What is E-COMMERCE? Characteristics, advantages and disadvantages of E- commerce
E-Commerce simply means Electronic commerce. People buying and selling goods and services over internet is known as E-commerce.
This article covers all the basic information related to What is E-commerce including some of the characteristics, advantages and disadvantages of E-commerce.
WHAT IS E- COMMERCE?
In a layman language -People buying and selling various goods and services electronically over internet is called E-commerce.
“Kalakota and Whinston (1997) define E-commerce from these perspectives:
1. From communication perspective-, Electronic commerce is the delivery of information, products and services, or payments over telephone lines, computer networks or any other electronic means.
2. From a business process, perspective-Electronic commerce is the application of technology towards the automation of business transactions and workflow.
3. From a service perspective-, Electronic commerce is a tool that addresses the desires of firms, consumers, management to cut service costs while improving the quality of goods and increasing the speed of service delivery.
4. From an online perspective- Electronic commerce provides the capability of buying and selling products and information on the internet and other online services.”
To understand it in a very easy way we will study each word individually and then join it to get the exact meaning.
Electronic + Commerce = E-commerce
ELECTRONIC- Electronics is a branch that integrates millions of people around the globe by just one click making the lives of people more easy and convenient.
COMMERCE- Commerce is a branch that deals with sales and purchase of goods and services, various monetary transactions related to business especially on large scale.
E-COMMERCE- When the buying and selling of goods and services, trade among various economic agents, business dealings takes place electronically over internet making people comfortable to access all the information they want to get in just one click. This procedure is known as E-commerce.
FOR EXAMPLE- Amazon is one of the leading Ecommerce companies. Millions of people rely on the quality products and convenient services offered by Amazon.
Amazon offers various attractive deals to the customers, provide good quality products, offer on time delivery and many more features to serve the customers and can have customer retention and maximize the profit.
Nowadays in this, fast running scenario people want to save their time and energy. Therefore, they prefer to surf over various E-commerce websites and order online whatever they want to have.
FEATURES OF E-COMMERCE
There are many features of Ecommerce but here we will discuss 5 main features to gain clarity in this topic.
The 5 main features we are going to talk about are:
- Interactivity
- 2. Ensure quality richness
- 3. Marketing
- 4. Management
- 5. Business law and Ethics
INTERACTIVITY- E-commerce builds trust and loyalty of customers by interacting with them on various issues. This creates a healthy relationship between the company and the customer and increase integration of customers with companies around the globe and vice versa.
ENSURE QUALITY RICHNESS- The key for customer retention is providing a good quality product and services to its customers. Every organization whether it is large or small should focus on the quality because customers feels satisfied if they’ll get quality product and this helps in the generation of faith towards the company.
MARKETING- Every organization needs to build some strategies to survive in the market. Marketing of the product is a crucial step to follow be it advertising of the product, brand promotion, packaging, labeling and much more so that their product should stand out from others.
MANAGEMENT- Management of E-commerce efforts need to be monitored and maintained time to time. Due to the dynamic environment technology changes at a huge speed and management of various approaches and theories is by far very important to take care of.
BUSINESS LAW AND ETHICS- whenever we want to purchase any product, we first check whether that product is legit or not. Legal and ethical issues are extremely important in E-commerce because customers are not having face-to-face interaction with the seller, so there are very much chances that a dealer is engaged in illegal practices and can cause harm to the customers and this can happen vice- versa as well. To avoid these frauds it is very crucial to have strict business laws and everyone should follow the norms.
ADVANTAGES OF E-COMMERCE
E-commerce provides facilities to various organizations, customers and society. These benefits increase surprisingly with the passage of time. As the industries evolve, E-commerce is also on a high pace and fits suitably in the dynamic world where everything changes in a blink of an eye.
1. Benefits to organizations
2. Benefits to customers
3. Benefits to society
TO ORGANISATIONS- A massive amount of people are over internet, so E-commerce expands the marketplace to national as well as international markets. An organization can reach to more and more customers with no time and can deal with businesspersons all around the world with minimum capital.
Another benefit is that E-commerce reduces the cost of processing, storing, retrieving, managing the paper based information.
E-commerce also lowers telecommunications cost as the internet is much cheaper than VAN’S.
Some others amazing benefits could be compressed delivery time, simplified processes, improved customer services, reduced transportation costs, increases flexibility and much more.
TO CUSTOMERS- Whenever you feel hungry no matter its early in the morning or late in the night, you can just order online and can get your food at only in minimum time or you want to go to a party and need to go for shopping but have no time? No worries you can just select a dress in one click and can get the dress at your door. Yes you can order 24*7 from almost any location.
E-commerce offers more choices to the customers than any normal shop.
E-commerce allows customers to give their reviews and ratings for the products and can share and exchange their ideas with as much people they want to and can compare their experiences for future references.
Customers can also participate in online auctions, with more digitized products E-commerce offers quick delivery; they can get detailed and relevant information in just few seconds and much more.
TO SOCIETY-E-commerce allows many people to work from their homes only, which ensures less travelling of people, and hence reduces pollution from the society we are living in.
E-commerce facilitates delivery of public services such as health care, social services, education, reduces cost and improves quality.
E-commerce enables people to join with third party countries and can increase their quality of living by accessing the knowledge that are not available in their respective countries. This makes
People more self- dependent and can grab many opportunities.
DISADVANTAGES OF
E-COMMERCE
Everything in this world initially enters with some advantages but with the changing times those advantages changes their phase to disadvantages .Here we are going to see some of the disadvantages of E-commerce. These disadvantages can be categorized in mainly 2 parts:
1. Technical
2. Non-technical
TECHNICAL DISADVANTAGES- Sometimes it could happen that there is a lack of security, reliability, protocols and some communication errors, which can disturb the customers during and after their transactions.
It is very important to have proper bandwidth and it is insufficient.
Software development tools are still evolving and changing rapidly so it become very difficult for some of the companies to survive in the market due to lack of updated technology.
While operating the transactions online it is important to have a good balance between the hardware, software, operating systems and other components.
NON -TECHNICAL DISADVANTAGES- To run any kind of E-commerce business, proper skills and knowledge regarding computer and electronics is required. Lack of experience can result in delays and the organizations and customers can miss out the opportunities prevailing in the market.
Security and privacy is the major issue especially in B2B area, many people faces these issues very often and it is a difficult task for convincing customers for online transactions because customers do not trust unknown faceless seller. So making people switch from physical to virtual stores is a difficult task.
In most of the applications, there are not yet enough sellers and buyers for profitable E-commerce operations.
Accessibility to the internet is still expensive and/or inconvenient for many potential customers.
Technologies are being updated regularly and despite of these limitations, a rapid progress is seen in the field of E-commerce. The potential benefits of E-commerce are convinced enough that more and more people want to learn about it and wants to get engage in E-commerce operations.