Electronic Commerce - Role of Ecommerce in a Social Environment

International Barriers to E-Commerce

Shashank Kumar

Sullivan University

January 5, 2017

Author Note

Shashank Kumar, MSMIT, Sullivan University

Correspondence concerning this article should be addressed to Shashank Kumar, MSMIT, Sullivan University, 3101 Bardstown Rd, Louisville, KY 40205.

Contact: skumar2405@my.sullivan.edu

Abstract

This paper evaluates the role of E-Commerce in the present-day business and social environments. This paper also calls out three international barriers to E-Commerce and analyzes their impact on the successful proliferation of E-Commerce.

E-Commerce

According to Turban et al., electronic commerce (EC) refers to using the Internet and intranets to purchase, sell, transport, or trade data, goods, or services. Ecommerce, in the broader sense, not only refers to the buying and selling of goods and services, but conducting all kinds of business online such as servicing customers, collaborating with business partners, delivering e-learning, and conducting electronic transactions within or between an individual or an organization. It can be perceived of as a more advanced form of mail-order purchasing through a catalog, and can be used to obtain almost any kind of product or service nowadays.

Role of E-Commerce in Modern Business

Ecommerce has been around since the mid-90s. However, recently, in the past few years, Ecommerce is getting more and more attention from entrepreneurs and all kinds of businesses. Electronic commerce is becoming one of the main things that new business want to employ to stretch their market to places that they do not have complete reach to.  It has almost become necessary to have an online sales presence even for small business.

Firms which do e-commerce are considered more customer oriented since it adds a convenient option to deliver products and services to the customer. For a business, selling goods online is value addition and also helps reduce labor and retail costs. It is turning out to be the cheapest and most cost effective way to do business. For a consumer, this means buying goods online offers the most value when compared to buying in a retail store. Most modern business that offer ecommerce now have an easy to use online interface as well that caters to a larger spectrum of customers.

Ecommerce opens up multiple avenues for a business for engaging and maintaining additional markets. Businesses do not have reach to remote corners of the countries in which they are doing business in. Having a good online market place helps sell goods to a customer base that would not have been possible with a traditional retail store. Ecommerce is even more critical to small and medium businesses and startups. For such companies, the sure shot way to reach their products to customers is through online marketing – and if you are marketing your product online, it only makes sense to sell the product/service online as well. Not to mention that fact that business can save millions of dollars because they do not need to invest in physical retail shops.

Role of Ecommerce in a Social Environment

Social commerce is emerging as an important platform in e-commerce, primarily due to the increased popularity of social networking sites such as Facebook, LinkedIn and Twitter. Social networking sites provide innovative business models. New revenue models are being created almost daily. Although some generate limited revenue, others succeed. Many communities attract a multitude of advertisers. These advertisers reach out to the customers of these social networking sites to sell their products and services. According to Kwahk & Ge (2012), 70% of consumers visit social media websites such as message boards, social networking sites and blogs to get information on a company, brand or product. Nearly half (49%) of these consumers made a purchase decision based on the information they gathered from social media sites. Social support and website quality positively influence the user's intention to use social commerce and to continue using a social networking site.

The term Social Commerce was introduced by Yahoo! in November 2005 to describe a set of online collaborative shopping tools such as shared pick lists, user ratings and other user-generated content sharing of online product information and advice Social commerce is now a form of Internet-based social media that allows people to actively participate in the marketing and selling of products and services in online marketplaces and communities.

International barriers of Ecommerce

E-commerce arguably has a potential to add a higher value to businesses and consumers in developing countries than in developed countries. Yet most developing country-based enterprises have failed to reap the benefits offered by modern information and communications technologies. There are three main types of international barriers to e-commerce:

• Economic barriers
• Sociopolitical barriers
• Cognitive barriers

Economic barriers. Barriers associated with the lack of economies of scale in small developing countries are widely recognized. Slow Internet diffusion in developing countries can be attributed to market and infrastructural factors controlling the availability of Information and Communications Technologies (ICTs). Unavailability of credit cards and most transactions being cash based transactions is also a major factor. Rapid growth of e-commerce in the US can be attributed to infrastructure already in place and an easy availability of a physical delivery system. Such systems are rarer in developing countries. (Kshtetri, 2008)