Importance of E-Commerce: Riya Jacob K Dept of BCA 2020 - 21

IMPORTANCE OF E-COMMERCE
Riya Jacob K
Dept of BCA
2020 - 21
IMPORTANCE OF E-COMMERCE
• Electronic commerce means engaging commercial activities using
the electronic media.
• Operating efficiency of the business firm will definitely improve
and which in turn strengthen the value and service given to
customers and provide a completive edge over competitors.
• The direct benefit accrue to an organisation on practising e-
commerce are better quality, greater customer satisfaction, better
decision making, low cost, high speed and real time interaction.
• E-Commerce has the potential to increase revenue by creating
new markets for the existing products and establishing new
distribution channels to better serve and interact with customers.
• Plenty of opportunities are available from e-commerce and the
importance of e-commerce can be discussed under the following
heads.
1. Consumer Sovereignty
• Consumer is the king in the market.
• The marketing strategies.of all business organisations are one
way or other, related with the satisfaction of consumers.
• Consumers in e-commerce enjoy wide choice and best service.
He is free to selèct any goods and services displayed on
computer screen.
• Orders can be placed over the Internet and goods are delivered
at the doorsteps of consumers, thus avoiding inconveniences
associated with manual shopping.
• The consumer gets full attention of the supplier as e-commerce
envisages one- to-one marketing, There are no middlemen to
operate between producers and consumers in e-commerce since
service of intermediaries are needed to facilitate exchange of
goods and services between buyers and sellers.
• The intermediaries' are start to disappear from the market scene
as the world go for electronic trading.
2. Customisation
• High Quality relationship is crucial for retaining customers
in the e-commerce environment.
• Customer relationship management (CRM) is a new concept
in marketing and e-commerce provides plenty of
opportunities to practice CRM in organisations with a view
to establish better relationship with customers.
• It becomes absolutely necessary for the company to
enhance customer loyalty;
• otherwise the customer is full of choice scan jump from one
web site to another.
• In order to employ technology to develop, low cost
customer retaining methods, establish close relationship
with customers and develop customer loyalty.
• To achieve this, marketers in all industries are seeking new
ways to interact with customers and delivering service,
3. New Markets
• It is easier to penetrate and reaching of the customers
across the world within minutes over Internet.
• The net enables suppliers to introduce and promote new
products to meet the needs of the individual buyers.
• Even if some customers have been missed may be reached
through the net.
• Thus customer can have better quality products from any
country at reasonable prices CE-commerce also makes
'mass customisation' and 'net production' possible.
• An easy- to-use ordering system allows customers to order
their own unique product; business-to- business electronic
commerce allows the quick and efficient manufacture of
what the customer ordered.
4. Efficient Use of Resources
• Availability of plenty of information, no transportation costs
and free entry into markets led to the efficient use of
resources that will in turn reduce both cost and prices
• For example cost of processing invoice electronically is
much cheaper than traditional methods
• The aggregate demand for goods and services will be
increased due to the supply of abundant information about
goods and services.
• An important reason for the growth of e-commerce is that
it reduces the cost of doing business.
• Selling over the Web will reduce its cost Online transaction
costs are 70-90% less than those involving human
mediation.
• In the US, it costs banks only 5 cents to process a Net-based
transaction, compared to $1.07 if the same transaction is
done in a branch, and 27 cents for an ATM transaction.
5. Employment Opportunities
• E-commerce provides employment
opportunities to large number of people
across the world.
• A large number of professionals are employed
in software services sector.
• Many of the western and European countries
require large number of motivated
professionals in the future.
6. Quick and Speedy Disposal of Customers
• Internet related technology process transactions at a
great speed and it takes less time to complete
formalities without considerable investment.
• The time consuming procedures of printing, mailing
catalogues, inviting quotation etc. can be given to
computerised system to avoid delay associated with
the traditional system of processing customers,
moreover, massive exhibition of goods at a central
place.
• For example, Amazon.com, worlds biggest book store
have millions of e-books for online sale, can exhibit
electronically their products with texts, pictures, prices
etc. in no time.
7. Managing Competition
• E-commerce is particularly attractive because it can
serve as the 'great equalizer'.
• That is, it enables the small-and medium-sized
enterprises to effectively compete with large and
multinational firms in the global marketplace.
• Here the classic case is amazon.com - a virtual
bookstore that did not exist a few years ago and does
not have a single square foot of bricks and mortar
floor space.
• Amazon.com is currently posting an annual sales rate
of $1.2 billion.

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IMPORTANCE OF E-COMMERCE

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