Month: July 2021

University of Mumbai BMS Notes

Podcasts and Vodcasts

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Podcasts

A podcast is an episodic series of spoken word digital audio files that a user can download to a personal device for easy listening. Streaming applications and podcasting services provide a convenient and integrated way to manage a personal consumption queue across many podcast sources and playback devices.

A podcast series usually features one or more recurring hosts engaged in a discussion about a particular topic or current event. Discussion and content within a podcast can range from carefully scripted to completely improvised. Podcasts combine elaborate and artistic sound production with thematic concerns ranging from scientific research to slice-of-life journalism. Many podcast series provide an associated website with links and show notes, guest biographies, transcripts, additional resources, commentary, and even a community forum dedicated to discussing the show’s content.

The cost to the consumer is low. While many podcasts are free to download, some are underwritten by corporations or sponsored, with the inclusion of commercial advertisements. In other cases, a podcast could also be a business venture supported by some combination of a paid subscription model, advertising or product delivered after sale.

People are motivated to create a podcast for a number of reasons. The podcast producer, who is often the podcast host as well, may wish to express a personal passion, increase professional visibility, enter into a social network of influencers or influential ideas, cultivate a community of like-minded viewership, or put forward pedagogical or ideological ideas (possibly under philanthropic support).

Because podcast content is often free or, at the very least, affordable for the average podcast consumer, podcasting is often classified as a disruptive medium, which is averse to the maintenance of traditional revenue models. Long-running podcasts with a substantial back catalogue are amenable to binge consumption.

Vodcasts

A step beyond podcasting, vodcasting, also called video podcasting or vlogging, adds video to the downloadable sound files podcast listeners are used to. Download the video files is a simple matter of subscribing to a vodcast in one of the many freely available directory programs.

After downloading and saving them to a portable video player, users can choose when and where they want to watch the video, making them independent of television programming schedules. A number of vodcasting tools also exist to help turn people from mere video consumers to producers.

Apple added vodcasting support to its popular iTunes software, which lets users subscribe to pod and vodcasts and automatically downloads the most recent updates. Ipodder, another popular service that started with podcasts, also has a vodcast directory.

Vodcasts’ large file size makes a flat rate, broadband Internet connection a necessity to speed up downloads and keeps costs down. Watching the video away from the computer also requires a mobile video player, which are often built into newer PDAs and many MP3 players, including the iPod Video.

  • A video file that is posted to some site and which is automatically downloaded by subscribers of the site.
  • A video podcast, or video clip distributed on the Internet and available for download through RSS subscription and aggregation for playback on computers or portable devices.
  • Also referred to as a Video Podcast, is a syndicated web feed of audio and video files available through the Internet.
  • A type of podcast that contains full motion video. VOD, the first three letters of vodcast are an acronym for “video on demand” but when coupled with podcast subscription is better described as a “vodcast.”

Engagement:

Research all you can:

A good vodcast like all other alternatives also requires in-depth research. The finished product is a true replica of the amount of research and study one has done for it and also depends on the success or failure of the podcast. Take inspiration; learn from vodcast examples, vodcast sites to get better.

Choose your channels:

Ensuring you post on the right forums in the next important thing hence make a list of all different medium you can target to publish your vodcast. Since this is a new trend, you will first have to check its flexibility on the domains you’re targeting and then proceed.

Go with a calendar:

Although creating a vodcast can be a pretty exclusive, time-consuming and even costly affair, a calendar can definitely make things a whole lot easier. Try creating goals that can be met instead of burdening yourself with it all at ones. Keep wholesome breathing space between creating a vodcast and podcast since churning them out every week will surely hamper the quality and add to the exhaustion.

Announce your new offering everywhere you can:

Since you’re taking a big step with digital marketing, the fact that vodcasts are being created should be highlighted on your social media so people are aware of what you’re doing. Once your followers know your offerings they will be curious to check it out.

Choose how frequently you wish to broadcast:

Keep a considerable time gap between the days you choose to upload a vodcast. For ease of making, you could create two at a time, depending if you’re able to work up both the script and video together, however, make sure to shoot them only one at a time. Doing too many at once will come forth as being too promotional.

Work on great content:

Although visuals surpass audio content in most scenarios and even for a vodcast the same can be considered, it is definitely important to consider your content with graphics. In this scenario, one can understand the vodcast software they plan to use and how it can merge your content and video in the best possible manner to ensure both shine in their own ways and produce a splendid outcome.

University of Mumbai BMS Notes

Promoting Web Traffic

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Harness the power of social media

Social media isn’t just a way for your friends from high school to show off pictures of their children or snap photos of what they ate for lunch. It’s also an effective way to promote a website, as it helps businesses reach a diverse audience and build brand awareness.

Whether it’s on Facebook, Twitter or Instagram, social media marketing is important for engaging followers. Importantly, posting compelling content increases the chances that your audience will share it which is free promotion for your website. And the more people click on your content, the more chances you’ll have of getting website traffic and improving your conversion rate.

Submit your site to online directories

In addition to optimizing your SEO to help people discover your website, you’ll want to submit your site to online directories. Online directories make it easy for people to find your URL and navigate to your site. Depending on your industry, there may be a directory for your specific business type.

Try guest blogging

Expand your website promotion even further by collaborating with a guest blogger. When another writer in your industry writes a post on your own blog, you expand your reach to their audience and gain quality leads. In addition, connecting with writers who are already established in their field helps you grow your own network. This can bring you more exposure, traffic and social media shares.

Solidify your website SEO

SEO, or search engine optimization, is one of the most effective ways to promote a website, as it helps improve a site’s ranking on Google and other search engines. Unlike paid search ads, SEO is totally free the competition is open to everyone, based on the quality of the content you publish, the fluidity of the navigation you offer to your visitors, and the number of links you receive from external sources.

You can achieve strong SEO by placing certain keywords and phrases throughout your website, adding alt text to your images and optimizing your headings so that your website can get found on search engines.

Take advantage of email marketing

There’s a reason you always see email marketing placed high up on articles that talk about how to drive traffic to your website. Why? Because it’s proven to be effective over and over. In fact, its average rate of return can be as high as 4400%, or $44 for every dollar spent.

Start a blog

When considering how to promote your website, a good practice is to create a blog to bolster your SEO and increase your site’s rank on search engines. Blogging makes it easier for people to find your site and discover your business. On top of that, it helps you establish yourself as an authority in your field and can dramatically improve your conversion rate.

University of Mumbai BMS Notes

Legal Issues in E-commerce in India

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Electronic commerce or e-commerce legal issues industry in India has come a long way since its early days and has been growing rapidly across the world. The industry has matured and has seen the entry of many new players in the market. India is considered as a profitable market for these e-commerce businesses.

Competition

E-commerce legal issues have seen a generation of new players and the merging and acquisition between several old players. This has enabled development of new services, distribution channels and far greater efficiency in business activities than ever before. This development has the possibility of leading to certain competition issues with respect to the development of strategies for growing the network and maintaining their market power.

Data Protection

Security of the information provided during an online transaction is a major concern.

The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 and the Section 43A of the IT Act together provide a structure and guidelines for the protection of data in India.

It is required of the Company to take all reasonable precautions to prevent any corruption, damage, loss or destruction of the private information and/ or data, even upon the termination of the contract between the parties.

The contracts often have specific clauses to deal with such privacy concerns and they bind all employees, agents, and subcontractors.

Security of the information provided during the online transaction is a major concern. Under section 43A of the IT Act the “Reasonable practices and procedures and sensitive personal data or information Rules, 2011” have been proposed, which provide a framework for the protection of data in India. Data can be personal, which has been defined as “any information that relates to a natural person, which, either directly or indirectly, in combination with other information available or likely to be available with a body corporate, is capable of identifying such person.” The date can also be sensitive and a sensitive personal data consists of password, financial information, physical, physiological and mental health condition, sexual orientation, medical records and history and biometric information. The entity collecting data should have a privacy policy in place, should always obtain consent from the provider of sensitive information and maintain reasonable security practices and procedures. Unauthorized access to personal information and any misuse of such personal information should be checked by the online goods/service providers.

E-Contracts

Electronic contracts are governed by the basic principles provided in the Indian Contract Act, 1872 (“ICA”), which mandates that a valid contract should have been entered with a free consent and for a lawful consideration between two adults. Section 10A of the Information Technology Act, 2000 (“IT Act”) provides validity to e-contracts. So, both ICA and IT Act needs to be read in conjunction to understand and provide legal validity to e-contracts. Further, section 3 of the Evidence Act provides that the evidence may be in electronic form.

Both the Indian Contract Act and the IT Act must be read in conjunction to understand the legal validity of e-contracts. Thus, e-contracts are governed by the basic principles of a valid contract that mandates that the contract must be entered in with free consent and a lawful consideration between two competent parties.

Also, Section 10A of the Information Technology Act, 2000 (“IT Act”) provides the validity of the e-contracts.

On e-commerce websites that operate in an online environment, the possibility of minors entering into contracts is very high. Hence, it is crucial for an online business portal consider such possibility and provides a form on the website stating that the individual with whom it is trading or entering into the e-contract has attained the age of majority.

Intellectual Property Rights

E-commerce websites are designed and sometimes operated by other parties specializing in the field. Often the content is also managed by a third party. Thus, unless the agreement between the parties specifically provides the IP rights, there is a possibility of infringement subject to the trademark, copyright or patent on an online platform.

Some others Concern:

  • Ensure proper online contracts
  • Original documentation in relation to taxation
  • Record retention obligations
  • Exchange control regulation
  • Import-export regulations
  • Foreign data protection law
  • Terms and conditions must be specific depending upon the nature of the goods & services offered and not generic.
  • Reasonable efforts to prevent the unauthorized transaction.
Management Notes

Payment Gateway, Types, Advantages and Disadvantages

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Payment gateway is a technology that facilitates secure online transactions between customers and merchants. It acts as a bridge between the merchant’s website or app and the financial institutions involved in processing payments. When a customer enters payment details (like credit/debit card or UPI), the gateway encrypts and securely transmits the information for authorization. Once approved, the transaction is completed, and funds are transferred to the merchant’s account. Payment gateways ensure fraud prevention, data security, and fast transaction processing. Examples include Razorpay, PayPal, and Stripe. They are crucial for e-commerce, subscription services, and digital platforms.

Types of Payment Gateway:

  • Hosted Payment Gateway

A hosted payment gateway redirects users from the merchant’s site to a secure third-party payment page (like PayPal or Razorpay) to complete the transaction. After payment, the customer is redirected back. This type ensures high security and PCI compliance since the transaction occurs outside the merchant’s platform. However, it may affect user experience due to the redirection. It is ideal for small and medium businesses that prioritize security and ease of setup over customization.

  • Self-Hosted Payment Gateway

A self-hosted payment gateway allows businesses to collect payment details on their own website and send this data to the gateway’s URL for processing. It gives merchants control over the user experience and branding. However, it requires them to ensure security standards like PCI DSS compliance. This method is commonly used by medium to large-scale e-commerce businesses that have in-house technical expertise to manage and secure customer data.

  • API (Non–Hosted) Payment Gateway

An API-based payment gateway integrates directly into a website or app, allowing users to enter payment information without leaving the platform. It provides a seamless and fully customized checkout experience. However, it demands a high level of security management and technical infrastructure. Merchants must comply with security standards and maintain encrypted connections. This type is ideal for businesses that want complete control over the design and flow of the payment process.

  • Local Bank Integration Gateway

This gateway connects directly with local banks, allowing users to make payments via net banking. Customers are redirected to their bank’s website to log in and authorize the transaction. It’s secure and preferred in regions with strong banking networks but limited card use. However, it lacks global scalability and may not support cards or wallets. It suits domestic businesses targeting local customers and banking systems.

Advantages of Payment Gateway:

  • Secure Transactions

Payment gateways provide strong encryption and fraud protection, ensuring that sensitive customer data such as credit card details and personal information are securely processed. They comply with security standards like PCI-DSS, reducing the risk of data breaches. With multi-layered authentication and tokenization, both customers and merchants benefit from secure online transactions. This builds trust, enhances the reputation of the business, and encourages more users to make digital payments confidently, knowing their information is protected from unauthorized access and cyber threats.

  • Faster Payment Processing

Payment gateways speed up transaction processes by instantly validating and authorizing payments. This enables real-time confirmation for both merchants and customers, improving the overall shopping experience. The quick settlement of funds boosts cash flow for businesses and reduces the delay between purchase and payment. Automation of payment verification also decreases manual intervention, minimizing errors and saving operational time. Such speed and efficiency are essential for businesses dealing in e-commerce, subscriptions, or high-volume sales, where time and accuracy are critical to customer satisfaction and business growth.

  • Global Reach

With payment gateways, businesses can accept payments from customers across the globe using various currencies and payment methods. They support international credit/debit cards, wallets, and alternative payment methods, allowing digital entrepreneurs to expand their market reach beyond local boundaries. By providing a localized payment experience through multi-language and multi-currency support, gateways improve conversion rates. This feature is particularly beneficial for startups and e-commerce platforms looking to scale their operations globally, tap into new markets, and enhance the accessibility of their digital products or services.

  • Improved Customer Experience

A seamless, user-friendly checkout experience is crucial for customer satisfaction. Payment gateways integrate directly into websites and mobile apps, enabling quick and hassle-free transactions. Features like one-click payments, saved payment information, and mobile wallet compatibility streamline the buying process. Additionally, the ability to offer various payment options empowers customers to choose their preferred method. This reduces cart abandonment and increases the likelihood of repeat purchases. By enhancing convenience and efficiency, payment gateways contribute significantly to building customer loyalty and improving overall digital business performance.

Disadvantages of Payment Gateway:

  • Transaction Fees

Payment gateways often charge transaction or processing fees for each payment, which can add up significantly—especially for small or medium businesses. These fees may include a fixed charge plus a percentage of each transaction. Over time, this reduces profit margins and can impact pricing strategies. Additionally, international payments may incur higher fees due to currency conversion and cross-border charges. Businesses with high transaction volumes or low-margin products may find payment gateway fees a financial burden without proper cost planning.

  • Technical Integration Issues

Integrating a payment gateway into a website or mobile application requires technical knowledge and expertise. Poor integration can lead to payment failures, delays, or a frustrating customer experience. Frequent updates, API changes, and compatibility with different platforms can cause issues that require constant monitoring. Small businesses without dedicated IT support may struggle to implement or maintain the system. Any errors in integration could lead to abandoned carts or loss of sales, impacting customer trust and brand credibility.

  • Security and Fraud Risks

While payment gateways come with security protocols, they are still vulnerable to cyber threats, including phishing, hacking, or fraudulent transactions. Businesses handling sensitive payment information may become targets for cybercriminals. A data breach can result in financial loss, legal penalties, and loss of customer trust. Companies must invest in strong encryption, tokenization, and PCI DSS compliance, which may increase operational costs. Managing fraud prevention tools and keeping up with evolving threats requires constant vigilance and updates.

  • Dependence on Internet Connectivity

Payment gateways require a stable internet connection to function effectively. In areas with poor connectivity or during server outages, transactions may fail or be delayed, resulting in poor customer experience and loss of revenue. This reliance makes online businesses vulnerable during downtimes, and recovery may be slow without proper technical support. Offline alternatives are limited, so businesses must ensure they have backup systems or alternative modes of payment to avoid complete service disruption.

University of Mumbai BMS Notes

E-Commerce Laws: Need for E-Commerce laws

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Applicable Laws & Regulations

Regulatory Technology & Data Protection
1.     Foreign Direct Investment Policy

2.     Further, the Foreign Exchange Management Act, 1999  Companies Act, 2013

3.     Payment and Settlement Act, 2007 and other RBI regulations on payment mechanisms

4.     Labelling and Packaging

5.     Legal Metrology Act, 2009 read with Legal Metrology (Packaged Commodity) Rules, 2011

6.     Sales, Shipping, Refunds and Returns

7.     Moreover, Regulations prescribed by the relevant ministry/state regulations

 1.     Information Technology Act, 2000 

2.     Additionally, Information Technology (Intermediaries Guidelines) Rules, 2011 

3.     Information Technology Act, 2000 (IT Act) and General Data Protection Regulations (GDPR).

4.     Consumer Protection Act, 1986
Tax Legal
1.     Income Tax Act, 1961

2.     Double Taxation Avoidance Agreement

3.     Good and Services Tax

 1.     Indian Contract Act, 1872

2.     Indian Copyright Act, 1957

3.     The Patents Act, 1970

4.     Intellectual Property Issues

5.     Labour laws

Other Conditions include:

  • Marketplace e-commerce entities will be permitted to enter into transactions with sellers registered on its platform on a B2B basis.
  • E-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfilment, call centre, payment collection, and other services.
  • Digital & electronic networks will include a network of computers, television channels, and any other internet application used in an automated manner such as web pages, extranets, mobiles, etc.
  • An e-commerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies.
  • In the marketplace model goods/services made available for sale electronically on the website should provide the name, address, and other contact details of the seller. Post-sales, delivery of goods to the customers, and customer satisfaction will be the responsibility of the seller.
  • E-commerce entities providing a marketplace will not exercise ownership over the inventory i.e. goods purported to be sold. Such an ownership over the inventory will render the business into an inventory-based model.
  • In the marketplace model, payments for sale may be facilitated by the e-commerce entity in conformity with the guidelines of the Reserve Bank of India.
  • Similarly, In the marketplace model, any warranty/ guarantee of goods and services sold will be the responsibility of the seller.
  • E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.
  • Further, guidelines on cash and carry wholesale trading as given in para 6.2.16.1.2 of the FDI Policy will apply to B2B e-commerce.
Type of Entity Permitted Activities Can Keep Inventory? Permitted FDI/Route
E-commerce entity Marketplace Model (for goods and services:

B2C e-commerce)

 No 100% Automatic
Manufacturer B2B and B2C e-commerce

(Selling its products manufactured in India, through wholesale and/or retail through e-commerce)

 Yes 100% Automatic
Cash & Carry Wholesale Trader B2B e-commerce

(sells goods to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers)

 Yes 100% Automatic
Single Brand Retail Trader B2C e-commerce (at least 30% Indian sourcing of products, and must be operating through at least one brick and mortar store) Yes 100% Automatic
Food Product Retail Trader B2C e-commerce (retail trading of food products manufactured and/or produced in India) Yes 100% Government Approval
Services (Subject to respective conditions and applicable laws) sale of services through e-commerce (Relevant Sectoral Cap) Automatic

Note: Many laws applicable in e-commerce and it is in developing stage., Pl Update here in comment section about any latest changes.

Need for E-Commerce laws

Management Notes

E-Trading, Introduction, Meaning, Definition, Objectives, Features, Process, Advantages and Limitations

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E-Trading, or Electronic Trading, refers to the process of buying and selling securities through electronic platforms using computers, smartphones, and the internet. It has revolutionized the financial market by replacing traditional floor-based trading systems with fast, efficient, and transparent electronic systems. Investors can access stock exchanges, place orders, monitor market movements, and manage their investments from any location. E-Trading has increased market participation, reduced transaction costs, and improved the speed of trade execution. Today, it is one of the most important developments in modern financial services and capital markets.

Meaning of E-Trading

E-Trading is a method of conducting securities transactions electronically through online trading platforms connected to stock exchanges. Investors use internet-based systems provided by brokers to buy and sell shares, bonds, mutual funds, derivatives, and other financial instruments. Orders are transmitted electronically and matched automatically by the stock exchange trading system.

Definition of E-Trading

E-Trading can be defined as the electronic execution of financial transactions through computerized networks that connect investors, brokers, and stock exchanges, enabling the purchase and sale of securities without physical interaction.

Objectives of E-Trading

  • Improving Market Efficiency

One of the primary objectives of E-Trading is to improve the efficiency of financial markets. Electronic trading systems automate the process of placing, matching, and executing orders, reducing delays and manual intervention. Investors can execute transactions quickly and accurately, resulting in smoother market operations. The use of advanced technology minimizes errors and enhances the speed of information processing. Efficient trading systems increase market liquidity and ensure that securities are traded at fair prices. By improving operational efficiency, E-Trading strengthens the overall performance of stock exchanges and contributes to a more effective financial market environment.

  • Enhancing Transparency

E-Trading aims to create a transparent trading environment where all investors have access to the same market information. Electronic platforms provide real-time updates on security prices, trading volumes, market indices, and company announcements. This transparency reduces information asymmetry and enables investors to make informed decisions. Since all transactions are recorded electronically, there is greater accountability and reduced scope for manipulation. Transparent trading practices increase investor confidence and trust in the market. By ensuring equal access to information, E-Trading promotes fairness and helps maintain the integrity of financial markets.

  • Reducing Transaction Costs

A significant objective of E-Trading is to reduce the cost associated with securities transactions. Traditional trading methods involved substantial paperwork, manual processing, and higher brokerage charges. Electronic trading eliminates many of these expenses by automating transactions and reducing administrative requirements. Investors can place orders directly through online platforms, lowering operational costs for brokers and exchanges. Reduced transaction costs make investing more affordable and accessible to a larger population. This objective encourages greater participation in financial markets and increases the overall efficiency of capital allocation within the economy.

  • Providing Easy Market Access

E-Trading seeks to provide convenient and easy access to financial markets for investors. Through internet-based trading platforms and mobile applications, investors can buy and sell securities from virtually any location. There is no need to physically visit a stock exchange or brokerage office. This accessibility expands market participation by enabling people from different geographical regions to invest in securities. Easy access also benefits individuals with limited time by allowing them to monitor and manage investments conveniently. As a result, E-Trading promotes financial inclusion and broadens the investor base within the capital market.

  • Ensuring Faster Trade Execution

One of the important objectives of E-Trading is to ensure rapid execution of buy and sell orders. Electronic systems process orders within seconds, significantly reducing delays associated with traditional trading methods. Faster execution enables investors to take advantage of market opportunities and respond quickly to changing market conditions. Automated order matching systems ensure accuracy and fairness in trade execution. Quick transaction processing improves liquidity and enhances overall market performance. By minimizing execution time, E-Trading increases investor satisfaction and supports the efficient functioning of financial markets.

  • Promoting Investor Participation

E-Trading aims to encourage greater participation from both individual and institutional investors. The convenience, accessibility, and affordability of online trading platforms attract a larger number of market participants. Investors can access financial markets with minimal infrastructure and lower transaction costs. Educational resources, research tools, and market information available on trading platforms help investors make informed decisions. Increased participation enhances market liquidity and improves price discovery mechanisms. By creating a user-friendly trading environment, E-Trading encourages broader involvement in investment activities and supports the growth of capital markets.

  • Facilitating Secure Transactions

A key objective of E-Trading is to provide a secure environment for financial transactions. Modern electronic trading systems use encryption technologies, authentication procedures, and cybersecurity measures to protect investor data and financial assets. Electronic records reduce the risks associated with physical documentation, such as loss, theft, or forgery. Secure trading platforms ensure that transactions are processed accurately and confidentially. Investor confidence increases when financial activities are conducted in a safe and reliable environment. Therefore, maintaining transaction security is a fundamental objective that supports the credibility and stability of E-Trading systems.

  • Supporting Efficient Settlement and Record Keeping

E-Trading aims to improve settlement processes and maintain accurate transaction records. Electronic systems facilitate seamless transfer of securities and funds through integrated clearing and settlement mechanisms. Automated record keeping ensures that all transactions are documented accurately and can be easily retrieved when needed. This reduces administrative burdens and minimizes the likelihood of disputes or errors. Efficient settlement systems decrease operational risks and improve market reliability. Accurate records also support regulatory compliance and auditing requirements. By enhancing settlement and record management, E-Trading contributes to the smooth and efficient operation of financial markets.

Features of E-Trading

  • Electronic Trading Platform

One of the most important features of E-Trading is the use of electronic trading platforms. Investors can access stock markets through web-based portals or mobile applications provided by brokers. These platforms allow users to place buy and sell orders, track investments, and monitor market performance in real time. The electronic nature of the system eliminates the need for physical presence at stock exchanges. Trading platforms are designed to be user-friendly and efficient, enabling investors to conduct transactions conveniently. This feature has significantly transformed securities trading by making it faster, more accessible, and technologically advanced.

  • Real-Time Market Information

E-Trading provides investors with real-time access to market information. Prices of securities, market indices, trading volumes, company announcements, and other relevant data are continuously updated. This feature helps investors make informed decisions based on current market conditions. Access to accurate and timely information reduces uncertainty and enhances transparency in the trading process. Investors can analyze trends, compare investment opportunities, and respond quickly to market movements. Real-time information improves decision-making quality and contributes to efficient price discovery. As a result, E-Trading creates a more transparent and responsive financial market environment.

  • Fast Order Execution

A major feature of E-Trading is the rapid execution of transactions. Electronic systems process and execute buy and sell orders within seconds. Once an investor places an order, it is automatically transmitted to the stock exchange and matched with a corresponding order. This speed allows investors to take advantage of favorable market opportunities and react promptly to price changes. Faster execution reduces delays associated with traditional trading methods and improves market efficiency. Quick transaction processing enhances investor satisfaction and supports higher trading volumes. Consequently, fast order execution is a key advantage of modern electronic trading systems.

  • Paperless Transactions

E-Trading operates through a completely paperless system. Orders, confirmations, settlements, and account statements are processed electronically, eliminating the need for physical documents. This feature reduces administrative costs, minimizes paperwork, and improves operational efficiency. Paperless transactions also decrease the risk of document loss, damage, forgery, or delays. Electronic records can be stored securely and accessed easily whenever required. The transition from manual documentation to digital processing has simplified trading activities and enhanced convenience for investors. This feature contributes significantly to the modernization and sustainability of financial market operations.

  • Accessibility from Anywhere

One of the most attractive features of E-Trading is its accessibility. Investors can trade securities from any location with an internet connection. Whether at home, in the office, or while traveling, users can access trading platforms through computers, tablets, or smartphones. This feature removes geographical barriers and allows broader participation in financial markets. Investors no longer need to visit broker offices or stock exchange premises to conduct transactions. Increased accessibility promotes financial inclusion and encourages more people to participate in investment activities. As a result, E-Trading has expanded the reach and popularity of capital markets.

  • Integration with Demat Accounts

E-Trading is closely integrated with Demat accounts, which hold securities in electronic form. When securities are purchased, they are automatically credited to the investor’s Demat account, and when sold, they are debited accordingly. This integration simplifies the settlement process and eliminates the need for physical share certificates. Electronic transfer of securities reduces risks associated with theft, loss, and forgery. It also improves the speed and accuracy of transactions. The seamless connection between trading accounts and Demat accounts enhances convenience and efficiency, making E-Trading a secure and reliable investment mechanism.

  • Enhanced Security Measures

Security is a crucial feature of E-Trading systems. Online trading platforms employ advanced technologies such as encryption, firewalls, multi-factor authentication, and secure login procedures to protect investor information and financial assets. Electronic records provide clear transaction histories, reducing the possibility of disputes and fraudulent activities. Regular monitoring and cybersecurity measures help safeguard systems against unauthorized access and cyber threats. These security features build investor confidence and ensure that transactions are conducted safely. As financial markets become increasingly digital, robust security remains an essential feature that supports the credibility of E-Trading.

  • Automated Order Matching and Settlement

E-Trading systems use automated mechanisms for order matching and settlement. Buy and sell orders are matched electronically based on price and time priority without human intervention. This automation ensures fairness, transparency, and efficiency in trade execution. After execution, integrated clearing and settlement systems facilitate the transfer of funds and securities. Automated processes reduce operational errors, improve accuracy, and accelerate settlement cycles. Investors receive timely confirmation of transactions and updated account records. This feature enhances the reliability and efficiency of market operations, making E-Trading an effective tool for modern securities trading.

Process of E-Trading

E-Trading is the process of buying and selling securities electronically through internet-based trading platforms. It has replaced traditional manual trading methods with fast, secure, and efficient digital systems. The process involves several steps, beginning with opening the required accounts and ending with the settlement of securities and funds. Modern stock exchanges use advanced technology to ensure transparency, accuracy, and quick execution of transactions. Understanding the process of E-Trading helps investors participate effectively in the stock market and make informed investment decisions.

Step 1. Opening a Demat Account

The first step in the E-Trading process is opening a Demat (Dematerialized) account with a registered Depository Participant (DP). A Demat account holds securities in electronic form and eliminates the need for physical share certificates. Investors must submit documents such as identity proof, address proof, PAN card, and bank account details to complete the account-opening process. The Demat account ensures the safe storage and transfer of securities. It also reduces the risks of loss, theft, damage, or forgery associated with physical certificates. A Demat account is mandatory for participating in electronic trading.

Step 2. Opening a Trading Account

After opening a Demat account, the investor must open a trading account with a registered stockbroker. The trading account acts as an interface between the investor and the stock exchange. Through this account, investors can place buy and sell orders for securities. Brokers provide online trading platforms and mobile applications that enable easy market access. The trading account records all transactions and allows investors to monitor their portfolio. It also facilitates communication between the investor and the stock exchange. Without a trading account, electronic trading cannot be conducted.

Step 3. Linking Bank Account

The next step is linking a bank account to the trading and Demat accounts. The bank account is used for transferring funds required to purchase securities and for receiving proceeds from sales. Investors must provide accurate banking information during the account setup process. Integration of the bank account ensures seamless movement of money during transactions. It also simplifies fund transfers and settlement procedures. The linked bank account creates a complete electronic trading framework by connecting financial resources with trading and investment activities, making transactions efficient and convenient.

Step 4. Logging into the Trading Platform

Once the accounts are activated, investors can log into the broker’s online trading platform using a secure username and password. Modern trading platforms are accessible through computers, tablets, and smartphones. After logging in, investors can view market information, analyze securities, monitor portfolio performance, and place orders. Trading platforms provide real-time updates on prices, market indices, and company announcements. This stage enables investors to access the stock market electronically and make investment decisions based on current market conditions. Secure login systems ensure the protection of investor data and transactions.

Step 5. Market Analysis and Selection of Securities

Before placing an order, investors analyze market conditions and select the securities they wish to buy or sell. They may use technical analysis, fundamental analysis, research reports, and market news available on the trading platform. Investors evaluate factors such as company performance, industry trends, economic conditions, and risk levels. Proper analysis helps identify suitable investment opportunities and reduces the chances of poor decision-making. This stage is critical because informed investment decisions can significantly influence returns. Market analysis forms the foundation of successful E-Trading activities.

Step 6. Placing the Order

After selecting a security, the investor places a buy or sell order through the trading platform. The order contains details such as the name of the security, quantity, price, and type of order. Investors may place a market order, which executes at the current market price, or a limit order, which executes at a specified price. The trading platform instantly transmits the order to the broker’s system. Accurate order placement is essential because it determines how and when the transaction will be executed in the market.

Step 7. Order Execution and Matching

Once the order reaches the stock exchange, the electronic trading system automatically matches it with a corresponding buy or sell order. Matching occurs based on price and time priority. When a suitable match is found, the trade is executed immediately. The stock exchange sends confirmation to the broker, who then updates the investor’s trading account. Automated order matching ensures fairness, transparency, and efficiency. Since the process is computerized, transactions are completed within seconds. This stage represents the core function of E-Trading, where actual buying and selling of securities take place.

Step 8. Clearing and Settlement

The final step of E-Trading is clearing and settlement. After trade execution, the clearing corporation calculates the obligations of buyers and sellers. During settlement, funds are transferred from the buyer’s bank account to the seller, while securities are transferred from the seller’s Demat account to the buyer’s Demat account. Modern stock exchanges generally follow a T+1 settlement cycle, meaning settlement occurs one business day after the trade date. Once settlement is completed, the investor’s account balances are updated. This stage officially concludes the E-Trading transaction and ensures the transfer of ownership.

Advantages of E-Trading

  • Convenience and Accessibility

One of the greatest advantages of E-Trading is its convenience and accessibility. Investors can buy and sell securities from any location using a computer, tablet, or smartphone with an internet connection. There is no need to visit a broker’s office or stock exchange. Trading can be conducted from home, the workplace, or while traveling. This flexibility saves time and effort while making investment activities more convenient. Easy accessibility encourages greater participation in financial markets and allows investors from remote areas to engage in trading activities, thereby promoting financial inclusion and market expansion.

  • Faster Execution of Transactions

E-Trading enables rapid execution of buy and sell orders. Once an investor places an order, it is transmitted electronically to the stock exchange and processed within seconds. Automated order-matching systems ensure quick and accurate trade execution. Faster transactions help investors take advantage of market opportunities and respond promptly to price changes. The speed of E-Trading reduces delays associated with traditional trading methods and improves overall market efficiency. Quick execution also enhances investor satisfaction and supports higher trading volumes. As a result, E-Trading contributes significantly to the smooth functioning of financial markets.

  • Lower Transaction Costs

Another important advantage of E-Trading is the reduction in transaction costs. Traditional trading involved extensive paperwork, manual processing, and higher brokerage fees. Electronic trading eliminates many administrative expenses and streamlines operations. Online brokers often charge lower fees compared to traditional brokerage services. Reduced transaction costs make investing more affordable and attractive to a larger number of investors. Lower costs also improve investment returns by minimizing expenses associated with trading activities. This advantage encourages greater participation in capital markets and enhances the efficiency of financial transactions within the economy.

  • Real-Time Market Information

E-Trading provides investors with real-time access to market information, including security prices, trading volumes, market indices, and corporate announcements. Continuous updates help investors monitor market conditions and make informed decisions. Access to timely information improves investment planning and reduces uncertainty. Investors can react quickly to market developments and adjust their strategies accordingly. Real-time data also enhances transparency by ensuring that all market participants receive information simultaneously. This feature supports fair trading practices and efficient price discovery. Consequently, E-Trading empowers investors with valuable information needed for effective decision-making.

  • Improved Transparency

Transparency is a major advantage of E-Trading systems. Electronic platforms record all transactions and provide detailed information about orders, prices, and trade execution. Investors can easily verify transaction details and monitor account activities. Since market information is available to all participants simultaneously, opportunities for unfair practices and information manipulation are reduced. Transparent trading processes increase investor confidence and trust in financial markets. Regulatory authorities can also monitor trading activities more effectively through electronic records. By promoting openness and accountability, E-Trading contributes to the integrity and credibility of capital markets.

  • Paperless and Environment-Friendly Operations

E-Trading operates through a paperless system, eliminating the need for physical documents such as share certificates, trade slips, and account statements. Electronic processing reduces paperwork and administrative burdens for investors, brokers, and stock exchanges. Digital records are easier to store, retrieve, and manage compared to physical documents. The reduction in paper usage also supports environmental sustainability by conserving natural resources and reducing waste. Paperless operations improve efficiency while minimizing the risks associated with loss, damage, or forgery of documents. This advantage reflects the technological advancement and environmental benefits of E-Trading.

  • Better Portfolio Management

E-Trading platforms provide investors with tools for effective portfolio management. Investors can monitor their holdings, track performance, analyze returns, and review transaction history in real time. Many platforms offer research reports, market analysis, and portfolio evaluation features that assist in investment decision-making. These tools help investors diversify their investments and manage risk more effectively. Easy access to account information improves financial planning and investment control. Better portfolio management enables investors to align their investment strategies with financial goals. Consequently, E-Trading enhances the overall investment experience and supports long-term wealth creation.

  • Enhanced Security and Accuracy

Modern E-Trading systems incorporate advanced security measures such as encryption, authentication protocols, and secure login procedures. These features protect investor information and financial assets from unauthorized access. Electronic transactions reduce the likelihood of human errors associated with manual processing. Automated systems ensure accurate order execution, record keeping, and settlement. Investors can access detailed transaction histories that improve accountability and reduce disputes. Strong security and accuracy enhance confidence in online trading platforms and encourage greater market participation. Therefore, E-Trading provides a safe and reliable environment for conducting financial transactions.

Limitations of E-Trading

  • Dependence on Internet Connectivity

One of the major limitations of E-Trading is its complete dependence on internet connectivity. Investors require a stable and fast internet connection to access trading platforms and execute transactions. Any disruption in connectivity can prevent investors from placing orders or monitoring market movements. During periods of high market volatility, even short interruptions may result in missed opportunities or financial losses. Investors in remote areas with poor internet infrastructure may face additional difficulties. This dependence on technology creates operational challenges and can negatively affect the trading experience, especially when immediate market action is required.

  • Risk of Cybersecurity Threats

E-Trading platforms are vulnerable to cybersecurity risks such as hacking, phishing, malware attacks, and unauthorized access. Cybercriminals may attempt to steal sensitive information, including login credentials, financial details, and investment records. Such attacks can lead to financial losses and compromise investor privacy. Although brokers and exchanges implement advanced security measures, no system is entirely immune to cyber threats. Investors must remain vigilant and adopt safe online practices. The growing reliance on digital platforms makes cybersecurity a significant concern, highlighting one of the most important limitations of E-Trading in modern financial markets.

  • Technical System Failures

Technical failures can disrupt E-Trading operations and affect investors’ ability to trade efficiently. Problems such as server crashes, software glitches, hardware malfunctions, and platform downtime may occur unexpectedly. These issues can delay order execution, prevent access to trading accounts, or result in incomplete transactions. During periods of heavy trading activity, system overloads can further increase the likelihood of technical disruptions. Investors may suffer losses if they are unable to respond to market movements promptly. Therefore, dependence on technological infrastructure makes E-Trading susceptible to operational risks associated with system failures.

  • Lack of Personal Interaction

Unlike traditional trading methods, E-Trading offers limited personal interaction between investors and brokers. Investors often make decisions independently through online platforms without direct guidance from financial professionals. While experienced investors may find this beneficial, beginners may struggle to understand market trends and investment strategies. The absence of personalized advice can lead to poor investment decisions and increased risk exposure. Some investors prefer face-to-face consultations to discuss financial goals and investment opportunities. The reduced level of human interaction in E-Trading can therefore be a disadvantage, particularly for inexperienced or less confident investors.

  • Risk of Overtrading

The ease and convenience of E-Trading may encourage investors to trade excessively. Since orders can be placed instantly, some individuals may engage in frequent buying and selling without adequate analysis or planning. Overtrading often leads to higher transaction costs and increased exposure to market risks. Emotional reactions to short-term market fluctuations can further encourage impulsive trading behavior. Instead of focusing on long-term investment objectives, investors may become preoccupied with daily price movements. This tendency can negatively affect portfolio performance and financial discipline, making overtrading a significant limitation of electronic trading systems.

  • Information Overload

E-Trading platforms provide vast amounts of market information, including price updates, charts, research reports, financial news, and analytical tools. While access to information is generally beneficial, excessive information can overwhelm investors, particularly beginners. Investors may struggle to distinguish relevant data from less important information. Information overload can create confusion, delay decision-making, and increase the likelihood of errors. Constant exposure to market news may also lead to emotional decision-making rather than rational analysis. Therefore, the abundance of information available through E-Trading platforms can sometimes become a disadvantage rather than an advantage.

  • Limited Understanding of Market Risks

Many investors enter E-Trading because of its simplicity and accessibility without fully understanding the risks associated with financial markets. Easy access to trading platforms may create a false sense of confidence and encourage participation without adequate knowledge or experience. Investors who lack financial literacy may misinterpret market information and make inappropriate investment decisions. The availability of sophisticated trading tools does not guarantee successful outcomes. Without proper education and risk management, investors may incur significant losses. This limitation highlights the importance of investor awareness and financial knowledge in electronic trading environments.

  • Security and Privacy Concerns

Although E-Trading platforms employ security measures, concerns regarding data privacy and account security remain. Personal information, banking details, and investment records are stored electronically, making them potential targets for unauthorized access. Investors may worry about the misuse of sensitive data or breaches of confidentiality. In addition, fraudulent websites and fake trading applications can deceive unsuspecting users. Security concerns can reduce investor confidence and discourage participation in online trading activities. Maintaining strong privacy protection and secure digital infrastructure is therefore essential. Nevertheless, concerns about security and privacy continue to be a notable limitation of E-Trading.

Management Notes

Introduction to E-Procurement, GEM Portal

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E–Procurement (Electronic Procurement) is the use of digital platforms and internet-based technologies to carry out all or part of the procurement process for goods and services. It includes functions like vendor registration, online bidding, tendering, purchase orders, invoicing, and payments. E-Procurement enhances transparency, reduces paperwork, minimizes delays, and improves efficiency in procurement operations. It allows real-time tracking, better price comparisons, and centralized data management. Governments and large organizations widely adopt e-procurement systems to promote accountability and reduce corruption. Tools like GeM (Government e-Marketplace) in India are examples. Overall, e-procurement streamlines the traditional buying process by making it faster, more transparent, and cost-effective.

Functions of E-Procurement:

  • Vendor Registration and Management

E-Procurement systems facilitate online vendor registration, allowing suppliers to submit their details, qualifications, certifications, and product catalogs. This function helps organizations maintain an updated and verified list of qualified vendors. It streamlines the selection process, ensures compliance with procurement policies, and reduces the risk of fraud. The system also enables vendor performance tracking and relationship management through ratings and feedback. Automated alerts, approval workflows, and data storage improve transparency and efficiency. This function ensures only compliant and capable suppliers are considered for procurement, creating a fair and competitive environment.

  • Online Tendering and Bidding

E-Procurement platforms allow organizations to publish tenders and receive bids electronically. It replaces traditional manual tendering with a faster, more transparent process. Registered vendors can download tender documents, submit bids, and seek clarifications through the portal. The system supports automated evaluation, deadline enforcement, and bid comparisons. Features like encryption and digital signatures ensure confidentiality and legal validity. Online tendering reduces paperwork, minimizes delays, and discourages favoritism or manipulation. It promotes fair competition and helps achieve best value for money in procurement decisions while ensuring full auditability of every transaction.

  • E-Catalog Management

E-Catalog management involves maintaining an online repository of approved products and services with standardized descriptions, prices, and specifications. It allows buyers to easily browse, compare, and select items for purchase. Vendors update their catalogs, which buyers access via the procurement portal. This function reduces the need for repeated negotiations and simplifies routine purchases. It supports contract compliance, budget control, and price consistency. Integrated catalogs enhance procurement accuracy and reduce manual errors by using predefined items. E-Catalogs are especially useful for recurring or low-value purchases under rate contracts or framework agreements.

  • Purchase Order Management

E-Procurement automates the generation, transmission, and tracking of Purchase Orders (POs). Once a requisition is approved, a PO is created and sent to the vendor electronically. This function ensures clarity in specifications, delivery schedules, terms, and pricing. It reduces manual intervention and errors, and provides a real-time record of purchase commitments. The system also allows PO amendments, acknowledgment from suppliers, and integration with inventory and accounting systems. Automated PO workflows help maintain control over expenditures and streamline order fulfillment and audit trails, leading to better supplier coordination and cost efficiency.

  • Invoice and Payment Processing

This function allows vendors to submit electronic invoices that are matched against purchase orders and goods received notes (GRNs). The system validates invoice details, checks for duplicates, and routes them for approval. Once verified, payments are scheduled through integrated financial systems or banking platforms. E-Procurement ensures faster, more accurate payments, reducing disputes and improving supplier relationships. It supports GST compliance, TDS deduction, and other statutory reporting. Digital records of every transaction enable full traceability, audit readiness, and reduction in processing costs. This function brings transparency and efficiency to the accounts payable process.

GEM Portal

GeM (Government e-Marketplace) Portal is an online platform launched by the Government of India to facilitate transparent, efficient, and cost-effective procurement of goods and services by government departments, organizations, and public sector units (PSUs). It allows registered buyers and sellers to conduct end-to-end procurement digitally, including vendor registration, product listing, bidding, order placement, and payment processing. The GeM portal eliminates the need for physical tendering, promotes fair competition, and ensures transparency through real-time tracking and audit trails. It supports bulk purchases, rate contracts, and reverse auctions. With features like e-contracts and e-invoicing, GeM enhances accountability and reduces corruption.

Benefits of GeM:

  • Transparency and Efficiency

GeM ensures a high level of transparency in public procurement by eliminating manual processes and reducing human intervention. Every transaction on the platform is digitally recorded, traceable, and open to audit. The online bidding, reverse auction, and real-time tracking features prevent manipulation, favoritism, and corruption. Automation of workflows accelerates procurement cycles, reduces paperwork, and minimizes errors. Notifications and alerts at every stage keep both buyers and sellers informed. This transparency builds trust among stakeholders and enhances the credibility of government purchases, ultimately ensuring fair competition and better governance.

  • Cost Savings and Value for Money

GeM facilitates cost-effective procurement through features like reverse auctions, competitive bidding, and price trend analytics. Buyers can compare multiple products and services from different sellers, ensuring optimal pricing and quality. Standardized specifications and catalog-based purchases avoid overpricing and help control expenditure. GeM also eliminates intermediaries, reducing procurement costs further. The ability to negotiate and leverage bulk buying strengthens the purchasing power of government organizations. Overall, GeM ensures value for public money by promoting competition and informed decision-making, leading to significant savings for the government over time.

  • Accessibility for Small and Local Vendors

GeM provides an open, easy-to-use platform for MSMEs, startups, artisans, and women entrepreneurs to register and sell directly to government buyers. It levels the playing field by removing traditional barriers like middlemen, complex paperwork, and lobbying. The portal offers equal opportunities through transparent listing, order allocation, and performance-based recognition. It also supports initiatives like “Make in India” and “Vocal for Local” by encouraging the purchase of domestically produced goods. By promoting local vendors, GeM contributes to economic inclusiveness, job creation, and grassroots entrepreneurship across the country.

University of Mumbai BMS Notes

Brick and Mortar

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The term “brick-and-mortar” refers to a traditional street-side business that offers products and services to its customers face-to-face in an office or store that the business owns or rents. The local grocery store and the corner bank are examples of brick-and-mortar companies. Brick-and-mortar businesses have found it difficult to compete with mostly web-based businesses like Amazon.com Inc. (AMZN) because the latter usually have lower operating costs and greater flexibility.

Brick and mortar (also bricks and mortar or B&M) refers to a physical presence of an organization or business in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence (e.g., a retail shop in a building) and offer face-to-face customer experiences.

This term is usually used to contrast with a transitory business or an Internet-only presence, such as fully online shops, which have no physical presence for shoppers to visit, talk with staff in person, touch and handle products and buy from the firm in person. However, such online businesses normally have non-public physical facilities from which they either run business operations (e.g., the company headquarters and back office facilities), and/or warehouses for storing and distributing products. Concerns such as foot traffic, storefront visibility, and appealing interior design apply to brick-and-mortar businesses rather than online ones. An online-only business needs to have an attractive, well-designed website, a reliable e-commerce system for payment, a good delivery or shipping service and effective online marketing tactics to drive web traffic to the site. Governments are also adopting e-government approaches, which is the use of online services for citizens to enable them to fill in government forms, pay tax bills and register for government programs online; these services aim to cut bricks and mortar costs (building leasing/purchase and staff costs) and improve services to citizens (by offering 24/7 access to information and services).

Benefits

The presence of brick and mortar establishments may bring many benefits to businesses;

  • Customer service: face-to-face customer service can be a big contributor into increasing sales of a business and improving customer satisfaction. When customers can take a product back to the store to ask staff questions or help them learn to use it, it can make customers feel more satisfied with their purchase. Research has shown that 86% of customers will pay more for a product if they have received great customer service.
  • Face-to-face interaction: Many consumers prefer to be able to touch products, and experience and test them out before they buy. This is often attributed to Baby Boomers, older Generation X customers and the elderly being used to a more traditional in-person approach when it comes to shopping and preferring to have a demonstration of products or services, especially when buying new technology. Other studies show, given equal prices, a 90% preference for the in-person shopping experience, including among teens, who combine social interaction with shopping. On the other hand, many of these consumers engage in showrooming: trying on clothes or otherwise examining merchandise in-store, and then buying online at cheaper prices.
  • Trust: Online commerce presents an increased risk of internet fraud, and thus some consumers may be averse to it.

Attracting More Attention to Physical Stores

Online retailers often find an easier time attracting customers because it takes less effort and time to draw them in. Online sales continue to grow over the years because customers can shop from the convenience of their homes, 24 hours a day.

Brick and mortar stores must employ more tricks in order to entice customers to leave their homes and come and shop in a physical store. The reality is that technology and the internet are also vital to the success of brick and mortar stores in today’s world. Stores that offer the latest in technology-based payment systems, ordering options, and websites are usually the ones that bring in the most business. Consumers are constantly looking for easier and faster ways to shop and purchase the things they want and need.

Brick and mortar stores, while not as necessary as they once were, are still thriving. While online retail stores seem to be taking over, many companies are embracing the changing times and now operate with both online and brick and mortar options.

University of Mumbai BMS Notes

Bricks and Clicks, Advantages of Bricks & Clicks Business Model

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Bricks and clicks, or omnichannel retail strategy, is a jargon term for a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips (physical catalogs). Many retailers also offer telephone ordering and mobile phone apps, with most providing telephone sales support. The wide uptake of smartphones made the model even more popular, as customers could browse and order from their smartphone whenever they had spare time. The model has historically also been known by such terms as clicks and bricks, click and mortar, bricks, clicks and flips, and WAMBAM, i.e. “web application meets bricks and mortar”.)

Bricks and clicks is a term for a business model by which a company integrates both offline (bricks) which means shops and stores plus online (clicks) presences. Additionally sometimes retailers add a few extra flips added such as catalogue, telephone ordering and mobile phone apps and telephone sales support. The initiation of mobile web has made businesses operating bricks and clicks businesses very popular, because it means customers can do tasks like shopping when they have spare time and do not have to be at a computer. Most of the bricks and clicks customers like to use mobile shopping sites. A common example of the bricks and clicks model is when a chain of stores allows the customer to order products both online and physically in one of their stores, also allowing them to either pick-up their order directly at a local branch of the store or get it delivered to their home.

An example of the bricks and clicks model is when a chain of stores offers consumers a choice of purchasing products either online, or physically, in one of their stores, which may subsequently be either picked-up at one of their retail stores (click and collect, curbside pickup), or delivered. The model has many alternative combinations, as well as the related omnichannel concept of showrooming where customers try on clothing in person but the actual purchased product is ordered in-store on the retailer’s website and delivered to their home later. By the mid-2010s, the success of the model had discredited that the Internet would render traditional retailers obsolete through disintermediation.

Home delivery

The default model in e-commerce is one of browsing and ordering online, with goods sent from a warehouse, or in some cases, a retail store. One of the first known purchases from a company arguably operating a bricks and clicks business model was a Pizza Hut pizza ordered over the internet in 1994. The great surge in adoption of the bricks and clicks model came around 2000, with large retailers, such as Walmart, starting websites that allow users to browse some of the same goods that they would find in store from their personal computer screens.

Advantages

Bricks and clicks is beneficial to various segments. For example, supermarkets often have different customer types requiring alternative shopping options; one group may wish to see the goods directly before purchase and like the expediency of quickly shopping, while another group may require a different convenience of shopping online and getting the order delivered when it suits them. Thus, having a bricks and clicks model means both customer groups are satisfied.

For companies

The bricks and clicks model has typically been used by traditional retailers who have extensive logistics and supply chains, but are well known and often respected for their traditional physical presence. Part of the reason for its success is that it is far easier for a traditional retailer to establish an online presence than it is for a start-up company to employ a successful purely online one, or for an online only retailer to establish a traditional presence, including a strong and well recognised brand, without having a large marketing budget. It can also be said that adoption of a bricks and clicks model where a customer can return items to a brick and mortar store can reduce wasted costs to a business such as shipping for undelivered and returned items that would traditionally be incurred.

For consumers

A bricks and clicks business model can benefit various members of a customer base. For example, supermarkets often have different customer types requiring alternative shopping options; one group may wish to see the goods directly before purchase and like the convenience of shopping in person on short notice, while another group may require a different convenience of shopping online and getting the order delivered when it suits them, having a bricks and clicks model means both customer groups are satisfied. Other previously online-only retailers have stated that they have found benefit in adding a brick-and-mortar presence to their online-only business, as customers can physically see and test products before purchase as well as get advice and support on any purchases they have made. Additionally, consumers are likely to feel safer and have more confidence using a bricks-and-clicks business if they already know the brand from a brick-and-mortar store.

Disadvantages

For firms

A major factor in the success or failure of this business model is in the control of costs, as usually maintaining a physical presence paying for many physical store premises and their staffing requires larger capital expenditure which online only businesses do not usually have. Conversely, a business selling more luxurious, often expensive, or only occasionally purchased products like cars may find sales are more common with a physical presence, due to the more considered nature of the purchasing decision, though they may still offer online product information. However, some car manufacturers such as Dacia have introduced online configurators that allow a customer to configure and order complete cars online, only going to a dealership to collect the completed car, which has proven popular with customers.

“On the other hand, an online-only service can remain a best-in-class operation because its executives focus on just the online business.” It has been argued that a bricks and clicks business model is more difficult to implement than an online only model. In the future, the bricks and clicks model may be more successful, but in 2010 some online only businesses grew at a staggering 30%, while some bricks and clicks businesses grew at a paltry 3%. The key factor for a bricks and clicks business model to be successful “will, to a large extent, be determined by a company’s ability to manage the trade-offs between separation and integration” of their retail and online businesses.

For consumers

  • Some argue that online shopping, which makes price comparison easier for customers, encourages a ‘race-to-the-bottom’, where retailers only compete on price, with quality and service deteriorating as a result. This is especially prevalent when comparison shopping websites such as mySupermarket allow prices to be compared without even visiting a retailer’s website.
  • The prices listed online may not match the prices listed offline. The reasons for this include mis-management, and economics (overhead cost of an online purchase and an offline purchase is different). This may result in confusion and deviations of expectations for the buyers.
  • Buyers may end up buying more items than they need, because online businesses are able to show them more items, more promotions, and more advertisements.
University of Mumbai BMS Notes

Pure Online business model

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Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product’s availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

Internet business models are categorized as business-to-consumer, business-to-business, and more recently, consumer-to-consumer. Business-to-consumer and business-to-business models typically sell goods and services or provide information designed to help visitors make purchase decisions. Consumer-to-consumer models involve consumer-to-consumer information or product exchange.

An online shop evokes the physical analogy of buying products or services at a regular “bricks-and-mortar” retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. When an online store is set up to enable businesses to buy from another businesses, the process is called business-to-business (B2B) online shopping. A typical online store enables the customer to browse the firm’s range of products and services, view photos or images of the products, along with information about the product specifications, features and prices.

Pure-play Internet companies operate solely on the Internet, while click & mortar business models combine a physical presence with online selling or marketing. Click & mortar businesses may operate a website that sells products or advertises those it sells on the high street. The difference between the two business models is reflected in running costs, marketing strategies and customer perceptions. Internet business have fewer overheads but businesses that have a strong street presence inspire more customer confidence.

Marketing:

Pure-play companies have to invest more money, time and effort in marketing than a hybrid businesses. Businesses that have a physical presence, particularly on a national or international scale, are already known to potential customers, whereas Internet business have to advertise their presence more aggressively.

Perceptions:

Business that combine a presence on the street with online retailing may inspire more customer confidence than those that only operate online, according to the Internet Marketing Center. Customers believe that a business is less likely to vanish overnight if it has a customer presence, the website explains.

Benefits to Customers:

Companies that only operate online can sell products at a greater discount to customers because they have fewer operational costs. Clicks & mortar businesses can offer a more versatile service.

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