E-commerce is an activity of buying or selling a product in an online service or through the Internet. Electronic commerce uses technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems and automated data collection systems.
Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction life cycle, although it may also use other technologies such as e-mail. Typical e-commerce deals include online book purchases (such as Amazon) and music purchases (music downloads in the form of digital distribution like iTunes Store), and less, customized/personalized online store inventory service. There are three areas of e-commerce: online retail, electricity market, and online auctions. E-commerce is supported by electronic business.
An e-commerce business may also use some or all of the following:
- Shop online for retail sales directly to consumers through websites and mobile apps, and conversation trading via live chat, chatbots and voice assistant
- Provide or participate in the online marketplace, which processes sales from business to consumer or consumer to third party consumers
- Business-to-business purchases and sales;
- Collect and use demographic data through web and social media contacts
- Business-to-business (B2B) data transfer
- Marketing to potential customers and established via e-mail or fax (for example, with newsletters)
- Engage in pretail for launching new products and services
- Online financial exchange for currency exchange or trading purposes.
Video E-commerce
Timeline
Timeline for e-commerce development: 1971 or 1972: The ARPANET was used to regulate the sale of cannabis among students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology, which was later described as a "seminal e-commerce action" in John Markoff's book. What was said The Dormouse .
Maps E-commerce
Business applications
Some common applications related to electronic commerce are:
Government regulation
In the United States, certain electronic trading activities are governed by the Federal Trade Commission (FTC). These activities include the use of commercial email, online advertising, and consumer privacy. The 2003 CAN-SPAM law sets national standards for direct marketing by e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising should be honest and not deceptive. By using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce promises in the company's privacy statement, including promises about the personal information security of consumers. As a result, the company's privacy policy related to e-commerce activity may be subject to enforcement by the FTC.
Ryan Haight Online Pharmacy Consumer Protection Act of 2008, passed in 2008, amended the Controlled Laws to deal with online pharmacies.
The legal conflict in cyberspace is a major obstacle to harmonizing the legal framework for e-commerce worldwide. To provide uniform legal e-commerce worldwide, many countries adopt the UNCITRAL Model Law on Electronic Commerce (1996).
Internationally there is International Consumer Protection and Enforcement Network (ICPEN), established in 1991 from an informal network of fair customer trading organizations. The goal is expressed as to find ways of working together in dealing with consumer issues related to cross-border transactions in both goods and services, and to help ensure the exchange of information among participants for mutual benefit and understanding. From here comes Econsumer.gov, the ICPEN initiative since April 2001. It is a portal to report complaints about online transactions and associated with foreign companies.
There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Trade Steering Group and works on general privacy legislation throughout the APEC region.
At Australia , Trades are included under the Australian Treasury Guides for electronic commerce and the Australian Competition as well as the Consumer Commission set up and offer advice on how to handle online businesses, and offer specific advice on what happens if things go wrong.
At Great Britain , the Financial Services Authority (OJK) was previously a regulatory authority for most aspects of the EU Payment Service Regulations (PSD), until its replacement in 2013 by the Prudential Authority and Financial Authority Regulatory Authority. The UK implements PSD through the 2009 Payments Service Rules (PSRs), which come into force on November 1, 2009. PSR affects companies that provide payment services and their customers. These companies include banks, non-bank credit card issuers and exporters of non-bank traders, e-money publishers, etc. PSR creates a new class of regulated companies known as payment institutions (PIs), which are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD prior to November 1, 2012.
In India , the Information Technology Act 2000 regulates the basic implementation of e-commerce.
In China , the Telecommunications Regulation of the People's Republic of China (announced on 25 September 2000), establishes the Ministry of Industry and Information Technology (MIIT) as the government department that regulates all telecommunication-related activities, including electronic commerce. On the same day, Administration Steps on Internet Information Services released, are the first administrative regulations to address profit-generating activities conducted over the Internet, and lay the groundwork for future regulatory governing e-commerce in China. On August 28, 2004, the eleventh session of the Permanent Committee of the tenth NPC adopted The Electronic Signature Law, which governs data messages, electronic signature authentication and legal liability issues. This is considered the first law in China's e-commerce law. This is an important milestone in order to improve the legislation of China's electronics trade, and also marks the entry stage of China's rapid development of electronic commerce legislation.
Form
Contemporary electronic commerce can be classified into two categories. The first category is business based on the type of goods sold (involving everything from ordering "digital" content to direct online consumption, ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce). The second category is based on the nature of the participants (B2B, B2C, C2B and C2C);
At the institutional level, large corporations and financial institutions use the Internet to exchange financial data to facilitate domestic and international business. Data integrity and security are an urgent issue for electronic commerce.
Aside from traditional e-commerce, the term m-Commerce (mobile commerce) as well (about 2013) t-Commerce has also been used.
Global trends
In 2010, the UK had the highest per capita e-commerce expenditure in the world. In 2013, the Czech Republic is a European country where e-commerce contributes the most to the company's total revenue. Almost a quarter (24%) of the total state turnover is generated through online channels.
Among the developing countries, China's e-commerce presence continues to grow every year. With 668 million Internet users, China's online shopping sales reached $ 253 billion in the first half of 2015, accounting for 10% of China's total retail sales in that period. The Chinese retailer has been able to help consumers feel more comfortable shopping online. E-commerce transactions between China and other countries rose 32% to 2.3 trillion yuan ($ 375.8 billion) in 2012 and accounted for 9.6% of China's total international trade. In 2013, Alibaba has an e-commerce market share of 80% in China. By 2014, there are 600 million Internet users in China (twice as many as in the US), making it the largest online market in the world. China is also the largest e-commerce market in the world with sales value, with an estimated US $ 899 billion in 2016.
Recent research clearly shows that electronic commerce, commonly referred to as e-commerce, today forms the way people shop for products. The GCC countries have a rapidly growing market and are characterized by a richer population (Yuldashev). Thus, resellers have launched Arabic-language websites as a means to target this population. Secondly, there is a predicted increase in mobile purchases and widespread internet audiences (Yuldashev). The growth and development of both aspects make GCC countries a bigger player in the electronic trading market with the advancement of time. Specifically, research shows that the e-commerce market is expected to grow to more than $ 20 billion by 2020 among these GCC countries (Yuldashev). The e-commerce market also gained a lot of popularity among western countries, and especially Europe and the US. These countries are highly characterized by consumer-packaged goods (CPG) (Geisler, 34). However, the trend shows that there are signs of the future of a reverse. Similar to GCC countries, there is an increase in purchases of goods and services in online channels rather than offline channels. Activist activists strive to consolidate and cut their overall costs and governments in western countries continue to impose further regulations on CPG producers (Geisler, 36). In this sense, CPG investors are forced to adapt e-commerce because it is effective as a means for them to grow.
In 2013, Brazil's e-commerce is growing rapidly with retail e-commerce sales expected to grow at double-digit rates by 2014. By 2016, eMarketer expects retail e-commerce sales in Brazil to reach $ 17.3 billion. India has an Internet user base of around 460 million as of December 2017. Despite being the third largest user base in the world, Internet penetration is low compared to markets like the United States, United Kingdom or France but is growing at a much faster rate. , adding about 6 million new arrivals every month. In India, cash on delivery is the most preferred method of payment, accumulating 75% of e-retail activity. The Indian retail market is expected to increase from 2.5% in 2016 to 5% by 2020.
Future trends in GCC countries will be similar to western countries. Despite the forces that drive businesses to adapt e-commerce as a means to sell goods and products, the way in which customers make purchases is similar in countries of these two regions. For example, there is an increasing use of smartphones that come along with an overall increase of internet audiences from the region. Yuldashev writes that consumers are improving the more modern technology that enables mobile marketing. However, the percentage of smartphone and internet users making online purchases is expected to vary within the first few years. It will be independent on the willingness of the public to adopt this new trend (Portal Statistics). For example, the UAE has the largest smartphone penetration of 73.8 percent and has 91.9 percent of the population having access to the internet. On the other hand, smartphone penetration in Europe has been reported to be at 64.7 percent (Statistics Portal). Regardless, the percentage difference between these areas is expected to increase in the future as e-commerce technology is expected to grow allowing more users. The e-commerce business in these two areas will result in competition. Government bodies at the country level will enhance their actions and strategies to ensure sustainability and consumer protection (Krings, et al.). These upgrading measures will improve environmental and social standards in countries, the factors that will determine the success of e-commerce markets in these countries. For example, the adoption of harsh sanctions will make it difficult for companies to enter the e-commerce market while soft sanctions will ease the company. Thus, future trends between GCC countries and Western countries will be detached from these sanctions (Krings, et al.). These countries need to make rational inference to get effective sanctions.
The growth rate of internet users in Arab countries has been fast - 13.1% by 2015. Most of the e-commerce markets in the Middle East are made up of people in the 30-34 year age group. Egypt has the largest number of internet users in the region, followed by Saudi Arabia and Morocco; this is a 3/4 share of territory. However, internet penetration is low: 35% in Egypt and 65% in Saudi Arabia.
E-commerce has become an important tool for small and large businesses around the world, not only to sell to customers, but also to engage them.
In 2012, e-commerce sales reached $ 1 trillion for the first time in history.
Mobile devices play an ever increasing role in the mix of e-commerce, this is also called mobile commerce, or m-commerce. By 2014, an estimate of purchases made on mobile devices is 25% of the market by 2017.
For traditional businesses, one study suggests that cross border information and e-commerce technology is a good opportunity for rapid growth and growth of companies. Many companies have invested heavily in mobile app investments. DeLone and McLean Models state that three perspectives contribute to e-business success: the quality of information systems, service quality, and user satisfaction. No time and space constraints, there are more opportunities to reach customers worldwide, and to reduce unnecessary intermediate links, thus reducing cost rates, and can benefit from one on one large customer data analysis, to achieve high-level plans strategic personal adjustment, to fully enhance the core competitiveness of products in the enterprise.
Modern 3D graphics technologies, such as Facebook 3D Posts, are considered by some social media marketers and advertisers as a preferred way to promote consumer goods rather than static photos, and some brands such as Sony have paved the way for augmented reality commerce. Wayfair now lets you check the 3D version of its furniture in home settings before buying.
Logistics
Logistics in e-commerce is mainly about fulfillment. Markets and online retailers should find the best way to fill orders and ship products. Small companies usually control their own logistics operations because they do not have the ability to hire outside companies. Most large companies hire fulfillment services that handle the logistics needs of the company.
Impact on markets and retailers
The e-commerce market is growing at a real level. The online market is expected to grow by 56% in 2015-2020. Traditional markets only expected 2% growth during the same time. Brick and cement retailers are struggling because of the ability of online retailers to offer lower prices and higher efficiency. Many large retailers can maintain offline and online presence by linking physical and online bidding.
E-commerce allows customers to overcome geographical barriers and allows them to buy products anytime and from anywhere. The online and traditional markets have different strategies for doing business. Traditional retailers offer fewer kinds of products because of the rack space in which, online retailers often have no inventory but send customer orders directly to manufacturing. The pricing strategy is also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost of storing inventory. Online retailers base their prices on the speed of delivery.
There are two ways for marketers to do business via e-commerce: completely online or online along with a brick and mortar store. Online marketers can offer lower prices, better product selection, and high levels of efficiency. Many customers prefer the online market if the product can be delivered quickly at a relatively low price. However, online retailers can not offer the physical experience that traditional retailers can do. It may be difficult to assess the quality of a product without physical experience, which may cause customers to experience product or seller uncertainty. Another issue about the online market is the concern about the security of online transactions. Many customers remain loyal to renowned retailers because of this issue.
Security is a major problem for e-commerce in developed and developing countries. Ecommerce security protects business websites and customers from unauthorized access, use, alteration or destruction. Types of threats include: malicious code, unwanted programs (ad ware, spyware), phishing, hacking, and cyber vandalism. E-commerce websites use different tools to avoid security threats. These tools include firewalls, encryption software, digital certificates, and passwords.
Impact on supply chain management
For a long time, the company has been plagued by a gap between the benefits of supply chain technology and solutions to deliver those benefits. However, the emergence of e-commerce has provided a more practical and effective way to benefit from new supply chain technologies.
E-commerce has the ability to integrate all inter-company and intra-company functions, meaning that the three flows (physical flow, financial flow and information flow) of the supply chain can also be affected by e-commerce. Attention to the physical flow improves the way the product and the level of inventory movement for the company. For information flow, e-commerce optimizes the information-processing capacity of the company it once owned, and for financial flows, e-commerce enabled the company to have a more efficient payment and settlement solution.
In addition, e-commerce has a more sophisticated impact on the supply chain: First, the performance gap will be eliminated because companies can identify gaps between different levels of the supply chain by means of electronic solutions; Secondly, as a result of the emergence of e-commerce, new capabilities such as implementing ERP systems, such as SAP ERP, Xero, or Megaventory, have helped companies to manage operations with customers and suppliers. But this new capability is still not fully exploited. Third, technology companies will continue to invest in new e-commerce software solutions as they expect return on investment. Fourth, e-commerce will help solve many aspects of problems that may be difficult for companies to encounter, such as political barriers or cross-country changes. Finally, e-commerce gives companies a more efficient and effective way to collaborate with each other in the supply chain.
Impact on job
E-commerce helps create new job opportunities because of information-related services, software applications and digital products. It also leads to job loss. Areas with the biggest job loss predictions are retail, post and travel agents. The development of e-commerce will create jobs that require highly skilled workers to manage a large amount of information, customer demand, and production processes. Conversely, people with poor technical skills can not enjoy welfare. On the other hand, because e-commerce requires sufficient stock that can be delivered to customers on time, the warehouse becomes an important element. Warehouse requires more staff to manage, supervise and manage, so that the warehouse environment conditions will be noticed by employees.
Impact on customer
E-commerce brings convenience to customers because they do not have to leave home and just have to browse online websites, especially to buy products that are not sold in stores nearby. This can help customers buy more products and save customer time. Consumers also gain strength through online shopping. They are able to research products and compare prices among retailers. In addition, online shopping often provides sales promotions or discount codes, making it more effective for customers. In addition, e-commerce provides detailed product information; even in-store staff can not offer such detailed explanations. Customers can also review and track order history online.
E-commerce technology cuts transaction costs by allowing both manufacturing and consumers to pass through intermediaries. This is achieved through the expansion of the best price quotes in the search and purchase areas of the group. The success of e-commerce at the urban and regional levels depends on how local companies and consumers adopt e-commerce.
However, e-commerce has no human interaction for customers, especially those who prefer face-to-face connections. Customers are also concerned with the security of online transactions and tend to remain loyal to renowned retailers. In recent years, clothing retailers such as Tommy Hilfiger have started adding Virtual Fit platforms to their e-commerce sites to reduce the risk of customers purchasing clothes of the wrong size, although this varies greatly according to its purpose. When a customer regrets purchasing a product, it involves a return of goods and a refund process. The process is uncomfortable because the customer has to pack and post the goods. If the product is expensive, large or fragile, it refers to security issues.
Distribution channel
E-commerce is increasingly important because the company has adopted a pure click and brick-and-click click system. We can distinguish the pure click and brick-and-click click systems adopted by the company.
- Pure or pure click companies are those who have launched websites without their previous presence as a company.
- Coal companies and clicks are already existing companies that have added online sites to e-commerce.
- Click-to-go online retailers who then open a physical location to complement their online efforts.
Digital channel type
E-commerce can occur on reseller websites or mobile apps, or e-commerce markets like in Amazon, or Tmall from AliBaba. The channel may also be supported by conversation trading, e.g. live chat or chatbots on the website. Traffic conversations can also be stand-alone like live chat or chatbots in messaging apps and through voice assistants.
Recommendations
Contemporary e-commerce trends recommend companies to shift traditional business models where focusing on "standard products, homogeneous markets and long product lifecycles" for new business models where the focus on "varied and customized products". E-commerce requires companies to have the ability to meet the different needs of different customers and provide them with a wider range of products.
With more product choices, product information for customers to choose and meet their needs becomes very important. To address the principle of mass customization to companies, the use of recommendation systems is recommended. This system helps recommend the right products to customers and helps customers make decisions during the buying process. Recommendation systems can be operated through top sellers on websites, customer demographics or consumer purchase behavior. However, there are 3 main ways of recommendation: recommending products to customers directly, providing detailed product information and indicating opinions or criticisms of other buyers. This is useful for the consumer experience without physical shopping. In general, recommendation systems are used to contact customers online and help them find the right products they want effectively and directly.
See also
References
Further reading
External links
- Small Business Ecommerce Resources , US: SBA
Source of the article : Wikipedia
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