Access to the internet has opened up a wide range of opportunities for businesses which helps medium-sized enterprises to sell their services and products at the world market. The latest researches point out the importance of the internet to many enterprises. Internet facilitates the work of many companies and allows making more profit.
Internet commerce is usually associated with buying and selling different goods and services via the internet. It should be pointed out that this area has been developed last years, and internet commerce does not presuppose only buying and selling. In fact, this notion means the use of electronic resources in business transactions to transform, redefine and create relationships between individuals and organizations (Bill n.d.).
There are different types of e-commerce, such as business-to-business, business-to-government, business-to-consumer, consumer-to-consumer and mobile commerce (Vulkan 2003). Business-to-business e-commerce means the relations between companies. Such type of relationship is popular in the areas of inventory management, supplier management, channel management, distribution management and payment management. The benefits of business-to-business e-commerce in developing countries are transaction costs, disintermediation, transparency in pricing, economies of network effects and scale. The use of the internet allows reducing search costs and the costs of processing transactions. More than that, online processing makes logistics and management better. Disintermediation assumes direct relationships between sellers and buyers. The Internet presents all the necessary information about purchases and transactions which gives the customers a good opportunity to compare prices and find the most competitive one for a product.
Business-to-consumer e-commerce includes customers looking for purchasing information and buying products through the internet. The most popular business-to-consumer models are Drugstore.com, Amazon.com, Beyond.com, ToysRus and Barnes and Noble. Business-to-consumer e-commerce reduces transaction costs allowing the consumers to make better buying decisions sparing their time and money.
Business-to-government e-commerce includes different processes between the public sector and different companies. Licensing procedures, public procurement, and different government-related operations may be done via the internet. The establishment of e-commerce is assumed by the public sector. The use of the internet makes its procurement processes more effective.
Consumer-to-consumer e-commerce means the trade relations between private consumers or individuals. There are three forms of this type of e-commerce; they are online bidding on the goods sold via the internet, such as eBay, peer-to-peer systems, such as the Napster model, and advertisements at portal sites, such as eWanted and Excite Classifieds. Consumer-to-business e-commerce is comprised of reverse auctions where the customer has the opportunity to conduct transactions.
There are a lot of factors that make e-commerce so popular nowadays. They are economic, market and technology factors (.Singh & Kundu 2002). Economic factors include economic efficiency of the use of the internet in trade relations that reduces the communication costs and provides more economic and speedier electronic transactions with suppliers, low-cost technological infrastructure, lower advertisement costs, cheaper customer service alternatives, and easy access to information. Market factors are the desire of many companies to capture the world market which may be easily achieved with the help of the internet. Providing more detailed information via the Internet helps companies do their business more effectively. The development of modern technologies is the main point to the popularity of e-commerce. Having only one information provider, companies save communication costs. More than that, e-commerce services enable small companies to reach the global market. “Mass customization” and “network production” are possible due to the popularity of e-commerce. Easy-to-use ordering systems allow the customers to find products according to their personal needs and interests. The Internet gives the opportunity to get connected with people from different corners of the world quickly and conveniently. Consumers have more influence over the process of making products. The manufacturer may follow the interests of consumers and direct respond to them. E-commerce has changed the old linear/vertical economy relationships to end-to-end relationship management solutions (Lawrence 2011).
J.P. Morgan emphasizes that the popularity of e-commerce is increasing now. He presupposes that e-commerce revenue will grow to $963 billion by 2013. The report of 2011 points out that e-commerce revenue has increased to $680 billion all over the world which is 18.9 percent more than in 2010. The percentage of people who do not use the internet for buying and selling goods and services reduced to 20 percent in 2007 and 12 percent in 2010. Online advertisements have become more popular and influential over the customers who use the internet. Online advertising represents 13,7 % of all U.S. advertising, while in 2009, it was only 3.9 percent. Online sales in the USA are expected to continue growing about $20 billion to $30 billion each year for the next five years. It is also pointed out that Amazon continues to be an e-commerce giant (Rao 2011).
The researchers express their concern about the expansion of the e-commerce during next five years. There are main five marketing issues that are still troubling many specialists. They are managing lists, relevance, data overloading, partnerships and privacy (Rosencrance 2008). Effective marketers will achieve an increase in the number of consumers with whom they have personal relationships and influence their choice. Personalization presupposes providing the information which you are expected to require. The marketers provide you with the information they think you need based on either your previous behavior or on the behavior of others who seem to have the same demands and interests as you do. The most effective way to establish trusted relations with the new consumers is to have partnerships with those companies they trust to. Every customer searching the internet and looking for the necessary item is overloaded with information. As we can see from all these marketing issues, the customer has less privacy (Murray 2001). Professional marketers impose on the customers their choice. The customers do not even pay attention to the fact that their behavior is controlled. For example, many customers do not even think about the fact that they are followed during their search in Google. The Google Chrome program registers the sites which are more attended by you. This helps professional marketers follow your interests and needs. The customers do not even pay attention to the fact that they buy items they do not need in fact. They may use the internet for a particular purpose, but bright and colorful advertisements, which are present on every site, make them forget what they want.
Marketing relationships have changed a lot since the internet has invented and become accessible for everyone in the world. Many researchers predicted the revolution of trade relations with the growth of e-commerce. It facilitates our life, on the one hand, and it has a lot of drawbacks, on the other hand. Nevertheless, it is impossible to stop the growth of popularity of the e-commerce (Hirsh 2002).
Bill, H n.d., ‘History of e-commerce’, Sell It! on the Web Your expert Guide to E-Commerce, Online Retailing &Internet Marketing. Web.
Hirsh, L 2002, ‘The next wave of e-commerce technology’, E-Commerce Times.
Lawrence, JE 2011, ‘The growth of e-commerce in developing countries: An exploratory study of opportunities and challenges for SMEs’, International Journal of ICT Research and Development in Africa, vol. 2, no. 1, pp. 15-28. Web.
Murray, A 2001, E-Commerce for Development: Challenges and Opportunities. Web.
Rao, L 2011, ‘J.P.Morgan: Global E-Commerce Revenue to Grow by 19 Percent in 2011 to $680B’, TechCrunch.
Rosencrance, L 2008. ‘E-Commerce Sales to Boom for Next 5 Years: Forecasts project online sales of $215B to $335B annually by 2012’, Computer World.
Singh, N & Kundu, S 2002, ‘Explaining the growth of e-commerce corporations (ECCs): An extension and application of the eclectic paradigm’, Journal of International Business Studies, vol. 33, no. 4, pp. 679-697.
Vulkan, N 2003, The economics of e-commerce: A strategic guide to understanding and designing the online marketplace, Princeton University Press, New Jersey.