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Electronic Commerce


It is evident that technology has been incorporated into a majority of business operations. Since the advent of technology, there have been numerous changes in the field of business. Therefore, one aspect, which cannot be overlooked, and this is the adoption of electronic commerce by commercial enterprises. Electronic Commerce which is popularly known as e-commerce is defined as the buying and selling of information, products and services over the computer networks (Manzoor, 2011). Consequently, products and services are ordered, bought, or sold electronically. For instance, websites like Amazon and e-bay are used to conduct online business, which is part of the broad electronic commerce.  Manzoor mentions that the whole idea behind e-commerce began in the year 1990s. In the United States of America, the framework of electronic commerce was announced by the government in the year 1997; the policies within the framework stated that all federal purchases will be transacted in paperless form and that gave a new way of conducting trade and commerce (Nag 7 Bajaj 2005). This marked the turning point from the traditional form of commerce to new ways of processing and transferring of information over the internet. This is because e-commerce would include the paperless exchange of business information using electronic data exchange, e-mail, e-bulleting boards, electronic fund transfer, World Wide Web (www), and other network based technologies (Nag & Bajaj, 2005). One can rarely mention the term e-commerce without touching another important aspect which is also known as the e-business. This is because they are closely related in terms of technology, because e-business involves the moving an organization towards a full electronic environment through the change of their work procedure, re-engineering their business process and integrating them with business partners beyond their traditional boundaries (Nag & Bajaj, 2005). An example of e-commerce at work is where an individual orders for a product online from the Amazon.com website, but the delivery id done physical at his door step; this is known as partial e-commerce (Manzoor 2010).

There are several types of e-commerce, for example; business to business (B2B), Business to Client (B2C) and Client to Client (C2C). According to Nag and Bajaj, B2B is the transactions involving business entities, for example, website companies. B2C is where a company sells it products or services to clients for their own use over the internet. Among the major examples of B2C business are; online banking, online retail services and online travel services. C2C is a virtual market over the internet where sellers and buyers meet to exchange goods, including used goods at a negotiated price. This site is also known as an auction site (Manzoor 2010).  

The major characteristics of e-commerce are similar to the characteristic of new media; a term used to refer to all that is related to the internet and the interplay between technologies (Socha & Eber-Schmid 2013). The e-commerce process is very interactive in because both suppliers and buyers are able to interact over the internet, for example, emails, instant messages and chat rooms which encourage effective feedback whenever there are questions (Manzoor 2010). Another major characteristic of e-commerce is that is not limited to geographical boundaries (Nag & Bajaj 2005). Trading partners from distant geographical regions can be able to communicate over the internet. The internet has raised the access of data, communication and productivity throughout the business world. E-commerce process is also very fast since it takes place over the internet, thus very reliable.

It is worth noting that electronic commerce utilizes the internet and other computer networks, in order for the business transactions to be effective. Electronic commerce has its merits and shortcomings. E-commerce should not be viewed as an artless process of buying and selling products over the internet. The term e-commerce encompasses the exchange of data amongst various enterprises’ computers. It involves buying and selling of all products and services over the internet, electronic fund transfer, smart cards, as well as all other business transactions relying upon computer digital networks.

There are several significances of e-commerce. The sole purpose of e-commerce is to integrate business owners, government authorities and contractors into a single network platform, which enables communication amongst them (Nag & Bajaj 2005). It is paramount to note it has been argued that e-commerce has various functions. According to Nag and Bajaj (2005), the functions are divided into four stages, with each stage being dependent on the rest. E-commerce has been viewed as a tool for communication as it enables transfer of business information from one party to another. Secondly, e-commerce enables process management, where computers are interconnected to enable sharing and transfer of data. This eliminates the use of a person, who could physically move data from one machine to the other. Thirdly, e-commerce ensures proper service management. This utilizes technology to improve on service delivery. For instance, the federal express website serves as a clear example of service management. Lastly, transaction capabilities ensure that customers can follow up on their transactions electronically, without having to contact any customer care agents.

It is evident that electronic commerce has expanded rapidly in the last five years, and the trend is expected accelerate. Nonetheless, it is vital to note that e-commerce has both the bright side and the dark side. It is critical to note that electronic commerce may occur between businesses, or between a business and a customer. However, irrespective of the parties involved, there are merits and demerits. E-commerce has been regarded as cost effective when compared with traditional business transaction methods (Nag & Bajaj 2005).  E-commerce is credited with the elimination of logistical problems, as well as ensuring equity amongst all businesses. Secondly, e-commerce has improved profit margins in various companies. For instance, the cost of processing an air ticket manually is higher than the cost of processing it electronically. This indicates that e-commerce is effective for the economy, not only to the business owners, but also to consumers. E-commerce requires little infrastructure and does not require insurance or physical space (Nag & Bajaj 2005).  As a result, the cost of adopting e-commerce is hugely lowered.  In addition, e-commerce has proved to be of prominent use to the customers. It is argued that customers experience enhanced and speedy services while conducting business electronically (Nag & Bajaj 2005).  This is vital as it saves the customer’s time. Customers are also able to view and compared different products and prices. E-commerce enables communication amongst various stakeholders in the business field (Nag & Bajaj 2005).  As a result, it has enabled people to collaborate in searching for business solutions. This has resulted in teamwork, which has been credited with several business breakthroughs. Lastly, e-commerce has enabled effective sharing of information, expediency and regulation (Nag & Bajaj 2005).  This has proved to be convenient to customers, as well as the business owners.

Although the advantages of e-commerce appear as eye catching, e-commerce has its challenges. People have been concerned over the security of the data they transact over the internet (Manzoor 2010). This concern has been accelerated by the invention of computer viruses, which comprise the integrity of the data. . Another disadvantage of e-commerce is that there is no guarantee to quality of goods and services since some e-commerce suppliers are crooks. Mechanical failures can also mess up the whole process of e-commerce (Nag & Bajaj 2005).More often than not, the cost of e-commerce has hindered small businesses to embrace it. It is worth noting that e-commerce is not free. In addition, it is evident that there are some products that cannot be sold online. For instance, a website that is selling furniture online may be engaging in a futile activity (Nag & Bajaj 2005). Such products require physical contact with the customer to check some properties like texture. E-commerce also ensures efficiency and reliability within the transaction, hence better customer service. The use of search engines to search for products and services has made it easy for the clients (Manzoor 2010).

Since electronic commerce is dependent on technology, its standards improve together with the advancement in technology. Therefore, there are several emerging trends within the field of e-commerce. It is noticeable that new business models are being invented daily, and organizations are using IT heavily to restructure and re-engineer themselves (Manzoor 2010).  The uses of Broadband and Mobile devices are boosting the e-commerce process. Online shopping has necessitated the advent of electronic money transfer, such PayPal, Money Bookers and M-pesa. These money transfer services form the huge aspect of electronic commerce. Online advertisement has also taken root over the internet. It is evident that a majority of products and services are advertised, ordered, bought or sold through the internet (Nag & Bajaj 2005).. Services like nail cutting and hairdressing can only be advertised for local customers.

In conclusion, it is clear from the discussion that electronic commerce is headed towards eliminating traditional business methods. The shortcomings associated with electronic commerce can be eliminated in order to make it efficient and reliable. The invention of e-commerce was necessitated by the need for quick, reliable and cost effective transactions. The adoption of e-commerce into the business world did not disappoint. Since the invention of e-commerce, there has been increased customer satisfaction, quick services and a huge reduction in the cost of running businesses.           

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