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Policing Digital India.

November 17, 2017
In my previous article published here about nine months back, I wrote about the birth of an Idea called Digital India, its vision, steps taken for its implementation, its achievements and the overall goal of this programme. What we missed of the Digital India Programme were its Limitations. Like every medicine we take has its negative side effects on our body, the same can be said for any development programme initiated and implemented by the government.
Policing the Digital India Programme has now become the focal point. As this programme proceeds further towards its goal  we are getting aware of its shortcomings and limitations as well as of the people who can exploit it selfishly both from within the country and from outside. The threats are enormous and as India paces forward digitally so does these threats which are getting bigger and more powerful. They can be so powerful that they can cripple India in one stroke economically, politically and on the defensive front. We will lose the war before we know what happened.
Let us take few real life examples.
In 2007, a small country Estonia faced a massive cyber attack from unscrupulous Hackers. Suddenly the vital infrastructure came crashing down. From newspapers websites to banks to power system everything collapsed. It took several days for the country to recover.
A decade later the cyber criminals are more powerful, intelligent and secretive but not all critical infrastructures are strong enough to resist the cyber attack.
In 2015 the cyber hackers got control of Ukraine power infrastructure crippling it to resist the nationalisation of the power grid owned by the government.
In 2010, India was the worst affected by computer worm called Stuxnet. About 15000 computers were infected by this worm. About 15 computers were installed in critical infrastructure facilities in Gujarat and Haryana electricity boards including an offshore oil rig of state owned petroleum exporter ONGC.
Concerns  has been raised by the Indian domestic electric equipment industry over the contracts awarded to the Chinese companies for the installation of Supervisory control and data acquisition systems ( SCADA) in more than 18 cities. . SCADA is a computer based industrial automation control system that practically makes factories and utilities run on their own. The government has taken note of this concern and has ensured that only audited and tested equipment are connected to the electric grid. Also the government plans to develop a testing facility for cyber security where source equipment can be tested for malware content before its installation and periodically after its commissioning.
An attack on the electricity grid can be more debilitating for a country than a military attack since electricity is the life of the nation. All the vital infrastructures Defence, Banking, telecom and transportation are vulnerable to the cyber attacks.
In 2016 a terminal at India’s largest container port Jawaharlal Nehru Port Trust was hit by the cyber attack. The terminal which could handle 1.8 million containers units was grounded to halt. The attack was mounted through a malware called Petya.
An IIT Kanpur study shared with parliament’s committee of finance shared that attacks by the Equation group which according to wiki-leaks report is a clandestine CIA AND NSA programme infected India’s telecom, military and research institutes.
Recently the American media alleged that the recent elections in United States were manipulated and rigged by the Russian Hackers to ensure Republican Party victory and installing Donald Trump as American President as it would serve the Russian interests.
China is seen a major threat to India’s vital infrastructure. Even Pakistan can launch a cyber attack on India’s infrastructure with the help with its terrorist organisations.
A cyber attack on critical infrastructure could be a preferred mode of attack in a future war. It can cripple a nation without firing a single shot.


Digital Payments on the Rise 

The massive growth of mobile industry in India catapulting it to number one position in the world  especially in the area of Smartphone, the entry of major banking and non banking financial institutions into  the market offering digital payment services has considerably boosted the consumer’s confidence in the Digital payment system particularly the mobile payments. Payments through mobile are easy due to user friendly software, it can be made anywhere in the country and mobiles are easy to carry and operate to any kind of place unlike the laptop computers.
Cashless payments have increased 22% from October 2015 to October 2016. Mobile banking Transaction grew 175% while the money transacted using mobile banking has grew 369% from October to October according to India spend analysis of RBI (Reserve Bank of India) data. IMPS (Immediate payment system —    money is transferred using text messaging or online banking) transactions has increased 116% while IMPS transfers grew 150% in the year ending October 2016. According to a study conducted by Google and BCG (Boston Consultancy Group), digital payments industry in India will grow 10 times to touch $500 billion by 2020. The Google-BCG report also identified that the top three services for which Indian consumers prefer online payments to offline payments include online shopping, utility bill payments, and movie ticket purchases. Indian consumers are 90% as likely to use digital payments for both online and offline transactions. According to the Reserve Bank of India (RBI), the volume of mobile wallet transactions doubled during April 2015-February 2016 period to cross 55 crore.
Thus it could easily be inferred from the above statistics that the Digital Payments Industry in India is booming. The proliferation of Mobile devices, Mobile Apparatus and operating system has led to the innovation in the mobile industry and more so in the mobile payment system. Today, India has a number of cashless methods—banking cards, mobile wallets, AEPS, UPI, BHIM, Micro-ATMS, internet banking, etc. Banking cards are our popular debit/credit/pre-paid cards. They have been in the system for quite long and continue to grow with increased number of shops and establishments accepting them. Mobile wallets are used to make payment based on mobile number of the other party or a QR code. UPI/BHIM and mobile wallets ride on the cell phone. The success or failure of mobile-based payments in India is something that we should keenly watch as we operate on different constraints and opportunities.
Thus from the laborious cheque based system to the present Digital payments that are completed in a fraction of seconds, we have come a long way. The trend is going to continue and we are going to witness further disruption.
However we have to take into account that apart from the convenience there are risks, threats and vulnerabilities involved also in the Digital Transactions. If these are not noticed they will widen the mobile attack landscape. The wealth of information that is stored on and transmitted via mobile devices creates unmeasured opportunities for attackers to target user data (personal, confidential, and sensitive information) regardless of the motive.
Payment data can be divided into two parts. One is Identification data and other is authentication data. Identification data is to identify the individual like his unique I-card number, aadhar card, Voters I card, Pan card etc. Authentication data is a Pin or a fingerprint that helps us to identify a person who he claims to be. Both these type of data (Identification and Authentication) are required to be protected at all points of time and the latter being highly sensitive and requires stricter security requirements.


Security Breaches
As the Digital India progress forward towards its goal so does the Cyber criminals. With the Digital payments growing organically and inorganically (with demonetisation) over the last few years, India has started to witness its shares of payment security breaches. Some of these breaches are Debit card breach, UPI compromise, interbank transfer hack or the hack of leading mobile wallet company are all publically known. Bur apart from all these breaches, there are number of security breaches that are not reported to the public due to lack of public disclosure norms in the public.
Recent breaches like Equifax  happened in United States proves that payment data is not only with the processors but also with the third parties like credit rating companies and the compromise can happen in any entity in the ecosystem. In July 2017, a mobile malware called Bankbot compromised over 400 apps on the Google play store. An app that is infected by Bankbot is capable of creating ‘fake’ Internet banking login screens and even credit/debit card entry screens. So, when a user enters their banking details in these screens, they are actually handing over the information to the attacker. An Android Banking Trojan called Svpeng was detected in July 2017 to have attained key logging functionality (key logger – malicious software that records what a user types on their keyboard). And this functionality allowed the Trojan to steal confidential information from other apps installed on the infected phone.
These are just a few of the many examples of advanced threats that are being increasingly developed by attackers to hunt down their victims. And to combat such threats, we need to secure our Smartphone with a defence system that is not only proactive but multilayered too.
The response to these breaches and concerns has been mixed .On the regulatory side some action has been taken but there is lack of effective enforcement. . For example, a 2013 RBI guideline says that banks are required to adhere to payment security standards (PCI-DSS) but the compliance rates amongst banks are still in single digits. Even the banks that comply end up with restricting the scope undermining their very compliance.
For mobile wallets, RBI has issued a few guidelines for getting a security audit conducted but without a benchmarking payment security standard for each of the cashless methods. This allows each of the players to define “what is securing”, making the exercise ineffective.
Payment breaches are borderless, and we in India need to learn from all the breaches that have happened globally apart from our own set of breaches.


Setting Security standards.

What we need is to beef up our security system as we do in case of a terrorist attack in our country. Adopting International security payments standards across cashless systems can help secure us from these Cyber attacks. To secure the cashless methods unique to India like Bhim, UPI, AEPS the govt. must set up an expert committee to study the international payment standards in cashless systems and modify it to Indian environment.
The Defence payment Act with inter-ministry representatives in one such step taken by the government in this direction and we hope that it consists of Digital payment experts who can address the issue and define the security standard. This will help us to foster digital payment innovation in a secure environment.
Timely enforcement of digital payment security standards will not only help our country to achieve a secure digital payment ecosystem but also achieve the country’s dream of going cashless.


 Suggested Readings.

  1. Mobile Payments are on the rise by Rajib Singha.
  2. Payments on Mobile Phone is not as safe as you think by Dharshan Shantamurthy.
  3. CriticalInfrastructure on target : A cyberattack that could be worse than the war. 
  4. Digital india by Anurag Dubey





Digital India — Power to Empower

January 21, 2017

Digital India is the most discussed topic in the current Indian news media and public opinion alike. Especially with the announcement by the Indian govt to ban Rs 500 and Rs 1000 notes and introduce new Rs500 and Rs 2000 notes to curb Black money market and promote Digital money payment in the market.

First let us know the definition of the word “Digital”. Digital describes electronic technology that generates, stores, and processes data in terms of two states: positive and non-positive. Positive is expressed or represented by the number 1 and non-positive by the number 0. Thus, data transmitted or stored with digital technology is expressed as a string of 0’s and 1’s. Each of these state digits is referred to as a bit (and a string of bits that a computer can address individually as a group is a byte).

Prior to digital technology, electronic transmission was limited to analog technology, which conveys data as electronic signals of varying frequency or amplitude that are added to carrier waves of a given frequency. Broadcast and phone transmission has conventionally used analog technology.

Digital technology is primarily used with new physical communications media, such as satellite and fibre optic transmission. A modem is used to convert the digital information in your computer to analog signals for your phone line and to convert analog phone signals to digital information for your computer.

India has been in the forefront in the world when it comes to Information technology in software . Information technology in software has been the sunrise industry in India the 1980’s and 1990’s with the vision that it will become the world leader in the 21st century . The dream has come true .

However despite being the powerhouse in the software the role of government to provide electronic digital services to its citizens is comparatively low as compared to the developed nations.

The National e-governance plan was approved in 2006 and had made a steady progress through Mission Mode Projects and Core ICT Infrastructure but still more homework has to done to reach the mission.

Digital India Vision.

The Digital India vision provides the intensified impetus for further momentum and progress for this initiative and this would promote inclusive growth that covers electronic services, products, devices, manufacturing and job opportunities. India in the 21st Century must strive to meet the aspirations of its citizens where government and its services reach the doorsteps of citizens and contribute towards a long-lasting positive impact. Thus the vision of Digital India aims to transform the country into a digitally empowered society and knowledge economy.  

Digital India Programme.

Digital India programme was started by the Indian Government with the objective of making all the government services electronically available to citizens by enhancing the Internet connectivity and the online infrastructure. This initiative was launched by Prime Minister Narendra Modi on 1st July, 2015 at Indra Gandhi Indoor Stadium,New Delhi. The program also aims to bring big investments in the technology sector of India and bridge the digital segment of the country.

The govt. launched this initiative to develop and integrate all govt. departments,ministries and public services.Hence it would improve the life of general public and citizens. Based on these programmes, all central govt, state govt and union territory govt. will be integrated.The existing and the ongoing projects of e-governance will be aligned with the concept of digital India.

The cost of the project is supposed to be Rs 1,13000 crores. This is most expensive and ambitious programme ever launched by the Indian government.

Thus the aim Digital India programme is fulfil the vision to transform India into digitally empowered society and knowledge economy.  This program me has been envisaged by Department of Electronics and Information Technology (DeitY).The programme will be implemented in phases and will be completed in 2018.

Through Digital India Programme the Indian Government aims to create jobs for 18 lakh people and bring investment of around Rs. 4.5 lakh crore in the country.

How it is to going be implemented ?

For effective implementation the digital India programme has been divided into three parts:

  1. The creation of the digital infrastructure.

  2. Delivering services digitally

  3. Digital literacy.

  1. The creation of Digital infrastructure.

    1. High speed internet as a core utility to be made available to all Gram Panchayats. Government intends to lay national optical fibre network in all 2.5 lakh gram panchayats. The government plans to provide nationwide information infrastructure by March 2017.

    2. Beginning of a unique , lifelong , online and authentic Digital Identity. Digital India programme aims to enhance the processes and delivery of different government services through e-Governance with payment gateway, UIDAI, EDI and mobile platforms. It also intends to deliver the school certificates, voter ID cards, etc. online.

    3. Digital Banking with the help of mobile phones and bank account. As a part of the drive the Government is focusing on zero imports of electronics by setting up smart energy meters, mobile, micro ATMs, consumer and medical electronics.

    4. Ease of access to common service center in the locality. The government is planning to create 28,000 seats of BPOs in various states and set up at least one Common Service Centre in each of the gram panchayats in the state.

    5. Shareable private space on a public cloud.

  •     6.Safe and secure Cyber space in the country. Establishing Wi-Fi    facilities in all universities across the nation is also a part of the Digital India Programme. Under the programme, e-mail would be made the main mode of communication .

  • 2. Delivering Services Digitally.

  1. Provide a easy and single window access to all sections in the society by integrating all departments.

  2. Making all govt. services available in real time through mobile and internet. The initiative also looks to provide internet services to almost 2.5 lakh villages by March 2017 and 1.5 lakh post offices in the coming two years.

  3. All citizens to be available on the cloud to ensure easy access. The programme also focuses on providing electronic services to people related with education, health, farmers, security, justice and financial inclusion through e-Kranti services.

  4. Ease of doing Business through digital govt. services. Some of the facilities which will be      provided through this initiative are

     A.. Digital Locker (storage of documents like Voters card, Pan Card, driving license, educational documents in the cloud) .

    B. .  is a website, launched by on 1 July 2015 to keep a record of the attendance of Government employees on a real-time basis. This initiative started with implementation of a common Biometric Attendance System (BAS) in the central government offices located in Delhi.

    C   E-sign framework (digitally sign a document using Aadhar card authentication),

     D. My (This portal works as an online platform to engage citizens in governance through a  “Discuss”, “Do” and “Disseminate” approach.)

      E.   Swach Bharat Mission mobile app which will enable citizens to get all the information regarding cleanliness,

       F.  National scholarship Portal to make it easier to process applicant for scholarship easy through online,

       G.   E-hospital – Online Registration System under this initiative enables people to avail services like online registration, payment of fees and appointment, online diagnostic reports, checking on the availability of blood online, etc.,

       H.   Digital India platform – This initiative will involve digitization of data and records on a large scale in the country to make easy and quick access to them possible.

       I.   Bharat Net – Under this initiative, a high-speed digital highway will connect all 250,000 gram panchayats of the country. This is the world’s largest rural broadband project using optical fibre.

        J.  Wi-fi Hotspots –To improve digital connectivity in the country,

        K.   Next Generation Network – this service will replace 30-year old telephone exchanges to manage all types of services like voice, data, multimedia and other types of communication services .

        L.    Electronics Development Fund – The fund will be set up to support the manufacturing of electronics products that would help create new jobs and reduce import. The funds will promote innovation, research and product development to create a resource pool within the country

        M.    Centre of Excellence on Internet of Things (IoT) – In partnership with NASSCOM, DeitY and ERNET in Bangalore, Centre of Excellence will enable rapid adoption of IoT technology and encourage a new growth strategy. IoT will help the citizens in services like transport system, parking, electricity, waste management, water management and women’s safety to create smart cities, smart health services, smart manufacturing and smart agriculture, etc.

      5   Cashless and digital payments.

      6 .Leveraging GIS for decision support systems and development.

  1. Digital literacy.  

   A.   Universal digital literacy. Digital Literacy mission will cover six crore rural households.   It is        planned to connect 550 farmer markets in the country through the use of technology.

   B.  Universal accessibility to all digital resources. The Government looks to make all information  easily available to the citizens through online hosting of data .

   C.   All govt. documents/certificates to be available on the cloud.

   D.   Availability of all digital resources/services in all Indian languages.

    E.     Collaborative Digital platforms for participative governance.

    F.     Portability of all entitlements for individuals through the Cloud.


The govt. of India hopes to achieve  growth on multiple fronts with Digital India Programmes. Digital India aims to provide the much needed thrust to the nine pillars of growth areas, namely

  1. Universal access to Internet.

  2. Public Internet Access Programme

  3. e-Governance – Reforming Government through Technology

  4. e-Kranti – Electronic delivery of services

  5. Information for All

  6. Electronics Manufacturing

  7. IT for Jobs

  8. Early Harvest Programmes

  9. Broadband Highways

Achievements and Partnerships of Digital Programme .

As the launch ceremony of Digital India week by Mr Narendra Modi on 1st july 2015 ,top CEOs from India  and abroad has committed to invest Rs224.5 lac crores(US 3.3 trillion dollars) towards this initiative. The CEOs said  that this investment will be made to the manufacture of Internet devices and smartphones in India which will help creating jobs in India as well as reducing the cost of importing them.

Leaders from Silicon Valley ,San Jose , California expressed their support for Digital India during prime minister’s visit to USA in September 2015. Facebook’s CEO, Mark Zuckerburg changed his profile picture in support of Digital India and started a chain on Facebook and promised to work on WiFi Hotspots in rural area of India. Google committed to provide broadband connectivity on 500 railway stations in India. Microsoft agreed to provide broadband connectivity to five hundred thousand villages in India and make India its cloud hub through Indian data centres. PM Modi met Apple CEO Tim Cook as well and he invited Apple to set up manufacturing unit in India and Cook agreed to it. Foxconn, which is Apple’s largest manufacturer, has decided to set up a manufacturing base in India. Qualcomm announced an investment of US$150 million in Indian startups. Oracle plans to invest in 20 states and will work on payments and Smart city initiatives.

 Times Now and ET Now has announced the launch of the second edition of Digital India Summit & Awards on 22 March 2016 . On 28 December 2015, the Panchkula district  of Haryana  was awarded for being the best as well as top performing district in the state under the Digital India campaign.

Scope of Digital India Programme.

The overall scope of Digital India programme is

    1.To prepare India for a Knowledge future.

    2.To realize Indian talent plus Information technology to better India Tomorrow.

  1. Making Technology central to enable change.

    4.Making it an umbrella programme by weaving together a large number of ideas and thoughts into a single, comprehensive vision, so that each of them is seen as part of a larger goal.

     5.The Digital India Programme will pull together many existing schemes which would be restructured and re-focused and implemented in a synchronized manner.



E-Commerce Revolution — The Happening

October 3, 2015

The fast development of telecommunications technology in the past few decades is changing many aspects of our lives – how we search for information, how we travel and not at least how we buy products or services. Although classic shop-based retail is still preferred, e-commerce or electronic commerce, namely the buying and selling of products and services exclusively through electronic channels, is gaining ground.

The most well-known form of e-commerce or electronic commerce is online shopping, also known as business to consumer e-commerce (B2C), where private customers can order various products which they then receive by courier or postal mail. Another category of e-commerce focuses on transactions between companies, such as manufacturers and a wholesalers or wholesalers and retailers and is called business to business e-commerce (B2B). The third category of e-commerce involves transactions from consumer to consumer (C2C), as in the example of eBay or other similar websites.

Around 45% of the world population has an internet connection today . In 1995, it was less than 1%.. The number of internet users has increased tenfold from 1999 to 2015. The first billion was reached in 2005. The second billion in 2010. The third billion in 2014. Today it is 3.2 billion .

Asia accounts for 48.4% of the total internet users in the world followed by Europe. China, the country with most users (642 million in 2014), represents nearly 22% of total, and has more  users than the next three countries combined (United States, India, and Japan). Among the top 20 countries, India is the one with the lowest penetration: 19% and the highest yearly growth rate. At the opposite end of the range, United States, Germany, France, U.K., and Canada have the highest penetration: over 80% of population in these countries  has an internet connection.

With an expected 33 percent of the global market in 2015 and over 37 percent in 2018, the Asia Pacific region is becoming the leader of the e-commerce industry. In fact, China, due to its unprecedented economic boom, is not only driving the region’s leadership, but is also set to outdo the United States as the single country with the largest e-commerce market in the world. China On Path to World Domination in E-commerce.emerging markets in Asia-Pacific have fueled China’s business-to-consumer e-commerce markets. In 2014, Chinese consumers are to spend more on online purchases than in the U.S. market. China is dominating worldwide e-commerce sales growth by a remarkable 63.8%. India comes in second with a distant 31.5%. The statistic shows the transaction size of China’s online shopping market from 2007 to 2013 with projections through 2018, based on annual sales. In 2013, online commerce transactions in China reached approximately 1.84 trillion yuan(289 billion dollars).

Taobao, a consumer-to-consumer platform, the Chinese search-engine Baidu and the ‘Amazon of China’, Dang Dang count among the world’s largest internet companies and have created an online infrastructure that can no longer be defined as that of a developing country.

Another emerging Asian market in terms of e-commerce is India. Recent statistics show that retail e-commerce sales in  India have grown tremendously, from 2.3 billion U.S. dollars in 2012 to an estimated 17.5 billion U.S. dollars, representing an almost eight-fold growth. As of 2015, the retail e-commerce sales as a percent of total retail sales in India are set to account for 0.9 percent of all retail sales in India, but this figure is also expected to grow in

the near future, reaching 1.4 percent in 2018. The most successful e-retailer in India is, a fashion and lifestyle company specialized in apparel, footwear, fashion accessories, beauty products, home accessories and other fashion and lifestyle products. With 26.26 million unique visitors in October 2014 alone, manages to surpass Amazon, the world’s most successful e-retailer. Some of the most popular product categories among online shoppers in the region include airline tickets and reservations, baby supplies, cosmetics, clothing, accessories and shoes, as well as computer hardware and software. According to recent data, the number  of digital buyers in India alone is expected to reach 41 million by 2016, representing some 27 percent of the total number of internet users in the country. Furthermore, a growing number of people in the Asia Pacific area are increasingly using their mobile devices for online shopping. In India, some 9 percent of the country’s population had made a purchase via mobile phone within the past month, as of the fourth quarter of 2014.

Statistics and facts about online shopping behavior

Online shopping is a thriving market and the numbers can prove it: retail e-commerce sales worldwide amounted to 1.08 trillion U.S. dollars in 2013, 1.5 trillion U.S dollars in 2015 and projections  show growth of up to 2.48 trillion U.S. dollars by 2018. In the first quarter of 2015, mobile e-commerce spending reached 10 billion U.S. dollars in the United States  alone. According to a 2015 study regarding mobile shopping penetration worldwide, 46 percent of internet users in the Asia Pacific region and 20 percent of those in North America had purchased products via a mobile device, whether smartphone or tablet computer. Furthermore, when asked whether mobile phones will become the main tool  for purchasing goods in the future, some 9 percent of respondents in an extended global survey strongly agreed. According to a new report by digital advertising company Criteo, 30% of e-commerce transactions worldwide are now happening on mobile devices. 10% of E-Commerce dollars Are Spent via Mobile Device. In 2018, U.S. mobile retail revenues are expected to amount to 130.12 billion U.S. dollars, up from 56.67 billion U.S. dollars in 2014.

With such promising perspectives, retailers and industry experts around the globe are constantly trying to adapt to the changing behavior of buyers in order to stay competitive and relevant. Not only the products they offer become important, but also the design of their webpage, the way products are photographed and even the accompanying text, as well as ease and security of payment or delivery costs. Some companies are known as “pure-click” or “pure-play” if they that have launched a website  without previously having a physical outlet, such as online market leader Others are “bricks-and-clicks,” if they have added an online site to their bricks and  mortar business, like Walmart. And finally, “click-to-brick” are online retailers that later open physical locations in addition to their shopping websites, as is the case with many startups and small online brands which want to increase their visibility in the real world.

One of the phenomena that are changing the face of retail is the increased availability of multi-channel retailers, where customers have an array of possibilities to look up and then buy a certain product. Internet-savvy buyers are more and more determined to spend considerable time researching certain products on different websites and reading online reviews, as well as comparing prices through a website or application, in order to get the best deal possible. Many times they do their research online and end up buying offline, this phenomenon being called webrooming. The increasing availability of smartphones with access to the internet and barcode scanning software also allows customers to go to a store

first  and then research products they find there, in order to see if there are better price-offers elsewhere. If they end up buying online, whether because they found a better price or delivery  is more convenient, the phenomenon is called showrooming, a growing trend among buyers. Furthermore, buyers use their mobile devices for a variety of purposes associated with shopping, such as tracking a delivery, posting their own reviews of certain products, claiming online coupons offering discounts, or even contacting friends and family to ask for advice regarding a certain product. Potential buyers may also turn to their social media platforms for reviews, advice, recommendations. As a recent study shows, especially among the  young, social media feedback can be an important factor influencing purchasing decision.

How Much Online Shoppers Around the World Are Spending

But how much are people around the world actually spending online? According to Statista’s Digital Market Outlook, the United States is not only leading in terms of total e-commerce revenue, but also among the countries with the highest revenue per online shopper. On average, Americans are expected to spend $1,804 online this year, almost  double of what Japanese shoppers are spending online. United kingdom comes second with $1629 online followed by Sweden $1466 online. .China comes at no. 8 with $626 online.

According to the study, although the U.S. are still in the top spot as far as overall sales are concerned amounting to 359 billion US Dollars in 2014, Europe had business-to-consumer e-commerce generated revenues of roughly 325.4 billion U.S. dollars in 2013.  In 2013, online commerce transactions in China reached approximately 1.84 trillion yuan (289 billion US Dollar).

Market capitalization of the largest internet companies worldwide as of May 2015 (in billion U.S. dollars) This year, e-commerce company alibaba market value was 233 billion while  Amazon’s market value was 199 billion U.S. dollars . Search market leader Google had a market value of 373 billion U.S. dollars. followed by Alibaba 233 billion and facebook 227 billion US Dollars.As of August 2015, Google’s market capitelization was 432.15 billion U.S. dollars. Second-ranked social network Facebook had a market cap of 256.63 billion U.S. dollars.

Desktop Shoppers Outspend Mobile Buyers

As people have grown accustomed to completing tasks on mobile devices and smartphone screens have become large enough to allow comfortable browsing, more and more online shopping is done on the go. However, according to data published in Monetate’s E-Commerce Quarterly report, people still tend to fire up their laptops or desktop computers when shopping for big-ticket items.

According to Monetate’s findings, which are based on millions of online shopping sessions worldwide, the average amount spent by online shoppers is significantly higher on desktop devices than it is on smartphones and tablets .

The e-commerce is not a kind of new industry, but it is creating a new economic model. Most of people agree that the e-commerce indeed to be important and significant for economic society in the future, but actually that is a bit of clueless feeling at the beginning, this problem is exactly prove the e-commerce is a sort of incorporeal revolution. Generally speaking, as a type of business active procedure, the e-commerce is going to leading an unprecedented revolution in the world, the influence of this model far exceeded the commercial affair itself. Except the mentioned above, in the area of law, education, culture and also policy, the e-commerce will continue that rise in impact. The e-commerce is truly to take human beings into the information society

Marketing and Economic Development.

December 4, 2011

Why is it that even the most shrewd businessmen and the companies will find it impossible to market their products in a poor country like Ethiopia or Namibia where the economic growth is almost negligible. Why is it that despite the present economic turmoil in the western countries all the market savvy companies still compete with each other to market their products there . Why is that all the companies are now focusing on China  and India  for the Investment and marketing where the economic growth rate is the highest in the world.

Does it mean that the marketing and business development of a company is dependent on the economic development of a country and the Marketing contributes to the economic development of a country. How do we measure the contribution of the marketing  to the economic development of a country.

First we have to look at the economic history of a country. All the countries since when they were formed were mainly agricultural economy where the main products were food grains and animal products and the market was also dominated by the agricultural products.The corporates were mainly in the form of small and large farmers , landowners, money lenders . The towns and cities had small shopkeepers, merchants , and wholesalers.

As the Business grew these small business owners expanded as they had now more and more capital and wealth. Yet they were mostly family owned business with narrow vision.The management was unheard of. The growth of capital in the form of money, gold , silver and land grew more and more for these small business but was unsecured from petty thieves and robbers in the house. The moneylenders only were lenders and there was no secured ware house to keep all these wealth and insure its safety.

The creation of the banks was the watershed in the history of the capitalism as they they created a mechanism of not only safeguarding the businessmen’s wealth at a marginal return but also became the most important tools of investment for the businesses  through bank borrowing at a small interest rate. As the banking size grew rapidly both in terms of size and numbers the business grew even more rapidly both in private as well as in government sector.

As the years passed the business transformed into sophisticated capitalism ,the industrial houses especially in the free market economies of the west . The advance management and marketing tools developed it into an intelligent chess game where the most intelligent capitalist makes the highest profit while others have to satisfy with the lower profits.Competition among the capitalists both in small and large scale has been the mainstay of capitalism and has been the life support of the Marketing. Development in marketing is only possible if there is competition in the market as it helps us to develop more and more tools to attack and defend our interests in the market.

The fact is that Marketing is another positive development of economic growth like we see so many developments taking place around us as the result of the economic growth. The economic growth of a country is a result of agricultural and mainly the Industrial growth . The rise of the capitalist class  and companies in the free world led to the fair and free competition resulting in the increased production of goods and services . The rise in the employment as a result of the industrial growth led to the rise in the income which resulted in the increase in the consumption  of these goods and services. The rise of the Capital led to the increased investments by the business class in all sectors of the economy creating a multiplier effect to the industrial  growth and infrastructure. This defines the economic growth of a country where the economy grows as a result of the growth rate in all sectors.This is what the countries like China and  India are experiencing.presently. On the other hand countries of the west is experiencing a recession that is the negative economic growth or  reduced economic growth in all sectors of their economy leading to high unemployment and inflation.

Competition breeds marketing . In fact I can say that competition is the mother of all marketing taking place in the market. Competition requires more than one company in the market. As the number of the companies grow in the market the birth of Industry takes place. We have telecom industry, Computer industry, Infrastructure industry, electronic industry to name a few where there are large number of competitors armed with niche marketing tools to safeguard their interests.As the marketing segment grows in the industry  , it induces the consumers to buy more and more as well as attract more prospects. This creates a spread effect leading to the rise in the consumption of goods and services leading to increased production of goods and services to satisfy the increase in the demand. The industrial growth takes place due to capital enlargement  and increased investments leading higher economic growth.

There fore  marketing accompanied with finance is the major instrument in the hands of the present industry to facilitate economic growth not only in its sector but also in other industry as well .The economic growth taking place right now and that took place in the west few years back was the result of the marketing .This science of the creation of the demand of product and services has helped the developed economies to reach their present stage and is sure to be the panacea to the present recession which they are experiencing now.


How Externalities affect Marketing.

November 7, 2011


In the modern Marketing world when we as consumers are bombarded with continuous messages from marketing and advertising firms through mass media ,we have to also gauge the effect of these messages on the society as a whole . The overall effect of the Marketing on the social hemisphere which may be negative or positive is known as Externalities. In other words Externalities are the social cost and benefits of the Marketing .

Externalities is an Economic concept . For example Pollution is an Externality for an company. it is a social cost caused by a company which the society has to take into account. The pollution caused by motor vehicles to the environment  in a city and its citizens or the giant oil spill in an ocean causing the death to millions of fishes and sea organisms and damaging the ecology of ocean which may take thousands and millions of years to heal is a Social cost.Similarly the planting of trees by the company in its premises or staring a school for the poor children free of cost is a Social benefit .

What will be a Marketing Externality. How do we control the spread effects of the Externality caused by the Marketing to the society.For example a Cigar rate manufacturing company conveys the harmful effect of smoking in its message while advertising its product or an Oil  company advises the people to save oil through its advertising campaign of its product. Such messages if they goes down well with the public and if in a given period of time these messages are able to reduce the numbers of the smokers or reduce the consumption of Oil to the desirable level can be considered as the social benefit of the Marketing or Advertising as these messages had a positive effect on the society. Similarly a perfume company portraying a nude male or female in its advertisement can have an negative effect on the society . It hurts the sentiments of the public , has an damaging effect on the teenagers and causes a moral outrage on the conservative sections of the society. Similarly advertising campaign depicting gods and goddesses in an insulting manner has evoked public outrage against that company and has even led to violence.Such advertising campaign that have ill effects on the minds of the citizens in a society are the Social cost of the Marketing to the society.

A company while making an advertising campaign has to consult all sections of the society whenever it sees even a tiny bit of scope of controversy in the message to the public.

Movies are the most affected by the Externalities. As most movies are seen by the large number of audience and is at least 2 to 3 hours in length it has many scenes in it which can  controversies and protest from various sections of the societies. Similarly many movies have been applauded and awarded by the audience for promoting positive message to the society and fighting for their cause.

How do we control the Negative effects of Externalities ? For that we will have to measure the effect of a externality on the society. Then we have to device methods to control these negative effects . We have to regulate these messages to prevent their ill effects on the society as a whole. We have to regulate on what is to be heard , seen and read and what is not to be heard , seen and read by the citizens of the society from the marketing messengers. For that we have bring in more laws and amend various laws to regulate the media and the messengers.

In the countries where there is an authoritarian governments like military dictatorships, communist countries , Religious fundamentalist countries where the Media and the messengers has little or no freedom of expression and speech and is controlled by the government it is very easy to regulate such externalities. However in the democracy where the rights of speech and expressions of the public and media are protected by the law it is very hard to regulate on what is to be published and what not to be published. The fight between the regulators of speech and the upholders of speech is most visible in these open societies and the battle is fought in all fronts from the streets to the media ( Print and electronic) to the political stage to the courts of law to the hearts and minds of the people.

In democracies the government has set up autonomous bodies which regulate the keepers of freedom of expressions through messages  in movies, in media or through advertisements and direct marketing.The censor board regulates the motion pictures, the court in case of media and advertisement regulatory body in case of marketing. Any complaint can be lodged by any person or community in these bodies against the messengers and the se bodies take appropriate action against these messengers if they are found guilty.Also these bodies institute guidelines for these messengers which they have to follow to maintain Decorum in the society .

Marketing can cause inflation by as it continuously induces the public to buy those products whose purchase lead to price rise as their demand is highly elastic. Marketing also decreases savings of the people and  reduces investment in a country . It increases the conscipicious consumption and y expenditure. Marketing has to be controlled in various ways to reduce the inflation . Also aggressive marketing results in the wastage and unnecessary expenditure both for the companies and the customers.

For example let us take that due to aggressive and effective marketing of a Car manufacturing company say Maruti Suzuki leads to the surge of its demand in the market for a year. Other car manufacturers take notice and immediately enter the market with their new brands to make profits. Due to the rise in purchasing power of the people and in their numbers , the demand of the cars continue to rise for more than a year now .New car manufacturers continue to enter the market while the old ones come up with new models to survive and fight competition. As a result we are faced with situation of increasing demand in that country for the cars.  The rise in the demand of the cars causes increase borrowings from the banks by its customers ( Car Finance) leading to the rise in the interest rates.The rise in the cars sold also leads to increase fuel consumption , both petrol and diesel leading to its price rise.The rise in the price of the fuel causes the rise in the cost of public transport which is again levied on the public using this means of transport by increasing the price of the bus and train ticket. Also the rise in fuel prices also increases the transport cause of all raw materials , finished goods in other industries leading to the price rise of their products like foods, vegetables, electronic durables, electricity etc.. This is the externality of Marketing leading to the inflation. This is what countries like India and China is facing for the past few years due to the increase in demand of all consumer durables.

Another example can be the rise in the consumption of the electronic goods like television, washing machines, microwave oven, refrigerators and all those household goods which run on electricity.The rise in the consumption of these durables lead to the rise in the consumption of the electricity which leads to its rise in price . The effect of this price rise has now to be borne by all the transport run by electricity like trams, trains, metros as well as by the factories . Ultimately the price rise in borne by the producers, consumers and the government depending on their leverage and the noise they make.

Marketing has both positive and harmful affect in the society as a whole. Therefore it has to be regulated and directed in a direction that brings out its positive features to the society. Marketing is a weapon which cannot be left to the irresponsible persons by the company. It has to be handled carefully especially now when the information technology has reached its threshold and marketing is riding on it. The effect of the marketing to the society be it in any form can be as destructive as many nuclear bombs in terms of numbers and the area it covers. It can have a positive affect by promoting eco friendly messages, social welfare messages, raising the consciousness of the people and entertainment .


The Market Makers.

October 8, 2011


Any product or service  requires a Physical space or a place to be bought or to be sold.All the negotiation process which includes exchange of goods & services with each other in case of Barter economy or exchange of Money with goods & services in case of Monetary economy , Bargaining process, Final sale happens in this Physical place. This Place in known as The Market .In short Market can be defined as a place where Goods and services are Bought by the buyers and sold by the sellers.Market is a Place where the Buyers and Sellers interact.It may be a shop , a mall, a stock exchange or a computer where the deal is done.

The Market Makers are those persons who create a demand for a product. By creating a demand for a product the market maker is able to attract customers for that product . Now he has to sell that product to the customers.For that both the Sellers and the customers requires a physical space or place where they can sell and by the Product. This place where the whole Buying and Selling process takes place is the Market . In short we can say the Market Makers create a Market for the Product i.e they create both the demand and supply of a Product.

The Important fact is that The Market Maker may not necessarily be the direct seller of the Product. He may not be available in the Market directly to the customers. The Market Makers just helps to create a demand and Supply for a product , tangible or intangible with the help of  the Marketing tools like analysis , planning and control and through distribution channels. He may be the Business man, a manager or a group of people who are given an assignment to create a demand for a product and how to supply it in the market or create a market for the product.For example the role of the Market Maker assumes importance when the first car was invented. The task of the market maker is to create a demand for this car i.e he has create a market for the car. He has to create a process where the customers are attracted for the cars and are ready to pay the given price for the car.For that he uses all the marketing tools available at that time in order to create a market for the cars and make maximum return on the investment (R.O.I.).He also has to make sure that the the car is available to the customer on his demand in the minimum possible time. He has to create various channels of distribution for the efficient supply of these cars in the market i.e shops , showrooms, dealers, agents , sub agents, sales and service centers and so on.

The History of the Market and the Market Makers.

One of the most important advances needed for the creation of a market system took place sometime between 12000 and 10000 B.C. with the advent of specialization (Division of labor) and the start of the Neolithic Age. The birth of small communities of people changed the mindset of the Neolithic men to shift from tribe hunting and food gathering to become expert in one task like  hunting, gathering, cooking, tool making, shelter making, or clothes making . As  methods of agriculture improved , the first towns and cities were seen.Dependable food supplies allowed people to build permanent houses and settle in one area. As settlements increased in size, new forms of society such as religious centers, courts, and marketplaces developed. The advent of towns produced further specialization, creating jobs in tool making, pottery making, carpentry, wool making, tool making, and masonry, among others. The specialist created items faster and of a better quality than if each family made its own, increasing standards of living.

The earliest signs of Market system at work could be seen in the form of Barter system during 6000 B.C. The development of Money Market system may date from around 3000 BC in Mesopotamia when Shekel were uses as the form of money. The Lydians were first people to use Gold and Silver coins in 600-650 B.C. The Paper money or the Banknotes were used in China during the Song Dynasty in the 7th century and were known as Jiaozuo. Banknotes were used in Europe in 1661 by Stockholms Banco.

During 1100 b.c. feudalism was prevalent all over the world in different forms.It was a world of kings and lords, vassals and serfs, kingdoms and manors. Long distance trade was expanding and new worlds of foreign spices, oriental treasures, and luxurious silks were discovered. Three hundred and fifty years later, after weathering a Black Death and the Hundred Years War, Europe emerged by expanding trade to new levels and building the foundation for the start of the competitive market economy we know today.

With a population spurt starting around 1470, cities, markets, and the volume of trade grew. Banking, initially started by Ancient Mesopotamians, grew to new heights and complexities, the guild system expanded, and the idea that a business was an impersonal entity, with a separate identity from its owner, took hold. Silver imports from the new world drove expanded trade and bookkeepers created standardized principles for keeping track of a firm’s accounts based on Luca Pacioli’s advances. Early entrepreneurs, called merchants and explorers, began to raise capital, take risks, and stimulate economic growth. Capitalism had begun.

It began with much resistance, however. The idea of gain was shunned and shamed. The practice of usury, charging interest on loans, was banned by the Church. Jobs were assigned by tradition and caste. Innovation was stifled and efficiency was forcefully put down, punishable by death. In sixteenth-century England, when mass production in the weaving industry first came about, the guildsmen protested.

With the advent of a complex marketplace and capitalists, the battle of ideas raged to explain the sources of wealth and to explain the workings of market. Between approximately 1550 and 1800, a philosophy called mercantilism ( hoarding of Gold and treasure as the source of nation’s wealth) was at the forefront.Monopolies and tariffs were promoted and competition and trade were discouraged. However during the 18th century in the Europe new school of thoughts promoting commerce and not mercantilism came up. Adam Smith further backed this idea and was the first to capture and explain the essence of the marketplace. He did so in his famous 1776 work An Inquiry into the Nature and Causes of the Wealth of Nations, slaying the mercantilist dragon in the process. Within, Smith outlines certain laws of the market, that are worthy of mention.

Smith explains that self-interest acts as a guiding force toward the work society desires. As Smith notes in Wealth, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-interest." While one would naturally assume that everyone following only his or her self-interest would not create a very good society, there is another force that prevents selfish individuals from exploiting the marketplace. That regulator is competition.

This principle can be explained best with the following excerpt from The Worldly Philosophers.

A man who permits his self-interest to run away with him will find that competitors have slipped in to take his trade away; if he charges too much for his wares or if he refuses to pay as much as everybody else for his workers, he will find himself without buyers in the one case and without employees in the other.

Following Smith there were many other economists, ideologists, sociologists, and philosophers that pontificated on the workings of the increasingly complex marketplace. Ricardo outlined the all important principles of trade while Malthus predicted overpopulation and doom. Mill contemplated on liberalism while Bentham promoted utilitarianism. Marx painted a bleak picture of forced labor and surplus value while Keynes later showed there sometimes was reason for an active government.

By the of Smith’s death in 1790, the nascent Industrial Revolution had already reared its head. The effects of the Renaissance, the humanist movement, and the new focus on science and empiricism would translate into the launch of movement that would impact the world as none before it had. It was this revolution, often harsh and cruel, that prompted thoughts of communism, created robber barons and titans, and led to the development of the innovations, technology, and standards of living we have . The colonization of Asia, Africa, America and Australia by the European countries led by England also contributed to the Industrial revolution and the growth of Capitalism. These colonies were major supplier in raw materials, Gold&Silver and Cheap Labor to England during the Industrial revolution and also became its tapped market for its finished goods. No doubt this market played a key role towards the Prosperity and economic development of the European countries for more than 300 years and was the major cause of the two world wars( A bone with with many dogs to fight for).

The growth of the Financial market ( Stock&Shares, Commodity & Currency, Gold & Silver) especially during the  the 20th century brought new breed of Market Makers . From here we can define the Market Makers as a bank or brokerage company that stands ready every second of the trading day with a firm ask and bid price. This is good for you, because when you place an order to sell your thousand shares of Disney, the market maker will actually purchase the stock from you, even if he doesn’t have a seller lined up. In doing so, they are literally "making a market" for the stock. You probably take for granted that you can buy or sell a stock at a moment’s notice. Place an order with your broker, and within seconds, it is executed. Have you ever stopped to wonder how this is possible? Whenever an investment is bought or sold, there must be someone on the other end of the transaction. If you wanted to buy 1,000 shares of Disney, you must find a willing seller, and visa versa. It’s very unlikely you are always going to find someone who is interested in buying or selling the exact number of shares of the same company at the exact same time. This begs the question, how is it that you can buy or sell anytime? This is where a market maker comes in.

A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks an offsetting order. This process takes place in mere seconds.

The Internet as well as increased trade and flow of capital would create profound change in business. The markets would go dot com crazy and then crash and burn. We’ve gone from hunting, gathering, bartering, and grunting to specialization, miniaturization, internationalization, mass-production, and six sigma—all due to the invisible hand, innovation, and industry. And such is the history of the market system and the Market Makers.


Suggested Readings

Zero to One Million

By Ryan.P.M.Allis
September 18, 2003

The Role of Money in Marketing .

September 4, 2011



Money is a  medium through which goods & services are bought and sold  between the two parties in the Market. Monetary system was the evolution from the from Barter system where goods & services were exchanged between the two parties in the market. Money may be in the form of Gold, Silver , Bronze or Paper currency. Presently Money is a Medium of exchange, a unit of account ,a standard or deferred payment , and store of value.

The   development of  Money Market system may date from around 3000 BC in Mesopotamia when Shekel were uses as the form of money. The Lydians were first people to use Gold and Silver coins in 600-650 B.C.  The Paper money or the Banknotes were used in China during the Song Dynasty  in the 7th century and were known as Jiaozi. Banknotes were used in Europe in 1661 by Stockholms Banco.The Gold was used as the medium of exchange between different countries during 17th and 19th centuries and the Gold standard was completely adopted as the Legal tender by all the countries in the 20th century. After the world war 2 , the U.S. Dollar replaced the gold standard as the International trading currency in the Bretton Woods Conference to the present date.

Man has been obsessed with money from the day he recognized its value . It assumes a number one position in his quest for Wine , Women and Wealth. He has invaded , plundered , looted, stole ,enslaved and colonized many kingdoms and countries to  achieve this aim. He has used all possible tools given in the book of Sex, Greed and Manipulation to achieve this aim. It also reflected his dark side as his demand for money never ceases.

The rise of corporate in the modern world owes its growth to his lust for more and more money. After all Modern corporatism is the evolved form of the Imperialism . Unlike the colonial powers it does not possesses a visible army or troops to invade but it has all possible resources to crush any resistance that comes in its way to achieve this goal. In fact the British used East India Company for more than hundred years to milk out gold and silver from its colony India . The American , the European , the Japanese multinationals all are now using  these tools to further their interests and earn profit. The Chinese and Indian companies are following them .

Marketing is the major arm of the Corporate to achieve this aim. After all Marketing and the Market are nothing but the tools developed by the Corporate to get more and more money from the masses. The companies are run by profit and even the Government agencies cannot sustain losses for a long time and continue to survive. To put across simply if there is no Marketing there will be no Market and if there is no market there will be no Business. Furthermore if there is no Marketing there will be no money and if there is no Money there will be no Market.

We all work for Money. Our hunger for better standard of living can only be satisfied if we have a high source of Income. Our needs create a demand for the product  which is satisfied by the Market.The money is invested in the marketing by the company to make it’s product more visible to the customers. Like any other organ of the company like finance, Administration , the Marketing also has its costs. Payment to its staff, agencies , Cost of advertisement, Stationary and much more .

The motive of Marketing by the company is not just to attract Customers but make them buy its product .

For that it has to attract only those customers who are willing to buy its product as well as have the ability to pay for it i.e who have the purchasing power to buy that product . This segment is called its Target Market. The Purpose of the Marketing from here becomes more clear . Attracting Willing and Wealthy Customers is the Motive of the Marketing People. Customers who are ready to buy not just one product of the company but many more of its product  again and again provided they are satisfied. A Valued Customer is a customer who spends millions of Dollars  to purchase the company’s product for a long period of time. The company must give special attention to its Valued Customers. Many companies spend billions of dollars to entertain such customers through marketing and sales promotions . Customer retention is the order of the day.

For any company to survive it has to invest its resources in the Marketing . The scope of Marketing has enlarged due to fact that the marketing environment has become more and more competitive . So the companies has to pump more and more money in the marketing. No doubt the Marketing heads today enjoy the life of the rich and famous as compared to the heads of other department.