How to start an e-commerce business in India?

Last Updated at: Dec 23, 2020
How to start an e-commerce business in India?
E-commerce in India has witnessed a growth of 56% in the first quarter and 38% in June 2020, as per a recent survey by Nielsen. Prompted by the Covid-19 induced lockdown, several FMCG companies from Dabur and ITC to Mondelez and Marico are using e-commerce platforms to launch products before making them available in traditional retail shops.


The volume jump in recent weeks was led by the significant uptick in sales of electronics, according to data from Unicommerce, a technology solutions provider for the ecommerce industry. India’s ecommerce industry has recovered about 90% of its overall order volumes since restrictions on shipping of non-essential products were relaxed in early May, according to industry estimates.


For Walmart-owned Flipkart and Amazon, daily deliveries are down to around 10% of what they were prior to the lockdown, while the gross merchandise value (GMV) of products they sell has fallen to around 5% of what it was a month ago, top executives told ET.


From back in the good old days, when the products were sold through the Barter system, then onto the introduction of currency, to date where most of the transactions and business are being done online. The digital world has not just taken over bits and pieces of marketing but completely over the e-commerce businesses all over the world.

What is an e-commerce business?

E-commerce business is defined as buying and selling the products along with the transactions of funds as well as the interchange of data, everything over the internet.

Statistics of e-commerce business

The graph of the e-commerce industry has grown rapidly and tremendously over the past few years and the statistics so provided are proof of it. According to statistics done by the Economic Survey of  India, the Indian e-commerce market has grown rapidly by over 19% reached a whopping $33 billion. Well, these are surely some crazy numbers that are enough to influence and individual or a company to get their business started and growing all throughout.

The e-commerce trend came to India with some of the most famous e-commerce business sites including Amazon, Flipkart and several others in the 1990s. Since then, there has been continuous progress and increasing demand of consumers as well as retailers trying to set their feet in this business.

Start Your Business

Looking at the above-mentioned statistics, one can easily say that the future of e-commerce in India looks promising, but along with that, other statistics state that with the growth rate that India has, it will surpass the US e-commerce industry by 2034, becoming the second-largest market globally.

Types of e-commerce business

E-commerce is a vast domain in itself, and with the number of types and business in which it is branched and distributed makes it even more immense. There are not just one or two of these, but various e-commerce businesses depending on the interaction between the consumers, administration, and business.

The types of e-commerce business are as follows:

  1. Business to Business (B2B): These deal with the exchange of services, information and products between the businesses directly rather than having intermediates such as customers and others.
  2. Business to Consumer (B2C): In such cases, the business is directly linked with the consumers,i.e., the products, services, promotions, and others are sold and business deals are made with the customers and there is no linking with other businesses and professionals. One of the examples of such an e-commerce business is Amazon.
  3. Consumer to Consumer (C2C): These are based on the interactions between the customers for selling, buying and promotions online. In such type of e-commerce, a third-party platform is provided online where even transactions can take place. An example of such an e-commerce website is eBay.
  4. Consumer to Business (C2B): In such a business, the products and other services provided by the consumers are made available online for the companies to purchase or bid on them. Some of the products include photographs and other such stuff which might also be helpful for the digital marketing of the company.
  5. Business to Administration (B2A): These types involve the transactions that are carried out between the companies and government bodies, as a lot of such government administrations are dependent on online services as well as their products in some way or the other. Such e-commerce businesses have grown in the past years considering the capabilities of online services and such companies.
  6. Consumer to Administration (C2A): This is not a very popular part of e-commerce business as the public administration rarely purchases any services or products directly from the consumers. Usually, some other intermediates are involved. C2A can be seen in some of the fields including education, tax filing, etc.



M-commerce is another type of e-commerce wherein the transactions and services take place through mobile phones. This type of e-commerce is rapidly growing considering the use of mobile phones in today’s world. These are preferred because of the user-friendly and fast methods that have been made available to consumers as well as the companies.

 Steps to start an e-commerce business in India:

After looking at all the types and the growth opportunities that an e-commerce business offers, one is surely tempted to try their hands-on to it. Well, if you want to start your own business, it seems complicated, yet it is quite simple. To make it, even more, easier and streamlined, here are some of the steps one must follow and keep in mind while developing their e-commerce business:

1. Plan your niche and have a business strategy: Before starting and running your business online, build a strategy and plan a particular niche where you need to focus. Instead of having a number of products for sale, focus and invest only on a limited and narrowed down a list of products. This helps you promote and build marketing strategies according to a particular set of products, which can further be expanded. Along with these, try to start the business which is moderately competitive and has a scope in the market. Avoid picking up the niche which is already influenced by a number of major brands.

2. Name the brand: Choosing a name is not a tough job, but you need to ensure the name is unique and descriptive. Try and pick up a short and influencing name that defines your brand and the niche which it caters to. Also, it should be easy to remember. Once the name is finalized, the logo of the company must be designed which carries a tagline along with the logo symbolizing the brand. It is always advisable to register your trademark which could be a logo or tagline or a combination of both. 

3. Choose the right entity: In India, a business can be registered as a sole proprietorship, one person company, limited liability partnership, and private limited company, partnership, etc.  There are different accounting, taxation and compliance and legal documentation requirements for each and the necessary filings must be done with the RoC. For example, a partnership based company needs to get the Partnership Deed drafted whereas a sole proprietorship does not have many legalities.

4. Registering your e-commerce business and opening a bank account: Once all the basic details are done, get your business registered and complete all the legal formalities. Once registered, have a separate bank account for your business and professional purposes including paying the taxes, payments and other business-related transactions.

5. Build the e-commerce website: While building your website, you can choose either building and developing it from scratch or using a pre-built platform. If you are not into heavy investing, having a pre-built website is the correct option, as it provides you with all the details and all you need to do is list your products and details and you are good-to-go. Always remember to get a Privacy Policy, Terms and Conditions documents drafted, especially if your business involves collecting data from the consumers.

6. Payment gateways: To get your transaction done, you need to set-up the online payment methods for your business allowing the processing of a payment through various methods including credit card, debit card, Paytm, and others. 

7. Logistics: One of the most important steps for carrying out your business successfully. This process involves the complete process from shipping to delivery of the products to the customers. Having a successful logistics management is one of the most essential steps of running an e-commerce business. It could either be outsourcing products through a third party or in case of a smaller business, delivering the products directly from your warehouse to the customers.

8. Digital Marketing:  It is one of the best and most essential ways to market and publicize your products. Digital marketing could be done in several ways which include the following:

SEO: It is one of the most trusted ways of optimization of the website. Try using SEO strategies and keywords to rank among the top results of the search engine page.

  • Social Media Marketing: Promote and advertise your products on various social media platforms including Instagram, Facebook, and several others.
  •  Promotions and collaborations: You can try and collaborate with several brands of the same niche which leads to your promotions as well.
  • Word of Mouth and interaction with customers: The most important aspect of marketing is trust. Try developing your trust and potential among the customers, which helps in the age-old tradition of the word of mouth method, resulting in the attraction of more customers.

Every domain and business has both advantages and disadvantages added to it. And so is the case with an e-commerce business.

Advantages of e-commerce business

Some of the advantages are listed below:

          Availability: The online business is available 24*7, making it convenient for the customers to shop anytime, anywhere they want according to their comfort, unlike the stores which have fixed opening and closing times.

          Wide Range: Unlike stores having a limited range of products, having an e-commerce business makes it possible to enlist and sell as many products as you want to, without any constrictions of space and size.

          Easy accessibility: These e-commerce businesses and websites are easily accessible, along with being user-friendly and having the potential to develop the customer base worldwide.

Disadvantages of e-commerce business

Limitations on customer service: You may not be able to easily interact with your customers for an honest opinion or service feedback. This may come across challenging while working towards improvisation and business expansion.

Product delivery time: Unlike shopping at stores, where customers can buy the products instantly, in the case of online shopping, the customers have to wait to get their hands on to the products.

Security: Security of products, personal and bank details are an issue with the number of cyber-hacking cases growing each day.

Highly competitive: As stated in the beginning, finding the right niche is very important. The more competitive the niche is, the more you work on product or service quality and spend on paid promotions.

As such, along with all these pointers once your business is targeted and set-up, you are good to go and ready to build up and grow your business with innumerous possibilities and opportunities.

Click here: how to register a company