BANGALORE: Almost entirely governed by B2B transactions, the e-commerce market in India will touch Rs 195,000 crore by 2005. B2C's share in this pie will be a minute Rs 3,000 crore. These figures have been revealed in a study conducted by National Association of Software Services and Companies (Nasscom) and Boston Consulting Group (BCG) on E-commerce Opportunities for India Inc. The study was released here on Thursday during the two-day E-biz India 2001 hosted by Nasscom.

Contrary to the belief that e-commerce is dead, the revolution is just beginning in India, claims the report. It points out that quite a few Indian companies have already started reaping the benefits of connecting to the Internet. For instance, an FMCG company (its name was not disclosed) has reduced its system inventory from 45 days to five days, while Cisco has brought down its training cost by 60 per cent by e-learning.

Adding a note to the e-commerce transaction volume in India in 2005, the report said that they should be interpreted with caution. Some of the external barriers to e-commerce adoption are limited Internet access among individual as well as businesses, multiple gaps in legal and regulatory framework, poor telecommunications and communication infrastructure and issues of trust in e-commerce transactions and lack of reliable payment mechanisms. On the other hand, uncertainty about benefits, cultural issues, low IT usage and fear of transparency in operations are some of the internal barriers.

It is important to note that the study does not include the involvement of government transaction (G2B and G2G).

The Nasscom-BCG study also studied the potential of e-commerce in some of the industrial sectors. It found that automotive and consumer goods sectors would have shifted 30-35 per cent and 25-30 per cent of their commerce to the 'e'-way by 2005 respectively.

Of the Rs 3,000 crore of B2C transaction by 2005, about one fourth would be in telecom services sector. This is followed by consumer electronics. However, BCG India chairman Arun Maira noted that a significant part of the entire B2C market would again come from companies and organisations carrying out retail purchases.

Another fast emerging area is that of Business-to-Employees (B2E), the benefits of which have so far not been exploited in the country, largely due to uncertainty about what initiative can be taken, uncertainty about benefits and lower priority compared to B2B and B2C initiatives.

With the projection of a fast growth in the adoption of e-commerce, there is a huge potential in the product and services market of e-solution. The global e-solution market is expected to touch $640 billion by 2005. The ration of product to services market would be 30:70. Supply chain management and Customer relationship management products would account for 72 per cent of the packaged solutions market, the study revealed. The Indian e-solutions market can touch $9 billion by 2005.

Expectedly, the report said that while India had a strong position in services, it was weak in products, where it has great opportunity but limited experience. It has suggested a three-step process for India to achieve a $1 billion product market share in e-solution by 2010.

The Nasscom-BCG report has emphasized the importance of government's involvement in promoting e-commerce. It said that the government needs to prioritize its initiatives. It needs to take immediate action to overcome external barriers to e-commerce.