Electronic Commerce, E-commerce, is the movement of everything involving business to the Internet and the World Wide Web. Parties involved in a transaction interact electronically in a way similar to businesses using Electronic Data Interchange (EDI) concept.
E-Commerce involves transactions between parties in eight different relationship settings, such as
The concept of E-Commerce is actually derived from EDI (Electronic Data Interchange) concept. EDI was developed in 1960s and has been used to do business electronically long time ago before the Internet and Information Superhighway developed.
The purpose of EDI development is to make the exchange of information among businesses easy. With the evolution of personal computer and the development of Internet, EDI has merged to a new concept, known as E-Commerce.
In these few years, E-Commerce grew very fast such as following example are given.The results of a study done by the University of Texas' Graduate School of Business, in conjunction with Cisco System, Inc, showed that revenue generated by internet businesses is larger than all previous estimates; E-Commerce contributed US$300 billion in US revenue and 1.2 million jobs in 1998. Moreover, in 1998, total E-Commerce exceeded US$102 billion for US based-companies.
Other key statistics from the report are:
B. Obstacles, Which May Defer the Development of E-Commerce.
There are two major problems in this area:
The major issues involved with network security are as follows:
The Commonwealth has played other crucial roles in the development of electronic commerce. Few realise that the insignificant number zero (0), used in the digital computing that is the backbone of electronic commerce, has its origins in the Indian sub-continent. The India of today is a modern society whose computer programmers are responsible for many innovations taking place in the world of electronic commerce. Nor should the leading role played by London, the financial centre of the world and a commercial powerhouse, be forgotten.
Electronic Commerce is revolutionising the way we work. Electronic mail (e-mail) has become a common application and obtaining information by browsing websites is now part of everyday life. The creative union of telephone and computer resulting in the Internet is the basis of today's electronic commerce. Today, 600 million telephones are in use today. A telephone is taken for granted in the developed world, where consumers have access to computers that are becoming not only more powerful but also cheaper day by day. However, this essential technology is still beyond the reach of the vast majority of the population in the developing world, where 'telephone density' is a mere one-tenth of that in the developed world. How can electronic commerce take root in such places that do not have adequate technological infrastructure to begin with? Will people in these countries miss out on the information revolution as they did the industrial revolution? Are we moving towards a society that is divided on the basis of information haves and have-nots? Technology has thus become an important pre-requisite in the development of trade through electronic commerce. Already, there are signs of erosion in competitiveness of markets in developing nations where the margins are thin. Finally, in the twenty first century knowledge will replace capital and labour as the dominant form of productive capacity. Over the past hundred years, huge industrial and financial infrastructures have been built to anticipate primary demand. This bloated infrastructure will yield to leaner and more agile organisations responding to actual demand.E-Commerce is transforming industry and commerce. It shifts business focus from retail and physical stores to the virtual business.
Every month, an estimated one million new Internet users join the growing online community worldwide. Moreover, half a million new buyers enter the pool of some 10 million Internet buyers-people who actually purchase something on the Net each month (Straits Times, 20th June 1999). Below is a discussion about the future trend of E-Commerce in various areas and countries:According to the US Commerce Department, E-Commerce is projected to be the primary economic growth for the US over the next 100 years. IT businesses still contribute less than 1% of the country's overall economic production, but they are growing more rapidly and provide more evidence that E-Commerce will be the engine for economic growth in the next century. However, the agency has not yet figured out how big an impact Internet business has had on the country to date (E-Commerce Times, 23rd June 1999)
Moreover, Deloitte Consulting (CNets News, 23rd June 1999) forecasts that E-Commerce revenues would top US$1.1 trillion globally by 2002 from US$15 billion in 1997. Out of the US$1.1 trillion, US$842 billion (76.5%) would be from the US
Another report by Beth Cox in her article "Report Projects 1999 E-Commerce Revenue at $95 billion"(E-Commerce News, 7th June 1999) pointed out that:Report by Data Monitor (NUA, June 1999) shows that Electric Commerce allow grows rapidly in Western European countries. The report identified Germany, Britain and France as the top three consumer online shopping markets in Europe. The Western European consumer online will be worth US$775 million by the end of this year and will increase to US$8.6 billion by 2003.
The E-Commerce markets for those top three consumers online shopping market in Europe are as follows:On the other hand, at an International Data Corp (IDC) conference held in Prague (NUA, June 1999) , experts predict that there will be a steady growth in E-Commerce for Eastern Europe. The main force for this steady growth is the regional IT market growth.
Moreover, the significant obstacles to the growth in the region include high online access costs, a small home market and the universal concern over security issues. However, experts project a significant growth of Electric Commerce by 2001. This growth will be pushed by new technologies and solutions.
However, experts project the significant growth of E-Commerce in Eastern Europe by 2100. This growth will be pushed by new technologies and solutions.
To sum up, the growth of Electric Commerce in Western Europe will be significant. On the other hand, the growth in Eastern Europe is steady but is expected to have a significant growth by 2001, driven by new technologies and solutions.In Australia, organisations are using the Internet to satisfy communication, network, research needs and increasingly to sell goods and services online to consumers and payment were made through secure credit cards and digital cash.
The latest figures from Australian Bureau of Statistics in the article "Internet Use Continues to Grow in Australia" (NUA, June 1999) pointed out that over 1.1 million households were online at the end of 1998. This has been an increase of 280% in the last two years compared to 286,000 households in 1996.
By the year 2000, the report estimates that there will be 2 million households online in which 13% of adults accessed by home and 14% accessed from work.
The report also showed that of the more than four million adults who had accessed the internet in the 12-month period leading to the survey.
According to International Data Corporation (IDC) in the article "There's No Business like E-Business" (CFO Asia, June 1999), the E-Commerce revenues in Asia will not come close to US or European level. E-Commerce turnover in Asia (excluding Japan) will barely reach US$2 billion this year. These sales are expected to increase to US$32 billion by 2003 (400% annual increase). However, it is still small compared to the E-Commerce sales in the US, which is expected to hit US$500 billion by 2003.
According to John Culbreth, the Singapore-based CFO of US computer-chip maker Micron Semiconductor (CFO Asia, June 1999), the growth of Electric Commerce will be slower in Asia due to different banking rules, tax structures and other regutating issues.
However, there is a strong interest in E-Commerce in the region, but experts suggest that Asia countries should focus more to business-to-business (B2B) than business-to-consumer (B2C) transactions. Below is the discussion of the development of E-Commerce in Asia particularly in Japan, Singapore and Malaysia.
1. Japan
A survey done by the the International Trade and Industry Ministry and Anderson Consulting show that B2C in Japan is expected to generate over 1 trillion yen in revenue by 2003.
In 1998, B2C trade accounted for 0.02% of the total household expenditure in Japan. While the next five years will see rapid growth in E-Commerce, such trade will still only account for just 1% of overall household expenditure.(NUA, April 1999)2. Singapore
Singapore has a well-planned development of Internet among the South East Asia countries. The Government of Singapore has launched a project called IT 2000. The aim of this project is to transform Singapore into a global hub, boosts the economic engine, enhances the potential of individuals, links communities locally and globally and improves the quality of life. The project has launched "Singapore One-One Network for Everyone" -a national high-capacity network platform, which provides applications and services in area such as government, home, and business. The network backbone is based on Asynchronous Transfer Mode (ATM) and fast Ethernet (100 Mbps) technology.3. Malaysia
Malaysia has launched its network called JARING (Joint Advanced Research Integrated Network). JARING is a network that links local universities. The objective of the network are to establish an integrated data communication network, enhance multi-disciplinary R&D activities, study and evaluate the use of data communication technology and its impact on socio-economic activities. In addition, Malaysia has also launched the project called Multimedia Super Corridor. This project will enable access to the information related to government record, education, health care and businesses.With the rapid growth of E-Commerce, it is no doubt that there will be increased opportunities either for businesses or individuals. Some opportunities for businesses are in the area of:
In addition, Australian Department of Employment, Education, and Training & Youth Affairs (DEETYA) predicts that the strongest jobs growth will be computing professionals.
E-Commerce leads to simpler, faster and more efficient business transactions. It shifts business focus from retail and physical stores to the virtual business, which affects both producers and consumers. Both sides are better off with the development of E-Commerce.
In these few years, E-Commerce grew very fast. However, despite of its rapid growth, there are several factors which may deter its development, such as : communication infrastructure, security issue, law and tax issue. Recent study by various groups and experts pointed out that E-Commerce is growing and will be the primary economic growth for the US over the next 100 years. In Europe and Australia, it is expected to have a significant growth. In Asia, although E-Commerce revenues is still small compared to the US, it is growing fast and experts suggest that we should focus more to business-to-business transaction (b2b) than business-to-consumer (b2c) in Asia.The conclusion to be drawn from this essay is that electronic Commerce will increase the efficiency of the economy. However, it will also create artificial barriers, and we will have to learn live with them.
