The New Era of E-commerce
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The concept of ecommerce can be simply summarized as the use of technology to do business. Several scholars have define ecommerce differently. Roger Clarke defines ecommerce as the use of telecommunication and its related tools in trading of goods and services.[1] Damanpour defines ecommerce as an electronic medium that allows for value exchange between different parties using information and communication technology (ICT).[2] Ecommerce involves the doing of business online; this involves selling a product or a service online and delivering it offline or selling digitized products such as books, videos, movies, or music and delivering them online.[3][4] According to Steward et al. ecommerce is the use of computer software and internet services to send and receive product and service quotations, applications, purchase orders, and all other data relating to participants in the supply chain network.[5]
Consolidating all the existing definitions ecommerce can be defined as a way of carrying out business through the internet using private communication networks to facilitate selling and buying of goods and services, by allowing for money transfer.[5] The transactions involve a show of desire or willingness to purchase using a credit card or other online money transfer platforms such as PayPal or Venmo, followed by the transfer of the agreed amount to the right account holder. Overall, it is any business transaction in which interactions are done online, through computer technologies.[6]
History of E-commerce development[edit]
The integration of markets took time since it involved the bringing together of many companies into a single shared market.[7] Marketing strategies intensified overtime due to the need for companies to outdo others and succeed not only in the local markets, but also in the international markets.[8] The internationalization of markets lead to a change in the trading standards, business practices, and trading techniques of companies.[9][10][11] The changes were mostly enforced due to the emerging technologies at the time.[10] Globalization and internet revolution of the 20th century sparked the whole economy leading to the emergence of new concepts and business ideas for investors.[12] Internet inventions in the early 1990s lead to innovations that turned the internet into a commercial medium. The evolution started in 1991[13] when the first World Wide Web, invented by Tim Berners, was launched to the public. In 1994, Nestcape Communications Corporation launched the Navigator, the first popular web browser that composed of a series of web browsers.[13] Pizza Hut then adopted the browser to allow their customers make orders online.[14] In the same year, Amazon the online retail giant was founded by Jeff Bezos.[13] In 1995, eBay was founded, and Amazon also made it first online sale.[14]
In 1996 internet coverage increased and over 40 million people got access to the internet making online sales to hit over $1 billion for the year.[15] In 1998, PayPal was founded changing the way of making payments. People moved from the use of credit cards to the use of mobile money. The industry continued to expand in revenue the types of products sold and by 2000, revenues from online shopping in the US alone surpassed $25 billion.[16] The numbers increased and by 2001 70% of internet users had made online purchases.[16] Two years later Apple launched itunes, a digital platform for selling music.[17] In 2006, Facebook started to allow for advertisement and selling through the platform, increasing the amount of online sales and by 2012, the sales in B2C reached $1 billion.[17]
In 1995 of Chinese Market, Jack Ma created the "China Yellow Pages", the first Internet company to provide web page creation services for enterprises. In 1998, China's first online transaction was successful. After 2000, China's ecommerce is the development stage. After 2008, the development of e-commerce in China has grown by leaps and bounds. Jack Ma created Alibaba Group. Huateng Ma created Tencent.[18] Since 2014, the central government has intensified the strategy of "Internet Plus" with many relevant policies to develop nationwide e-commerce as part of the new national economic policy to transform China's economy from export-led to domestic consumption driven. In 2017, Chinese consumers spent more than $750bn online – more than the UK and US combined.[19]
E-commerce models and features[edit]
Companies continue to adapt to the technological realities and enter the online market. There have emerged new marketing and advertising strategies as the companies strive to gain a larger market share through brand positioning.[20] The main forms and models of ecommerce as seen in most business organizations are business-to-business, business-to-consumer, business-to-government, and customer-to-customer.[20]
Business-to-Business (B2B)[edit]
Is the most common and fundamental model in ecommerce. It represents transactions and exchange of goods and services between companies.[21] It is commonly seen in the supply chain involving manufacturers, retailers, suppliers, wholesalers, and distributors. The transactions usually aim at helping the business acquire the assets. B2B main focus is on the e-infrastructure which facilitates logistics and operations.[22] The e-markets and websites, which facilitates interactions between merchants.
Business-to-consumer (B2C)[edit]
The model is concentrated around the mechanisms through which the business organizations meets their consumers’ preferences, demands, and needs through sales of goods and services.[23]The major market for B2C models are e-retail and e-banking platforms that allows for personal financial management.
Business-to-Government or Government-to-Business (B2G/G2B)[edit]
The model is concerned with dealing between a business entity and the public sector. The business operations are carried out to fulfill the interest of the public sector and gets paid by the government.[23] For example government procurement contract to supply medical facilities with medicine and equipment.[23]
Consumer-to-consumer (C2C)[edit]
The model deals with dealing between buyers and other buyers.[23] A perfect example of a C2C model is the auctioning system found in eBay.[24]
Upstreaming and down-streaming corporations[edit]
Upstream functions are operations of the firm that occur on the buy-side.[25] They mainly involves the suppliers. Chaffey (2011) asserts that inbound logistics and procurement are the two main activities at the upstream level.[25] Procurement activities are operations that occurs between the firm and its suppliers. Such activities include; selecting the suppliers, making orders, delivery on orders, and making payments. The emergence of internet lead to the rise of e-procurement.[26] E-procurement is the use of internet technologies to connect firm and suppliers through a virtual platform for carrying out procurement activities.[26] The e-procurement main functions are to help in inventory control to avoid overstocking or understocking.[26] It helps manage purchases processes involving making and confirming orders, delivery, and payments. It helps maintain a repository of the suppliers’ information by keeping their contact details, products offered, and locations.[25]
When companies share their inventory information with suppliers, the suppliers can use the company’s demand forecast and prepare for them the right amount of products in advance to avoid future inconveniences.[25] Kell & Rigby Company adopted e-procurement in its ecommerce operations and by 2001, the strategy helped the company save on costs by $442,000.[27]
Downstream activities are those that occur on the sell-side of the supply chain. It usually involves the customers and distributors. The major activities associated with it are outbound logistics, order fulfillment, marketing, and customer relationship management. Customer relationship management involves meeting the consumers' desires and needs to achieve consumer satisfaction.[27] Tesco, a British food retailer company applied ecommerce in selling of its groceries. In 2005, the company’s profits increased by 37% as a result of the online selling of groceries. Up to date, Tesco is the leading retailer of grocery in the UK given its large market share.[27]
Business global distribution[edit]
China[edit]
Forecasts by the GlobalData E-commerce Analytics indicated that ecommerce industry in China would grow by 17.2% in 2021 due to the highest increase in the number of online shoppers as a result of the ongoing covid-19 pandemic.[28] Ecommerce in China developed rapidly due to the high internet connectivity and access coupled with ready availability of smartphones, presence of alternatives forms of mobile payment such as WeChat Pay and Alipay, rapid rise of new ecommerce platforms, and increased security and authenticity of online shopping.[29] The National Bureau of Statistics China reported that while in-store sales in the country dropped by 3.9% in 2020, while online shopping sales rose by 14.8% in the same year.[28] In China, the major ecommerce companies include: Alibaba, Taobao, Pinduonduo, and Taobao. The common payment platforms are WeChat Pay, Alipay, Huabei, and Fen Fu.[30]
Alibaba Group[edit]
The Alibaba Group uses both B2B and B2C models of ecommerce. It is the largest ecommerce company in the world in terms of market capitalization.[29] The group operates in four major segments; commerce, cloud computing, digital media and entertainment, and innovation initiatives.[30] The company's ecommerce sector generates revenue by providing marketing services, customer management services, selling of products, accepting commissions on transactions, charging, membership fees, and charging on-demand delivery services fees.[29]
Taobao[edit]
Taobao is an online shopping platform registered under Alibaba Group Holdings. As of 2016, Taobao was the leading online retailer in China having more than 70% of all online transactions made on the platform. The introduction of Taobao Villages in 2013 , the number of rural residents in China shopping online increased making the number of households involved in ecommerce activities to shoot by 10%.[31]
ByteDance[edit]
Early in 2021 ByteDance, Tok-tok's parent company, announced its motive to venture into ecommerce. The company made the announcement when it launched its hunt for ecommerce experts on its jobs postings. The new venture will be separate from Tok-tok to allow merchants sell their products via a new ecommerce platform. The new platform is focused on ensuring the move of Chinese goods to international market through cross-border retailing. Currently, cross-border retailing is steady in the US with almost 64.7 people (23.3% of the total population) engaging in it.[32] By integrating its shopping platform on Tok-tok, Byte Dance will face direct competition from US based social commerce platforms like Instagram and Facebook.
TikTok (Douyin)[edit]
Tik-Tok, which is a music creative short video social software released by ByteDance, was launched on September 20, 2016. The application was initially created by Chinese under the name Douyin in 2016 before changing the name to Tik-Tok and marketing it internationally the following year.[33] After the launching of Douyin ecommerce in 2018, in-app expenditure and purchase through Tik-Tok rose by a 222% in the first quarter of 2019 driving the Chinese ecommerce market beyond its rivals.[34] The live stream and online e-commerce platform were projected to generate a revenue of CNY 961 billion, equivalent to $134 billion in 2020.[35]
The United States[edit]
America forms the second largest ecommerce market after China. The ecommerce market in the country recorded a revenue of $538 billion as of 2020. The sector is expected to grow by about 30% in 2021 due to the ongoing coronavirus pandemic. Major players in the US ecommerce market are; Amazon, eBay, Walmart, Tesco, and social apps like Facebook, Twitter, and Instagram. Paypal is the dominant method of payment.[36]
Amazon[edit]
Amazon is the largest player in the US ecommerce market. It has the largest market share, and of January 2021 Amazon accounted for over 41.4% of the total annual retail sales in the ecommerce industry. It is projected that with time, the company's market share will grow to 50% in terms of gross merchandise volume (GMV).[36]
Instagram[edit]
Instagram is a social network that allows for marketing and selling of products. Business can create content and products and post them on their pages as a way of marketing themselves to the potential customers.
Facebook[edit]
Facebook is an American online social media and social networking service owned by Meta Platforms. (Founded in 2004 by Mark Zuckerberg)
'Europe[edit]
Data analysis of the ecommerce sector in Europe suggests that the European ecommerce industry will continue to grow and reach half a trillion dollars in the coming years. Ecommerce user rate in Europe is at 53% coming third after China and the US. As of 2021 June, the value of ecommerce retail revenue in Europe stood at $465.4 billion across the EU member countries. Ireland has the highest number of ecommerce revenue share of companies following the exit of Britain. Germany has the highest number of ecommerce users at 62.4 million, followed by the UK at 57.2 million, France at 46.2 million, Italy at 33.3 million, and Spain at 28.3 million. Cross border ecommerce in the EU purchasing from extra EU sellers is at 25% with Germany having the highest cross-border ecommerce revenue of $26.5 billion.[37]
Impact taken by new business Model of E-commerce[edit]
Market and industries[edit]
Ecommerce have led to globalization and integration of the international market.[38] As a result, producers and consumers have been brought together in a simpler way leading to faster responses on market demands, price stability due to competition, flexibility for consumers due to a wider product range to choose from, reduced cost of advertising and marketing due to social commerce, and increased profitability.[38]
Suppliers and retailers[edit]
Ecommerce have changed the supply chain management system. Fulfillment processes can be done electronically enabling distributors to properly handle their files in a timely and accurate manner leading to cost reduction and enhanced customer service. Besides, ecommerce have helped retailers and suppliers understand demand patterns to avoid overstocking an understocking cases.[39]
Employment and customers[edit]
Ecommerce have led to the creation of more job opportunities. Ecommerce utilizes tech solutions implying more people will be needed in the tech industry to create the software. Ecommerce has also created direct job opportunities through remote hiring of sales persons, distributors, and administrators.[39]
Environment[edit]
Ecommerce has helped in environmental sustainability and conservation. Ecommerce helps reduce global carbon emission since people do not have to drive into stores to purchase goods, they make orders online and receive the products at their door steps.[40] Besides, companies like Amazon have sophisticated delivery systems such as drone that do not consume fossil fuel but use green energy leading to more environmental sustainability.[40]
References[edit]
- ↑ Clarke, Roger (2009-01-01). "An eCommerce Perspective on Carbon Trading". BLED 2009 Proceedings.
- ↑ Ferrera, Cécile; Kessedjian, Eowyne (2019). "Evolution of E-commerce and Global Marketing". International Journal of Technology for Business (IJTB). 1 (1): 33–38. doi:10.5281/zenodo.2591544. ISSN 2644-5085.
- ↑ Tian, Yan; Stewart, Concetta (2006). "History of E-Commerce". Encyclopedia of E-Commerce, E-Government, and Mobile Commerce. Retrieved 2021-10-29.
- ↑ Ariguzo, Godwin C.; Mallach, E.; White, D. S. (2006). "The first decade of e-commerce". Int. J. Bus. Inf. Syst. 1 (3): 239. doi:10.1504/IJBIS.2006.008598. Unknown parameter
|s2cid=ignored (help) - ↑ 5.0 5.1 Steward, S.; Callaghan, J.; Rea, T. (1999-07-01). "The eCommerce Revolution". BT Technology Journal. 17 (3): 124–132. doi:10.1023/A:1009640823618. ISSN 1573-1995. Unknown parameter
|s2cid=ignored (help) - ↑ Lomax, Steve (June 2006). "Securing the eCommerce revolution: safeguarding Internet transactions". Card Technology Today. 18 (6): 9–10. doi:10.1016/S0965-2590(06)70507-2.
- ↑ Mathur, Ike (1995). "Readings in international business: Robert Z. Aliber and Reid W. Click, editors, Cambridge, MA: The MIT Press, 1993, pp. vii+522, $18095". International Review of Economics & Finance. 4 (3): 315–316. doi:10.1016/1059-0560(95)90049-7.
- ↑ Dipak, Mazumdar; Sandip, Sarkar (2008). "Globalization, labor markets and inequality in India".
- ↑ "Globalization of world fi nancial markets: crisis or coordination?", Globalization; Today and Tomorrow, Routledge, pp. 120–134, 2013-10-14, doi:10.4324/9780203810491-18, ISBN 9780203810491, retrieved 2021-12-03
- ↑ 10.0 10.1 zimmermann@stlouisfed.org (2010). Globalization - Today, Tomorrow. IntechOpen. Search this book on
- ↑ Rodrik, Dani (2012). The Globalization Paradox: Why Global Markets, States, and Democracy Can't Coexist. Oxford University Press. Search this book on
- ↑ Monahan, Torin (2005-08-31). Globalization, Technological Change, and Public Education. New York: Routledge. doi:10.4324/9780203632987. ISBN 978-0-203-63298-7. Search this book on
- ↑ 13.0 13.1 13.2 Curran, James; Coen, Sharon; Aalberg, Toril; Hayashi, Kaori; Jones, Paul K; Splendore, Sergio; Papathanassopoulos, Stylianos; Rowe, David; Tiffen, Rod (2013-10-01). "Internet revolution revisited: a comparative study of online news". Media, Culture & Society. 35 (7): 880–897. doi:10.1177/0163443713499393. ISSN 0163-4437. Unknown parameter
|s2cid=ignored (help) - ↑ 14.0 14.1 P. Cunningham and F. Fröschl, Electronic Business Revolution: Opportunities and Challenges in the 21st Century. Springer Science & Business Media, 2013.
- ↑ Metallo, Concetta; Agrifoglio, Rocco; Schiavone, Francesco; Mueller, Jens (2018-11-01). "Understanding business model in the Internet of Things industry". Technological Forecasting and Social Change. 136: 298–306. doi:10.1016/j.techfore.2018.01.020. ISSN 0040-1625. Unknown parameter
|s2cid=ignored (help) - ↑ 16.0 16.1 "Amazon Echo Dot (4th gen) review: Alexa's new small budget ball". The Guardian. 2021-04-14. Retrieved 2021-10-29.
- ↑ 17.0 17.1 Alsaad, Abdallah; Taamneh, Abdallah; Sila, Ismail; Elrehail, Hamzah (2021-09-01). "Understanding the global diffusion of B2B E-commerce (B2B EC): An integrated model". Journal of Information Technology. 36 (3): 258–274. doi:10.1177/0268396220961396. ISSN 0268-3962. Unknown parameter
|s2cid=ignored (help) - ↑ Ma, Pengcheng (2020). Electronic Commerce Development in China (Thesis). Vysoká škola finanční a správní.
- ↑ "E-commerce in China: A present and future market overview". www.retail-insight-network.com. 7 October 2019. Retrieved 2021-11-18.
- ↑ 20.0 20.1 Jongen, Wijnand (2018), "New business models", World Scientific Book Chapters, World Scientific Publishing Co. Pte. Ltd., pp. 216–235, retrieved 2021-10-29
- ↑ Sila, Ismail (May 2013). "Factors affecting the adoption of B2B e-commerce technologies". Electronic Commerce Research. 13 (2): 199–236. doi:10.1007/s10660-013-9110-7. ISSN 1389-5753. Unknown parameter
|s2cid=ignored (help) - ↑ Sila, Ismail; Dobni, Dawn (2012-08-24). "Patterns of B2B e‐commerce usage in SMEs". Industrial Management & Data Systems. 112 (8): 1255–1271. doi:10.1108/02635571211264654. ISSN 0263-5577.
- ↑ 23.0 23.1 23.2 23.3 Nagaty, Khaled Ahmed (2010), "E-Commerce Business Models", Encyclopedia of E-Business Development and Management in the Global Economy, IGI Global, pp. 347–358, doi:10.4018/978-1-61520-611-7.ch034, ISBN 9781615206117, retrieved 2021-11-18
- ↑ Le-Nguyen, Khuong; Guo, Yue (May 2016). "Choosing E-commerce Strategies: A Case Study of eBay.vn Partnership". Journal of Information Technology Teaching Cases. 6 (1): 1–14. doi:10.1057/jittc.2016.1. ISSN 2043-8869. Unknown parameter
|s2cid=ignored (help) - ↑ 25.0 25.1 25.2 25.3 Chaffey, Dave; Smith, PR (2017-03-31), "Digital marketing plan", Digital Marketing Excellence, 5 Edition. | New York : Routledge, 2017. | Revised edition of the authors’ Emarketing excellence, c2013.: Routledge, pp. 555–626, doi:10.4324/9781315640341-10, ISBN 9781315640341, retrieved 2021-11-18
- ↑ 26.0 26.1 26.2 Chaffey, Dave; Smith, Pr (2017-03-31). Digital Marketing Excellence: Planning, Optimizing and Integrating Online Marketing (5 ed.). 5 Edition. | New York : Routledge, 2017. | Revised edition of the authors’ Emarketing excellence, c2013.: Routledge. doi:10.4324/9781315640341. ISBN 978-1-315-64034-1. Unknown parameter
|s2cid=ignored (help) Search this book on
- ↑ 27.0 27.1 27.2 Sun, Lu; Ma, Yan (January 2010). "On cooperation and competition between upstream and downstream companies in supply chain". 2010 International Conference on Logistics Systems and Intelligent Management (ICLSIM). IEEE. 3: 1513–1517. doi:10.1109/iclsim.2010.5461221. ISBN 978-1-4244-7331-1. Unknown parameter
|s2cid=ignored (help) - ↑ 28.0 28.1 Xiao, Liang; Zhang, Yanan (2020-07-08). "An analysis on the policy evolution of cross-border ecommerce industry in China from the perspective of sustainability". Electronic Commerce Research. doi:10.1007/s10660-020-09427-y. ISSN 1389-5753. Unknown parameter
|s2cid=ignored (help) - ↑ 29.0 29.1 29.2 Greeven, Mark J.; Wei, Wei (2017-09-05). Business ecosystems in China: Alibaba and Competing Baidu, Tencent, Xiaomi and LeEco (1 ed.). Abingdon, Oxon; NewYork, NY: Routledge, 2018.: Routledge. doi:10.4324/9781315209142. ISBN 978-1-315-20914-2. Search this book on
- ↑ 30.0 30.1 Cockayne, David (2016-06-30). "Redefining B2B relationship marketing: Insight from postmodern Alibaba". Journal of Customer Behaviour. 15 (1): 49–66. doi:10.1362/147539216X14594362873497. Unknown parameter
|s2cid=ignored (help) - ↑ Liu, Min; Zhang, Qian; Gao, Song; Huang, Jikun (2020-12-01). "The spatial aggregation of rural e-commerce in China: An empirical investigation into Taobao Villages". Journal of Rural Studies. 80: 403–417. doi:10.1016/j.jrurstud.2020.10.016. ISSN 0743-0167. Unknown parameter
|s2cid=ignored (help) - ↑ "Global Cross-Border Retail Will Triple Over The Next Six Years". Cross-Border E-commerce Magazine. 2017-04-10. Retrieved 2021-11-18.
- ↑ Graziani, Thomas (2018-07-30). "How Douyin became China's top short-video App in 500 days". WalktheChat. Retrieved 2021-11-18.
- ↑ "Douyin: The New Social Commerce Frontier For International Brands?". luxurysociety.com. 2021-04-16. Retrieved 2021-11-18.
- ↑ Xuan, Ji (2021-07-01). "How Short Video Streamers Manage to Operate Successful Work- Case Study of Tik Tok" (PDF). Art and Performance Letters. 2 (4): 58–64. doi:10.23977/artpl.2021.020414 (inactive 31 July 2022). ISSN 2523-5877.
- ↑ 36.0 36.1 Tsagkias, Manos; King, Tracy Holloway; Kallumadi, Surya; Murdock, Vanessa; de Rijke, Maarten (June 2020). "Challenges and research opportunities in eCommerce search and recommendations". ACM SIGIR Forum. 54 (1): 1–23. doi:10.1145/3451964.3451966. ISSN 0163-5840. Unknown parameter
|s2cid=ignored (help) - ↑ "Topic: E-commerce in the European Union". Statista. Retrieved 2021-11-18.
- ↑ 38.0 38.1 Mazzarol, Tim (2015-01-02). "SMEs engagement with e-commerce, e-business and e-marketing". Small Enterprise Research. 22 (1): 79–90. doi:10.1080/13215906.2015.1018400. ISSN 1321-5906. Unknown parameter
|s2cid=ignored (help) - ↑ 39.0 39.1 "Supply Chain Management (SCM)", B2B Integration, PUBLISHED BY IMPERIAL COLLEGE PRESS AND DISTRIBUTED BY WORLD SCIENTIFIC PUBLISHING CO., pp. 409–437, November 2002, doi:10.1142/9781860949579_0014, ISBN 978-1-86094-323-2, retrieved 2021-11-18
- ↑ 40.0 40.1 Mangiaracina, Riccardo; Marchet, Gino; Perotti, Sara; Tumino, Angela (2015-07-06). "A review of the environmental implications of B2C e-commerce: a logistics perspective". International Journal of Physical Distribution & Logistics Management. 45 (6): 565–591. doi:10.1108/IJPDLM-06-2014-0133. hdl:11311/987082. ISSN 0960-0035.
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