E-commerce also known as electronic commerce or internet commerce is a business model that enables a firm or individual to conduct business over the internet. It is the activity of electronically buying or selling of products on online services or over the internet, and the transfer of money and data to executive these transactions.
This which can be conducted over computers, tablets, or smartphones may be thought of like a digital version of mail order catalog shopping. It may take place on retailers Web sites and Mobile apps, or those of marketplaces such as on Amazon or Tmall from AliBaba. Those channels may also be supported by conversational commerce, live chat or chatbots on Web sites, messaging apps and via voice assistance. E-commerce operates in all four of the following major market segments:
- Business to Business
- Business to Consumer
- Consumer to Consumer
- Consumer to Business
Effects of E-Commerce Industry
E-commerce industry markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015-2020. In 2017, retail E-commerce sales worldwide amounted to 2.3 trillion US dollars and E-retail revenues are projected to grow to 4.88 trillion US dollars in 2021. E-commerce allows customers to overcome geographical barriers and allows them to purchase products anytime and from anywhere.
E-commerce can occur 24 hours a day, seven days a week. Online and traditional markets have different strategies for conducting business. The pricing strategies are also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost to keep inventory.
Online retailers base prices on the speed of delivery. Online marketers can offer lower prices, greater product selection and high efficiency rates. Many customers prefer online shopping if the products can be delivered quickly at relatively low price.
Security is a primary problem for E-commerce in developed and developing countries. This security is protecting business websites and customers from unauthorized access, use, alternative or destruction. These types of threats include malicious codes, unwanted programs like adware or spyware, phishing, hacking and cyber vandalism.
E-commerce websites use different tools to avert security threats. These tools include firewalls, encryption software, digital certificates and passwords. E-commerce sometimes has limited customer service and lack of instant gratification. When you buy an item online, you must wait for it to be shipped to your home or office. Online images do not necessarily convey the whole story about an item, and so E-commerce purchases can be unsatisfying when the products received do not match consumer expectations.
This helps create new job opportunities due to information related services, software apps and digital products. E-commerce has provided a more practical and effective way of delivering the benefits of the new supply chain technologies.
It brings convenience for customers as they do not have to leave home and only need to browse websites online, especially for buying the products which are not sold in nearby shops. The development of E-commerce will create jobs that require highly skilled workers to manage large amounts of information, customer demands, and production processes.
It is more applicable for small businesses or companies that usually control their own logistic operation because they do not have the ability to hire an outside company. E-commerce is in turn driven by the technological advantages of the semiconductor industry, and is the largest sector of the electronics industry.
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