Everyone heard of Alibaba, and today most of us tried E-commerce. Founded in year 1991, E-commerce which is known as electronic commerce. E-commerce has increased in popularity in the last few decades and it is slowly replacing traditional physical stores. E-commerce allows us to purchase or sell goods or services or transmitting of fund or data over internet. World leading E-commerce company to have transactions online round the clock is Amazon. According to statistic furnished by Ministry of International Trade and Industry (MITI), Malaysia’s gross domestic product (GDP) has boosted from 5.
9% or 68.3 billion in year 2015 until 6.1% or 74.6 billion in year 2016 contributed by E-commerce. Types of transactions over the internet includes retail business to consumer B2C (Amazon), business to business B2B transactions (IBM or Dell), and consumer to consumer C2C (eBay or Lazada).
Recently, E-commerce has expanded from normal electronics to mobile devices. Our society not only started to accept E-commerce but enjoyed the convenience and practicality of modern technology in shopping and selling.
Demand for a product or services differ according to the needs and wants of consumer. Yet, there are challenges in E-commerce, including method to keep the flow of customer attraction, finding the right product to sell and still can compete with other similar business, and to achieve long term profit.Customer attraction is main challenge for E-commerce. One of the approach for customer attraction is to have a good marketing strategy. It is vital to maintain the customer traffic flow in businesses. Consumer in marketplace can easily be influenced by marketing strategies, promotions and advertisements before making decision to purchase something.
Imagine if you want to purchase something online, for sure you will compare the quality of product, prices, and feedbacks of the product and choose the best amongst it. Several studies have shown that the seller’s reputation may affect the buyer’s willingness to purchase. (Lucking-Reiley, et al.,(2000) Some of the shoppers may only window-shop a few marketplaces or website; not necessarily instantly buying online as they might choose to check out at physical store or check other site for better deal.
There are more rivals over the net as more businessman are exposed to E-commerce business. Attracting new customers is costly and it will be better if we can keep the previous customer compared to spending more on marketing to find new customers. Good marketing strategy helps to keep the business going in order to retain customer flow. To attract more customers, we could also utilize technologies for instance, by using Search Engine Optimization (SEO). SEO helps to increase the traffic to your platform through search engine by searching certain keywords. SEO provides good quality and quantity of traffic and also gets an organic result. SEO can attract visitors from all parts of the world which is interested in your product or service to your platform. Organic results also mean that it does not cost a penny when using SEO. Almost all of the internet users uses search engines. So, search engines can act as a great source of qualified free traffic by using the right ecommerce SEO. (Niranjanamurthy, et al., 2013). Thus, attracting the interest of customer is one of the challenge for E-commerce.Other challenges of e-commerce are to sell the right products. To create a successful store where consumers want to shop, you must be fully prepared so that their shopping experience is a perfect 10. With the amount of competition on the Internet competing for consumer’s shopping dollars, you must go above and beyond so that your store stands out. As a new e-commerce business, you must whet in on a hyper-focused product niche where the competition is not flourishing yet and where you can target a specific group of online customers interested in your choice of products.
There are a lot of products in the same category. Due to internet accessibility, different marketplaces offer discounts and promotions, customers tend to switch their preferred stores. Francis (2015) points out that, 86% of clients switch stores due to poor customer service as customer service is vital to retain previous and current customers.. One must do researches about the strategies to be stand out among others. Authentic and unique products are found to be more protruding and desired by most. According to a Statista report by Aaron (2017), ecommerce sales is expected to bring about $4.5 trillion of profit by year 2021. In the United States, ecommerce stands approximately 10% of retail sales and that figure is predicted to increase around 15% each year! In sum, selling the right products can be a big challenge.Achieving long-term profit is also a great challenge of e-commerce. Achieving long-term profit may be difficult for most of the merchant. We can create our own webpage to be more convenient for our customers. A website can indicate the product quality similar to how a store environment is which means that it portrays how the product quality is. (Wells, et al., 2011). If your webpage does not have sufficient information about the product you are selling, consumers will make inference about the product sold based on their idea or concept of the product.
A good E-commerce should be mobile and website friendly platform so that it will be convenient to users. Besides, we will have the database and details of our own customers. We can thereafter explore new customer by using the SMART marketing strategies. What is SMART strategy? SMART is Specific, Measurable, Actionable, Relevant and Time-Bound. For example, we can target to achieve 10% of online revenue contribution within a time range by expecting 50,000 new online customers this financial year at an average cost per acquisition (CPA) with an average profitability. By having new customers, we can increase our database. PQ Brito (2015) states that, E-Commerce is a type of business which is able to generate a huge database. We could also set the price margin cheaper or similar to other competitors. If most customers have you as a preferred seller, they will purchase from you. After that, we could enhance our product categories by having more variations and choices for customers to choose from. Briefly, to achieve long-term profit is one of the challenges of e-commerce.
To summarize, attract new and retain customers, selling the right products, and achieving long-term profit is the main challenges in the e-commerce business. Information and communication technologies (ICT) has transformed today’s businesses from normal commerce to e-commerce due to easy access to technology, affordability, and trending. E-commerce challenges in a way are much the same as traditional commerce that is meeting the demand and supply determine by consumer and supplier or merchant. To date through E-commerce, product value, delivery speed, pricing, and customer service has become more competitive than before. More and more consumer is getting a good deal from E-commerce which made shopping convenient anywhere and anytime round the clock. If you have not tried e-commerce, feel free to check it out.
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