Examination of e-commerce
E-commerce grows rapidly nowadays, our generation can even say “we have witnessed the birth and growth of the e-commerce”. Experts affirm that e-commerce is still raw. The weakness of e-commerce is simple to explain. Aren’t all of us shopping online? Frankly speaking - no, and we all can agree with this fact, but electronic commerce expands and grows fast. But before we start to analyse influence of e-commerce on businesses or markets in general, let’s define what actually e-commerce is?
Some of the investors define e-commerce as "when a person or business uses the Internet as part of their business model." Without a doubt - this is a professional definition, but if we say more simply, it’s commerce activity which is executed with the help of the Internet and may contain such processes as trading products online, providing services or maintaining an informational website/ business blog online. Various companies can use e-commerce as a main tool of business, at the same time the others can use it as an additional implement. Most businesses sell goods and services online and offline (in retailing stores), using different types of selling activities. The others can use e-commerce for hiring freelancers, or just placing the advertisements etc. Anyway the Internet and money in the best combination maximize sales.
Not all of us shop online and according to statistics, e-commerce makes up about 5% of all retail. But it grows rapidly. E-commerce takes significant place in more and more markets, it disrupts them in a way.
In 1992 in the USA people already could pay online using credit cards. It means few years earlier first step of e-commerce was all about discovering the web and setting up the first online shops. It was imitation of offline commerce world, trying to show the product to the potential client from all possible sides.
The next step, lets call it the second step of e-commerce, was dedicated to transformation of old websites to smart multimedia portals that tried to attract potential clients. Those sites appeared not just when people were searching for some specific product , they were made to engage customer, to “push” customers to purchase, convincing to spend money on special deals. This way a lot of people make purchases following impulsively.
The third step of e-commerce is a slow development of enveloping, which refers slightly to the previous step. Nobody knows for sure how it will look like in the future.
Now we can see the picture: e-commerce occupies social networks and cell phones. The reason is that every business is trying to get closer to customers. This is the new type of competition. This topic is discussed on many conferences in the world, and during one of them, participants said: "digital is destroying analogue business models".
Why e-commerce becomes disruptive for many markets? It’s not only about buying music, books and other goods online.
Almost all of us love to do shopping, and usually we get used to shop with friends because it has to be fun. When shopping with friends you get opinion about the stuff you buy, complements or pieces of advice, because you spend time on getting something new. Comunication is also essential. During one of the conferences Sonali de Rycker, an independent director on the board of IAC (InterActiveCorp) said: “Remember that shopping is social experience...". The mass usage of social networks is changing all that. This way people forget about communication and doing shopping together. But as we informed above ecommerce is still emerging and not all people are shopping online.
There is a positive influence of e-commerce on business - increase of sales and thank to that, engaging investors. E-commerce divides commercial world into new different parts. Nowadays commerce is turning to the new look, changing the analogue of business models as it was mentioned above. Facebook has changed a lot in this area. For many companies it became a very important tool for sales. Customer's behaviour depends a lot on the opinion of their friends. If some messages about sales or new products will get “likes”, they will spread through the network of their friends, plus recommendations from friend to friend.
Not all companies/businesses get 100% return on investment using e-commerce. Anyway some of them use social networks to maximize selling and get tremendous return on that, but some of them still get little effect from e-commerce or social networks on everyday business. More and more people use laptops, mobile phones and other devices to join "always-connected" world. Those who will find a way to involve – will win the battle for the third step of e-commerce. “The winner takes it all”.