E-Commerce

E-Commerce - Overview
E-Commerce or Electronics Commerce is a methodology of modern business, which
addresses the need of business organizations, vendors and customers to reduce cost
and improve the quality of goods and services while increasing the speed of delivery.
Ecommerce refers to the paperless exchange of business information using the
following ways −

• Electronic Data Interchange (EDI)

• Electronic Mail (e-mail)
• Electronic Bulletin Boards
• Electronic Fund Transfer (EFT)
• Other Network-based technologies

Features
E-Commerce provides the following features −
• Non-Cash Payment − E-Commerce enables the use of credit cards, debit
cards, smart cards, electronic fund transfer via bank's website, and other modes
of electronics payment.
• 24x7 Service availability − E-commerce automates the business of
enterprises and the way they provide services to their customers. It is available
anytime, anywhere.
• Advertising / Marketing − E-commerce increases the reach of advertising of
products and services of businesses. It helps in better marketing management
of products/services.
• Improved Sales − Using e-commerce, orders for the products can be
generated anytime, anywhere without any human intervention. It gives a big
boost to existing sales volumes.
• Support − E-commerce provides various ways to provide pre-sales and post-
sales assistance to provide better services to customers.

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• Inventory Management − E-commerce automates inventory management.

Reports get generated instantly when required. Product inventory management
becomes very efficient and easy to maintain.
• Communication improvement − E-commerce provides ways for faster,
efficient, reliable communication with customers and partners.

Traditional Commerce v/s E-Commerce

Sr. Traditional Commerce E-Commerce
No.

1 Heavy dependency on information Information sharing is made easy via

exchange from person to person. electronic communication channels making
little dependency on person to person
information exchange.

2 Communication/ transaction are Communication or transaction can be done

done in synchronous way. Manual in asynchronous way. Electronics system
intervention is required for each automatically handles when to pass
communication or transaction. communication to required person or do the
transactions.

3 It is difficult to establish and A uniform strategy can be easily

maintain standard practices in established and maintain in e-commerce.
traditional commerce.

4 Communications of business In e-Commerce or Electronic Market, there

depends upon individual skills. is no human intervention.

5 Unavailability of a uniform platform E-Commerce website provides user a

as traditional commerce depends platform where al l information is available
heavily on personal communication. at one place.

6 No uniform platform for information E-Commerce provides a universal platform

sharing as it depends heavily on to support commercial / business activities
personal communication. across the globe.

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E-Commerce - Advantages
E-Commerce advantages can be broadly classified in three major categories −

• Advantages to Organizations
• Advantages to Consumers
• Advantages to Society
Advantages to Organizations
• Using e-commerce, organizations can expand their market to national and
international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers, and suitable business partners
across the globe.
• E-commerce helps organizations to reduce the cost to create process,
distribute, retrieve and manage the paper-based information by digitizing the
information.
• E-commerce improves the brand image of the company.
• E-commerce helps organization to provide better customer services.
• E-commerce helps to simplify the business processes and makes them faster
and efficient.
• E-commerce reduces the paper work.
• E-commerce increases the productivity of organizations. It supports "pull" type
supply management. In "pull" type supply management, a business process
starts when a request comes from a customer and it uses just-in-time
manufacturing way.
Advantages to Customers
• It provides 24x7 support. Customers can enquire about a product or service and
place orders anytime, anywhere from any location.
• E-commerce application provides users with more options and quicker delivery
of products.
• E-commerce application provides users with more options to compare and
select the cheaper and better options.
• A customer can put review comments about a product and can see what others
are buying, or see the review comments of other customers before making a
final purchase.
• E-commerce provides options of virtual auctions.
• It provides readily available information. A customer can see the relevant
detailed information within seconds, rather than waiting for days or weeks.
• E-Commerce increases the competition among organizations and as a result,
organizations provides substantial discounts to customers.
Advantages to Society
• Customers need not travel to shop a product, thus less traffic on road and low
air pollution.
• E-commerce helps in reducing the cost of products, so less affluent people can
also afford the products.
• E-commerce has enabled rural areas to access services and products, which
are otherwise not available to them.

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• E-commerce helps the government to deliver public services such as

healthcare, education, social services at a reduced cost and in an improved
manner.

E-Commerce - Disadvantages
The disadvantages of e-commerce can be broadly classified into two major
categories −

• Technical disadvantages
• Non-Technical disadvantages
Technical Disadvantages
• There can be lack of system security, reliability or standards owing to poor
implementation of e-commerce.
• The software development industry is still evolving and keeps changing rapidly.
• In many countries, network bandwidth might cause an issue.
• Special types of web servers or other software might be required by the vendor,
setting the e-commerce environment apart from network servers.
• Sometimes, it becomes difficult to integrate an e-commerce software or website
with existing applications or databases.
• There could be software/hardware compatibility issues, as some e-commerce
software may be incompatible with some operating system or any other
component.
Non-Technical Disadvantages
• Initial cost − The cost of creating/building an e-commerce application in-house
may be very high. There could be delays in launching an e-Commerce
application due to mistakes, and lack of experience.
• User resistance − Users may not trust the site being an unknown faceless
seller. Such mistrust makes it difficult to convince traditional users to switch from
physical stores to online/virtual stores.
• Security/ Privacy − It is difficult to ensure the security or privacy on online
transactions.
• Lack of touch or feel of products during online shopping is a drawback.
• E-commerce applications are still evolving and changing rapidly.
• Internet access is still not cheaper and is inconvenient to use for many potential
customers, for example, those living in remote villages.

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