Transition of Rural Economy into Global Economy

Transition of Rural Economy into Global Economy ABSTRACT Sustainable Development of Rural India with E-business Dr. Himanshu Agarwal, Reader, D. N. (PG) College, Meerut. Editor, Edited Book “e-marketing in Indian Scenario” Prof. Ashok Kumar, Head, Department Management Studies, Forte Institute of Technology, Meerut. The benefits of E-business over traditional mode of business Reach. The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, e-business opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world. Scope: E-business allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. E-business includes, among other things, information management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow. Interactivity: Whereas traditional marketing is largely about getting a brand's message out there, e-business facilitates conversations between companies and consumers. With a two-way communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive. Immediacy: It is able to, in ways never before imagined, provide an immediate impact. By closing the gap between E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business —that is to say, any business which utilizes a computer. This usage is somewhat archaic, however, and in most contexts e-business refers exclusively to Internet businesses. In the past few years, virtually all businesses have become, to some degree or another, an e-business. The pervasiveness of Internet technology, readily available solutions, and the repeatedly demonstrated benefits of electronic technology have made e-business the obvious path. This trend continues with new technologies, such as Internet-enabled cell phones and PDA's, and the trend of e-business saturation will most likely continue for some time. E-Marketing in Indian Scenario / 19 providing information and eliciting a consumer reaction, the consumer's buying cycle is speeded up and advertising spend can go much further in creating immediate leads. Demographics and Targeting: Generally speaking, the demographics of the E-business are a marketer's dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middleclasses. The Internet creates the perfect environment for niche marketing to targeted groups. Adaptivity and Closed Loop Marketing: Closed Loop Marketing requires the constant measurement and analysis of the results of marketing initiatives. By continuously tracking the response and effectiveness of a campaign, the marketer can be far more dynamic in adapting to consumers' wants and needs. With e-business, responses can be analyzed in real-time and campaigns can be tweaked continuously. Combined with the immediacy of the Internet as a medium, this means that there's minimal advertising spend wasted on less than effective campaigns. The combination of all these factors results in an improved ROI and ultimately, more customers, happier customers and an improved bottom line. E-business Initiatives in India: The core strategy of the e-business initiatives in India depend upon the clients' needs the target audience they need to reach out to, the profile of the target audience which includes demographics as well as psycho graphic segmentation. Internet marketing has grown to gargantuan proportions as it has been able to deliver the goods with regards to measuring the return on investments. There are varied e-business tools that we use to support the initiatives in India -- banner ads, search engine placement, affiliate marketing keyword promotion (bidding) and e-mail marketing. Our E-business plans enable us to support e-business initiatives in India, which is driven by a four-fold strategy: ? Business referrals: The best way to get new clients is the ones referred by current clients. ? Trade shows and sales networks: We present our offerings at major trade shows in our industry. ? Excellent execution: We believe, one's ability to sell is only as good as one's delivery. ? Product marketing: Our product development is driven purely by market needs. E-Marketing in Indian Scenario / 20 E- business in India, key challenges for growth E-business in India is projected to grow 10 times in value over the next five years, according to a joint study undertaken by the country's main software industry body and the Boston Consulting Group. Ecommerce is expected surge to Rs 1.95 trillion by 2005 according to the study released by the National Association of Software and Service Companies (NASSCOM) and the Boston Consulting Group. It seems to be a good time for E-business in India. No hype, simply strong fundamentals. Eyeballs and venture funding are no longer important, instead value and getting the numbers right seem to be new mantra. That's good news in itself because this mantra hasn't failed in the last 200 years of corporate history I know of. Internet marketing has been increasing around in India since last 5 years. However, e-commerce has picked up only recently and Online Marketing is slowly growing up in India too. Currently, most of the business people were doing their business through online due to more technology development and internet users across the India. Internet Usage and Population Statistics in India YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Users 1,400,000 2,800,000 5,500,000 7,000,000 16,500,000 22,500,000 39,200,000 50,600,000 40,000,000 42,000,000 Population 1,094,870,677 1,094,870,677 1,094,870,677 1,094,870,677 1,094,870,677 1,094,870,677 1,094,870,677 1,112,225,815 1,112,225,815 1,129,667,528 % Usage Source ITU 0.1% ITU 0.3% ITU 0.5% ITU 0.7% ITU 1.6% ITU 2.1% 3.6% C.I. Almanac C.l.Almanc 4.5% IAMAI 3.6% IWS 3.7% Day by day, online shopping is truly catching on in India, traditional brick and mortar stores are also getting the hand of doing business online. The trends demonstrate that traditional stores will keep on doing sufficient business while the online stores increase their virtual presence on the internet. The internet is also proving to a boon in disguise for many small and medium enterprises, which are joining hands with major Indian online portals to display their products and advertise their services. Internet Marketing is one of today's fastest growing marketing opportunities. With the use of today's Internet Marketing medium one can open doors to potential client who will be able to search and seek your website through the use of Search Engines. E-Marketing in Indian Scenario / 21 E-Commerce showed 30% Growth In 2007-08: E-commerce is set to grow at a 30 percent pace to touch Rs. 9,210 crores in 2007-08 from Rs. 7,080 crore in 2006-07 boosted by strength in the classifieds, subscription and downloads businesses, according to the latest Internet and Mobile Association of India (IAMAI) report. Of course, readers please remember that the IAMAI has every reason to paint a rosy picture about the e-commerce business considering its mandate is “to expand and enhance the online services sector.” The online travel industry, which is growing from a larger base, is estimated to grow 27 percent to Rs. 7,000 crore from Rs. 5,500 crore. Online classifieds is seen expanding 52 percent to Rs. 820 crore from Rs. 540 crore, while paid content subscription is expected to rise 50 percent to Rs. 30 crore from Rs. 20 crore and digital downloads could also increase 50 percent to Rs. 255 crore from Rs. 170 crore. E-tailing is estimated to jump 30 percent to Rs. 1,105 crore from Rs. 850 crore. Top 20 E-commece Companies of India Name of the Companies: 1. Indiamart Intermesh Limited, 2. Sify, 3. Gigosoft, . Stylusinc, 5. Synapse, 6. Magnon Solutions, 7. Planet ECom, 8. CMC Limited, 9. Times of Money.com, 10. Cygnet Infortech Pvt. Ltd. 11. Jplan Infotech, 12. Steel RX Corp, 13. Advent Infosoft Pvt. Ltd., 14. Paysignet, 15. WebServerIndia, 16. Weblink, 17. Sakshay, 18. Senseware, 19. Digital Arts, 20. Vsplash. India Diffusion of E-Business in Rural Market: As new networks of B2B activity emerge, rural businesses are taking part in their development. Ecommerce activity by food and agricultural firms and a growing number of examples of other rural firms developing innovative ecommerce strategies reveal that many rural businesses are embracing e-business. E-business activity involves many industries that do business in rural India. Manufactured e-commerce shipments are concentrated in five manufacturing industries. Food products are the fifth largest sub sector of manufacturing with e-business shipments. In addition to shipping products electronically, the food products industry purchased $11.2 billion of materials online in 2006, making it the sixth most active e-commerce purchasing industry. The important presence of food products manufacturing firms in the rural economy suggests that many rural businesses use e-commerce technology. Ebusiness use by agricultural input industries suggests that many other rural firms have also adopted e-strategies. Many rural agricultural input firms are part of the chemical and machinery industries, the third and fourth largest manufacturing e-commerce industries. An August 2007 survey of agricultural input firms revealed that roughly half of the firms ordered supplies online and a fourth paid for their supplies online. E-Marketing in Indian Scenario / 22 Instead of rural India coming to urban marketing centers, the reverse phenomena has to take place and e-business can successfully pioneer this movement as: ? It offers businesses a cost-effective way to expand into global markets ? It lowers the transaction costs of businesses by dealing directly with overseas suppliers and customers ? It streamlines the rural business processes and Production, marketing and delivery mechanisms can be revolutionized, opening up new opportunities. ? It reduces procurement costs for seed, feed and chemicals and maximizes prices for products. Decision-making can be aided by detailed Web-based information such as weather, marketing and industry reports. ? The middleman who takes away huge margins would be marginalized, and the artisans' vulnerability replaced with empowerment. ? More regularization due to systems that track down sales and maintain quality controls. Another significant advantage that the products from rural areas have in comparison with the other products that are being sold in the virtual world is the exclusivity. E-business as increased the reach and is a new source of infomediary mode for these products Consumer electronics or air tickets which are being sold through internet has lower percentage of conversion rates i.e. with respect to the number of users who visit the product on a web page and the number of users who buy them. The obvious advantage of rural e-commerce is the removal of digital divide between the rural and urban folk. Agricultural Informatics and Communication in India: ICT's diffusion and infusion in agricultural sector provides the necessary “digital opportunities” or advantages for productivity increase, for income generation, for decrease in regional disparity and for improving their linkages with the market. Markets, the driver for agricultural growth, depends on effective information system i.e. what people want, at what price, where to get it, and who can supp1y it. There have been both national and internationa1 efforts (DOT force of the UN, the UN/ESCAP committee on poverty reduction, the millennium development goals, poverty net of the World Bank) to improve information flows and communication services to eliminate poverty. Rural India should be given a chance through Digital Networks for farmers (DNF), DISNIC programme, E-cooperatives, and digital E-Marketing in Indian Scenario / 23 SME's to usher in a “Digital Inclusion for fostering rural prosperity and grass roots level of development. Emergence of the E-Choupal: In this scenario, some time back, the ITC chose the most unexploited avenue of agribusiness. As per the annual report, of 2004, “It had foreseen an inspiring vision; selected a challenging corporate strategy, and formulated a world-class execution plan with consummate investments in technology, brands, people and governance”. The result: the ITC of today—a completely transformed organization, driven by vision, powered by verve; internationally viable; a national asset, creating ITC has evolved from being a leading agri commodity exporter to a major player across the agrivalue chain”. But the most unique intervention is perhaps the concept of 'e-Choupal', which catalyzes the potential to address several issues confronting the competitiveness of the traditional Indian agricultural value chain. 'e-Choupal' is till date the unparallel way to deliver real-time information and customized knowledge in the local language to the marginal farmers and small landholders to improve their decision-making ability. Thus, it is a drive to align the farm output with the market demand so as to bring a stable equilibrium is this arena. Launched in June 2000, : 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'eChoupal' services today reach out to more than 3.1 million farmers growing a range of crops—soyabean, coffee, wheat, rice, pulses, shrimp—in over 31,000 villages through 5050 kiosks across six states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra and Rajasthan). Some of the Strategies to Follow the Train ? Development of Proof-of-Concept Projects in pilot districts ? Agricultural Resources Information System (AgRIS) ? AGMARKNET led Market extension system ? Digital SMEs covering Urban Clusters and Rural Clusters ? E-Cooperative and COOPNET of Agriculture and Rural Credit Societies ? ICT for Micro level Planning: DISNIC Programme ? Rural Empowerment and Development through E-Learning (READ):Community Information and Communication Centres and Digital Libraries (DL) Centres — READ Centres through Broadband Connectivity in about 12000 Rural Colleges, which produce about 9 billion students in the age group of2l -23 Years annually E-Marketing in Indian Scenario / 24 ? Establishment of AgRIS Centres in 300 Agricultural Colleges (215 under SAU System, 85 under AU and General Universities), 89 ICAR Institutions, and 35 State/Central Agricultural Universities. ? Networking of Departments of Geography, Departments/Faculties of Agricultural Marketing, Schools of Earth and Atmospheric Sciences, Schools of Social Sciences, Centres for Regional Development Studies and Agricultural Colleges. ? Adoption of Quality Management System (QMS). ? Intranet for Collaborative Research, Extension arid Training. ? Portals in officially recognised Indian Languages - Localization. ? Adoption of Portal Models. ? Broadcasting / Wider-Dissemination Model. ? Critical Flow Model. ? Comparative Analysis Model. ? E-Advocacy/Lobbying and Pressure Group Mode). ? Integrated Services Model. ? Documentation of Geometry of Information Flow. ? Capacity Building of all Stakeholders involved in the Collaborative Research and Development Models. Challenges lying ahead A major challenge is the financing parts of all these initiatives and it includes funding infrastructure developments designed to enhance rural India's ability to participate in the information economy. This can be done by those stakeholders who will benefit from rural e-commerce and improvement of telecommunication infrastructure in general. Other major challenges that face the e-business transactions in rural level are the lack of a proper business model. The top barriers to e-business as a medium to fuel rural growth are: ? Security and Encryption ? Trust and Risk ? Lack of information by rural artisans ? Lack of qualified personnel to work with farmers, artisans and other rural folks. ? Lack of proper business models ? Too slow and undependable internet ? Legal Issues ? Fraud and Risk of Loss ? Modes of payment ? Culture ? Consumer Privacy E-Marketing in Indian Scenario / 25 These bottlenecks are in addition to the other usual e-commerce bottlenecks like pricing structure for users by various service providers, availability of bandwidth which may be a hindrance for users to experience the real world shopping experience etc. Conclusion Rural India cannot afford to ignore the changes being wrought by the information economy, nor can they afford to just sit back and passively wait to receive its benefits in the form of more convenient access to products and services, information and entertainment, The basic steps to increase the awareness and popularity of the IT in rural areas have to be proactively taken. Public Internet access points such as libraries, tele-cottages and online access centers provide an important means of alleviating the 'digital divide', and lobbying for the availability and retention of such facilities will help reduce inequity of access to web- based government and financial services. Also, until widespread computer literacy is achieved, rural communities will need to campaign for the continuation of sufficient physical infrastructure to meet the needs of those people who are not prepared to go online for services. The outcome of rural e-business and IT expansion are the capacity to increase employment in regional communities in two distinct ways: by there being more work located in the rural areas; and by rural people being able to work remotely for urban based enterprises (teleworking). REFERENCES Ø Beynon-Davies P. (2004). E-Business Palgrave, Basingstoke. ISBN 1-4039-1348-X Ø Paul Timmers, (2000), Electronic Commerce - strategies & models for business-to-business trading, pp.31, John Wiley & Sons, Ltd, ISBN 0-47172029-1 Ø Leonard, Stacie "E-Business and Its Advantages." http://ezinearticles.com Id=280089 Ø "History and Evolution of ITC Limited". ITC Limited. Ø The Global 2000 - Forbes.com Ø http://contentsutra.com/article/419-e-commerce-to-see-30-growth-in2007-08-boosted-by-classifieds-paid-cont Ø http://www.financialexpress.com/fe/daily/20010128/fco26019.html Ø Bharat Bhasker (2003), Electronic Commerce Framework, Technologies and Applications, Tata McGraw-Hill Publishing Company Limited, New Delhi. Ø Ewing Marion Kauffmann Foundation (2001). A Report on Rural Life in the Heartland. E-Marketing in Indian Scenario / 26