E - Commerce
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.
• 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.
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.
• E-commerce helps the government to deliver public services
such as healthcare, education, social services at a reduced
cost and in an improved manner.
Disadvantage
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.
