E-commerce is digitally enabled commercial transactions between and among organizations and
individuals. E-commerce describes the buying and selling of products, services, and electronically
transferring information and funds between two or more parties via computer networks including the
internet. Simply put, it is online shopping as we commonly know it.
BENEFITS OF E-COMMERCE:-
International marketplace: – 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.
Operational cost savings: – 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 reduces the paper work.
24/7 access: – It provides 24×7 supports. Customers can enquire about a product or service and
place orders anytime, anywhere from any location.
More choices: – E-commerce application provides users with more options and quicker delivery
Price comparisons: – E-Commerce increases the competition among organizations and as a
result, organizations provide substantial discounts to customers. E-commerce application
provides users with more options to compare and select the cheaper and better options. An
environment of competition where substantial discounts can be found or value added, as different
retailers for customers.
Review a Product:– 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
Readily available information: – A customer can see the relevant detailed information within
seconds, rather than waiting for days or weeks.
Connects people: – E-commerce has enabled rural areas to access services and products,
which are otherwise not available to them.
Facilitates delivery of public services: – E-commerce helps the government to deliver public
services such as healthcare, education, social services at a reduced cost and in an improved
E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
LIMITATIONS OF E-COMMERCE
Fraud and Lack of security: – There is a Lack of sufficient system security, reliability, standards
and communication protocols. There is no real control of data that is collected over the Web or
Internet. Data protection laws are not universal and so websites hosted in different countries may
or may not have laws which protect privacy of personal data. There are numerous reports of
websites and databases being hacked into, and security holes in software.
Facing increased competition from both national and international competitors often leads to
price wars and subsequent unsustainable losses for the organization.
Dependence on electronic technologies: – Computing equipment is needed for individuals to
participate in the new ‘digital’ economy, which means an initial capital cost to customers. Not just
the initial cost of buying equipment but making sure that the technology is updated regularly to be
compatible with the changing requirement of the Internet, websites and applications.
A basic technical knowledge is required of both computing equipment and navigation of the
Cost of access to the Internet, whether dial-up or broadband tariffs.
Breakdown in human interaction. Physical contact and relationships are replaced by electronic
processes. Customers are unable to touch and feel goods being sold on-line or gauge voices and
reactions of human beings. A lack of trust because they are interacting with faceless computers.