e-commerce

E-commerce is becoming more and more common with every passing day but how much do you know about it. Let’s dig in and find out more.

LEARNING OBJECTIVES

By the end of this topic, you are expected to;

• Understand the meaning of e-commerce
• Understand the features of e-commerce
• Understand the benefits and challenges of e-commerce

E-commerce also known as electronic commerce refers to the activity of buying or selling products electronically. This is done over the internet or on online services. Some of the technologies that electronic commerce heavily borrows from include; mobile commerce, supply chain management, electronic funds transfer, online transaction processing, internet marketing, electronic data interchange (EDI), automated data collection systems and inventory management systems. Technological advances in the semiconductor industry are therefore the main drivers of electronic commerce.

Modern electronic commerce typically uses the World Wide Web for at least one part of the life cycle of the transaction although it may also use other technologies like e-mail. Typical transactions of e-commerce include the purchase of online books (like Amazon) and music purchases (like iTunes store). There are three main areas of e-commerce: online auctions, electronic markets and online retailing. The electronic business supports e-commerce.

E-commerce business may also employ some or all of the following;

• Online shopping for retail sales direct to consumers through Web sites and mobile apps, and conversational commerce through chatbots, voice assistants and live chats.
• Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales.
• Business-to-business buying and selling
• Gathering and using demographic data through web contacts and social media
• Business to business electronic data interchange
• Online financial exchanges for currency exchanges or trading purposes
• Engaging in retail for launching new products and services
• Marketing to prospective and established customers by e-mail or fax (for example, with newsletters)

ADVANTAGES OF E-COMMERCE

• Faster buying and selling procedure and eases the activity of finding products
• Buying and selling is done 24/7
• More reach to customers, no theoretical geographical limitations
• Lower costs of operation and better quality of services
• There is no need for physical company set-ups
• Easy to start and manage a business
• Customers can easily select products from different providers without moving around physically

DISADVANTAGES OF E-COMMERCE

• Prone to attack
• Minimum direct customer to company interactions, therefore, customer loyalty is low
• Mechanical failures can cause unpredictable effects on the total processes
• There is no guarantee of product quality