IndiaFilings » Learn » Starting an Online Business in India

Starting an Online Business in India


Starting an Online Business in India

Without a doubt, the retail of the future is in e-commerce. Even many established historical retail stores currently actively seek to have an online segment, it is estimated that such a measure can significantly boost existing sales by as much as 20% easily and up to 40% with some time, dedication and effort. It has become almost universal so that a business that does not have a website and some measure of online customer service at least is considered odd and the exception. In as little as a few decades, it is estimated as very likely that almost all traded products and all sales transactions will be completed online, cashlessly and in a hassle-free manner. But presently and very recently, Flipkart, India’s best known online business, announced an incredible $100 million sales in a mere 10 hours, on a day when they had offered special discounts to all who purchased their products. This fell slightly short of their target for the day, which was 1 billion in 24 hours.

And as a matter of fact, many more consumers were desirous of making purchases and were hindered from doing so, because the system crashed as customers tried to access the network simultaneously at such large volumes. Flipkart later apologized for this, saying they were unprepared, and some customers were disenchanted as Flipkart’s stellar reputation for customer service took a slight hit. Some competitors were also not pleased with what followed when Flipkart began to give away products to dissatisfied customers, in an effort to appease and mollify them, at rates lower than the cost price which technically is not allowed by law in the industry. But all of this shows just how popular a successful online business can be, just what a wide market it allows you to tap into, just how easy it can be to attract and retain customers because of ease of purchase from one’s own home etc.

Registration of your Online Business

Once your idea is in place and you are all set and ready to go, the next step is to actually register your business and incorporate your company. Some of the obligations binding on other offline retail stores are dispensed with for online businesses because of the obvious differences in operations. A registered office is still necessary, but it can be chosen according to the entrepreneur’s convenience, and a lot of space is not typically necessary. Registration is necessary to open bank accounts, receive online payments and conduct business; Flipkart was incorporated as Private Limited Company, and many businesses still follow the standard incorporation, especially if they have dreams of great growth. But other smaller businesses can at least begin by being registered as a Limited Liability Partnership, submitting the Shops and Establishment form at the nearest municipal office

Starting an Online Business

Some of the obvious prerequisites for starting an online business are as follows,

  • Find a need and latent demand to fill and tap
  • Use search engines to drive traffic to your site and be constantly
  • Design and build an easy-to-use website to attract and retain customers
  • Build processes and mechanism to fulfill customer orders
  • Establish a reputation for yourself in the online sphere
  • Follow up with your customers and subscribers with e-mail
  • Increase your income through back-end sales and upselling

Another obvious advantage is that an online business always stays open whereas most brick-and-mortar locations may operate 8 to 10 hours a day, online businesses run around the clock. Being able to make sales and money at all hours of the day is a huge advantage

Running your business operations exclusively online can also serve to reduce costs. Specifically, such businesses don’t have to pay rent on the typical physical location and usually have very little or at any rate, substantially lower employees to hire, and thus fewer wages to pay. Since they do not have similar manpower requirements to continue running successfully, these businesses typically enjoy relatively higher cost savings and relative productivity and efficiency.

Moreover, inventory costs are also typically low for online stores. E-commerce businesses do not typically face the same rigorous demands as brick-and-mortar stores, which must stay fully stocked at all times, for example, a supermarket must have every product you desire at the time you desire and when you go to the shop to purchase it, otherwise you come away without buying it and unsatisfied. Online stores, by contrast, can keep inventory low using drop-shipping methods, in which products are shipped to consumers straight from the manufacturer. Nonetheless, this requires careful and systematic planning and inventory management, otherwise, there can be similar problems.

A final advantage is that online business operations are also readily scalable, meaning it is easy to start off small and expand as needed. That can be much tougher with brick-and-mortar businesses since growing often means finding a new, larger location to house the businesses, which comes with additional expense.

Final Tips and Pointers

Any good online business must have solid logistics in place, and a clearly thought out plan of how to make deliveries on time and on schedule, so that customers remain satisfied and business keeps picking up. Besides all this, many other preparations will be necessary, and some specifications are expressly required for an online business to start. After the certificate for incorporation has been approved, the business must figure out how it is going to market itself, to spread brand awareness and popularity among customers, use social networking websites, other online tools to increase attraction and retention of customers. There is rapidly increasing competition in this segment, with the market seemingly overloaded as it were to saturation, so new entrants, in particular, have their work cut out, and a lot of skill, knowledge, and effort is necessary to reach profitability and sustainability and continue successfully after that point. helps Entrepreneurs and Business Owners – Start, Manage and Grow their Business.