareholders.
Alibabas growth grabbed the worlds attention when it went public on September 19,
2014. Alibabas IP priced at US$68 helped in raising US$21.8 for the company. Alibaba
entered India's E-Commerce space after Ant Financial Services Group, part of Alibaba
Group, took 25% stake in One97 which owns Paytm.
Revenue:$12293m

Major Players in the E-Commerce Industry [India]

1. mJunction
mJunction Services tops our list of the largest E-Commerce companies in India with its
high value and volume of business.

It is a 50-50 venture by Tata Steel and Steel Authority of India Limited(SAIL), which
shows its strong brand value and market presence. It was founded in 2001 and since then
has become the largest E-Commerce company in India and also the largest e-marketplace
for steel in the world.

Due to online and internet based model, mJunction has been able to bring in transparency,
efficiency and convenience in the buying and selling of steel and coal. The company is led
by Viresh Oberoi as the Chief Executive Officer and is headquartered in Kolkata.

mJunction was established to improve the supply chain and business processes of an
industry. It then moved into new areas of business like e-sourcing, e-selling, e-finance,
knowledge services and e-retail across diverse industry verticals. The company operates
through various website portals like metaljunction.com, coaljunction.in, metaljunction.com,
valuejunction.in, autojunction.in, straightline.in and mjunctionedge. The business model of

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the company is unusual in terms that it serves both the sides of the supply chain. It removes
the intermediaries in the supply chain and brings in transparency by doing online auctions
for steel and other materials. The tendency of producers to form cartels also got reduced
with the formation of mJunction. Even the smallest bidders can do transaction here. The
companys values of customer focus, innovation, excellence and integrity has led to its
tremendous growth.

Since the inception of the company, it has done transactions worth Rs 3,50,000 crores up to
2015. It is also one of the most respected companies in India for its corporate social
responsibility endeavors. It has won CSR, responsible supply chain and most innovative
company of the year awards judged by various agencies.

GMV = 9.694 billion dollars

2. Flipkart

Established in 2007 by Sachin Bansal and Binny Bansal, Flipkart is considered to be the
pioneers of E-Commerce in India.

The registered office of the company is in Singapore while its headquarters is in Bangalore,
and is one of the most popular online shopping destinations in India. Started by a team of
two persons, Flipkart today boasts of having 40 million products across 80 plus categories.

The companys website reports 8 million shipments per month, 75 million registered users,
10 million daily page visits, 85000 sellers with 17 state of the art warehouses.

Flipkart started off a s bookstore in 2007. In 2010, it launched the cash on delivery, music,
movies and mobile shopping. It expanded into fashion, lifestyle and apparel in 2012. 2013
was a landmark year for Flipkart in which it reportedly sold around 1 lakh books in a single
day. In 2014, it acquired Myntra, received a billion-dollar funding and started in-a-day
delivery guarantee. The company launched experience zones in 2015 along with a mobile
version of its website Flipkart Lite. In 2015, it bought a stake in MapmyIndia to enhance
its delivery services with the help of navigation technologies. Flipkarts mobile app was the
first to cross 50 million registered users in 2016. Flipkart investors include Tiger Global,
Accel Partners, Morgan Stanley, Sofina SA, Vulcan Inc., Naspers, Iconic Capital among a
host of other private equity partners.

Flipkart also has items under its own brand known as DigiFlip which includes tablets,
laptop bags, USB drives. In 2014, the company launched its own brand of mobile phones
and tablets Phablets. Also it has its own healthcare and in-house home appliances brand
known as Citron. Flipkart is one of the most valuable E-Commerce companies in India with
its founders featuring in the Forbes India Rich List 2015.

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GMV = 7.492 billion dollars

3. Snapdeal
Kunal Bahl and Rohit Bansal founded Snapdeal in 2010 and since then Snapdeal has
become one of the largest E-Commerce companies in India.

The company works on a marketplace model, and the vision of the company is to create a
superior and sustainable ecosystem for E-Commerce in India which can provide life
changing experiences to sellers and buyers. The company boasts of having 12 million plus
products, 150000 sellers and delivery to around 5000 cities across India.

The company has also partnered with global marquee investors like SoftBank, Temasek,
eBay, Venture Partners, Ratan Tata and others. Snapdeal also has the endorsement of
Aamir Khan as its brand ambassador. The company is said to sell 10 mobiles, 8 pairs of
shoes and 1 out of 4 DSLR cameras in India every minute. Snapdeal is also a pioneer in
selling branded real estate in India online.

To grow, Snapdeal has made a string of acquisitions in the past. It started with Bengaluru
based Grabbon.com and then esportsbuy.com based out of Delhi in 2011 and 2012
respectively. It then acquired some online handicrafts, fashion and gifting companies.
Snapdeal also bought a 50% stake in its logistics partner, GoJavas.com. In 2015, Snapdeal
acquired E-Commerce management software provider Unicommerce.com and also ventured
into the financial services space through the acquisition of RupeePower. One of the major
acquisitions of Snapdeal has been that of Freechrage.com, a leader in mobile transactions.
This has made Snapdeal the biggest mCommerce company in India.

Because of its innovative nature, Snapdeal is the recipient of many awards and
recognitions. It won the award for the best advertising campaign of the year in 2012. Its
founder, Kunal Bahl has won the 2015 Entrepreneur of the year award.

GMV = 4.323 billion dollars

4. Amazon India
Amazon is an E-Commerce company headquartered in Seattle, Washington, and is a global
brand in E-Commerce.

It is the largest internet retailer and e-seller in the United States, and the company is led by
its founder and Chief Executive Officer, Jeff Bezos. In India, Amazon has an online
bookstore, music, DVDs, electronics, software food, furniture, toys and jewelry.

The company is also the world largest cloud services provider. Amazon has surpassed
Walmart as the most valuable company in the United States by market capitalization in
2015.

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The company was founded in 1994. It started as a bookstore selling to 50 states in over 45
countries. The company went public in 1995. The business plan of Amazon was previously
unheard of. It did not go after profits for four to five years since its inception which caused
majority of stockholders of the company complain about its business model. However, the
company survived the Dot com bubble burst of the 2000s and its first turned profitable in
2001. The company also partnered with ToysRus and other merchants and provided them
with an online retailing platform. It delivered the orders on Sundays as well by partnering
with the United States Postal Service.

The company launched its India operations and its online marketplace Amazon.in in 2013.
This gave its independent merchants a platform to sell directly to customers. It started off
with books and video content, but soon added mobiles, DVDs, toys, apparels, furniture and
home products. Through its previous version India called Junglee, Amamzon first gained
market intelligence and found out the products for which market demand was greater. To
counter rivals like Flipkart and Snapdeal, Amazon has recently announced that it will invest
3 billion dollars in its India operation and infrastructure development.

GMV = 1.995 billion dollars

5. MakeMyTrip

Founded by Deep Kalra in 2000, MakeMyTrip is an online travel E-Commerce company.

The company is headquartered in Gurgaon, and the website provides all sorts of ticketing
facilities for train, bus, flights, hotel reservation. The company is renowned in India as one
of the best online travel companies, and has a top of the mind brand recall due to aggressive
advertising and marketing.

In addition to the web portal, the company also operates 65 retail stores in 50 cities across
India and it also has its international branches in New York and Sydney. The company has
recently made strategic acquisitions to enhance its presence in the South East Asia.

MakeMyTrips rise to the top of the travel and ticketing space has been because of its
relentless dedication and pursuit for innovation and determination. The company has
diversified its product offerings and has managed to stay ahead of the curve by rapidly
developing its technology to meet the global consumer demand. In India, MakeMyTrip is
the market leader in the online ticketing space with 43% market share. The company also
has a major 25% market share in the hotel booking space.

Apart from flight, rail and bus ticketing services, the company provides car hire services on
its website as well. The portal also provides hotel booking services in India as well as
international bookings. Around 13000 hotels have been indexed in the website and they can
be simultaneously compared with each other. Customized and group holiday packages are a

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specialty of the company. The company has come up with a mobile app and a route
planning service also.

MakeMyTrip is the winner of several national awards like Top 10 Best Company to Work
for in India, Most Favorite nline Tour perator in 2015, and best travel portal in the year
2014.

GMV = 1.648 billion dollars

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2.6 Opportunities in E-Commerce Industry:
The first week of a new year is unlike any other week of the year. If youre like me, youve
got what feels like a million thoughts and emotions running through your head.

You could be excited. You could be tired (still). Maybe youre thinking about goals. Maybe
youre thinking about how you want to challenge yourself this year (that includes writing
the new date correctly).

And maybe youre looking at the big picture. This was definitely a big-picture week for me
including when I sat down to write this post. I started by thinking about this question:
Whats the one thing E-Commerce will be known for in 2016?

Several trends jumped to mind immediately mobile (yep, there it is, I said it), social
media advertising, stronger integration between online and in-store experiences trends
that have been shaping the industry over the past couple years and are carrying a lot of
momentum as we enter 2016.

But one thing? Thats tough. E-Commerce sales are on a double-digit growth track. While
they are still less than 10 percent of total retail sales (which gives them tremendous upside
opportunity for 2016 and beyond), I see the growth of E-Commerce hitting the beginning of
a hockey-stick trajectory this year. I predict that E-Commerce sales will account for 12
percent of total retail sale by Holiday 2016.

Theres innovation up and down the industry and many opportunities as a result. I came
up with seven big E-Commerce opportunities, to be exact. 2016 is going to be a good year
for retailers, advertising channels, and consumers and heres why.

1. Shopping Will Become More Seamless Across Online, Mobile, and In-
store Experiences.
2016 will be a year of continued integration between online, mobile, and in-store shopping
experiences. For instance, its conceivable that consumers will soon be able to open the
Uber app, search for a movie, buy the ticket, and queue up an Uber driver to arrive at their
door to take them to the theater at the time they select all in one transaction.

Beacons will play a big role in the shopping experience convergence. Retailers including
Apple, Macys, and Target have experimented with beacons, and others will add the
technology to engage with customers in a more targeted way. Its possible that retailers this
year will add beacon systems that pick up where consumers left off in their online
experience, guiding them to the aisles that have the items they were viewing.

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2. Small Retailers Will Dominate the Content Commerce Space.
Many consumers want to deeply understand the products that help them fuel their passions
whether its motorcycle gear, cooking equipment, or kayaks. Content-driven E-
Commerce is becoming a popular way to address that need through informative videos and
storytelling around products.

But a lot of opportunity remains. Some of the largest E-Commerce retailers have put little
or no effort into delivering meaningful content-driven commerce. Instead, theyre
competing on low prices and fast shipping. Thats paving the way for small and niche
retailers to dominate the content commerce space in 2016 improving customer
engagement and loyalty using a method that many large retailers arent.

3. E-Commerce Retailers Will Figure Out How to Convert Mobile Traffic.

Its been the year of mobile for the past several years and at the fundamental level,
that wont change in 2016. What will change is that E-Commerce retailers will figure
out how to convert that mobile traffic.

By the time Holiday arrived last year, we were seeing marked improvements in mobile
conversion among our retail customers alone. That momentum will carry into 2016, when
retailers across the board capture the mobile opportunity.

4. Social Networks Will Dramatically Increase Their Product Advertising

Capabilities.
Google, Bing, and comparison shopping engines have shaped the direct return
advertising arena for E-Commerce retailers over the past 10 years. Now, most of the
major social media players are part of the equation and their voices are getting
louder.

Facebook, Twitter, Pinterest, YouTube, Instagram, and soon Snapchat will increase
their investments in product advertising formats. Well see social networks grow and
refine their product advertising options, including improving targeting capabilities
and developing new ads formats.

5. Pinterests E-Commerce Capabilities Could Explode.

Pinterest is an unleveraged E-Commerce goldmine. Its a product-focused environment
organically. Its similar to Google, with its mostly organic search environment. PLAs are a
natural addition to Google SERPs, just as buyable pins are a natural addition to Pinterest.

The Google PLA model could be a rocket ship for Pinterest stakeholders including
retailers who want another direct revenue driver, and consumers who want to find products

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beyond what Google surfaces and what Pinterests organic search results provide. Pinterest
has immense potential to become a major E-Commerce channel in 2016, and Im hopeful
that well see significant innovation in Pinterests E-Commerce capabilities this year.

6. The Last Mile Could Shift Into the Hands of Small and Mid-Sized
Retailers.
Large retailers have climbed the industry food chain in part because they have more
extensive and sophisticated supply chains to handle the final leg of shipping, and get
products from the warehouse to the consumer.

But companies including Shyp and Google Express (and even Uber) are starting to
shake things up. Smaller retailers that partner with dedicated, fast delivery service
providers could compete more aggressively against larger counterparts. That would
contribute to a leveling of the E-Commerce playing field.

7. Product Listing Ads Will Expand Across Everything Google.

Google is innovating quickly around its PLAs. Well see a rapid uptake of beta
features once they become generally available, such as expandable product ads and
product attribute cards. Theres sure to be new features introduced this year, too,
such as different views of products and additional product info.

PLAs will also be commonly found beyond the SERP this year in YouTube,
Gmail, and other Google properties. Thatll create new challenges for retailers in
determining how to allocate spend and optimize their ads across the Google
universe.

So, to answer the original question, Whats the one thing E-Commerce will be
known for in 2016? I think its going to be known as the year of creating the win-
win-win enjoyable and streamlined shopping experiences for consumers; high-
ROI product advertising approaches for retailers; and advertising models that deliver
significant revenue to ad channels themselves.

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Opportunity for E-Commerce Industry in India
With a population of 1.25 billion that includes a large young, mobile-first generation
many of whom share English as a common languageplus an emerging middle class, India
presents significant growth opportunities for retailers from across the globe. Following the
recent news that the Indian governments Department of Industrial Policy and Promotion
would officially allow up to 100% foreign ownership of E-Commerce marketplaces, both
web and brick-and-mortar retailers operating there have garnered some decisive new
advantages.

That marketplace aspect is important, however. Indian officials have also decided that E-
Commerce companies capitalizing on the new rules must be in the business of providing
technology platforms that facilitate trade between buyers and sellers, as opposed to an old -
fashioned, inventory-led model where a retailer owns the goods it sells. (This, by the
way, will hold back Apple, which has worked hard to persuade the Indian government to
relax foreign investment rules that would make it easier to run its own stores, rather than
rely on Indian retailers, as it does now.)

The policy provides a much overdue clarity on [foreign direct investment] in B2C E-
Commerce, Mihir Kittur, co-Founder and chief innovation officer at Ugam, a managed
analytics company, explained in an email to Retail Dive. This should pave the way for
speedier and hassle-free foreign investments into the E-Commerce sector, which should be
good for the E-Commerce players. The policy also defines the marketplace format that B2C
E-Commerce companies need to follow and permits manufacturers to undertake wholesale
and/or retail including E-Commerce without approval. Another positive for the retail
industry at large.

Even prior to the new guidelines, India posed an undeniably intriguing opportunity. The
nation's "modern trade" (including mall-based stores, chain stores and brands) is increasing
15% to 20% each year (though countrywide, it enjoys a lower organized retail penetration
of 8%), according to PricewaterhouseCoopers. Meanwhile, a study from the Internet and
Mobile Association of India last year found there were 52 million new Internet users there
in the first six months of 2015, bringing the countrys total user base to 352 million as of
June. And of those, 213 millionmore than 60%accessed the web through their mobile
devices.

Not surprisingly, as India's internet and mobile use has exploded, so has E-Commerce.
While it's still a small fraction of the overall Indian retail marketjust 4% to 6%its
growing rapidly and expected to scale up exponentially in coming years: Indias top 25
retail websites already account for some 62% of all web traffic nationwide, according to
digital market intelligence company SimilarWeb, and around 12% of all Internet users in
India are online shoppers, according to the Economic Times. Analysts believe that online
shopper penetration could grow to 20% by 2017.

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Looking further into the future, overall retail sales in India are projected to double to $1
trillion by 2020 from $600 billion last year, according to the Boston Consulting Group,
which adds that E-Commerce sales there are projected to quadruple in the next five years,
to $60 billion or $70 billion.

nline serves a lot of the pent-up demand," Kittur said. "It can lead to a lot of solutions for
people in cities, where theres a lot of money but not a lot of retail stores."

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2.7 Global Challenges faced by E-Commerce Industry:
International online retail is where the action is, and where itll stay. Here are some tips to
consider, when expanding your companys E-Commerce endeavors.

Its easier than ever to connect with new customers (and generate more revenue!) by
expanding into new international marketsespecially through online channels. Indeed,
global B2C E-Commerce is on track to hit $2.3 trillion by 2018, with much of that robust
growth occurring in emerging international markets.

For E-Commerce sites to achieve growth in new markets, they should be published in local
languages. Indeed, nearly 60% of global consumers spend more time on sites in their own
language than they do in Englishor boycott English-language websites altogether.

But companies should recognize several other key challenges when eyeing international
expansion opportunities. Here are a few concerns to consider, and some suggestions to
eliminate these pain points so your company can do what it does best: engage with
customers, and sell them world-class products!

1: Technical Infrastructure

Launching sites in international markets doesnt always mean those sites should be hosted
by servers in those markets. In many cases, that isnt possible due to local infrastructure
limitations. Its often unnecessary, too: latency issues are usually uncommon when using
robust solutions that smartly distribute server loads across larger regions (such as Europe).

However, the need for local hostingor geo-based server load balancingcan be quite
high in other international markets. Content Delivery Networks (CDNs) and geo-load
balanced servers are often used by companies to improve domestic site speed or reliability,
when delivering their primary-market site content (often in English) to core customers.
However, in international markets, CDNs have the added benefit of making it easy to play
nice with a countrys laws. This often occurs in China.

Finding a solution or turn-key vendor that provides dedicated IT resources and geo-load
balancing, when appropriate, is imperative. Geo-load balancing directs a client request to
the service node that is [geographically] closest to the client, or to the node with the most
capacity, writes MotionPoint client Rackspace. Choosing the closest service node is done
using a variety of techniques including proactive probing and connection monitoring.

The result? As Logan Lenz, a Global nline Strategist for MotionPoints Global Growth
team, explains: The system functions at optimum speed, which is great. But theres also an
ongoing component to this. Observation and care over time can help identify optimizations
to ensure load time is decreased, and site functionality remains intact.

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2: Logistics / Geopolitical Status

The Internet and E-Commerce have ushered in an era of untold changes in cross-border
conversation, culture and consumption. According to Bongo International, a provider of
international shipping services for businesses, savvy companies that ship overseas can
increase their revenue by an average of 17%.

But in the end, governments and bureaucracies have the final say in the flow of most cross-
border commerce.

Your company will need to play nice with international markets import regulations,
tariffs, taxes and other nuances. (This includes shipping prohibited and restricted items,
which vary from country to country.) Your organization must abide by export laws, too;
some governments simply wont permit companies to legally ship to specific countries.

Further, some international markets are infamous for local corruption, supporting terrorism,
or are in a locale thats prone to natural disasters. These things and more can threaten
reliable E-Commerce transactions and delivery.

There are a few key ways to mitigate these risks.

Firstly, align your product or industry with the potential threats of an area, and have
solutions for those problems, Logan says. For instance, some shipping providers have
issues shipping packages to countries like Pakistan. thers dont. Choose fulfillment
options that can accommodate your international expansion needs.

You can also partner with a vendor already fluent in these marketplaces, and their unique
challenges. They can educate your company on best practices in these markets, viable
fulfillment and marketing optionsor in some cases, advise you to engage other markets
poised to deliver greater returns at less risk.

3: In-Market Customer Support

Companies keen to expand into international markets shouldnt forget about the customer
support needs these markets will inevitably have. If your organization provides customer
service via e-mail, inbound phone calls or contact us forms, it should deploy localized
versions of these experiences for new consumers, too.

While a localized website with a customer service FAQ (translated into the local markets
language) will dramatically reduce customer service requests through self-service, your
company will still field calls and e-mails. This often means translating e-mail content, and
providing local phone numbers for customer service representatives.

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4: Relevant Payment Methods

Without using an all-in-one fulfillment partner, Logan says, most payment providers by
market allow for simple adoption into CMS/CRM platforms. Look for partners who can
identify the proper payment methods for each market. Reputable vendors use tracking
alarms and QA teams to ensure these payment methods are working correctly at all times.

Indeed, U.S. retailers are very familiar with credit cards and PayPal, but most dont
understand that those payment types arent actually ubiquitous beyond U.S. borders. If
these customers dont see their preferred payment options, they wont transact.

Our research absolutely supports this. Logan recalls one client who launched an E-
Commerce site, and accepted only credit card payments for the first few months online.
But after integrating local payment options, revenue skyrocketed, Logan says. Within
weeks, a full third of its site revenue hailed from these local options transactions. Orders
were up, too.

Another client also saw amazing lifts when adopting local payment platforms. Its
conversion rate grew by 217%, the quantity per transaction increased by 33%, and revenue
grew 210%.

International online retail is where the action isand where itll stay. Companies that
partner with world-class vendors who have a thorough understanding of the markets
cultures, politics and customer expectations can win big, year after year.

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Challenges face by E-Commerce Industry in India
E commerce industry continues to be a darling of investors. In 2016, the E-Commerce
landscape promises to get bigger and wider, as Reliance and the Tata group plan to launch
their own E-Commerce platform to take on global and large Indian players. Almost 15
billion dollar of investments was committed to this sector in 2015 alone but 2016 is not
likely to see easy money days of 2015. Investments in 2016 are going to be accompanied by
a lot more thought and deliberation than in 2015 with expectations of a correction in the
hyper-funded and hyper-valued E-Commerce market, which is likely to trigger
consolidation in the space Technology has been something always very close to my heart
and e commerce very fascinating. I am penning my perspective of challenges faced by the
industry:

1. Logistics: Last mile delivery

While major multi-nationals like DHL and Fed-Ex operate in India, goods are normally
shipped through smaller and much cheaper third party carriers. Different carriers are used
for different regions of the country. For orders sourced outside the major cities, individual
couriers often are hired to make last mile deliveries from drop-off points by bicycle.

To tide over the logistics issue, many big players are backward integrating on their own,
acquiring logistics companies and using services of new startups focusing only on logistics
for e commerce space. Delivery an e commerce focused startup started in 2011 today has
950+ E-Commerce companies as its customers and is the largest e commerce focused
logistics company today. Other players in this space now are E Com Express founded in
2013 by former employees of Bluedart, Locodel Solutions founded in 2014, Quickdel
Logistics founded in 2011

Big players are also backward integrating coming up with innovative logistics and supply
chain solutions. In 2015, Snapdeal launched four-hour delivery, card-on-delivery, and 90-
minutes reverse pickups. They significantly ramped up own fulfillment centres contribution
to 60 per cent, compared to the seven per cent a year back. Amazon added eight new
fulfillment centres in 2015, increasing their storage capacity to nearly five million cubic
feet across all 21 centres in India.

The fast growing E-Commerce sector will drive the $300-billion domestic logistics industry
going forward and the introduction of the Goods & Services Tax slated for roll out
hopefully this year which will unify the markets, will be the biggest push for the sector.
2016 will also see a lot of focus will be on strengthening city local delivery networks,
vehicle tracking and setting base for local fulfillment.

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2. Cash on delivery: Preference for cash and high return rates
Unlike electronic payments, manual cash collection is laborious, risky, and expensive.
Courier companies generally hold the money for upto two weeks, which means that the E-
Commerce company has to restock inventory before the cash from its last sale has arrived.
Some couriers charge upwards of 3 per cent for this service. But the biggest hit comes from
the much higher return ratesometimes up to ten percent as the company has to pay for
reverse logistics as well.

The adoption of newer payment methods is slow but combined efforts of the industry and
the governments vision of a cashless economy could well tide over this challenge in the
next few years. In fact, The migration from cash and card payments to digital and mobile
payments is the tomorrow with 11 payments banks and 10 Small banks licenses given in
2015 which will become operational this year, the rise of the mobile wallets which is
expected to quadruple in 4 years from current Rs 350 crore and other disruptive payment
methods like Apple Pay, P2P payments, and wearables like wrist bands, watches, smart
rings and bPay jackets

3. High failure rates in online payments and low penetration of debit and
credit cards
For most e commerce sites, the success of online payments is around 65 per cent. This
coupled with the low penetration of credit and debit cards and the reluctance of Indian
consumers to put payment information online are major challenges.

The three big players in online payment gateways are BillDesk, TechProcess and
CCAvenue. However, they are being challenged by a host of newcomers-Citrus, Zaakpay,
PayU with superior technology

These new players are reducing the eight separate hops or fresh web pages that a customer
usually has to go through before completing a transaction, thereby reducing failure rates.
Citrus has reduced the hops to one while Zaakpay has reduced this to two.

To overcome the lack of trust that often keeps customers from making online payments,
players in this space are setting up wallets and trying new methods to build customer trust.
PayU for example has set up a facility called PayU Paisa. It keeps the payments made by
customers in a nodal account and the money is transferred to the e-tailer only after the item
purchased reaches the customer.

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4. Increasing trend of payments through mobiles
In 2015, 23 billion dollar worth of digital payments were done in India. With mobile
becoming a preferred mode of E commerce transactions, payments gateways have a fresh
challenge to reduce payment failure rates and cater to security of transactions. Digital
wallets and M wallets are coming as solutions. Less than 5 per cent of digital payments in
2015 were through wallets but this is likely to be 20 per cent by 2020. 2011 saw launch of
google wallet and Nokia money wallet, in 2012 came Ypaycash, M Pesa from Vodafone
and ICICI and Infibeam launching their own wallet.

From 2015 onwards several players have integrated mobile wallet payment mechanism into
their service offering. HDFC bank which controls 40 per cent of all E-Commerce
transactions in our country, as they are both card issuer and processor of card based
payments is the latest to jump into the wallet space.

5. High cost of customer acquisitions

With huge investor funding in this space, the sector is faced with intense pressure to acquire
new customers at irrational costs and show valuations. Focus in not on repeat sales from
same customer to increase loyalty and profitability but discounts and marketing spends to
acquire new customers. In addition there are at least 4-5 players in every segment
increasing competitive pressure and most of the players are running after valuations rather
than profitability with many not even able to meet operational expenses from revenues
generated today. However, this is soon going to change with investors now pushing startups
to rethink business models, trim teams and control their cash burn rate. In the last 2 few
months of 2015, we have seen pink slips being handed over in startups like TinyOwl and
Zomato and many more will follow in times to come.

Regulatory Challenges

E commerce industry being relatively new and growing at blistering pace, the change in
mindset in the government and law enforcing agencies to understand the uniqueness of this
industry is time consuming. The sector is highly dynamic with frequent changes in business
model as it is evolving. The current regulatory challenges faced by the industry are as
follows:

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6. Regulator: 9 ministries regulate E-Commerce
With all the recent news items, there will be as many as 9 government agencies who might
regulate e commerce sector. The Information Technology Act names online marketplaces
as a form of intermediary and therefore governed more under the safe harbor provision, that
if any wrong has been done by a third party, you will not be sent to jail. A low
understanding of the law enforcement agencies has cases like if someone has posted
something bad on facebook, should Mark Zuckerberg be put in jail.

Under the governments new startup India scheme, the department of Industrial Policy and
Promotion (DIPP) is currently deliberating details of a policy that proposes exempting
startups from 22 federal rules and regulations. These proposed reforms reportedly include
exemption from company and labor laws until a startups turnover reaches a certain level,
exemption from certain taxes for a specified period, and liberalizing the system for raising
capital globally and this new policy is expected soon.

Taxation: Clarity on VAT and implication of Sec 79 of IT Act

E Commerce companies allow sellers to sell on their platform and are not sellers
themselves. Who therefore is responsible for VAT payments continues to remain an
ambiguous area with not many states having clear legislations except Delhi, Rajasthan and
Kerala where they have legislated that E commerce companies are not sellers but only
service providers.

Section 79 of the Income Tax Act states that If you have more than 50% of your
shareholding changing hands, your accumulated losses cannot be carried forward next year.
Most consumer Internet companies have their lifecycle. For the first 10 years, they do very
heavy investments in team, promotion and technology, without much income. With
multiple investors changing hands in the funding life cycle, these companies have to be
very careful while raising capital to ensure the capital structure does not change by more
than 50 per cent.

7. Security: 2 step cards verification and cybercrime

Whenever you use credit card offline, say, in a petrol pump, you have to use a PIN. If you
use your card online, you have to use a code which comes on your mobile phone. The
government is looking to promote offline usage of credit cards, by saying that up to Rs
2000-3000, you dont need a PIN. However, inspite of a 128 bit encryption in online

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payments, these initiatives to promote e commerce business is still some time away.
Similarly for hardcore data theft, trade secret issues and other such challenges our police
and judiciary is not sensitized enough on the impact and need for immediate action.

With E Commerce becoming a buzz word and growing at blistering pace, the eco system is
continuously finding solutions to the industry challenges. With the Prime Ministers Digital
India initiative and the start up India launch slated a week from now, I am sure that
appreciation of these industry challenges will be faster and new solutions will emerge for
the sector to continue growing exponentially.

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2.8 Michael Porter Analysis of E-Commerce Industry

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Porters five forces model show competitive situation of a particular unit by different forces
such as 1) Consumers power, 2) Suppliers power, 3) threat of new entrants, 4) threat of
substitutes, 5) market competitors (Porters 1980). These forces determine the profitability
and competitive strength of industry. These main factors affecting each force are explained
in the context of Indian electronic retailer market.

Bargaining power of buyers

The bargaining powers of buyers are very high due to copious online shops which offer
cheaper products and services. Today E-Commerce industry is in full swing mode, there are
lot of promotions, campaigns and processes to retain and win customers. Customers can
easily compare price of a product, services, offers and all other benefits like payment,
transportation refund methods and exchange methods by switching from one website to
other. Moreover there is no cost for switching. COD, Cheap price, same day delivery, Easy
returns, and Exchange offers all these are services provided by E-Commerce industry to
gain and satisfy customers. With this one can understand, the bargaining power of
customers in E-Commerce industry.

E-Commerce industry has high competition which allows customers to rule because of this,
companies maintain competitive price to engage buyers. There are different E-Commerce

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sites available for the customers and lot of influx of new entrants who offers niche product.
Therefore, customers have the plenty of option to buy from other websites if they are not
satisfied from one. They not only demand lower prices but also variety of products and
services.

Hence, their bargaining power is huge.

The bargaining power of customers determines by two major factors that is, number of
suppliers and competitors of a product. When there are many competitors and supply of a
product is in surplus then bargaining power of buyer is strong to demand lower price. With
the help of E-Commerce there will be more inventory control, low production cost can be
achieved and also quick response time. Manufacturers save money by avoiding
intermediaries and by selling directly to customers. Hence, companies making use of IT and
EC can reduce the production cost and afford to maintain the price of a product relativel y
low.

There is an advantage to consumers when they collectively put pressure on producers either
to decrease the price or to improve the quality of a product. Mostly the bargaining power of
buyers has its effect on pricing when they are associated more organized and collectively
held responsible for producers income, buyers are interested for a product which has more
suppliers and interested in making continuous purchase.

How to assess the power of a buyer group?

The following conditions indicate that a buyer group is powerful:

1. The buyer group is more focused, or purchases more in volumes than the seller's
sales
2. Any product which is purchased from the industry represents greater amount of
buyer's costs
3. Purchased products are standardized or undifferentiated from the industry
4. Finding alternative suppliers are easy and competitors playing against other
competitors
5. Concentration of buyers relative to concentration of industry. If there are few buyers
and more suppliers then the buyer power is high
6. Importance of customer as a buyer. If a maximum portion of sales made by a given
customer, then this buyer enjoys increased bargaining power
7. Buyer switching costs. If the switching costs are low, then the buyer takes more
negotiating leverage than seller
8. There is a possibilities buyer integrating backward. It is possible for the buyers to
integrate backward of industrys space, with this it also enhances negotiating power
9. Differences of product. If there is no difference of product, buyers take advantage
from one firm to other

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Bargaining Power of Suppliers
Suppliers bargaining power is very low due to high competition within themselves and also
customer rely on brand and trusted sites. Most of the suppliers rely on key E-Commerce
giants like Amazon, Flipkart & Snapdeal due to high customer network.
Suppliers also have the option to sell or list their products in different online stores. There
are multiple channels to sell the product, it depends on supplier, and if the supplier is
manufacturer then for him E-Commerce is one of the channel.

There are huge numbers of sellers who list their products on E-Commerce sites, therefore
bargaining power of sellers individually is limited. Sellers also have the option to list their
products with multiple E-Commerce sites. If an E-Commerce sites changes his policy
which is unsatisfactory the seller may opt for other sites who is more favorable. When the
suppliers have bargaining power, they charge higher price, adjust quality of a product,
control inventory and change delivery times. They will have affect on competitive
environment.

Hence, these carriers also possess some bargaining power. The sources which generate
traffic on E-Commerce sites can also be considered as suppliers because search engines
play a major role in providing traffic to E-Commerce sites. Moreover, there are many
referring sites such as coupondunia.com deals4you.com and social networks which provide
traffic to E-Commerce sites, any unsatisfactory change in the policy will have severe
impact on their profits.

Suppliers gain more power if:

If suppliers are concentrated than buyers

If switching cost is high when the buyer move to new supplier
If suppliers integrate and start selling directly to buyers
If they are expertise or possess technology which requires to manufacture goods
If the supplier has highly differentiated product
When there are huge buyers and few suppliers
When there is no availability of substitutes

In all of these cases, the bargaining power of suppliers is high to demand premium prices
and set their own timelines.

Rivalry Among Competing Firms

Rivalry between competing organizations is intense. Nowadays there is huge number of
search engines available which influences buyers decisions when looking for better online
retailers. Additionally, there is an increase in (dot com) retailers because of lower cost of
startups.
Since the threat of new entrants is very low in E-Commerce industry the number of
domestic players increased. The world is waiting to capitalize Indian market due to its rapid
growth and huge population. The intensity of rivalry among firms is considered to be high.
Many of the international players like Amazon and eBay are expanding their business in

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India. This has prompted forceful procedures being utilized keeping in mind the end goal to
get by in the business sector. An exemplary case is of Amazon who entered the business
sector with a couple of items and immediately extended its item classifications. This has
upped the ante for other online retailers competing to catch a bigger offer of India's
developing e-business market.

The force of competition between existing industry players affects longterm normal
industry benefit. Serious contention lessens normal industry benefit. The force relies upon:

1. Industry development rates. In the event that the business is described by moderate
development then firms must go after piece of the pie all together develop at above
normal rates.

2. Exit obstructions. When it is troublesome or excessive to leave an industry, frail

organizations won't leave, prompting overcapacity and cost wars.

3. Market focus and adjust. Contention will be more serious when there are a great
deal of little and just as adjusted contenders, and less extreme if there are less firms
or if there is a reasonable business sector pioneer.

4. Fixed costs. Commercial ventures with high settled expenses urge contenders to
produce at full limit, prompting overabundance yield and discounting.

Threat of new entrants.

The threats to the new entrants are considerably very low and have lot of potential to grow.
All they need is a properly managed platform to showcase their products and a good
operation team to deliver promptly and there should also be a separate team for customer
service to provide satisfaction. Any company who wish to start up or to compete in E-
Commerce industry is easy because it requires low capital. In India, FDI is allowed to
invest 51% in multi brand retail market, so when the new players plan to expand they have
lot of funding options.

However, it is very hard to gain customer loyalty, brand recognition and good ranking on
search engines since other major players in the industry already established very high and
loyal customer base. To achieve such position like Amazon, Flipkart & Snapdeal it requires
huge investment to build infrastructure and to maintain inventory. And also to compete in
the market new entrants require extra ordinary marketing budgets to an extent this restrict
some players to enter. One more barrier for the new entrants is payment market which has
intense competition among well established players, during online payments security
should be given paramount importance. Therefore, it is hard for new entrants to attract
customers.
By 2023 the industry will reach 56 Billion USD so there are lots of opportunities for
upcoming players. All the above factors pose great threat of new entrants to the Indian E-
Commerce industry.

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Threat of Substitute Products
There is no substitute for Internet so far in the world considering that one can say there is
no threat as such. There are substitutes like brands; people can switch from one brand to
other and also one E-Commerce site to other. The biggest substitute which is existing
currently in the market is the traditional stores "Brick and Mortar" some of these stores also
exist online as well. Traditional stores and shops can be considered as real threat when they
offer price equivalent to online offering. There are many who haven't tried online shopping
in India due to security reason. India is a biggest region there are many small cities, towns
and villages where there is no delivery options available due to this many people prefer
buying in shops. Every year there is an additional growth in number of Internet users and
online shoppers which is a clear sign that E-Commerce industry is growing and substitution
of threat is very low.

The substitute of products basically means customer can satisfy his need if one product is
not available. The existence of substitute products decreases attraction of an industry. It
depends on:

1. Similar price and quality of a substitute product. An industry is considered to be less

fascinated when alternative product is available.

2. Switching cost. When there is huge investment to switch to an alternative, the threat
of switching to this alternative is decreased.

3. Willingness of customer to switch. Most of the customers are reluctant to switch to

an alternative when they are more attached towards one particular product.

The competitors analysis can be summarized as below:

Future objectives: Competitors want to compete for a good strategic position and become
the market leader in both E-Commerce and physical commerce.

3. Current strategy: Competitors aim to increase profitability, gain market share, and
provide a wide variety of products to compete against Amazon through utilizing
competitive pricing, cost leadership, and differentiation strategies.

3. Assumptions: Competitors believe that the demand for online shopping will
continue to grow as consumers seek for more convenient and efficient ways of
shopping.

3. Capabilities: Competitors offer similar products as Amazon either at a lower price

or accompanied with differentiated services. Some of them have an international
presence with stable financial performance, enabling them to form global strategic
alliances to increase their market base of customers.

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Conclusion
In conclusion, bargaining power of buyers are very high because of growing trend in
internet users and mobile shopping. The threat of new entrants is low but to gain trust of the
buyers, new entrants must do something new or differentiate the market activities and also
should influx lot of capital in marketing budget. The bargaining power of suppliers is also
low due to huge competition and low concentration. There are exceptions if the supplier is
manufacturer and also monopoly then holds certain power as long as there is no perfect
substitute. The only substitute which is threatening the industry is Brick and Mortar and
certain category of products which people prefer buying in shops rather online. Finally,
rivalry among competitors is very high due to lot of new entrants and increased number of
search engines which influences the buyers decision. The strategy of new entrants should
be defined within porters 5 forces model all these 5 models are interlinked with each other
and no force can be De-valued.

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2.9 SWOT Analysis of E-Commerce Industry:

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Strengths:
Boundary less (global location): E-Commerce can be dealt globally as no
specific boundary is required. It enables all the companies to expand them to global
level.
Time saving: It saves time and transportation. Because there is no need to go
anywhere physically.
No time constraints: It can be used any where any time as there is no time
constraints.
Price/Product comparison: Helps consumers to compare price and product
effectively and efficiently.
Cost effective: Reduces logistical problems and puts a small business on a par
with giants.
Direct communication with consumer: Social networking sites, online
advertising networks can be mediums to buzz about online store.
Improved customer interaction: Quick feedback and comment forms are main
features to interact with customers.
Flexible target market segmentation: Target market segment here in e
commerce is flexible can be modified any time.
Simple and easier exchange of information: - Improves information sharing
among merchants and customers and enables prompt quick just in time deliveries. .
Lowers transaction cost: Things can be automated in a well implemented online
store. If online download facility is available then distribution cost can be cut off.
Easy arrangement of products: Products can be arranged in the shelves within
minutes. With online store it is quite easy.
Faster buying procedure: E commerce means better and quick customer services.
Online customer services make customer happier. Due to absence of intermediaries
for buying products. So buying procedure will be fast and quick.
No physical company set up: Doing e business is cost effective because no
physical set up is required for that.

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 Easy transactions: Financial transactions through electronic fund transfer are
very fast and can be done from any part of the world.
Niche Products: Almost everything can be sold on internet. Even if products
targeted to smaller markets the buyer will be somewhere on net.
Low operating cost: It can be started and continued with very low investment.
Staff cost is very low.

Weaknesses:
Security: Security matter confuses customers especially about the integrity of the
payment process.
Fake websites: Fake websites can not only disgrace e commerce but bring bad
name to e commerce also.
Fraud: Concerns about misuse of financial and personal data is a great weakness
in e commerce.
Fewer discounts and bargaining: Hardly online businesses offer discounts and
bargaining cannot be possible.
Long delivery timing: Delivery time can be in days or weeks which one cannot
wait for.
No idea about quality and physical condition of the product: Online products
cannot be touched, wear or sit on the products.
Limitation of products: Limited number of products can be available.
Lack of personal services: Physical products can be available but lack in
personal services which are intangible.
More shipping cost: Shipping cost increases if we order online.
Limited exposure: In developing areas where internet is not accessible will have
no or little exposure to e commerce.
Limited advertising: Limited advertising opportunities are available because in e
commerce one cannot go for mass advertising.
Customers satisfaction: There is no interaction between customer and the seller.
Therefore the scope of convincing the customer does not exist. Many times
customers prefer to buy the product by reaching personally to the market rather than
purchasing through internet.

Opportunities:

Changing trends: E commerce is fast and effective even financial transactions can
be made from any part of the world. People of tomorrow will feel more comfortable
to buy products through internet only.
New technologies: Daily number of internet users is increasing. People feel more
comfortable to shop online.
Global expansion: E commerce can be operated any where any time without any
interruption.
High availability (24 hour and seven days a week): Along with each and every
click of the mouse business is in operation.
Wide business growth: E business has wide scope and broader vision to grow.

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 Cut down on local competition: Online customer services is a competitive
advantage for the company.
Advertising: Advertising is cost effective as compare to conventional offline
system.

Threats:
Competitors: Competition is increasing day by day big companies have already
entered in this field. They are making people habitual at the cost of their companies.
Changes in environment, law and regulations: Change in trends, fashion and
fad can distress E Commerce side by side change in law and regulations can also
affect it.
Innovation: Customers now a day are always in a search of innovative products.
Innovation can be either in product, place, promotion and even price.
Privacy concerns: Fears that information can be misused lead to spam e mail or
identity fraud.
No direct interaction: In E-Commerce there is no direct interaction of customer
and the seller. Thats why bargaining does not exist. People prefer to buy physically
a compare to online.
Fraud: Persons using unfair means to operate e commerce can damage the
confidence and faith of common people.
Risk: Nature of fraud and risk is different because when a customer relies on un
seen set up, he trusts and makes transactions. In such a way he is ready to face risk.

A developing country can be rationalized and mechanized if it introduces E-Commerce

effectively and efficiently. It will enhance its output and gives competitive advantage.
Information Technology (IT) has boosted E-Commerce worldwide. Now its easier to enter
to a new market and one can evaluate his/her product and companys performance. It
reduces business overhead and enhances business management.

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2.10 Introduction to Artificial Intelligence

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Since the invention of computers or machines, their capability to perform various tasks
went on growing exponentially. Humans have developed the power of computer systems in
terms of their diverse working domains, their increasing speed, and reducing size with
respect to time.

A branch of Computer Science named Artificial Intelligence pursues creating the computers
or machines as intelligent as human beings.

What is Artificial Intelligence?

According to the father of Artificial Intelligence, John McCarthy, it is The science and
engineering of making intelligent machines, especially intelligent computer programs.

Artificial Intelligence is a way of making a computer, a computer-controlled robot, or a

software think intelligently, in the similar manner the intelligent humans think.

AI is accomplished by studying how human brain thinks, and how humans learn, decide,
and work while trying to solve a problem, and then using the outcomes of this study as a
basis of developing intelligent software and systems.

Philosophy of AI
While exploiting the power of the computer systems, the curiosity of human, lead him to
wonder, Can a machine think and behave like humans do?

Thus, the development of AI started with the intention of creating similar intelligence in
machines that we find and regard high in humans.

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Goals of AI

To Create Expert Systems The systems which exhibit intelligent behavior, learn,
demonstrate, explain, and advice its users.
To Implement Human Intelligence in Machines Creating systems that
understand, think, learn, and behave like humans.

What Contributes to AI?

Artificial intelligence is a science and technology based on disciplines such as Computer
Science, Biology, Psychology, Linguistics, Mathematics, and Engineering. A major thrust
of AI is in the development of computer functions associated with human intelligence, such
as reasoning, learning, and problem solving.

Out of the following areas, one or multiple areas can contribute to build an intelligent
system.

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Programming Without and With AI

The programming without and with AI is different in following ways

Programming Without AI Programming With AI

A computer program without AI can answer A computer program with AI can answer
the specific questions it is meant to solve. the generic questions it is meant to solve.

AI programs can absorb new modifications

by putting highly independent pieces of
Modification in the program leads to change
information together. Hence you can modify
in its structure.
even a minute piece of information of
program without affecting its structure.

Modification is not quick and easy. It may

Quick and Easy program modification.
lead to affecting the program adversely.

What is AI Technique?
In the real world, the knowledge has some unwelcomed properties

Its volume is huge, next to unimaginable.

It is not well-organized or well-formatted.
It keeps changing constantly.

AI Technique is a manner to organize and use the knowledge efficiently in such a way that

It should be perceivable by the people who provide it.

It should be easily modifiable to correct errors.
It should be useful in many situations though it is incomplete or inaccurate.

AI techniques elevate the speed of execution of the complex program it is equipped with.

Acting Humanly: The Turing Test Approach

The Turing Test, proposed by Alan Turing (Turing, 1950), was designed to provide a
satisfactory operational definition of intelligence. Turing defined intelligent behavior as the
ability to achieve human-level performance in all cognitive tasks, sufficient to fool an
interrogator. Roughly speaking, the test he proposed is that the computer should be
interrogated by a human via a teletype, and passes the test if the interrogator cannot tell if
there is a computer or a human at the other end. Chapter 26 discusses the details of the test,

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and whether or not a computer is really intelligent if it passes. For now, programming a
computer to pass the test provides plenty to work on. The computer would need to possess
the following capabilities:

Natural Language Processing to enable it to communicate successfully in English

(or some other human language);
Knowledge Representation to store information provided before or during the
interrogation;
Automated Reasoning to use the stored information to answer questions and to draw
new conclusions;
Machine Learning to adapt to new circumstances and to detect and extrapolate
patterns.

Turing's test deliberately avoided direct physical interaction between the interrogator and the
computer, because physical simulation of a person is unnecessary for intelligence. However,
the so-called total Turing Testincludes a video signal so that the interrogator can test the
subject's perceptual abilities, as well as the opportunity for the interrogator to pass physical
objects ``through the hatch.'' To pass the total Turing Test, the computer will need

computer vision to perceive objects, and

robotics to move them about.

Within AI, there has not been a big effort to try to pass the Turing test. The issue of acting
like a human comes up primarily when AI programs have to interact with people, as when an
expert system explains how it came to its diagnosis, or a natural language processing system
has a dialogue with a user. These programs must behave according to certain normal
conventions of human interaction in order to make themselves understood. The underlying
representation and reasoning in such a system may or may not be based on a human model.

Thinking humanly: The cognitive modelling approach

If we are going to say that a given program thinks like a human, we must have some way of
determining how humans think. We need to get inside the actual workings of human minds.
There are two ways to do this: through introspection--trying to catch our own thoughts as
they go by--or through psychological experiments. Once we have a sufficiently precise theory
of the mind, it becomes possible to express the theory as a computer program. If the
program's input/output and timing behavior matches human behavior, that is evidence that
some of the program's mechanisms may also be operating in humans. For example, Newell
and Simon, who developed GPS, the ``General Problem Solver'' (Newell and Simon, 1961),
were not content to have their program correctly solve problems. They were more concerned
with comparing the trace of its reasoning steps to traces of human subjects solving the same
problems. This is in contrast to other researchers of the same time (such as Wang (1960)),

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who were concerned with getting the right answers regardless of how humans might do it.
The interdisciplinary field of cognitive sciencebrings together computer models from AI and
experimental techniques from psychology to try to construct precise and testable theories of
the workings of the human mind. Although cognitive science is a fascinating field in itself,
we are not going to be discussing it all that much in this book. We will occasionally comment
on similarities or differences between AI techniques and human cognition. Real cognitive
science, however, is necessarily based on experimental investigation of actual humans or
animals, and we assume that the reader only has access to a computer for experimentation.
We will simply note that AI and cognitive science continue to fertilize each other, especially
in the areas of vision, natural language, and learning.

Thinking rationally: The laws of thought approach

The Greek philosopher Aristotle was one of the first to attempt to codify ``right thinking,''
that is, irrefutable reasoning processes. His famous syllogisms provided patterns for
argument structures that always gave correct conclusions given correct premises. For
example, ``Socrates is a man; all men are mortal; therefore Socrates is mortal.'' These laws of
thought were supposed to govern the operation of the mind, and initiated the field of logic.

The development of formal logic in the late nineteenth and early twentieth centuries, which
we describe in more detail in Chapter 6, provided a precise notation for statements about all
kinds of things in the world and the relations between them. (Contrast this with ordinary
arithmetic notation, which provides mainly for equality and inequality statements about
numbers.) By 1965, programs existed that could, given enough time and memory, take a
description of a problem in logical notation and find the solution to the problem, if one exists.
(If there is no solution, the program might never stop looking for it.) The so-
called logicist tradition within artificial intelligence hopes to build on such programs to create
intelligent systems.

Acting rationally: The rational agent approach

Acting rationally means acting so as to achieve one's goals, given one's beliefs. An agent is
just something that perceives and acts. (This may be an unusual use of the word, but you will
get used to it.) In this approach, AI is viewed as the study and construction of rational agents.

In the ``laws of thought'' approach to AI, the whole emphasis was on correct inferences.
Making correct inferences is sometimes part of being a rational agent, because one way to act

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rationally is to reason logically to the conclusion that a given action will achieve one's goals,
and then to act on that conclusion. On the other hand, correct inference is not all of
rationality, because there are often situations where there is no provably correct thing to do,
yet something must still be done. There are also ways of acting rationally that cannot be
reasonably said to involve inference. For example, pulling one's hand off of a hot stove is a
reflex action that is more successful than a slower action taken after careful deliberation.

All the ``cognitive skills'' needed for the Turing Test are there to allow rational actions. Thus,
we need the ability to represent knowledge and reason with it because this enables us to reach
good decisions in a wide variety of situations. We need to be able to generate comprehensible
sentences in natural language because saying those sentences helps us get by in a complex
society. We need learning not just for erudition, but because having a better idea of how the
world works enables us to generate more effective strategies for dealing with it. We need
visual perception not just because seeing is fun, but in order to get a better idea of what an
action might achieve--for example, being able to see a tasty morsel helps one to move toward
it.

The study of AI as rational agent design therefore has two advantages. First, it is more
general than the ``laws of thought'' approach, because correct inference is only a useful
mechanism for achieving rationality, and not a necessary one. Second, it is more amenable to
scientific development than approaches based on human behavior or human thought, because
the standard of rationality is clearly defined and completely general. Human behavior, on the
other hand, is well-adapted for one specific environment and is the product, in part, of a
complicated and largely unknown evolutionary process that still may be far from achieving
perfection. This book will therefore concentrate on general principles of rational agents, and
on components for constructing them. We will see that despite the apparent simplicity with
which the problem can be stated, an enormous variety of issues come up when we try to solve
it. Chapter 2 outlines some of these issues in more detail. One important point to keep in
mind: we will see before too long that achieving perfect rationality--always doing the right
thing--is not possible in complicated environments. The computational demands are just too
high. However, for most of the book, we will adopt the working hypothesis that
understanding perfect decision making is a good place to start. It simplifies the problem and
provides the appropriate setting for most of the foundational material in the field. Chapters 5
and 17 deal explicitly with the issue of limited rationality--acting appropriately when there
is not enough time to do all the computations one might like.

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Applications of AI
AI has been dominant in various fields such as

Gaming AI plays crucial role in strategic games such as chess, poker, tic-tac-toe,
etc., where machine can think of large number of possible positions based on
heuristic knowledge.

Natural Language Processing It is possible to interact with the computer that

understands natural language spoken by humans.

Expert Systems There are some applications which integrate machine, software,
and special information to impart reasoning and advising. They provide explanation
and advice to the users.

Vision Systems These systems understand, interpret, and comprehend visual input
on the computer. For example,
o A spying aeroplane takes photographs, which are used to figure out spatial
information or map of the areas.
o Doctors use clinical expert system to diagnose the patient.
o Police use computer software that can recognize the face of criminal with the
stored portrait made by forensic artist.

Speech Recognition Some intelligent systems are capable of hearing and

comprehending the language in terms of sentences and their meanings while a
human talks to it. It can handle different accents, slang words, noise in the
background, change in humans noise due to cold, etc.

Handwriting Recognition The handwriting recognition software reads the text

written on paper by a pen or on screen by a stylus. It can recognize the shapes of the
letters and convert it into editable text.

Intelligent Robots Robots are able to perform the tasks given by a human. They
have sensors to detect physical data from the real world such as light, heat,
temperature, movement, sound, bump, and pressure. They have efficient processors,
multiple sensors and huge memory, to exhibit intelligence. In addition, they are
capable of learning from their mistakes and they can adapt to the new environment.

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2.11 Artificial Intelligence and E-Commerce:

Few industries are as competitive as E-Commerce. Not only are online retailers competing
with other online stores and brick-and-mortar locations, but also the overall noise that is the
Internet. We live in a world where consumer attention span is getting shorter and shorter:40
percent of people abandon a website that takes more than three seconds to load, and the
average shopping cart is abandoned more than 68 percent of the time. Im hard pressed to
find an E-Commerce site that is not constantly scrambling to engage more and drive more
sales.

Technology is finally helping with those efforts in a big way. Artificial intelligence (AI),
which has demonstrated its value in industries like marketing, healthcare and finance, is now
making a splash in online commerce.

Antoine Blondeau, CE of the worlds most funded AI company,Sentient Technologies,

once said, Five years from now, we'll see AI take a bigger role in making decisions, creating
pre-emptive solutions, and delivering insights. Society will become much more efficient as a
result. Think logistics, E-Commerce, healthcare, finance -- in all these domains and others we
will start to see massive gains from AI. We'll be able to leverage AI systems to help get
things to where they need to go faster and cheaper, we'll be able to enable people to see and
buy things they weren't even aware existed or even knew they wanted.

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Artificial Intelligence and E-Commerce: Entering This Brave New World
For most merchants, harnessing artificial intelligence, or AI, may seem like too futuristic a
goal to add to their 2017 priority lists. But while theres plenty of hype swirling around such
implementations as chatbots and the Internet of Things, the fact of the matter is that ever-
more-sophisticated personalization and recommendation technologies are already verging on
AI. Merchants should lay the groundwork now for future shopping experiences that are both
automated and satisfying.

Consumers desire for personalized shopping experiences is by now well documented. More
than half of consumers say they expect brands to recognize them across touchpoints, from the
store to the mobile device to the E-Commerce site and back again, and say they buy more
from merchants whose offers take into account past purchases and interactions (both online
and offline).

In response to this expectation, merchants are increasingly using tools that present products
and content that reflect shoppers preferences and past picks. Earlier this year, two-thirds of
merchants reported they were either already using personalization tools and planned to invest
more or were launching brand-new personalization initiatives in 2016. These investments are
likely to pay off, as merchants report that personalization improves results throughout the
customer lifecycle:

Engagement: 44% of merchants report improved email click-through rates, and 22%
report improved time on site

Revenue: 51% of merchants report an increase in site conversion, and 36% said
average order value increased

Loyalty: 26% of merchants said personalization caused both customer lifetime value
and customer satisfaction to increase

Product recommendation and customer profiling tools increasingly integrate past brand
interactions with big data insights that predict shoppers likely needs and paths to purchase.
AI is the logical next step in this progression, enabling machines to respond to shoppers
input with relevant information and products. Usage of AI-enhanced services is on the
rise: more than a third of U.S. online consumers report using a websites virtual agent or a
smartphone-based virtual assistant, such as Apples Siri, to seek customer service help.

On the E-Commerce front, merchants are using AI to transform their businesses through
whats been termed conversational commerce, whereby natural-language dialogue replaces
explicit searching and browsing activities, such as keyword-searching for products or
navigating through the customer service section to find shipping information. From Facebook
chatbots to on-site product discovery tools, merchants are using AI to give shoppers a user-
friendly entry point into their offerings.

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As an example, 1-800-Flowers has debuted GWYN, a gift concierge that directs shoppers
to suggested products across the companys line, which includes 1800flowers.com, Harry &
David, and more. A fixed footer keeps track of past inquiries and recommended products, and
offers shoppers a means to provide feedback on the service.

Employment of AI in Indian E-Commerce

In case of India, E-Commerce biggies like Flipkart, Snapdeal and Amazon are proactively
investing fortunes in AI research and development. Apart from intelligent chat facilities,
these companies have introduced image recognition feature to their platforms which is
attributed to deep learning.

According to Sachin Bansal, CEO, Flipkart, artificial intelligence is a key differentiator in the
fiercely competitive business of online retail. He believes, the big disruption that is
happening across the world is the rise of artificial intelligence. Therefore, by combining
social, mobile, big data analytics and AI, Flipkart attempts to build human brain-like
capabilities to sell smarter to its more than 45 million registered online buyers. Recently, the
company launched its messaging service on its app, called Ping. It serves as a shopping
assistant embodying artificial intelligence, to help users easily discover the item they are
looking for on its platform.

Likewise, Flipkart has just announced that it is working on automating its supply chain to
reduce shipment time and increase accuracy to ensure zero customer complaint. Confirming
the news, Adarsh K Menon, VP, Business Development said, We want to use data smartly
and intelligently at our backend for personalisation in customer offerings, service offering,
supply chain offerings. We have regular customer base of 45 million. We will use
technology, look at buying behaviour and preferences of customers and then personalized our
offerings. If we use data, which is available with us, intelligently, we will be able to give best
shopping experience to customers.

Further, Flipkart owned Myntra is too is reportedly set to introduce apparels designed with
the help of data science and artificial intelligence. The company has developed a smart bot
that accumulates fashion-related information from across the online world by crunching a
large amount of data centered around consumer demand in real time. Commenting on the
same, Ganesh Subramanian, head of new initiatives at Myntra, maintained, There is a big,
emerging trend among internet companies which have accumulated tons of data to use it for
personalization. Our platform is disrupting the current way of expert-based fashion
forecasting as it is 100% tech-backed.

Snapdeal is reportedly investing $100 million into a new multimedia research lab in
Bangalore. The companys app- findmystyle employs image recognition technology and
machine learning algorithms, to make search results faster, accurate and tuned to the specific
consumers.

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The Way Ahead-

It would be an understatement if we say, Artificial Intelligence is the next big thing, for it is
already here, and of course, with a bang!

Tech juggernauts across the world are advancing at an incredibly impressive pace towards the
crux of this technology. Google for example, is conducting a highly advanced research on AI
called Thought Vectors, in an attempt to infuse common sense into machines. Similarly,
Apple, Facebook and Microsoft are working on their respective projects on AI development.

How Will AI Impact E-Commerce In 2017?

Two factors make E-Commerce the perfect proving ground for artificial intelligence
technologies like machine learning: E-Commerce is highly competitive and gaining an
advantage over the competition requires the rapid processing of huge amounts of data.

Many areas of E-Commerce are ripe for AI-driven innovation. Every improvement to
logistics efficiency, marketing, pricing, or recommendations gives retailers an edge over the
competition. Retail generates and consumes monumental volumes of data from dozens of
channels. In fact, theres far too much data for a human to know where to look or even what
theyre looking for the perfect conditions for machine learning.

Machine learning is the overarching name for various methods of data analysis in which
computers find insights in data without being told exactly where to look for those insights.
Machine learning algorithms, when exposed to massive amounts of data, can extract patterns
and use those patterns to generate insights or predictions about future conditions.

When you upload a picture of a cat to Google Photos, it knows the object in the picture is a
cat. The cat identifying code wasnt written by a human: it developed as a consequence of
exposing an algorithm to lots of cat photos (and photos of things that arent cats).

The same principle can be applied in many areas of E-Commerce. To take one example, E-
Commerce merchants have become quite good at recommending related products, but anyone
who shops online knows that recommendation engines frequently get it wrong.

Recommendation engines are limited because they have access to a relatively small set of
data and because the ways they can reason about that data are constrained: People who
bought this product also bought that product is not the best possible way to predict future
purchases.

Machine learning will help merchants discover better ways of modeling user behavior so they
can make more accurate recommendations about what a customer is likely to be interested in
buying.

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By exposing machine learning algorithms to truly massive amounts of data from purchase
histories, social media data, web interactions, and anything else that might prove relevant,
merchants can build automated analytical models that arent limited by the ability of humans
to hypothesize about why certain people buy particular products.

This isnt the technology of the future; machine learning is already here and companies
like Boomtrain are using machine learning techniques to build retail personalization
platforms.

Personalization is far from the only benefit of machine learning and other artificial
intelligence technologies. Theyre already widely used in fraud prevention, logistics and
supply chain management, and pricing.

Over the next few years, the application of machine learning and artificial intelligence to E-
Commerce will become an increasingly important differentiator of E-Commerce
performance. Retailers who do not act to leverage the benefits of AI risk being left behind by
early adopters who reshape the E-Commerce market and the expectations of shoppers.

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3. Literature Review

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 Artificial Intelligence Applied To Project Success

Daniel Magaa Martnez, Juan Carlos Fernndez-Rodrguez

Universidad Antonio de Nebrija, Madrid, Spain

Abstract Project control and monitoring tools are based on expert judgement and
parametric tools. Projects are the means by which companies implement their strategies.
However project success rates are still very low. This is a worrying situation that has a
great economic impact so alternative tools for project success prediction must be proposed
in order to estimate project success or identify critical factors of success. Some of these
tools are based on Artificial Intelligence. In this paper we will carry out a literature review
of those papers that use Artificial Intelligence as a tool for project success estimation or
critical success factor identification. Keywords Project Management, Artificial
Intelligence, Decision Support Systems, Project Success, Critical Success Factors

I. Introduction
Project management is the main tool for implementing a companys goals so understanding
its key issues is really absolutely vital for Project success.

The main challenge of project Management, whether in the times of the Romans, the
Renaissance or the present, is to accomplish Project objectives as specified in the main
bodies of knowledge PMBOK, PRINCE2 e ISO21500.

Nevertheless, and in spite of the considerable length of time that Project Management has
been in existence, and the improvements of the last few years, there are a lot of projects that
are still being classified as not successful, in terms of the way they have been managed or
because of their results .

Some determining factors have been identified in Project Management literature:

1. Projects have always been associated with complexity, but they are getting more
complex in general, independently of the industry
2. Stakeholders play an important role in project development, it is not just the
realm of the project manager and their team.
3. Projects have always been surrounded by uncertainty and continuous changes that
make it really difficult to plan, and accomplish, schedules, resources and budgets .

As identified in the different bodies of knowledge, PMBok[2], Prince2[3] e ISO21500[4]

most of the processes are based on expert judgement or on other parametric analytic tools.
The fact that expert judgement is one of the most important tools in project management
has some limitations:

1. Projects are normally developed in a restricted resource environment so the

more complex is a project is, the more accuracy that is needed, and the more
difficult it is to apply this expert judgement.
2. Expert judgement is applied by people, by experts so it can lead to bias.

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On the other hand the bodies of knowledge identify other processes related to learned
lessons of the project as part of the methodology for obtaining better results, learning from
past experience and managing all that knowledge in an effective way. However reality
shows that, in general, lessons learned are treated in a very superficial way, they are not
well documented and they are not communicated so others can take advantage of them in
future projects. This is probably because lessons learned are perceived in a negative or
punitive way in many companies.

Summarizing, it seems that traditional project tools are not working properly when trying to
predict project success. Accordingly new project management tools are emerging in order
to improve project success or project success estimation.

The goal of this paper is to review these new proposals that use Artificial Intelligence to
improve project success or that can simply predict it. If we were able to predict the future,
we would be able to prepare for it. Originally future prediction in project management has
been done from the point of view of expert judgement, based on the opinion of those who
are analysing the project, the experts. There are studies that try to make a model of this
expert knowledge so technology could mitigate the identified risks and consequentially be
applied to project management.

II. Literature Review Methodology

Different references have been found in scientific literatureassociated with the use of
alternative tools to those used in themain bodies of knowledge, some of which are based on
Artificial Intelligence. These alternative tools are applied to various project management
areas:
1. Estimation of project success
2. Identification of critical success factors
3. Relatedness to project budget
4. Connection to project schedule
5. Project planning
6. Relatedness to risk identification

In this paper we will focus only on those using Artificial Intelligence algorithms to try to
conduct a project success estimation o try to identify critical success factors of a project.

In order to carry out this literature review we have done an unstructured initial search just
to identify different approaches and goals in the field of artificial intelligence applied to
project management.

The main objective is to identify the algorithms that are being used for this purpose. The
keywords used for this search have been: project management, artificial intelligence,
project success, project success prediction, and critical success factors.

Subsequently new structured searches have been made for each of the algorithms in order
to find more references to complete in this way the bibliography to be analysed. Repeated

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searches have been made combining these keywords: critical success factors, Project
success with every algorithm identified in unstructured previous searches.

Both searches, unstructured and structured, have been limited to scientific papers, books or
book chapters, excluding non-scientific articles. The researche has been done using Bucea
searching tool at Universidad Complutense de Madrid, Spain.

The result of these searches is 16 references where Artificial Intelligence has been applied
to project success estimation or critical success factor identification. Identified references
start in 1997 and finish in 2014.

Based on these results, we will perform a structured analysis in order to identify how
artificial intelligence algorithms are applied, detect the authors objectives and list their
limitations. Finally we will summarize the authors conclusions.

Therefore the following questions arise after this literature review process:

1. What are the authors goals when applying artificial intelligence to project
success?
2. What artificial intelligence algorithms have been applied?
3. What limitations are identified when applying those algorithms?

In the next section we will perform a project success concept definition based on existing
principle perspectives on scientific literature

III. Project success

One of the main worries of project management directors is knowing, with some
anticipation, if the project they are managing is going to be successful or not. This worry is
not a guessing game. It is supported by control and monitoring tools defined in project
management frameworks and the bodies of knowledge.

It is not the goal of this paper to review the vast existing literature associated with project
success. We would like to conceptualize the project success concept based on the main
existing research lines so it can help the reader to understand how artificial intelligence can
help in this area.

A project has been, traditionally, categorized as successful if it accomplished the Triple

Constraint: scope, budget and schedule. Traditional statistics or parametrical tools were
enough for this purpose. However these tools leave aside other qualitative aspects of project
management, for example the stakeholders point of view.

Initial studies in this field conclude that we should distinguish project success concepts,
focusing on managerial processes of project management on the one hand, and the
traditional Triple Constraint of scope, schedule, budget and quality on the other hand where
product success criteria is more important from the product point of view. In this regard a

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project could have been perfectly managed from the project teams point of view, but the
product is not in accordance with the stakeholders expectations.

Some authors have concluded that a correct definition of project success or project failure
has not been made and this is one of the main reasons why projects are still being
considered as failures.

There is a variety of studies proposing new key indicators to create a new framework in
order to measure project success based on five dimensions: project performance, project
impact on the customer, project impact on the business and its preparation for the future.

There is another field of research in literature of those who try to identify the projects
critical success factors.

Iv. Artificial intelligence algorithms applied to project success

During this literature review, the following algorithms based on artificial intelligence, and
applied to project success have been found.

A. Neural Networks

Neural Networks attempt to simulate, to a degree, human way of thinking, and are used,
nowadays, for multiple purposes, from credit approval, fraud detection, surveillance
systems and other kinds of prediction purposes.

One of the main parts of neural networks consists of learner training so neural network
adjust to data patterns and give better results. This training is done comparing neural
network results with real and known data and is repeated so it adjusts until results of a very
low error rate are achieved.

Neural networks, because of their characteristics, are more accurate than linear models,
based on regression models, which have been frequently used in project management

B. Fuzzy Cognitive Maps

Fuzzy Cognitive Maps are fuzzy graphical structures that allow the representation of causal
reasoning. This graphical representation is made of nodes where the most relevant nodes
are specifically identified for a decision-making system. Fuzzy cognitive maps have their
origin in a fuse of fuzzy logic and neural networks.

C. Genetic Algorithms

Genetic Algorithms try to simulate the evolutionary natural process and were originally
proposed by Holland.

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They are easy to apply so they can be fused with other heuristic methods creating ad-hoc
solutions. However it is difficult to apply them to large, complex, difficult-to-solve
problems.

D. Bayesian Model

Bayesian networks are described as a representation of a joint probability distribution. It is

one of the most common methods for data classification in different categories.

The Bayesian model allow us to answer questions such as what is the probability of X
being in state x1 if Y = y1 and Z=z1 . In other words, links the probability of A given B
with the probability of B given A.

E. Evolutionary Fuzzy Neural Inference Model EFNIM

EFNIM fuses genetic algorithms, fuzzy logic, and neural networks and has been
traditionally used for civil engineering problem solving. The combination of these three
algorithms makes the strengths of one cover the weaknesses of the other. So genetic
algorithms are used for optimization purposes, fuzzy logic deals with uncertainty and
neural networks for mapping inputs and outputs.

F. Evolutionary Fuzzy Hybrid Neural Network EFHNN

The model EFHNN includes four algorithms of artificial intelligence:

1. Neural Network
2. High Order Neural Network
3. Fuzzy Logic
4. Genetic Algorithm

Neural Networks and High Order Neural Networks, named together as Hybrid Neural
Network (HNN), manage the inference engine while Fuzzy Logic deals with the fuzzy
layer. Genetic algorithms optimize the final model.

The difference with EFNIM is that this model is able to manage problems more deeply
thanks to the large number of HNN models.

G. Support Vector Machine

This is a new way of learning, which is more powerful than traditional learning tools. It is
able to solve data categorization problems and regression problems as well.

Just as neural networks do, SVM requires training and testing with a training dataset.
SVMs characteristics allow it to deal better with unknown data and, generally speaking,
they present some advantages over neural networks. They are being applied successfully to
cost estimation in the construction industry

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 H. Fast Messy Genetic Algorithm

The Fast Messy Genetic Algorithm can identify optimal solutions in an efficient way to
problems with a large number of permutations. It is known because of its flexibility and
because it can be fused with other methodologies to get better results.

The difference between it and other genetic algorithms is based on the possibility of
modifying building blocks to better identify partial solutions so as to focus on a global
solution faster.

I. K-Means Clustering

K-Means is an easy approach for creating data cluster from random data. It is commonly
used for image pattern detection as well as for many other applications. Its main problem is
that it cannot ensure an optimal convergence, but is widely used due to its simplicity.

J. Bootstrap aggregating neural networks

Bootstrap aggregating neural networks are a combination of multiple artificial neural

network classifiers. They use more than one classifier based on ANNs so the final decision
is taken from each classifier by a voting system.

K. Adaptive boosting neural networks

The main difference with Bootstrap aggregating neural networks is that adaptive boosting
neural networks use weights that are readjusted on every iteration giving less importance to
those solutions that have not been classified correctly. As a result, classifiers focus on more
complex samples obtaining a faster solution each time.

VI.Conclusions

The possibility of project success prediction or identifying critical success factors in

advance is a field of research where researchers have been working intensively for project
management purposes.

Initial approaches have been based on statistical models that had not been able to answer to
project Management needs. In artificial intelligence, researchers have found algorithms and
tools that deal better with project uncertainty and complex environments where projects are
normally developed. Several algorithms deal with specific goals.

Critical success factors identification:

1. Neural Networks
2. Fuzzy Cognitive Maps
3. Genetic Algorithms
4. Bayesian Model

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Project success prediction:
1. Bayesian Model
2. Evolutionary Fuzzy Neural Inference Model - EFNIM
3. Neural Networks
4. Support Vector Machine
5. Fast Messy Genetic Algorithm
6. K-Means Clustering
7. Bootstrap aggregating neural networks
8. Adaptive boosting neural networks

The main conclusions obtained from the reviewed papers are that artificial intelligence
tools are more accurate than traditional tools, but are still complementary to traditional
tools. Artificial Intelligence tools are really helpful for the project manager to control and
monitor the project.

However some of the reviewed models have weaknesses and limitations that indicate
project managers should still use expert judgement and compare artificial intelligence
results with traditional tools before making a decision, so they can adjust them if necessary.

Trending is fusing different artificial intelligence tools so they can take advantage of the
strengths of a tool and cover the weaknesses of the rest. Best results are obtained when
fusing artificial intelligence tools with specific project tools like CAPP, which permits real-
time analysis, and PDRI, which allows the rating of how a project has been defined in its
very early stages, before a project begins.

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4. Research Methodology

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4.1 Research Objective:

To identify impact of artificial intelligence in E-Commerce industry.

To analyze how Marketing Automation plays a vital role to increase Sales Revenue
through website in E-Commerce industry.
To determine why marketing associates from E-Commerce industry are shifting
towards Artificial Intelligence.
To compare Revenue of E-Commerce player before implementing Artificial
Intelligence and after implementing Artificial Intelligence.
To analyze how much cost is to be taken to implement Artificial Intelligence for
online players
To determine, implementing Artificial Intelligence is feasible in terms of ROI or not?

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Research Design
The formidable problem that follows the task of defining the research problem is the
preparation of the design of the research project, popularly known as the research design.
Decisions regarding what, where, when, how much, by what means concerning an inquiry or
a research study constitute a research design. A research design is the arrangement of
conditions for collection and analysis of data in a manner that aims to combine relevance to
the research purpose with economy in procedure. In fact, the research design is the
conceptual structure within which research is conducted; it constitutes the blueprint for the
collection, measurement and analysis of data. As such the design includes an outline of what
the researcher will do from writing the hypothesis and its operational implications to the final
analysis of data. More explicitly, the design decisions happen to be in respect of:

(i) What is the study about?

(ii) Why is the study being made?

(iii) Where will the study be carried out?

(iv) What type of data is required?

(v) Where can the required data are found?

(vi)What periods of time will the study include?

(vii) What will be the sample design?

(viii) What techniques of data collection will be used?

(ix) How will the data be analysed?

(x) In what style will the report be prepared?

Before describing the different research designs, it will be appropriate to explain the various
concepts relating to designs so that these may be better and easily understood.

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Dependent and Independent Variables
A concept which can take on different quantitative values is called a variable. As such the
concepts like weight, height, income are all examples of variables. Qualitative phenomena (or
the attributes) are also quantified on the basis of the presence or absence of the concerning
attribute(s). Phenomena which can take on quantitatively different values even in decimal
points are called continuous variables.

But all variables are not continuous. If they can only be expressed in integer values, they are
non-continuous variables or in statistical language discrete variables. Age is an example of
continuous variable, but the number of children is an example of non-continuous variable. If
one variable depends upon or is a consequence of the other variable, it is termed as a
dependent variable, and the variable that is antecedent to the dependent variable is termed as
an independent variable. For instance, if we say that height depends upon age, then height is a
dependent variable and age is an independent variable. Further, if in addition to being
dependent upon age, height also depends upon the individuals sex, then height is a dependent
variable and age and sex are independent variables. Similarly, readymade films and lectures
are examples of independent variables, whereas behavioral changes, occurring as a result of
the environmental manipulations, are examples of dependent variables.

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Data Collection Plan
Primary Data We chose the quantitative research approach to standardize the data collecting
process. According to Birkler primary data can be collected using many different mechanics;
questionnaires, interviews, observations and experiments. There are disadvantages connected
to all, but common among them all is that no matter how you choose to collect your primary
data it can be very time consuming and costly. However, the advantage with collecting
primary data is that the information that is gathered has been collected for that specific
purpose which makes it current and relevant.

This study consists of a self-completion questionnaire, meaning that respondents answer

questions by completing the questionnaire themselves. Self-completion questionnaires can
come in several forms and while the most well-known of these forms probably is via mail or
post an online questionnaire have been chosen for this paper. To make the process as simple
as possible for both researchers and respondents the questionnaire was created and utilized on
the Internet site Enalyzer, www.enalyzer.com, which provides online questionnaires. Since
the study was constrained by limited funding an online-questionnaire was suitable which
limited the cost, as well as gives the possibility to distribute the survey to a larger sample, to
make the precision higher in the findings. This choice would also eliminate the influence the
interviewer has on the respondents. The data was then collected and downloaded from the
website.

However, there are a number of complications which prevented this. As the authors cannot
predict who will become a member of an online brand community we would have had to
study an enormous amount of purchases by a vast number of people before a buyer possibly
becomes a member of an online brand community. This is due to the fact that only a small
share of buyers will become members of an online brand community. It is namely a
prerequisite that we can study purchases that are being made by the same person, before they
have become members of the specific online brand community, and a period of time after
they have been members. Concerning the first measuring point in this ideal way of doing the
research, which is to say the point before the consumers become members of an online brand
community, we could, for obvious reasons, not target the big amount of purchasers that
would be required for making sure that an enough amount of those purchasers later on decide
to become members of an online brand community. Yet, if this would have been possible, we
would at the second measuring

point, sometime after the purchaser became member of the online brand community, register
what brand(s) the purchaser was buying. This would have given a correct picture of how the
consumers brand preferences and brand loyalty to a specific brand would have been affected
by the online brand community.

Since this way of carrying out the study was not possible, as it required far too many
resources to study the huge amount of purchases before the possible membership of an online

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community starts, another way to perform this study was chosen. Instead, member of online
brand communities was asked what brand they used to buy before they became members of
the specific online brand community, whereas at the same time they were asked what brand
they buy after being members for some time.

Members which had been member less than two months was excluded from the survey, as it
is expected that this time is required for the online brand community to possibly change the
mindset of the consumer when it comes to brand loyalty. Also, two months is a reasonable
time for new members to get to know the community and its functions. What were obtained
were the buyers alleged purchases, e.g. what they told us they bought. We believe that
consumers will not have any particular reason for lying about what brand(s) they used to
purchase before their membership, nor would they have any particular reason for not giving
us the true story about their brand selection of purchases at the time after they have been
members of the online brand community for at least two months.

We would also like to point out, for those who might criticize us for that consumers might not
remember what they have purchased back in time, that it is our strong belief that this is not
the case when it comes to members of online brand communities in the sports industry.
Sporting goods consumers, who are members of online brand communities, would never have
been members if they weren't very much concerned about what brands they buy and wear,
which mean that it is highly unlikely that they by mistake would specify a former, not
correctly remembered, brand of purchase. Having this said, we nevertheless consider that the
results of this study can be trusted to a high degree.

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5. Findings & Conclusion

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The upcoming years will undeniably witness AI's tremendous influence on the e-commerce
industry. The below-mentioned points will take you through the advantages and limitations of
AI and ways in which it will impact the overall E-Commerce Industry.

Advantages:

1. Visual search
Software platforms that drive E-Commerce websites are creating visual search
capabilities which allow consumers to upload an image and find
similar/complementary products. The visual search capabilities, particularly via
mobile, reads the item for clues -- color, shape, size, fabric and brand. This helps
consumers to find exactly what they are looking for right away.
Example- A consumer doesnt even have to be shopping to see something they would
like to purchase a new pair of Nikes at the gym or a friends new dress -- to easily
find similar items on your E-Commerce store.

2. Offline to online worlds merge

The offline to online experience requires minimal steps to shop and purchase,
providing a sense of autonomy to the consumer.
Example- Retailers redefine the way consumers engage with their brand, retail of the
future will have more information about shoppers to improve their customer service,
ultimately to create the opportunity to sell more items.

3. Personalization
Due to emerging AI technologies, online brands of all sizes will have increasing
access to tools laser-focused on personalization.
Many retailers currently use collaborative filtering to provide customers with
recommendations. These collaborative filters base their results on most viewed
history, best sellers, evergreen trends and other general parameters. AI brings a
seamless customer experience across all of those channels.

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 4. Retargeting Potential Customers
Look at AI in retailing for example, facial recognition is now being used not only to
deter shoplifters by scanning their images on CCTV cameras. Facial recognition is
now capturing customers dwell times as well. That means that if you linger for a
notable length of time by a certain product - say, a coffeemaker - that information will
be stored for use upon your next visit.
Omnichannel retailers are gaining ground on the ability to remarket their products to
customers. The face of sales is changing by responding to the customers lead and
impulses. Almost like reading their minds.

Limitations

1. Unsupervised learning

Right now, most AI systems learn new information through a kind of structured force-
feeding, relying on information given to those systems by humans. However, this form of
supervised learning isnt scalable, and doesnt mimic the way that human beings naturally
learn.
Currently, were still a few years away from machines that can learn this way, but when we
get there, well have the ability to use them to generate or augment ideas, and produce
concepts we couldnt come up with on our own.

2. Creativity and abstract thinking

Humans tend to think of ideas and solutions to problems in terms of abstractions. For
example, think about a horse. Chances are, you arent thinking about a very specific
example of a horse, and you dont need to list out all the required ingredients that
constitute a horse. Instead, you conceptualize the general idea of what a horse is.
A modern computer, on the other hand, would need thousands of examples of horses
to understand what horse means, and even then, it would have to define this
conceptual equine concretely and completely to use that idea in any application. If we
want machines that can take raw data and turn it into intuitive concepts that can be
grasped, we'll need to create machines that can think abstractly.

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3. Public trust

Self-driving cars run on sophisticated AI software to avoid collisions and drive better
than slow-thinking, distracted, mistake-prone human drivers. To date, self-driving
cars' record has been relatively clean, compared to that of human drivers.
However, only 39 percent of U.S. consumers claim they would feel safe in an
autonomous vehicle. AI is still a foreign concept to most of us, and thanks to decades
of science fiction, many of us are inherently distrustful of any fully mechanized
solution

4. Integration

AI doesnt exist by itself. It needs to be combined with something to be practical,

such as those aforementioned self-driving cars. Integration into existing products,
such as standard appliances and software programs, will be a major hurdle to
overcome and one were already overcoming. Were already seeing a plethora of
smart devices, but few of these feature true machine learning or AI tech.

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6. Bibliography

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Commerce.aspx#.WOAASlOGPIU

http://www.miva.com/blog/the-history-of-E-Commerce-how-did-it-all-begin/

http://10E-Commercetrends.com/

https://sokrati.com/blog/current-trends-about-indian-E-Commerce-industry/

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https://feinternational.com/blog/what-is-E-Commerce-an-introduction-to-the-industry/

https://yourstory.com/2016/06/E-Commerce-iamai-211005cr-2016-study/

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Trillion-This-Year/1014369

http://www.mbaskool.com/fun-corner/top-brand-lists/16182-top-10-E-Commerce-companies-
in-the-world-2016.html?start=5

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https://www.motionpoint.com/blog/the-4-biggest-challenges-facing-international-E-
Commerce-growth/

http://businessworld.in/article/The-Growing-Challenges-Of-Indian-E-Commerce-What-You-
Need-To-Know/10-01-2016-90121/

https://www.linkedin.com/pulse/industry-analysis-indian-E-Commerce-khalid-
aziz?articleId=6144866768058933248

https://www.entrepreneur.com/article/287438

https://techcrunch.com/2017/04/01/discussing-the-limits-of-artificial-intelligence/

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