IMPACT OF ELECTRONIC COMMERCE ON BUSINESS

September 10, 2019



E-commerce has a significant impact on business costs and productivity. E-Commerce has a chance to be widely adopted due to its simple applications. Thus it has a large economic impact. Electronic Commerce provides the capability of buying and selling products and information on the internet and other on-line service. Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. E-Commerce plays an important role in the economic growth and development of nation. It is a purposeful activity includes in planning, controlling, promotion and also distribution of various goods and services. E-commerce is usually associated with buying and selling over the Internet or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network. A more complete definition is: E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.
The Impact of Electronic Commerce on Business
 E-Commerce and E-Business are not solely the Internet, websites or dot com companies. It is about a new business concept that incorporates all previous business management and economic concepts. As such, E-Business and E-Commerce impact on many areas of business and disciplines of business management studies.
1. Management Information Systems – Analysis, design and implementation of e-business systems within an organization; issues of integration of front-end and back-end systems
2. Human Resource Management – Issues of on-line recruiting, home working and ‘Entrepreneurs’ works on a project by project basis replacing permanent employees.
3. Finance and Accounting –On-line banking; issues of transaction costs; accounting and auditing implications where ‘intangible’ assets and human capital must be tangibly valued in an increasingly knowledge based economy.
4. Economics –The impact of e-commerce on local and global economies; understanding the concepts of a digital and knowledge-based economy and how this fits into economic theory
5. Production and Operations Management –The impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and services electronically; similarly the time for processing orders can be reduced by more than 90 per cent from days to minutes. Production systems are integrated with finance marketing and other functional systems as well as with business partners and customers.
6. Marketing – Issues of on-line advertising, marketing strategies and consumer behavior and cultures. One of the areas in which it impacts particularly is direct marketing. In the past this was mainly door-to door, home parties and mail order using catalogs or leaflets.



Types of online business

Online businesses can have different online business-fronts (how they appear on the internet). These can take many forms, such as:
  1. websites
  2. online shops or marketplaces
  3. blogs
  4. Social media accounts.

Benefits of E-Commerce to Business
  1. International Marketplace
  2. Operational Cost Savings
  3. Mass Customization
  4. Lower Telecommunications Cost –
  5. Digitization of Products and Processes
  6. No more 24-hour-time Constraints

Benefits of E-Commerce to Consumers
  1. 24/7 Access
  2. More Choices
  3. Price Comparisons
  4. Improved Delivery Processes

There can also be drawbacks in doing business online, such as:
  1. some technical or web knowledge may be necessary
  2. software and hardware expenses
  3. Risk of online scams and fraud.

E-commerce in Southeast Asia


       This   data is based on the analysis of these companies in the period July 2016 to June 2017, for the following markets: Indonesia, Malaysia, Singapore, Thailand, Philippines and Vietnam
SEA e-Commerce is a mobile-first economy, leapfrogging all the Western economies when it comes to the importance of Mobile commerce in the traffic generated by each e-Commerce operator.
Mobile Traffic

      The  rise of Mobile in SEA’s e-Commerce appears unstoppable. In the past 12 months, mobile has grown on average 19%, now accounting for 72% of the overall e-Commerce web traffic.
Leading the pack is Indonesia, which now has a staggering 87% share of mobile traffic. In none of SEA’s country desktop traffic accounts for more than 30% of web traffic.
Conversion Rates per Country

      Using the average conversion rate in SEA as a reference (1x), Vietnam merchants are leading the way, with a conversion rate 30% higher than the average. Singapore displays the second highest conversion rate, closely tied with Indonesia.
     The data shows the low level of correlation between conversion rate and the level of maturity of each e- Commerce market.

    Work & Shop
At what time do Southeast Asia consumers shop the most and is the trend consistent across the region?

Orders per time of the day

    Considering the average number of order of the local country as reference (100%), the number of orders is highest between 9am and 5pm, when people are traditionally at work or school, with the exception of Singaporeans, who seem to enjoy evening shopping more than other countries, peaking at 10pm. Consistently across countries, there is a dip between 5pm and 7pm, were people typically commute and have dinner, before getting back into online shopping until 11pm.

Payment solutions offered by merchants

         Cash on Delivery is offered by more than 80% of the players in both Vietnam and Philippines.
       Bank transfer is another very popular payment method across SEA, with respectively 94%, 86% and 79% of merchants in Indonesia, Vietnam and Thailand offering it.
      In Thailand and Vietnam, almost 50% of merchants offer offline point of sales.
       Payment by installments proves to be very popular (and increasingly so) in both Vietnam (47% of merchants) and Indonesia (42%).

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