Electronic Commerce (e-commerce) is the result of the
developments and innovations in the areas of computer hardware,
computer software, internet and communications technology.
Electronic Commerce has the potential to be one of the
major economic revolutions of the 21st Century. E-Commerce,
new communication technologies and resultant exchange of information
and knowledge underlie the new way of doing business which will
provide opportunities to improve the quality of life and economic
well being of the people and has the potential to spur the growth
and employment in all the countries of the world.
E-Commerce is a subset of e-business. It is a commerce
or conducting transactions using network of computers and telecommunication
i.e. internet. It is an exchange of goods/services and the financial
consideration for them. Business includes a whole set of transactions
that must be completed before the goods/services change hands for
the financial consideration. E-Business links employees and internal
business processes through intranets, the business relations with
suppliers, customers through extranets and finally exchanging goods/services
for a value. Goods/services can be directly delivered on the net
or by conventional mode and similarly payment can be effected through
electronic means or by conventional mode. Indeed, designing the
effective and secured payment system is one of the roadblocks to
the full-fledged growth of e-commerce. The possibility of direct
interaction with the customers and elimination of intermediaries
who do not provide any value is the biggest advantage of the e-commerce.
The economics of e-commerce will enable large number of small players
to participate in the global business. Business organisations will
be able to cater to the needs of the customers without any barriers
of time and space. Compared to this a major disadvantage of e-commerce
is that the customer cannot have a feel of the goods as he cannot
touch them.
1.2
IMPACT ON BUSINESS
E-Commerce
will change the way the businesses are being carried on. It will
lead to emergence of new businesses as well as business practices
and also a new role for intermediaries. Indeed, all the functional
areas of business will undergo change. The new technology will transform
business processes, the way products and services are created and
marketed, dynamics of competitions, the organisation structure of
the enterprise and the nature of the enterprise itself. This will
include marketing, supply management, customer and sales management,
product development etc. Local proximity may no longer be a significant
factor in retaining customer. Local markets will be replaced by
global markets. Indeed it may bring to reality the goal of 'Vasudev
Kutumbakam' i.e. the whole word is one family. As a result, businesses
will have to focus on new differentiators and value addition and
constantly go on innovating the differentiators. Transparency and
openness is and will continue to be effective business strategy.
Already many businesses have started recognising key customers,
employees and suppliers more like a partner in the business. E-Commerce
will lead to better customer service, more personalised products,
reduced costs, supply chain efficiency and faster time to market.
The most significant aspect of e-commerce is new market development.
The e-commerce links and the infrastructure initially setup can
be successfully used in other sectors.
The change in the business functions will lead to new
business models and create new set of facts and circumstances that
can materially change the incidence of taxation.
The
internet will emerge as a new platform for marketing of products
and services that will displace and rebuild existing economy. It
will affect organisational structure, require different skills for
negotiation, new regulatory and legal framework, electronic money,
taxation and many other things. The evolution of e-commerce will
have profound impact on competition, mobility of enterprises, effect
on consumer behavior, changes in the way the work is defined and
managed. The net will enable businesses to save time on product
design, design according to the individual customer specification,
order and delivery of components, tracking sales and getting feedback
from customers. Estimates for the growth of E-commerce varies from
$ 300 billion to a trillion dollar by 2002.
The
businesses can have virtual project team, virtual learning space
so that the employees who are dispersed over various countries can
work together as if they are together in one physical room. Business
can be connected to the retail points in order to ascertain market
trends, demand of the products and with the suppliers upstream to
order the desired requirements. Better demand forecasting and stock
replenishment can lead to significant reduction in the cost.
1.3
BUSINESS MODELS
There are three major participants in the e-commerce
i.e. business enterprise, customer and governments. At present,
most e-commerce transactions are between business to business level
and accounts for almost 80% of the total E-Commerce transaction.
The potential of growth of E-Commerce in business to customer segment
cannot be easily predicted. However, with the advent of time, transactions
at business to customer level, Government to business level and
government to customer level are going to pickup. The potential
for growth of e-commerce is linked with speed, reliability, security
and to other electronic networking environment. The growth will
depend on the kind of industry, product involved and the type of
customer-supplier relationship necessary to preserve or to develop.
The consumers are generally concerned about
