The Development Of Electronic Commerce

Published Date: 02 Nov 2017

For the purpose of this essay it is necessary to define certain key concepts. The term "E-commerce" is defined as "The buying and selling of products and services by businesses and consumers through an electronic medium, without using any paper documents. E-commerce is widely considered the buying and selling of products over the internet, but any transaction that is completed solely through electronic measures can be considered e-commerce. E-commerce is subdivided into three categories: business to business or B2B (Cisco), business to consumer or B2C (Amazon), and consumer to consumer or C2C (eBay)" (InvestorWords, n.d).

Figure 1: Australian E-commerce sales (codigo interactive, 2012)

The above figure illustrates the development of Australian E-commerce sales from 2010 to 2013. It demonstrates that in 2010 the amount of money from E-commerce sales in Australia was $27 billion followed by an increase of about 10 percent and reached $30.2 billion in 2011. Australian E-commerce sales continued to increase to $33 billion in 2012 and it is predicted that by 2013 it will hit $37 billion. The significant development of Australian sales in recent years proves that E-commerce has a number of advantages.

The first and greatest benefit of E-commerce is low operational cost. Firstly, using web-based sales companies do not need to employ a number of staff members because there are many jobs can be done by computers. It is said that many companies take the advantages of saving from web-based technologies through operational procedures such as placing orders, receiving invoices, tracking shipment and processing payment which can be done by integrated online services. In addition, the companies also can save money by using the internet instead of other communication media. For example, the costs of printing and shipping paper can be cut by using online customer support documentation. Rao, S., Frazer, L. (2010). On the other hand, companies can also reduce the cost for expensive rental when physical stores are not the most necessity. Moreover, training and meeting can be done via the internet. Salespeople or dealers can be trained through the internet wherever they are living or whatever they are doing. For example, they can be in a training course when they are taking a stroll or they can be in a meeting with pyjamas at home. Rothstein, J. (2008) assumed that webinar and email are great tools for education online.

The second major advantage of E-commerce is saving time because people do not need to spend time to travel and go to the physical location of a shop. In the article web-based sales of O’Mara, D., L. (2008) Rothstein, J., senior vice president of Tri-Ed Distribution, Woodbury, N.Y. said that customers can save a lot of legwork while they check out products, prices and descriptions online. These days, by using online shopping accessing information, buying and selling products are much faster and easier than traditional shopping way. Having an internet connection and using a computer, a laptop, an iPad or a smartphone now a days people can access the information relating to a product such as how it looks like, where it was made, price, warranty time which are the same as the information that they will get if they go to a physical location shop. For example, customers of a company in New York are supplied with account information tools, sales history and product documentation. Rao, S., Frazer, L. (2010) reported that the internet is a useful tool to provide a wealth of information to customers. In addition, E-commerce also provides 24/7 services which is the another significant convenience for customers.

The other advantage of E-commerce is that there is no theoretical geographic limitation. The growth in the popularity of internet leads people to buy and sell products everywhere without the limitation of physical location. For instance, a person living in Brisbane, Queensland, Australia, through eBay can buy products Sydney or Melbourne even can buy products from China, Vietnam, America or other countries around the world. It means that buying and selling products online have no real boundaries. Dixon, H., and Quinn, B. (2004) claimed that firms are allowed to overcome traditional physical and geographical restrictions by the global nature and the way in E-commerce. Therefore, without the limitation of theoretical geographic, companies and organisations can reach out to customers and extend their market around the world.

One of the other advantages of E-commerce is improving communication with customers. The internet is a good tool to provide information for customers and is also an important advertising channel with lower costs. Rao, S., Frazer, L. (2010) said that "Web advertising and promotions may lower direct marketing costs". Moreover, web-based selling systems also help maintain and develop relationships between companies and customers. Most websites have customer feedback section so that their customers can enquire their questions, comments and concerns. Companies can check and respond rapidly to customers, thereby providing better services.

Although improving communication with customers is one of the advantages of E-commerce the other advantages are far outweigh so that it can be said that improving communication with customers is the least useful advantages. In fact if customers come to a physical store, most of their questions, requests, and concerns can be answered immediately with face to face communication. In addition, by face to face communication, salespeople can understand customers’ needs and wants; therefore, they can make suggestions immediately. As a result of this the relationship with customers will be developed.

Despite the vast number of benefits brought about by E-commerce there are also a considerable number of drawbacks. The first of these advantages is that there is no guarantee of product quality.