“ROLE OF E-COMMERCE IN GLOBAL TRADE”

PROJECT REPORT

A REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF
COMMERCE
IN CSJM UNIVERSITY KANPUR UP

SUBMITTED BY

SHRUTI PANDEY

ROLL NO- 22016004701

ENROLLMENT NO: - CSJMA22000996328

UNDER THE GUIDANCE OF

Dr. Ravi Rastogi

(Asstt. Prof., Department of Commerce,

BND PG College, Kanpur)

Department of Commerce
BRAHMANAND PG COLLEGE
Kanpur-208001
YEAR OF SUBMISSION 2024-25

i
 DECLARATION
I Shruti Pandey and certify that the work embodied in this Research Project work is my
own Bonafide work carried out by me under the Guidance of Dr. Ravi Rastogi for a period
of 2024 to 2025 at BND PG College, Kanpur affiliated by Chhatrapati Shahu Ji Maharaj
University. Kanpur, Uttar Pradesh. The work embodied in this Research Project has not been
submitted for the award of any other degree or diploma, except where due acknowledgment
has been made in the text.

I hereby declare that I have faithfully acknowledged, given credit to, and referred to the
research workers wherever their works have been cited in the text and the body of the
Research Project Report. I further certify that I have not wilfully lifted up some other's
work, text, data, results, etc. Reported in the journals, books, magazines, reports,
dissertations, thesis, etc., or available on websites, and included them in this Research
Project and cited as my own work.

Date: - Student Name & Sign

Place: - Kanpur Shruti Pandey
(B.Com – 6th Semester)

ii
 SUPERVISOR'S CERTIFICATE
This is to certify that thesis entitled “Role of E-Commerce in Global Trade”
submitted to the Chhatrapati Shahu Ji Maharaj University, Kanpur for the
award of Degree of Bachelor of Commerce is a record of Bonafide original
research work carried outby Dr. Ravi Rastogi under my guidance and
supervision.
The thesis embodies the work of the candidate herself. The candidate worked
under me for its guidance, commencing from the date of the approval of the
synopsis. She has put in good attendance with me. The work included in the
present thesis, has not been submitted for any other university degree.

Date: - Name of Supervisor:

Place: -Kanpur Dr. Ravi Rastogi
(Assistant Prof.,
Department of
Commerce, BND
PG College,
Kanpur)

iii
 ACKNOWLEDGEMENT
I would like to express my sincere gratitude to all those who have contributed to
the completion of this research project on the “Role of E-Commerce in Global
Trade” First and foremost, I would like to thanks my supervisor. Dr. Ravi
Rastogi for their guidance, support and valuable insights throughout the entire
research process. Their expertise and feedback have been instrumental in
shaping the direction and methodology of this study.
I am also thankful to my Principal Prof. Dr. Vivek Dwivedi whose willingness
to share their experiences and opinions has provided valuable data for analysis.

Thank You
Shruti Pandey
(B. Com – 6th Semester)

iv
 TABLE OF CONTENT

S. No. TITLE Page No.

1. Introduction to Role of E-commerce 1 to 4

in Global Trade
2 Objectives of Global E-Commerce 5 to 9

Trade

3. Types of E-Commerce Trade 10 to 14

4. Need for E-Commerce Global Trade 15 to 19

5. Business Applications of E-Commerce 20 to 25

in Global Trade
6. Managerial Issues related to E- 26 to 32

Commerce Global trade

7. Advantages & Disadvantages of E- 33 to 37

Commerce

8. Conclusion 38

9. Bibliography 39

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 Chapter- 1
INTRODUCTION TO ROLE OF E- COMMERCE IN
GLOBAL TRADE
E-commerce means using the Internet and the web for business transactions and/or
commercial transactions, which typically involve the exchange of value (e.g., money) across
organizational or individual boundaries in return for products and services. Here we focus on
digitally enabled commercial transactions among organizations and individuals.
E-business applications turn into e-commerce precisely, when an exchange of value occurs.
Digitally enabled transactions include all transactions mediated by digital technology and
platform; that is, transactions that occur over the Internet and the web.
Hence, e-tailing is a subset of e-commerce, which encapsulates all “commerce” conducted via
the Internet. It refers to that part of e-commerce that entails the sale of product merchandise
and does not include sale of services, namely railway tickets, airlines tickets and job portals.

Early Development:
The history of E-commerce begins with the invention of the telephone at the end of last
century. EDI (Electronic Data Interchange) is widely viewed as the beginning of ecommerce if
we consider ecommerce as the networking of business communities and digitalization of
business information. Large organizations have been investing in development of EDI since
sixties. It has not gained reasonable acceptance until eighties. The meaning of electronic
commerce has changed over the last 30 years.
Originally, electronic commerce meant the facilitation of commercial transactions
electronically, using technology such as Electronic Data Interchange (EDI) and Electronic
Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to
send commercial documents like purchase orders or invoices electronically. The growth and
acceptance of credit cards, automated teller machines (ATM) and telephone banking in the
1980s were also forms of electronic commerce. Another form of E-commerce was the airline
and railway reservation system.
Online shopping, an important component of electronic commerce was invented by Michael
Aldrich in the UK in 1979. The world’s first recorded business to business was Thomson
Holidays in 1981. The first recorded business to consumer was Gateshead SIS/Tesco in 1984.

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During the 1980s, online shopping was also used extensively in the UK by auto manufacturers
such as Ford, General Motors and Nissan. The systems used the switched public telephone
network in dial-up and leased line modes.

From the 1990s onwards, electronic commerce would additionally include enterprise resource
planning systems (ERP), data mining and data warehousing. An early online information
marketplace, including online consulting, was the American Information Exchange, another
pre-Internet online system introduced-in 1991. In 1990 Tim Berners-Lee invented the World
Wide Web and transformed an academic telecommunication network into a worldwide
everyman everyday communication system called internet/www(dot)Commercial enterprise
on the Internet was strictly prohibited until 1991.
Although the Internet became popular worldwide around 1994 when the first internet online
shopping started, it took about five years to introduce security protocols and DSL allowing
continual connection to the Internet. By the end of 2000, many European and American
business companies offered their services through the World Wide Web. Since then, people
began to associate a word “E-commerce” with the ability of purchasing various goods through
the Internet using secure protocols and electronic payment services.

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The Internet and the Web:
The Internet was conceived in 1969, when the Advanced Research Projects Agency (a
Department of Défense organization) funded research of computer networking. The Internet
could end up like EDI without the emergence of the World Wide Web in 1990s. The Web
became a popular mainstream medium (perceived as the fourth mainstream medium in
addition to print, radio and TV) in a speed which had never been seen before. The Web users
and content were almost doubled every a couple of months in 1995 and 1996.

E-Commerce – Meaning
The term electronic commerce or e-commerce refers to any sort of business transaction that
involves the transfer of information through the internet. By definition it covers a variety of
business activities which use internet as a platform for either information exchange or
monetary transaction or both at times.
For example, the numbers of consumer brand retail sites like Amazon(dot)com and
Flipkart(dot)com which normally provides information about products and also allows
monetary transactions to happen over the internet.
On the contrary there are the auctions sites like Quick(dot)com and eBay(dot)com where the
information about certain listed products and services are provided but the monetary

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transactions normally happen physically.
Apart from these two categories of e-commerce sites, there are some sites which enable
businesses to exchange trading goods and also service between two or more companies. All of
these forms of internet-based business platforms are known as e-commerce.
Over the last decade the advent of e-commerce has actually transformed the manner in which
people used internet. People now are not only just using internet for gathering information,
leisure or socializing online but also at the same time they are seeking measures to conduct
business.
Even popular social networking sites like Facebook(dot)com are allowing people to promote
and sell products and services online and the introduction of computer and mobile based e-
commerce application software like Shopify provides evidence of how e-commerce have
boomed over the past 5 years.

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 CHAPTER- 2
OBJECTIVES OF GLOBAL E-COMERCE
TRADE
Global e-commerce trade has revolutionized the way businesses operate, enabling companies
to expand their reach beyond domestic markets and tap into international consumers. With the
rapid growth of digital platforms and advancements in technology, e-commerce has become
an essential part of the global economy. This document explores the primary objectives of
global e-commerce trade and how they contribute to economic growth, market expansion, and
consumer benefits.
1. Market Expansion and Business Growth
One of the key objectives of global e-commerce trade is to facilitate market expansion and
business growth. Companies can reach a broader audience by selling products and services
online, eliminating geographical barriers. Small and medium-sized enterprises (SMEs) benefit
greatly from e-commerce, as they can compete with larger corporations by establishing an
online presence and offering their products to international customers.
Benefits of Market Expansion:
 Access to new customer bases
 Increased revenue streams
 Lower costs compared to traditional brick-and-mortar expansion
 Greater brand recognition and visibility
2. Enhancing Consumer Convenience and Accessibility
E-commerce provides consumers with the convenience of shopping anytime and anywhere.
By leveraging digital platforms, businesses ensure that customers can browse, compare, and
purchase products with ease. This enhances customer satisfaction and builds long-term
relationships between brands and consumers.
Key Aspects of Consumer Convenience:
 24/7 availability of products and services
 Multiple payment options for ease of transactions
 Personalized shopping experiences through AI and data analytics
 Faster and more efficient delivery systems

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3. Cost Efficiency and Operational Optimization
Another significant objective of global e-commerce trade is to reduce operational costs and
increase efficiency. Traditional retail involves substantial expenses such as rent, utilities, and
labour. In contrast, e-commerce allows businesses to operate with lower overhead costs by
utilizing digital marketing, automated customer service, and streamlined supply chain
management.
Ways E-Commerce Reduces Costs:
 Reduced need for physical storefronts
 Automation of order processing and customer support
 Lower marketing expenses through digital advertising
 Efficient inventory and warehouse management

4. Promoting International Trade and Economic Growth

E-commerce plays a crucial role in fostering international trade and contributing to economic
growth. By facilitating cross-border transactions, businesses can engage with global markets,
diversify their sources of revenue, and support economic development in different regions.
Economic Contributions:
 Increased trade opportunities for developing countries
 Job creation and entrepreneurship stimulation

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  Enhanced supply chain and logistics networks
 Growth of digital and fintech industries
5. Strengthening Competitive Advantage and Innovation
To thrive in the competitive e-commerce landscape, businesses must continuously innovate
and improve their offerings. The global nature of e-commerce pushes companies to adopt new
technologies, improve user experiences, and provide superior customer service.
Strategies for Competitive Advantage:
 Implementing AI and machine learning for personalized marketing
 Utilizing blockchain for secure and transparent transactions
 Enhancing mobile commerce (m-commerce) capabilities
 Providing superior customer service and engagement
6. Enhancing Digital Payment Systems
A key objective of global e-commerce is to improve and expand digital payment options.
Secure and efficient online payment methods ensure seamless transactions, boosting consumer
confidence and increasing sales.
Benefits of Digital Payment Systems:
 Faster and more secure transactions
 Integration with multiple currencies and payment gateways
 Reduction in fraud and chargebacks
 Increased financial inclusion in developing markets
7. Leveraging Data Analytics for Business Intelligence
E-commerce enables businesses to collect and analyze large amounts of data to enhance
decision-making. Through analytics, companies can understand consumer behaviour, predict
trends, and improve their marketing strategies.
Impact of Data Analytics:
 Improved customer targeting and personalization
 Enhanced inventory and supply chain management
 More effective advertising and promotions
 Better customer relationship management
8. Reducing Environmental Impact and Promoting Sustainability
With increasing global concerns about sustainability, e-commerce aims to reduce
environmental impact through efficient logistics and packaging solutions. Digital trade also
helps minimize the carbon footprint associated with traditional retail operations.
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Sustainability Initiatives:
 Adoption of eco-friendly packaging materials
 Optimization of delivery routes to reduce emissions
 Encouraging digital products and services
 Reducing waste through efficient inventory management
9. Ensuring Cybersecurity and Consumer Protection
As e-commerce expands, so does the risk of cyber threats. One of the key objectives is to
enhance cybersecurity measures to protect customer data and ensure safe online transactions.
Cybersecurity Strategies:
 Implementing robust encryption technologies
 Regular security audits and compliance checks
 Educating consumers on safe online practices
 Strengthening fraud detection and prevention mechanisms

10. Encouraging Cross-Border Collaboration and Partnerships

E-commerce fosters international business collaborations, enabling companies to form
partnerships with suppliers, distributors, and service providers worldwide. This enhances

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global trade efficiency and competitiveness.

Benefits of Cross-Border Collaboration:

 Access to new supply chains and logistics networks
 Enhanced product offerings through global sourcing
 Strengthened international brand presence
 Opportunities for joint ventures and investments

Global e-commerce trade has transformed the way businesses operate and interact with
customers worldwide. Its key objectives—market expansion, consumer convenience, cost
efficiency, international trade promotion, competitive advantage, digital payments, data
analytics, sustainability, cybersecurity, and cross-border collaboration—contribute to the rapid
growth of digital commerce. As technology continues to evolve, the global e-commerce
landscape will expand further, creating new opportunities for businesses and consumers alike.
By leveraging these objectives, companies can successfully navigate the digital economy and
establish a strong global presence.

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 CHAPTER- 3
TYPES OF E-COMMERCE
E-commerce has revolutionized global trade, enabling businesses and individuals to buy and
sell goods and services across borders. Based on the nature of participants and transactions,
e-commerce in global trade can be categorized into the following types:

1. Business-to-Consumer (B2C)
Definition:
B2C e-commerce involves businesses selling products or services directly to consumers
through online platforms.
Characteristics:
• Businesses operate online stores or marketplaces.
• Products are sold in smaller quantities.
• Payments are usually made instantly via digital payment methods.
• Customer service and user experience play a key role.
Examples:
• Amazon – A global e-commerce platform where businesses sell to consumers.
• Flipkart – An Indian e-commerce platform for consumer products.
• Alibaba (AliExpress) – Chinese e-commerce giant offering direct consumer sales.
Impact on Global Trade:
• Allows businesses to reach international customers without physical stores.
• Enables cross-border transactions with ease of payment and delivery.
• Supports small businesses in expanding their market reach.

2. Business-to-Business (B2B)
Definition:
B2B e-commerce involves transactions between businesses, such as manufacturers selling to
wholesalers or retailers.
Characteristics:
• Bulk transactions with high order values.
• Requires long-term contracts and negotiations.
• Uses specialized B2B platforms for transactions.
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• Involves supply chain and logistics management.
Examples:
• Alibaba.com – A wholesale platform for manufacturers and suppliers.
• IndiaMART – A B2B marketplace connecting Indian businesses.
• TradeIndia – An e-commerce platform for B2B transactions.
Impact on Global Trade:
• Allows companies to source products from international markets at competitive
prices.
• Reduces procurement costs and improves supply chain efficiency.
• Expands opportunities for manufacturers and suppliers globally.

3. Consumer-to-Consumer (C2C)
Definition:
C2C e-commerce allows individuals to sell products or services directly to other consumers
via online platforms.
Characteristics:
• Transactions occur between individuals without business involvement.
• Online marketplaces facilitate buying and selling.
• Payments are handled through third-party platforms.
Examples:
• eBay – An online marketplace where individuals buy and sell goods.

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• OLX – A classifieds platform for selling used products.
• Facebook Marketplace – A social platform for C2C selling.
Impact on Global Trade:
• Enables peer-to-peer commerce across borders.
• Reduces waste by promoting the resale of used goods.
• Provides individuals with a platform to start small businesses.

4. Consumer-to-Business (C2B)
Definition:
C2B e-commerce allows individuals to offer products or services to businesses, often through
freelancing or influencer marketing.
Characteristics:
• Individuals provide services or products to companies.
• Businesses benefit from user-generated content and freelance work.
• Includes influencer marketing, freelancers, and independent consultants.
Examples:
• Fiverr – A freelance platform for individuals offering services to businesses.
• Upwork – A global freelancing platform connecting professionals with companies.
• Shutterstock – A marketplace for individuals to sell digital assets like photos.
Impact on Global Trade:
• Allows businesses to source talent and services globally.
• Creates new employment opportunities for freelancers.
• Supports the gig economy and digital entrepreneurship.

5. Business-to-Government (B2G)
Definition:
B2G e-commerce involves businesses providing goods, services, or technology to
government agencies through online platforms.
Characteristics:
• Requires compliance with government regulations.
• Includes contracts for infrastructure, IT services, defence equipment, etc.
• Government agencies post tenders, and businesses bid for contracts.
Examples:

12
• GeM (Government e-Marketplace, India) – An online platform for businesses to sell
to government agencies.
• SAP Ariba – A procurement solution used by governments.
• UNGM (United Nations Global Marketplace) – A global procurement platform for
government contracts.
Impact on Global Trade:
• Enhances transparency in government procurement.
• Provides opportunities for businesses to work with international governments.
• Strengthens global public-private partnerships.

6. Government-to-Business (G2B)
Definition:
G2B e-commerce involves government agencies offering services to businesses, such as
taxation, business registration, and licensing.
Characteristics:
• Involves digital government portals.
• Provides business-related services online.
• Reduces bureaucratic delays and enhances efficiency.
Examples:
• Online Business Registration Portals – Allow businesses to register and obtain
licenses.
• E-Tax Portals – Help businesses file taxes online.
• E-Procurement Systems – Government platforms for procurement and tenders.
Impact on Global Trade:
• Streamlines international business operations.
• Reduces administrative burdens for businesses.
• Encourages compliance with regulations.

7. Government-to-Consumer (G2C)
Definition:
G2C e-commerce involves governments providing services directly to citizens via digital
platforms.
Characteristics:
• Enhances public access to government services.

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• Reduces paperwork and improves efficiency.
• Includes services like online bill payments, e-learning, and digital identity
verification.

Examples:
• Aadhaar (India) – Digital identity verification for citizens.
• E-Government Portals – Provide services like passport applications, bill payments,
and tax filing.
• Social Security Websites – Allow citizens to access welfare benefits.
Impact on Global Trade:
• Supports digital inclusion and financial access.
• Simplifies regulatory compliance for individuals.
• Encourages global standardization of e-government services.

E-commerce in global trade is diverse, covering business, consumer, and government

interactions. It has transformed traditional trade by reducing costs, increasing efficiency, and
enabling global market access. The rise of digital payment solutions, AI-driven platforms,
and cross-border logistics continues to expand the impact of e-commerce on international
trade.

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 CHAPTER- 4
NEED FOR E-COMMERCE IN GLOBAL
TRADE
E-commerce has become a fundamental part of global trade, transforming how businesses
and consumers engage in cross-border transactions. With the rise of digital platforms,
businesses of all sizes can now reach international markets, making trade more efficient and
accessible. Below are the key reasons why e-commerce is essential for global trade:

1. Expanding Market Reach

📌 Why It’s Important:
Traditional trade limits businesses to specific geographical locations. E-commerce removes
these barriers, allowing businesses to sell products and services globally.

🔹 How It Helps:
Small businesses can reach international customers without the need for physical stores.
E-commerce platforms provide access to millions of buyers worldwide.
Multilingual websites and currency conversion tools make global transactions easier.
✅ Example:

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Amazon, Alibaba, and Flipkart enable businesses to sell products internationally, expanding
their market reach beyond local customers.

2. Cost Efficiency & Lower Overheads

📌 Why It’s Important:
Traditional trade involves high operational costs, including rent, utilities, and staffing. E-
commerce significantly reduces these expenses.
🔹 How It Helps:
No need for physical storefronts, reducing infrastructure costs.
Automated processes (AI chatbots, order management) cut labor expenses.
Digital marketing (SEO, social media ads) is more affordable than traditional advertising.
✅ Example:
A small business in India can sell handicrafts to customers in the U.S. via Etsy, without
investing in an international distribution network.
3. Faster and More Efficient Transactions
📌 Why It’s Important:
E-commerce speeds up global trade by automating transactions and reducing processing
times.
🔹 How It Helps:
Instant payments through online gateways (PayPal, Stripe, Razorpay).
Automated order processing reduces shipping time.
Blockchain technology ensures secure and transparent transactions.
✅ Example:
Businesses can receive payments instantly from international customers, reducing delays in
cash flow compared to traditional bank transfers.

4. 24/7 Availability and Convenience

📌Why It’s Important:
Unlike physical stores that operate on fixed hours, e-commerce platforms are available 24/7,
allowing global buyers to shop at any time.
🔹 How It Helps:
Customers can shop from different time zones without restrictions.
Automated order processing ensures continuous sales.

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AI-driven customer support provides instant assistance.
Example:
A buyer in Europe can place an order from a U.S.-based seller at any time, without waiting
for business hours to open.

5. Enhanced Customer Experience

Why It’s Important:
E-commerce platforms provide a personalized and user-friendly experience, leading to
higher customer satisfaction.
🔹 How It Helps:
AI and machine learning offer personalized recommendations.
Multiple payment options (credit cards, digital wallets, cryptocurrency).
Easy return policies and tracking systems improve customer trust.
✅ Example:
Amazon’s recommendation engine suggests products based on a user’s browsing history,
improving the shopping experience.

6. Digital Payment and Security Advancements

📌 Why It’s Important:
Cross-border transactions used to be slow and risky. Digital payment solutions ensure secure
and instant transactions.

🔹 How It Helps:
Secure payment gateways prevent fraud and data breaches.
Multiple currency support for seamless global transactions.
Cryptocurrencies and blockchain provide additional security layers.
✅ Example:
PayPal, Stripe, and Razorpay enable businesses to receive payments globally without
currency conversion issues.

7. Boosting Small and Medium Enterprises (SMEs)

📌 Why It’s Important:
SMEs often struggle to compete with large corporations in traditional markets. E-commerce
levels the playing field.

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🔹 How It Helps:
Digital platforms provide equal opportunities for small businesses.
Low-cost digital advertising increases brand visibility.
Direct-to-consumer (D2C) models eliminate middlemen, increasing profit margins.
✅ Example:
A small clothing brand can sell directly to international customers via Shopify without
relying on large retailers.

8. Streamlined Supply Chain and Logistics

📌 Why It’s Important:
Global trade depends on efficient logistics and supply chains. E-commerce integrates these
processes for better efficiency.

🔹 How It Helps:
Real-time inventory tracking prevents stock shortages.
AI-driven demand forecasting optimizes supply chain management.
Third-party logistics (3PL) providers ensure faster international shipping.
✅ Example:
Amazon’s Fulfilment by Amazon (FBA) allows businesses to store inventory in
international warehouses, ensuring fast delivery.
9. Increased Competition and Market Innovation

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📌 Why It’s Important:
E-commerce encourages competition, leading to better products, services, and pricing for
consumers.

🔹 How It Helps:
Global competition pushes businesses to innovate and improve quality.
Price comparison tools enable consumers to find the best deals.
Digital feedback systems (reviews, ratings) hold sellers accountable.
✅ Example:
Multiple vendors selling electronics on eBay offer competitive pricing, benefiting
consumers.

10. Government Support and Digital Trade Policies

📌 Why It’s Important:
Governments worldwide are supporting e-commerce to boost economic growth and global
trade.
🔹 How It Helps:
Digital trade agreements simplify international business operations.
E-government services streamline business registrations and tax compliance.
Customs and border clearance are digitized for faster trade.
✅ Example:
The World Trade Organization (WTO) promotes policies that facilitate cross-border e-
commerce.
E-commerce is no longer just an option—it’s a necessity in global trade. It enables
businesses to expand internationally, reduces costs, improves efficiency, and enhances
customer experiences. As technology advances, e-commerce will continue to shape the
future of global trade, making it more inclusive and accessible for businesses of all sizes.

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 CHAPTER- 5
BUSINESS APPLICATIONS OF E-
COMMERCE IN GLOBAL TRADE
E-commerce has significantly transformed global trade by enabling
businesses to expand their reach, improve efficiency, and reduce costs.
Various industries and business functions leverage e-commerce to
facilitate trade, streamline operations, and enhance customer
experiences. Below are the major business applications of e-commerce in
global trade:

1. Online Marketplaces and Retail (B2C & B2B)

📌 Application:
E-commerce allows businesses to sell products and services directly to
consumers or other businesses through online marketplaces.

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🔹 How It Works:
Businesses list their products on e-commerce platforms.
Customers or businesses browse, compare, and purchase online.
Digital payment gateways process transactions securely.
Logistics and delivery services ensure global shipping.
✅ Examples:
Amazon, eBay, Flipkart (B2C) – Businesses sell directly to consumers
worldwide.
Alibaba, IndiaMART (B2B) – Wholesale suppliers connect with businesses
globally.
🌍 Impact on Global Trade:
Removes geographical barriers, enabling businesses to sell internationally.
Supports SMEs by providing a global sales platform.
Reduces costs by eliminating the need for physical stores.
2. Digital Payment and Financial Services
📌 Application:
E-commerce integrates various digital payment systems, making cross-
border transactions faster and more secure.
🔹 How It Works:
Businesses accept payments via digital wallets, credit/debit cards, and
cryptocurrencies.
Payment processors handle currency conversion automatically.
Blockchain technology enhances security and transparency.
✅ Examples:
PayPal, Stripe, Razorpay – Secure online payment processing.
Cryptocurrencies (Bitcoin, Ethereum) – Used for international transactions.
🌍 Impact on Global Trade:
Reduces transaction time and costs compared to traditional banking.
Enhances security and prevents fraud.
Enables businesses to accept payments from customers in different
countries.

3. Supply Chain and Logistics Management

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📌 Application:
E-commerce optimizes supply chain management by integrating digital
tools for inventory, procurement, and delivery.
🔹 How It Works:
Businesses use AI-driven demand forecasting to manage inventory.
Online platforms connect suppliers, manufacturers, and logistics
companies.
Customers track shipments in real-time for transparency.
✅ Examples:
Amazon Fulfillment (FBA) – Businesses store inventory in Amazon’s
warehouses for faster delivery.
DHL, FedEx, UPS – Global shipping and logistics providers supporting e-
commerce.
🌍 Impact on Global Trade:
Reduces delays in international shipping.
Enhances efficiency with automated warehouse management.
Lowers costs with optimized procurement and logistics.

4. Digital Marketing and Customer Engagement

📌 Application:
E-commerce businesses use digital marketing tools to target global
customers and increase sales.
🔹 How It Works:
Social media and search engines drive traffic to e-commerce sites.
AI and data analytics provide personalized recommendations.
Email marketing and chatbots improve customer engagement.
✅ Examples:
Google Ads, Facebook Ads – Global advertising platforms.
HubSpot, Mailchimp – Email marketing and customer relationship tools.
🌍 Impact on Global Trade:
Low-cost advertising reaches international customers.
AI-driven insights help businesses understand customer preferences.
Increases brand visibility and competitiveness in foreign markets.

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5. E-Procurement and Online Bidding (B2B & B2G)
📌 Application:
Businesses and governments use e-commerce platforms for procurement
and contract bidding.
🔹 How It Works:
Companies post their requirements on e-procurement platforms.
Suppliers submit bids, and the best offer is selected.
Digital contracts and e-signatures finalize transactions.
✅ Examples:
SAP Ariba – B2B procurement platform.
GeM (Government e-Marketplace, India) – B2G platform for government
tenders.
🌍 Impact on Global Trade:
Increases transparency and efficiency in global procurement.
Reduces procurement costs and middlemen involvement.
Encourages fair competition among international suppliers.

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6. Cross-Border Trade Facilitation
📌 Application:
E-commerce platforms simplify the process of importing and exporting
goods across borders.
🔹 How It Works:
Automated systems handle customs documentation and duties.
AI-driven tools calculate tax and tariff rates for different countries.
Blockchain technology ensures transparency in trade compliance.
✅ Examples:
TradeLens (IBM & Maersk) – Uses blockchain to streamline international
shipping.
DHL Express Trade Automation Service – Helps businesses manage global
trade regulations.
🌍 Impact on Global Trade:
Reduces paperwork and delays in customs clearance.

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Improves compliance with international trade laws.
Enhances trust between global buyers and sellers.

7. Online Services and Digital Products

📌 Application:
E-commerce allows businesses to sell digital products and online services
globally.
🔹 How It Works:
Businesses offer software, e-books, courses, and media streaming.
Digital downloads and cloud-based services eliminate the need for
physical shipping.
Subscription-based models generate recurring revenue.
✅ Examples:
Netflix, Spotify – Streaming services available globally.
Udemy, Coursera – Online learning platforms for international students.
Microsoft, Adobe – Cloud-based software subscriptions.
🌍 Impact on Global Trade:
Expands the reach of digital services to global customers.
Creates new revenue streams for businesses in various industries.
Reduces logistics costs by eliminating the need for physical delivery.

8. Business Intelligence and Data Analytics

📌 Application:
E-commerce businesses use data analytics to make informed decisions
and optimize operations.
🔹 How It Works:
AI analyses customer behaviour and predicts trends.
Businesses use data-driven insights to adjust pricing and marketing
strategies.
Cloud-based analytics tools provide real-time reports.
✅ Examples:
Google Analytics, Tableau – Track website traffic and user behaviour.
IBM Watson, Salesforce AI – AI-driven business intelligence solutions.

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🌍 Impact on Global Trade:
Improves decision-making with real-time market insights.
Helps businesses adapt to changing consumer demands.
Reduces risks by identifying fraud and potential market challenges.
E-commerce plays a crucial role in global trade by enabling businesses to
expand their market reach, improve efficiency, and reduce costs. From
online retail and digital payments to supply chain management and AI-
driven analytics, e-commerce applications continue to drive international
trade forward.

CHAPTER- 6
MANAGERIAL ISSUES RELATED TO E-
COMMERCE
E-commerce has transformed how businesses operate, offering opportunities for growth,
global reach, and cost efficiency. However, managers face several challenges in effectively
running an e-commerce business. These managerial issues range from technological concerns
to customer experience, logistics, and legal compliance. Below is a detailed exploration of
the key managerial issues in e-commerce and their impact.

1. Security and Cyber Threats

Issue:

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E-commerce platforms handle sensitive customer data, making them prime targets for
cyberattacks, hacking, and fraud.
Key Concerns:
 Data Breaches: Hackers steal customer information, including credit card details.
 Phishing Attacks: Fraudsters trick users into revealing sensitive data.
 DDoS Attacks: Cybercriminals overload servers, causing website downtime.
 Malware & Ransomware: Attackers encrypt data and demand payment for its
release.
Examples:
 Amazon and eBay constantly invest in cybersecurity to protect customer data.
 Facebook and LinkedIn have faced data breaches exposing millions of users'
information.
Managerial Solutions:
✔️Invest in firewalls, encryption, and multi-factor authentication (MFA).
✔️Implement secure payment gateways (PayPal, Stripe, etc.).
✔️Educate employees and customers about cybersecurity best practices.

2. Managing Customer Expectations and Experience

Issue:
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Online shoppers expect fast delivery, easy navigation, and seamless customer service. Failing
to meet these expectations leads to lost sales and negative reviews.
Key Concerns:
 Website Speed & UX: Slow loading times lead to high bounce rates.
 Order Fulfilment & Delivery: Customers demand fast shipping options.
 Customer Support: Poor response time reduces trust and loyalty.
Examples:
 Amazon Prime offers same-day delivery to meet customer expectations.
 Zappos is known for exceptional customer service and hassle-free returns.
Managerial Solutions:
✔️Optimize website performance for faster load times.
✔️Implement AI chatbots and 24/7 customer support.
✔️Offer multiple shipping options, including express delivery.

3. Supply Chain and Logistics Management

Issue:
Coordinating product storage, inventory, and delivery across multiple regions is complex.
Key Concerns:
 Inventory Management: Overstocking increases costs, while understocking leads to
lost sales.
 Global Shipping Issues: Cross-border e-commerce faces customs delays and high
shipping fees.
 Last-Mile Delivery Challenges: Delivering products efficiently to remote areas.
Examples:
 Alibaba and Flipkart use AI-driven inventory management to optimize stock levels.
 Amazon’s Fulfilment Centres streamline global shipping and delivery.
Managerial Solutions:
✔️Use AI-driven inventory tracking for demand forecasting.
✔️Partner with third-party logistics (3PL) providers like FedEx or DHL.
✔️Implement automated warehousing for faster order processing.

4. Digital Payment Issues and Fraud

Issue:
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Managing secure online payments across multiple regions and currencies is a major
challenge.
Key Concerns:
 Payment Fraud: Stolen credit cards, chargeback fraud, and fake transactions.
 Multi-Currency Transactions: Exchange rate fluctuations affect pricing.
 Limited Payment Options: Customers abandon carts if preferred payment methods
are unavailable.
Examples:
 PayPal, Stripe, and Razorpay help businesses offer secure payment solutions.
 Cryptocurrency payments are gaining popularity but still face trust issues.
Managerial Solutions:
✔️Implement fraud detection tools like AI-based risk assessment.
✔️Offer multiple payment options (credit cards, digital wallets, UPI, BNPL).
✔️Use geolocation-based pricing to account for currency fluctuations.

5. Competition and Pricing Strategies

Issue:
The e-commerce market is highly competitive, requiring businesses to continuously adjust
pricing and marketing strategies.
Key Concerns:
 Dynamic Pricing: Competitors frequently change prices, affecting sales.
 Brand Loyalty Challenges: Customers easily switch brands due to discounts.
 Advertising Costs: High costs for digital marketing and PPC (Pay-Per-Click) ads.
Examples:
 Amazon uses AI to adjust prices dynamically based on demand.
 Walmart competes with Amazon by offering lower prices and free shipping.
Managerial Solutions:
✔️Use AI-driven pricing strategies to stay competitive.
✔️Focus on customer loyalty programs and personalized offers.
✔️Optimize marketing spend by targeting high-conversion channels.

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6. Legal and Taxation Compliance
Issue:
E-commerce businesses must comply with different legal and tax regulations across
countries.
Key Concerns:
 Data Protection Laws: GDPR (Europe), CCPA (California) regulate user data.
 Sales Tax Compliance: Varying tax rates across different regions.
 Intellectual Property Issues: Copyright infringement and counterfeit products.
Examples:
 Amazon removed thousands of fake products to comply with brand protection
laws.
 EU’s GDPR rules require companies to protect user data or face heavy fines.
Managerial Solutions:

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✔️Hire legal experts for compliance with international laws.
✔️Implement transparent refund and return policies.
✔️Use automated tax calculation tools to manage global sales tax.

7. Technology Integration and Scalability

Issue:
As businesses grow, integrating new technologies and scaling operations efficiently is a
challenge.
Key Concerns:
 Website Downtime: High traffic can crash unoptimized websites.
 Integration with ERP & CRM: Businesses need seamless data flow.
 AI and Automation Costs: High investment needed for AI-driven personalization.
Examples:
 Shopify and WooCommerce provide scalable e-commerce solutions.
 Amazon Web Services (AWS) ensures uptime and smooth performance for online
stores.
Managerial Solutions:
✔️Invest in cloud-based e-commerce platforms for scalability.
✔️Implement AI-driven automation for better user experience.
✔️Use microservices architecture to ensure flexibility in growth.

8. Customer Retention and Brand Trust

Issue:
Keeping customers loyal in a competitive market is difficult.
Key Concerns:
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  Customer Acquisition Costs: It’s expensive to attract new users.
 Negative Reviews & Reputation Management: One bad experience can lead to
customer churn.
 Personalized Marketing: Customers expect tailored experiences.
Examples:
 Amazon Prime’s loyalty program encourages repeat purchases.
 Starbucks’ rewards app drives customer retention through discounts.
Managerial Solutions:
✔️Implement loyalty programs to encourage repeat purchases.
✔️Use AI-powered personalization for targeted recommendations.
✔️Address negative reviews with prompt customer support.

E-commerce presents immense opportunities for businesses, but managers must navigate
security threats, logistics, payment fraud, legal compliance, competition, and customer
expectations effectively.
Key Takeaways:
✔️Security and customer trust are crucial.
✔️AI and automation can improve efficiency.
✔️Global compliance and taxation must be managed proactively.
✔️Scalability and technology integration are necessary for long-term success.

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 CHAPTER- 7
ADVANTAGES OF E-COMMERCE
1. Global Market Reach
E-commerce allows businesses to sell products and services worldwide without requiring a
physical presence.
Benefits:
✔️Access to international customers.
✔️Increased sales opportunities.
✔️Expansion without opening physical stores.
Example: Amazon and Alibaba enable businesses to sell across multiple countries.

2. Cost Savings
Online stores reduce expenses related to rent, utilities, and in-store staff.
Benefits:
✔️Lower operating costs compared to brick-and-mortar stores.
✔️Reduced advertising expenses through digital marketing.
✔️Automation reduces manual labour costs.
Example: Many startups operate online-only businesses to save money.

3. 24/7 Availability
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Unlike physical stores, e-commerce businesses operate 24/7 without time restrictions.
Benefits:
✔️Customers can shop anytime, increasing sales potential.
✔️Automated systems handle orders and customer queries.
✔️No geographical limitations.
Example: Customers can order from Amazon at any time of the day or night.

4. Faster and More Convenient Shopping

Customers can browse products, compare prices, and make purchases within minutes.
Benefits:
✔️No need to travel to a physical store.
✔️Easy price comparisons and product reviews.
✔️Instant digital product delivery (e-books, software, etc.).
Example: Online grocery shopping with home delivery services like Instacart and
BigBasket.

5. Personalized Shopping Experience

🔹 E-commerce platforms use AI to recommend products based on customer preferences.
Benefits:
✔️AI-based recommendations improve customer experience.
✔️Personalized marketing increases conversion rates.
✔️Customer data helps businesses understand buying behaviour.
Example: Amazon's recommendation system suggests products based on browsing history.

6. Scalability
🔹 E-commerce businesses can scale operations easily without huge investments.
Benefits:
✔️Businesses can expand product ranges with minimal risk.
✔️Cloud-based platforms allow easy scalability.
✔️No need to invest in additional physical locations.
Example: Shopify enables small businesses to grow into international brands.

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7. Digital Payment Convenience
🔹 Customers can pay through multiple methods, including credit/debit cards, e-wallets, and
cryptocurrencies.
Benefits:
✔️Faster, more secure transactions.
✔️Contactless payments increase convenience.
✔️No need for handling physical cash.
Example: PayPal and Stripe provide seamless online payment solutions.

DISADVANTAGES OF E-COMMERCE

1. Security and Fraud Risks

Cybersecurity threats, data breaches, and online fraud are major risks in e-commerce.
Challenges:
🚫 Hacking and credit card fraud.
🚫 Phishing scams targeting customers.
🚫 Loss of sensitive customer information.
Example: Companies like Target and Facebook have faced data breaches.

2. Lack of Physical Interaction

Customers cannot physically inspect products before purchasing.
Challenges:
🚫 Risk of receiving defective or counterfeit products.
🚫 Higher return rates due to mismatched expectations.
🚫 Lack of direct customer service experience.
Example: Many customers hesitate to buy clothes online due to sizing issues.

3. High Competition and Price Wars

The e-commerce industry is highly competitive, making it difficult for small businesses to
survive.

35
Challenges:
🚫 Larger companies dominate the market.
🚫 Price wars lead to lower profit margins.
🚫 Customer loyalty is difficult to maintain.
Example: Amazon's pricing strategy forces smaller retailers to reduce prices.

4. Shipping and Logistics Challenges

Timely and cost-effective delivery is a challenge, especially for global shipments.

Challenges:
🚫 Delayed shipments due to customs and logistics issues.
🚫 High shipping costs for international orders.
🚫 Last-mile delivery issues in remote areas.
Example: Customers often complain about delayed deliveries from international sellers.

5. Dependence on Internet and Technology

A stable internet connection and reliable technology are required for smooth operations.
Challenges:
🚫 Internet disruptions affect transactions.
🚫 Websites crash during peak sales (Black Friday, Cyber Monday).
🚫 Technical glitches can frustrate customers.
Example: Many e-commerce websites experience downtime during major online sales
events.

6. Product Returns and Refund Issues

Online businesses face high return rates, leading to financial losses.
Challenges:
🚫 Fraudulent returns affect profitability.
🚫 Delays in refund processing create customer dissatisfaction.
🚫 Additional costs in handling returns.
Example: Online fashion retailers experience returns rates of 30-50%.

7. Legal and Taxation Complexities

36
Different countries have varying e-commerce regulations and tax policies.
Challenges:
🚫 Complex tax structures for cross-border sales.
🚫 Compliance with data privacy laws (GDPR, CCPA).
🚫 Import/export restrictions on certain products.
Example: Companies selling in the EU must comply with GDPR regulations on data
privacy.

37
 CONCLUSION

E-commerce has revolutionized global trade by eliminating geographical barriers, reducing

operational costs, and providing businesses of all sizes with access to international markets. It
has enhanced trade efficiency through digital payment systems, AI-driven supply chain
management, and automated logistics, making cross-border transactions faster and more
reliable.
Despite its numerous advantages—such as global market reach, 24/7 accessibility, and cost
savings—e-commerce also presents challenges, including cybersecurity threats, regulatory
complexities, and logistical issues. However, ongoing advancements in technology, better
cybersecurity measures, and evolving international trade policies are continuously addressing
these challenges.
Looking ahead, e-commerce will continue to shape the future of global trade, driving
economic growth, fostering innovation, and providing businesses and consumers with
unprecedented opportunities. For businesses to thrive in this digital landscape, they must
adapt to emerging technologies, prioritize customer experience, and comply with global trade
regulations.
Final Thought: The future of global trade is digital, and e-commerce will remain a key driver
of economic transformation worldwide. Businesses that embrace this shift will have a
competitive edge in the global marketplace.

38
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BY THESE WEBSITES:

 https://disk.com/resources/e-commerce-on-global-trade-flows/

 https://unctad.org/news/intricacies-impact-and-opportunities-e-

commerce-trade-and-development

 https://www.globaltrademag.com/how-e-commerce-is-driving-new-

trends-in-global-trade-and-logistics/

 https://tradecouncil.org/wp-content/uploads/2024/11/The-Role-of-E-

Commerce-in-Cross-Border-Trade-and-the-Global-Inflation-

Response-in-2024.pdf

 https://www.sciencedirect.com/science/article/pii/

S1877042811015382

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