A Brief Explanation of What E-commerce is
E-commerce touches all major aspects of economic life and presents a series of complex issues. It involves the integration of many elements of technology, infrastructure, business operation and public policy. All these elements need to operate together as smoothly as possible to yield the maximum benefits to its users. Most importantly, e-commerce requires new skills and forms of industrial organization; it therefore also needs to be looked at from social and political angles.
The transition of the global economy from an industrial focus to one based on knowledge and information presents numerous opportunities and challenges. This new paradigm has a significant impact on the way people lead their lives. It is enabled by the use of Information and Communications Technologies which have led to the compression of time and space.
The increasing pace of technological innovations, such as the rapid integration of the Internet and other telecommunications based activities into nearly every sphere of business has given rise to new ways of communicating, learning and conducting business. The Internet has facilitated the establishment of a “border-less” environment for communications and the electronic delivery of certain services.
Enter electronic commerce also known as e-commerce. Convergence of technologies is the major driving factor that contributes to the exponential growth of electronic commerce. Convergence goes beyond the use of technology to develop new products and services and is seen as a vehicle to improve the quality of life of society. Convergence will open new opportunities for all as everyone gains equal access to information and the global markets. Small business will be able to compete on an equal footing with big business.
But what is e-commerce?
Electronic commerce can be defined broadly as:
“The use of electronic networks to exchange information, products, services and payments for commercial and communication purposes between individuals (consumers) and businesses, between businesses themselves, between individuals themselves, within government or between the public and government and, last, between business and government ”
This definition encompasses the many kinds of business activities that are being conducted electronically, and conveys the notion that electronic commerce is much more comprehensive than simply the purchasing of goods and services electronically.
What are the benefits of e-commerce?
E-commerce is transforming the global marketplace and its impact is being felt across the full range of business. E-commerce requires an open, predictable and transparent trading environment, which operates across territorial borders and jurisdictions. To foster such an environment and to realize its full economic potential necessitates international co-operation, which will be instrumental in developing the enabling conditions for its growth.
Countries have to work together to remove barriers to the free flow of electronic products and services across jurisdictions and by resolving problems that may arise due to its borderless character.
The main benefits of e-commerce are demonstrable by the following achievements:
Improved response time: Quick and cost efficient way through which to communicate and update information.
Improved competitive positioning: Electronic commerce has a potential to level the playing field for small and large entities throughout the world. Small and Medium Enterprises and public sector customers reap the benefits of e-commerce.
Ease of concluding deals and financial transactions: Click-and-pay technology is gaining popularity as a means through which to transact. Published information, communicating, buying, selling, paying and checking orders occurs 24 hours a day, 365 days a year.
Extended markets reach and thus increased revenue potential: Geographic barriers or boundaries are removed. There is an increased number of Internet users to market products and services at lower cost and much faster.
Increased consumer convenience and choice: Consumers can easily locate hard to find goods and services, and also have a wide choice from which to make a purchase anytime, anywhere.
Reduced prices: Increased competition forces organizations to produce better quality products at reduced cost.
Improved customer service: Information is shared more quickly through the use of an electronic medium.
E-commerce has made life good and simple and as technology improves, so will the concept of e-commerce to ensure it is hassle free for its users.
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