E-Commerce
is an Evolution
DonHoo Lee
Today¡¯s economists
indicate that we are moving from the traditional economy that emphasized on
physical manufacturing of goods, to the new economy where companies concentrate
more on knowledge and information. The
key to the new digital world is e-commerce, electronic commerce, an electronic
transmission medium to engage in the exchange, including buying and selling, of
products and services requiring transportation. Supply and demand still remains the same
as the forces that control prices and quantities, but e-commerce changes how
these forces appear themselves.
E-commerce brings forth a tougher business competition, creation of new
marketplaces, faster speed of transactions, and rapid growth in technologies,
and also determines the nature of the leadership; it has put itself to become
one of the must-haves for companies today.
Movement
from the Industrial age to the Information Age and later on shifting to the New
Digital World, our economy has developed rapidly. Invention of EDI (Electronic Data
Interchange: sends purchase invoices electronically) in the late 1970s
accelerated the growth of e-commerce.
However, real economic growth period was in the 1990s when Tim
Berners-Lee introduced the ¡°World Wide Web¡± to the economy. Soon after, e-commerce was introduced in
a well organized way on the web. It
served the web with secure connections with electronic data transferring, internet
marketing, and electronic payment services. Today, e-commerce is being implemented
to e-business. Electronic business¡¯
not only exchanges information between buying and selling of goods but also
distributes information and provides support and services to consumers.
More consumer
demands appear in the internet than any other transmission mediums today. According to Morgan Stanley U.S.
Investment Research, the internet only takes four years to reach fifty million
people while television take more than ten years and radio about 38 years. It demonstrates that the internet has a
huge potential to grab many customers in a short amount of time, which in turn
can become a target market for growing firms.
Why do we then
prefer internet more? Because our old systems of economic are being replaced by the new
technology. Our time value
has gone up and our activities were more convenient, accurate, and faster. It does not require us to go to the
store to buy any given product. One
or two clicks do just enough to get the product shipped right to the door
step. Traditional distribution of products
had to go through many steps until consumer receives. E-commerce allowed skipping of many of
these steps, getting you the profits that could have been lost in those steps. Consumers gained the power over
the producers; we became more interested in the share of spending of a consumer
rather than just being targeted as a market.
Web-based company
such as Amazon.com is challenging many traditional companies to rethink about
how they should change. Traditional
companies such as Boeing and US Airways have successfully implemented to the
new modern e-commerce. E-commerce
is use in categories such as travel, financial services, pc hardware &
software, books & music, apparel & footwear, e-learning, and etc. Downloading music or software are now
common methods of today¡¯s digital delivery, and it has expanded to its systems
to have electronic book available online so that poorer areas can have the
opportunity to read books.
One of the most
essential systems e-commerce makes available to consumers is e-learning. Online education is increasing very
rapidly along e-commerce. In 2005,
more than 3.2 million students participated in on-line learning in the
CEOs realized that
they needed to enlarge their domestic market to overseas. In order to achieve that, they needed to
be prepared with global practices, techniques, and languages. As the market became more global, the
internet enabled customers to place an order to the company from a country far
away and have the product shipped to an exact location. It has led to a tremendous amount
of trading over the web. Due to the
new competitive market, companies had to develop new marketing strategies. Because the target was at many different
countries, it had to suit with many different traditional cultures, otherwise
it will most likely lead to failure.
Many companies have tried to standardize world practice by pushing
domestic products without a change, which led them to fail.
To
take all these advantages of e-commerce, firms had to face a lot of
challenges. Firms had to invest
more money to provide new approaches that were linked to the use of the
internet to remain competitive in the future. Managers needed to spend more time to
get used to the IT systems than ever before.
E-commerce
is beneficial for both companies and customers. Internet based e-commerce is more
affordable than traditional EDI for the companies. It can reach broader areas to get
customers from all around the world with less cycle times. Small companies are able to advertise
themselves to a huge population with a small cost. Customers are now able to have more
choices and information of vendors and products, and it has become more
convenient to shop at home. They
can compare products easier and the delivery of services has become much
better. E-commerce also
increased the labour force.
However, there are
some negatives about e-commerce.
Despite security protocols (like HTTPS); businesses with the internet
were more likely to be the victims of security loss. Information loss, computer virus, theft/hacking,
and manipulating their internal systems, are big issues of today¡¯s
e-commerce. They try to secure all
transactions with SSL (Secure Sockets Layer for private transactions through
internet) security standards.
Hosting your store in a secure hosting environment or displaying a
disclaimer during the checkout process helps to ensure that the visitor is in a
safe environment. However,
intellectual property protection still seems to be an issue of today.
E-Commerce is an
evolution that helped our traditional economy adapt to the new digital world,
using electronic technology through the internet, resulting in more
competitions, more marketplaces, faster transactions, and more advanced
technologies to make activities between customers and producers more
active. Internet has changed
economy so much that most of the business activities today are made in the
web. Therefore, we as customers and
internet users are responsible to keep our e-commerce healthy and safe so that
e-business can be more reliable in the future. That way, every single person in the
world will be able to take advantage of e-commerce.
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