The Impact Of E-Commerce On Trade And Business

Literature Survey

Describe about the How E-Commerce Effects on Trade and Business.

E-commerce started around 1991 with the birth of internet. During its initial years e-commerce was a means of commercial transactions such as (electronic data interchange) EDI and (electronic funds transfer) EFT. From the initial years Amazon and eBay has been associated with e-commerce (Mohapatra 2013: 3-5). The benefits of e-commerce can be shown to: (1) increasing the efficiency of traditional business, (2) decreasing the time and space of a business and (3) creating business at impossible places (Qin et al. 2014: 4-5). Over the years, the B2C has grown faster than B2B. The growth of e-commerce has kept pace with the growth of internet.

E-commerce and internet are closely related. The internet has been the single most important factor responsible for the start and the growth of e-commerce. Combined with internet globalisation and information technology have also fuelled the growth of the e-commerce industry (Hasan and Ui 2016). With the help of e-commerce business organisations have been able to maintain a competitive edge over their competitors. Innovation in the field of e-commerce has also helped trade and business.  E-commerce has shifted the focus of the customer from the goods to factors like the service, the delivery time and the information of the product. The business organisation doing e-commerce business should be able to identify the trends in e-commerce.

E-commerce has affected the mode in which an organisation does business (Zhang et al. 2015).  Business organisations have reorganised their marketing strategies because of e-commerce activities. The change in the business strategies has enabled the organisations to improve the operability of the organisations and thereby reduce the cost of operations. The macro-environment factors and the competition amongst the business organisations have a positive impact on the e-commerce performance. E-business can significantly increase the competitiveness of the organisations. Business organisations wanting to start e-business should start with a mix of retail and e-commerce and then can graduate to doing e-business only.

The progress in technology and supply chain management has enabled business organisations to operate of a global scale. SMEs have benefitted from e-commerce due to the local market become global (Savrul, Incekara, and Sener 2014). Although the size of SMEs does matter in a global environment, e-commerce can help these SMEs with the help of private and public help. E-commerce plays a role in employment generation and the economic development of the organisation.

Research Question

The economic efficiency of a business organisation and thus the national economy increases due to the growth of e-business. The macro-economic impact of e-commerce is it provides for greater competition in business with substantial lower prices. E-business gives the consumer more choices at a given time (Martinez-Lopez 2013: 15-25).  While the lowering of prices by a business house may not provide for better profits but in the long run the expanded choice and increase in economic activity of the business organisations increases the business. From a micro-economic point of view, increase in e-business affects the ICT.

In B2C e-commerce trust is a very important factor. Other factors responsible for the growth in B2C e-commerce are the commodity being sold, the service quality and the website services (Qiuping 2016). Since e-commerce depends on the use of internet, hence internet security plays a very important role. The internet security and the reputation of the website plays a role in the growth of e-business. The website features of the e-commerce organisations, the speed of the website and the quality of the website plays a role in the e-commerce of the organisation.

The growth of e-commerce is dependent on the corporate social responsibility (CSR) of the organisation (Chen 2016). CSR of SMEs has a positive impact on the e-commerce of the organisation. Thus, SMEs should pay importance to CSRs. The increase in e-business can be facilitated by strengthening the CSR and by constructing of enterprise ethics.

In e-commerce, customer loyalty is critical for the survival of the business (Chiu et al. 2014). For increasing the business of an organisation, business organisation should concentrate on repeat customers. It has been shown that a customer should purchase at least four times to become a loyal customer. Customers in e-commerce evaluate websites before making a purchase. The consumer behaviour’s attitude towards initial purchase from e-commerce reveals his intention to use e-commerce. However, his repeat purchase attitudes can be evaluated as his intention to use the same e-commerce site. The repeat purchase intentions of a customer are directly related to his website experience with e-commerce. 

As of 2012 e-commerce contributes to just 4% of the total trade in Europe (Gomez-Herrera, Martens and Turlea 2014). The impediments to trade in e-commerce are that the goods have to be physically transported. Especially when the goods have to be transported across different countries then the regulatory regimes of the different countries pose some amount of barriers to e-commerce. The second impediment to e-commerce is the online payment system and the parcel delivery system.

Research Hypothesis

Information and communication technology (ICT) is one of the most important factors responsible for the growth of e-business. For a business organisation carrying out e-business the external factors for carrying out its activities are the use of the technology, the market and the government (Janita and Chong 2013). A major issue for e-business is the penetration of the technology (internet). The internal factor for the growth of the business is the management of the business organisation.     

From 2002 to 2012 the share of e-commerce has increased from 15% to 30% (UNCTAD 2015) .The retail trade has increased from $ 3129 billion to $ 4344 billion during the same period. The number of service industry in e-commerce has increased from 11,164 to 12004 from 2010 to 2012. Thus e-commerce has greatly increased the trade and business.

For the purpose of the present research the questions are:

• How is the e-commerce related to the productivity of the organisation?
• How has the supply chain management been influenced by e-commerce?
• What are the factors that have influences e-commerce of the organisation?

Based on the above research questions the hypothesis can be developed as:

• E-commerce has not affected the trade volume of the organisation.
• E-commerce has not affected the revenue of the organisation.

For the purpose of the present research, secondary data will be collected from an organisation having business interest in e-commerce. Data will be collected over a five year period. The data should relate to the number of customers, the annual return, and amount of business in volume and revenue over a five-year period. The data would also represent the changes that have been initiated by the business house in supply chain management. Quantitative data would be collected for this purpose. To find the correlation between the different factors a deductive research approach would be used. The growth in the e-commerce of the business would be judged.

The data on the productivity and revenue over a five-year period would be analysed. The analysis would relate how e-commerce has shaped the organisation. An analysis of the number of customers with the business volume would also be studied. This analysis would provide for the effect of e-commerce on the trade and business of the organisation. The correlation between productivity, revenue, customers and annual return would be studied. This would provide for how the different factors responsible for the growth of the organisation are related.

Previous studies have shown that e-commerce has benefitted the trade and business of the business organisation. In the last for years, India has seen a growth of 250% in the number of customers in the e-commerce industry (Khan, Borhade, and Shaikh 2014). Many business SMEs have embraced e-commerce. The impact of e-commerce has been increased efficiency in business and increase in the number of customers while reducing the cost of business. E-commerce has seen newer opportunities for the business and marketing that is more efficient (Pickernell et al.2013).  

Research Design and Methodology

Others factors that influence the growth of trade and business would be considered. The factors that would be considered the various programs that have been taken up by the business organisation in successful implementation of e-commerce.

Conclusion

It can thus be concluded from the present research that the impact of e-commerce on trade and business has been very positive. The present research show that the there has been an increase in the revenue of the business while a decrease in cost of business. The productivity of the business has also increased. Even though there are concerns of internet security, integrity and privacy the concept, e-commerce has grown by leaps and bounds. E-commerce has been at the forefront of the change in business scenario.

	Week 1	Week 6	Week 10	Week 13	Week 14
Introduction
Literature review
Data collection
Data analysis
Conclusion

Figure 1: Gantt chart of the research

(Source: created by author)

References

Chen, Q., 2016. Comprehensive Evaluation of Businesses Strategy and E-Commerce Performance in Smes: A Corporate Social Responsibility Perspective. International Journal of Hybrid Information Technology, 9(6), pp.361-370.

Chiu, C.M., Wang, E.T., Fang, Y.H. and Huang, H.Y., 2014. Understanding customers’ repeat purchase intentions in B2C e?commerce: the roles of utilitarian value, hedonic value and perceived risk. Information Systems Journal, 24(1), pp.85-114.

Gomez-Herrera, E., Martens, B. and Turlea, G., 2014. The drivers and impediments for cross-border e-commerce in the EU. Information Economics and Policy, 28, pp.83-96.

Hasan, M. and Ui, H., 2016. Entrepreneurship and Innovation in E-Business. Advances in Social Sciences Research Journal, 3(1).

Janita, I. and Chong, W.K., 2013. Barriers of b2b e-business adoption in Indonesian SMEs: A Literature Analysis. Procedia Computer Science, 17, pp.571-578.

Khan, S. S., Borhade, S.N., and Shaikh, M. S. (2014). Impact of e-commerce on Indian market: Social and economic impact. Asian Journal of Multidisciplinary Studies, 2(12), 150-154.

Marti?nez-Lo?pez, F. (2013). Handbook of strategic e-business management. Springer Science & Business Media

Mohapatra, S. (2013). E-commerce strategy. New York: Springer.

Pickernell, D., Jones, P., Packham, G., Thomas, B., White, G. and Willis, R., 2013. E-commerce trading activity and the SME sector: an FSB perspective. Journal of Small Business and Enterprise Development, 20(4), pp.866-888.

Qin, Z., Chang, Y., Li, S and Li. F., (2014). E-Commerce Strategy. Springer.

Qiuping, L., 2016. Research on the Customer Satisfaction in Electronic Business Environment based on DEA Method: An Empirical Analysis. environment, 10(4).

Savrul, M., Incekara, A. and Sener, S., 2014. The Potential of E-commerce for SMEs in a Globalizing Business Environment. Procedia-Social and Behavioral Sciences, 150, pp.35-45.

UNCTAD, (2015). Information Economy Report  2015 Unlocking the potential for developing countries. United Nations Publications 

Zhang, Y., Gao, Y., Li, X. and Wang, D., 2015. Research on Operating Performance and E-business Marketing Strategy in Retail Enterprises based on Online Shopping. International Journal of Security and Its Applications, 9(11), pp.87-96.