Problem Solution Essay on E-Commerce Industries In Gujarat

Question

Task: Write a research essay based on a problem and solution essay model structure

Topic: Choose a topic of interest that is related to your further studies at university. Your teacher will help you with this. Please see the EAP2 ‘Sample topics’ guide for some ideas.

Answer

Introduction:
In this problem solution essay we have discussed E-commerce which is one of the fastest growing industries in the world. With the increased number of internet users and inclination of people towards online shopping, the popularity of e-commerce industry has gone of significantly. This is also similar to India as well, where there is constant growth in the number of e-commerce shoppers (Kalia, Kaur & Singh, 2018, pp.736-758). Therefore, a number of e-commerce companies are venturing into this part of the world. Gujarat is one of the largest states in India developed states of the country and preference of people towards online shopping is significantly high. However, along with the benefits, the e-commerce industries in Gujarat are also facing a number of challenges which are required to be mitigated. This problem solution essay will analyze those challenges and provide possible solutions to cope up with those.

Discussions:
The main issue for the e-commerce industries is about the negative perspective on e-commerce among a larger section of people and the solutions of this problem solution essay will focus on converting this negative thought into a positive one.

Challenges of e-commerce industries in Gujarat:
E-commerce industries are booming Gujarat because of the growing preference of people towards online shopping. However, challenges like growing Government taxes along with GST, high competitions from local retail industries and many more are posing huge challenges for this industry to gain the expected revenues or profits. Due to heavy industrialization in the last few years, many retail organizations have come up to hold the market of the state and people are getting a large variety of options for shopping other than e-commerce.

Issue 1: Government taxes:
Increasing Government taxes is surely a concern for the e-commerce industries in Gujarat. Due to the fact that in online shopping, most of the products are brought from other states and therefore, these organizations are required to pay extra taxes for them. In Gujarat, the taxes are high for selling products that are not manufactured in the state. However, in recent times, the tax rate has been lowered which has brought relief to the e-commerce industries according to (Srivastava, 2018) “problems arise only when the question arises on the taxation of income of a non-resident. Transactions in India by way of e-commerce income of a person is taxed in the country of source, the country of residence has the obligation to give relief from double taxation”. Still, the industry is in constant concerns about the fluctuating tax rates.

Issue 2: Heavy competitions from local retailers:
The competition is high for the e-commerce industries, due to the fact that there are growing numbers of local retailers and due to increasing industrialization; big retailers are also establishing their business in this part of the world. Therefore, people are getting a huge number of options for shopping and due to the fact that product delivery from e-commerce organizations takes a long time, therefore a large section of people still prefers shopping from local retails.

Issue 3: Trust and cash on delivery issues:
Despite the growing popularity of e-commerce industries, a large section of customers in Gujarat still have trust issues on online shopping. Many of them are not convinced about the quality of products that are available on these e-commerce portals. Moreover, many people are not still accustomed to online transaction methods which are greater in rural areas. They mostly have trust issues with the online transaction which keep them away from the mode of online shopping and many of them prefer to use cash on delivery methods for receiving their products from these organization. Cash on delivery method takes an increased time and cost for receiving the profits of the soled products. According to Malhotra (2014), “Low credit card access and low trust in online transactions has led to cash on delivery being the preferred payment choice in India. Unlike electronic payments, manual cash collection is painstaking, risky, and expensive.”

"Our findings suggest that high-speed Wi-Fi led to 2-3x increase in online activity and higher-bandwidth activities; spurred Internet skilling and instrumental uses online; shifted the time and space of device access; created social currency; and transformed the construct of Internet for the households. Ultimately, 8 out of the 12 households switched to high-speed Wi-Fi after the study concluded. We discuss considerations for policy and infrastructure deployments in introducing and on boarding new and existing users living with slow speeds to higher-quality networks” (Sambasivan et al., 2016, p.3). However, the focus of this study will be on above-discussed issues which are the most impacting ones.

Possible solutions of the issues:
Solution 1: The e-commerce industries need to discuss with the state Government on adjusting the taxes which can benefit them. They need to make the Government understand the issues that they are facing due to increasing taxes. The solutions can be made after negotiating with each other on this issue.

Solution 2: Competitions from local retailers are bound to come and this will continue to increase with the increase of industrialization. However, to cope up with these issues, the e-commerce industries need to create some innovative strategies and provide services to the customers with some attractive offers (Chuang & Lin, 2017, pp.22-38). For example, they can provide customers with attractive discounts which are not available for local retailers. Further, they can improve their service by taking feedbacks and surveys from local people. They need to make the people aware of all the benefits that they receive from online shopping. Moreover, they can increase their catalog of products for providing the customers with ample options to choose from. For example, the e-commerce organizations can bring in more international brands and sell them at affordable prices for attracting the customers.

Solution 3: Trust issues of the customers are required to be mitigated on an immediate basis. There have been a lot of complaints by the customers about the poor services of the e-commerce organizations and this can further lower their trusts in this industry. Therefore, these organizations should enhance their current service and provide the customers with the best services which are better than local retailers. For example, timely delivery of products along with maintaining their qualities can be a preferable solution. Further, there should be options for quick replacement of products and even quick repair facilities for the electronic gadgets. This will help in gaining the trusts of the customers.

Organizations of e-commerce industry should make the customers aware of all the facilities of online shopping and they should take help of the Government on making the people have trust on the online transaction (Bilgihan, 2016, pp.103-113). They should create new strategies for promoting online transaction systems. For example, they can provide attractive discounts on some products for the people who will buy them from their credit or debit cards. Further, they should make their e-commerce platform more user-friendly for smartphone users so that the customers can complete their online shopping hassle-free.

All these methods can probably create solutions for the ongoing issues. However, these organizations need to plan accordingly and create new ideas on improving their current systems. For example, they can enhance their technical systems to make the overall online shopping facility more attractive for the customers. “This also allows retailers to offer broad assortments more easily and efficiently to cater to the long tail (e.g., Anderson 2006) of customers’ preferences.” (Kahn, Inman & Verhoef, 2018). They need to create more godowns and hubs in the local areas for creating timely delivery facilities for the customers. This way they can possibly mitigate their current issues. These organizations need to assess the current market analysis and find possible scopes for improving the current situation.

Conclusions:In this problem solution essay we can infer that growing industrialization and increasing popularity of e-commerce in Gujarat, there are huge scopes for the e-commerce industries to have a significant hold in the state. However, the competitions form the local market will be high and they need to cope up with these challenges to sustain in the market. With increasing literacy rates and increased users of the internet and smartphone, there are huge opportunities for growth in the state. However, these organizations have to analyze all the risks and mitigate them with innovative planning and strategies. They should not allow the local industries to disrupt their services and need to gain the trust of the customers on an immediate basis. This problem solution essay thus analyzed all the challenges that the e-commerce industries are currently facing in Gujarat along with discussing their possible solutions to mitigate these issues.

References:
Bilgihan, A. (2016). Gen Y customer loyalty in online shopping: An integrated model of trust, user experience and branding. Computers in Human Behavior, 61, 103-113. https://doi.org/10.1016/j.chb.2016.03.014

Chuang, S. H., & Lin, H. N. (2017). Performance implications of information-value offering in e-service systems: Examining the resource-based perspective and innovation strategy. The Journal of Strategic Information Systems, 26(1), 22-38. https://doi.org/10.1016/j.jsis.2016.09.001

Kahn, B. E., Inman, J. J., & Verhoef, P. C. (2018). Introduction to Special Issue: Consumer Response to the Evolving Retailing Landscape. Journal of the Association for Consumer Research, 3(3), 000-000. https://doi.org/10.1086/699389

Kalia, P., Kaur, N., & Singh, T. (2018). E-Commerce in India: evolution and revolution of online retail. In Mobile Commerce: Concepts, Methodologies, Tools, and Applications (pp. 736-758). IGI Global. https://doi.org/10.4018/978-1-5225-2599-8.ch036

Malhotra, B. (2014). E-Business: Issues & Challenges in Indian Perspective. Global Journal of Business Management and Information Technology, 4(1), 11-16.

Sambasivan, N., Azad, G., Aoki, P. M., & Mitra, S. S. (2016, June). We call it Hi-Fi: Exposing Indian households to high speed broadband wireless Internet. In Proceedings of the Eighth International Conference on Information and Communication Technologies and Development (p. 3). ACM. https://doi.org/10.1145/2909609.2909651

Srivastava, D.K., 2018. Taxation of E-Commerce: Problems and Possible Solutions. In Contemporary Issues in International Law (pp. 447-457). Springer, Singapore.