Constraint in the growth of
E-Commerce
Introduction:
Electronic commerce, commonly
known as e-commerce or
eCommerce, consists of the buying
and selling of products or services
over electronic systems such as the
Internet and other computer
networks. The amount of trade
conducted electronically has grown
extraordinarily since the spread of
the Internet. A large percentage of
electronic commerce is conducted
entirely electronically for virtual items
such as access to premium content
on a website.
Electronic commerce that is
conducted between businesses is
referred to as business-to-business
or B2B. B2B can be open to all
interested parties (e.g. commodity
exchange) or limited to specific, pre-
qualified participants (private
electronic market). Electronic
commerce that is conducted
between businesses and consumers,
on the other hand, is referred to as
business-to-consumer or B2C. This
is the type of electronic commerce
conducted by companies such as
Amazon.com. It also consists of the
exchange of data to facilitate the
financing and payment aspects of
the business transactions.
History of e-commerce
History of ecommerce dates back to
the invention of the very old notion of
“sell and buy”, electricity, cables,
computers, modems, and the
Internet.
Ecommerce became possible in
1991 when the Internet was opened
to commercial use. Since that date
thousands of businesses have taken
up residence at web sites.
Business applications
Some common applications related
to electronic commerce are the
following:
• Email
• Instant messaging
• Newsgroups
• Online shopping and order
tracking
• Online banking
• Online office suites
• Domestic and international
payment systems
• Shopping cart software
• Teleconferencing
• Electronic tickets
Electronic commerce involves
every thing from ordering “digital”
content for immediate online
conventional goods and services, to
"meta" services to facilitate other
types of electronic commerce.
On the consumer level, electronic
commerce is mostly conducted on
the World Wide Web. An individual
can go online to purchase anything
from books or groceries, to
expensive items like real estate.
Another example would be online
banking, i.e. online bill payments,
buying stocks, transferring funds
from one account to another, and
initiating wire payment to another
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country. All of these activities can be
done with a few strokes of the
keyboard.
Advantages to Organizations
Due to the global reach of the
Internet, businesses organizations
are able to send messages
worldwide, exploring new markets
and opportunities. This breaks down
geographic limitations, and reaches
narrow markets that traditional
businesses have difficulties
accessing. Through the Internet,
business now offers a wide range of
choices and higher levels of
customer information and details for
individuals to search and compare.
Some build-to-order companies such
as Dell Computer Corp can even
provide a competitive advantage by
inexpensive customization of
products and services.
In terms of cost reduction, E-
commerce helps organizations
decrease costs in creating,
processing, distributing, storing and
retrieving information. For example
the communication and advertising
costs could be lower by sending e-
mails and using online advertising
channels, than by using television
commercials or the print media.
Advantages to Consumers
For customers, the advantages
occur in the buying process, product
research, evaluation and execution.
E-commerce provides customers
with a platform to search product
information through global markets
with a wider range of choices, which
makes comparison and evaluation
easier and more efficient. With the
ubiquity in accessing the Internet,
consumers are able to search for
shops or perform other transactions
anytime in almost location. Cheaper
goods and services is one of the
benefits for consumers who
purchase online. Furthermore,
delivery time and costs can be saved
by buyers when they purchase digital
goods and services.
Examples are e-books, music and
audio clips, software, games, and
distance education delivered via the
Internet.
Advantages to Society
By telecommuting, individuals can
nowadays work and do their
purchasing at home rather than by
traveling around. This will result in
less traffic and air pollution.
Constraint in ecommerce
growth
There are some barriers that came
in rapid growth of e commerce. If we
talk about Pakistan the main hurdle
that rise is that our most of the
population are illiterate, they not
even know that how to use computer
or in simple word we can say that
they have not full command on the
computer, they are unskilled
regarding the use of computer. And
those people who re skilled but they
are reluctant to shop online due to
fallowing reasons which I would
discuss below.
Hesitancy
Most customers and businesses
are hesitant to do transactions
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online. This is due to the fact that if a
person wants to feel the service or
good she is paying for, he lacks that
on the Internet. Moreover, some
people are used to shop with family
and friends and hang out to malls
and big outlets, which is otherwise
unavailable on the Internet. Also,
according to Consumers, they are
hesitant to buy some products
online. Online furniture businesses,
for example, have failed for the most
Part because customers want to test
the comfort of an expensive item
such as a sofa before they purchase
it. Many people also consider
shopping a social experience. For
instance, they may enjoy going to a
store or a shopping mall with friends
or family, an experience that they
can not duplicate online. Consumers
also need to be reassured that credit
card transactions are secure and
that their privacy is respected.
Online Safety
Online safety is a critical factor that
most people consider before even
thinking of performing commercial
transactions. Customers and
businesses should be assured of
privacy implications, confidentiality,
and security and like factors. An
amount of trust has to be developed
before starting or involving into
transactions.
Credit card
Electronic Transactions on the
Internet are becoming common
place. Books, software and even
groceries can be bought and sold
with the click of a button (and a
credit card). The biggest problem
with doing business over the Internet
is the lack of common standards
around security.
The Internet, by it's nature, is an
open system which means that
information can flow freely from one
computer to the next. Information
transmitted through the Internet can
be intercepted and copied as any
point along the path. For this reason
it is not a good idea to send
confidential information like credit
card numbers through the Internet
the same way you might send an
email to a friend. In order to send
confidential information you must be
sure that your private information
can not be intercepted along the
way.
Unable to Examine Products
Personally If we buy products
through the internet, we are not able
to examine the products physically
and the quality of the product.
Images of the products may be
available for viewing. But we can’t
buy the product by seeing the image
on the internet. There is a risk
involved in the quality of the product
that the consumer is purchasing.
Limited and selected sensory
information
The Internet is an effective conduit
for visual and auditory information:
seeing pictures, hearing sounds and
reading text. However it does not
allow full scope for our senses: we
can see pictures of the flowers, but
not smell their fragrance; we can see
pictures of a hammer, but not feel its
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weight or balance. Further, when we
pick up and inspect something, we
choose what we look at and how we
look at it. This is not the case on the
Internet. If we were looking at buying
a car on the Internet, we would see
the pictures the seller had chosen for
us to see but not the things we might
look for if we were able to see it in
person. And, taking into account our
other senses, we can't test the car to
hear the sound of the engine as it
changes gears or sense the smell
and feel of the leather seats. There
are many ways in which the Internet
does not convey the richness of
experiences of the world. This lack of
sensory information means that
people are often much more
comfortable buying via the Internet
generic goods - things that they have
seen or experienced before and
about which there is little ambiguity,
rather than unique or complex
things.
Privacy, security, payment,
identity, contract.
Many issues arise – privacy of
information, security of that
information and payment details,
whether or not payment details (e.g.
credit card details) will be misused,
identity theft, contract, and, whether
we have one or not, what laws and
legal jurisdiction apply.
Other drawbacks
One of the biggest drawbacks of e-
commerce is that many people may
not be satisfied with the virtual
experience of trading and buying
products lying possibly thousands of
miles away just by seeing its picture.
Limitations of E-commerce
The limitations of EC can be
grouped into technical and Non-
technical categories.
Technical Limitations of EC
1- There is a lack of system security,
reliability, standards, and some
communication protocols.
2- There is insufficient
telecommunication bandwidth.
3- The software development tools
are still evolving and changing
rapidly.
4- Vendors may need special Web
servers and other Infrastructures, in
addition to the network servers.
As time passes, these limitations will
be overcome; appropriate planning
can minimize their impact.
Non-Technical Limitations
1- Cost and justification the cost of
developing EC in-house can be very
high, and mistakes due to lack of
experience may result in delays.
There are many opportunities for
Out sourcing, but where and how to
do it is not a simple issue.
2- Security and privacy these issues
are especially important in the B2C
area, especially security issues
which are perceived to be more
serious than they really are when
appropriate encryption is used.
Privacy measures are constantly
improved.
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 Yet, the customers perceive these
issues as very important, the EC
industry has a very long and difficult
task of convincing customers that
online transactions and privacy are,
in fact, very secure.
3- Lack of trust and user resistance
Customers do not trust an unknown
faceless seller (sometimes they do
not trust even known ones),
paperless transactions, and
electronic money. So switching from
physical to virtual stores may be
difficult.
4- Lack of touch and feel online.
Some customers like to touch items
such as clothes and like to know
exactly what they are buying.
5- Accessibility to the Internet is still
expensive and/or inconvenient for
many potential customers. (With
Web TV, cell telephone access,
kiosks, and constant media attention,
The critical mass will eventually
develop.)
6-Credit Card security is a serious
issue if vulnerable.
7-Costs involved with bandwidth and
other computer and server costs.
Overcoming the barriers
We an overcome the barrier that
come in the growth of eCommerce.
Encryption
Process of transforming data into a
type that prevents casual observers
from deciphering
Privacy policy
A Web site's official statement on
the type of information collected on a
Site, how the information will be
used, how the person can access
this data and the steps for having the
data removed. A privacy statement
will also usually include information
regarding systems that are in place
to protect the information of web site
visitors.
Secure servers
Special servers that utilize
encryption to prevent unauthorized
users from intercepting and reading
a message that passes through its
system.
FAQ's (Frequently asked
questions)
No doubt you'll be asked many
questions about your product. Many
of these questions will be repetitive.
It's these questions and answers that
you'll want to add to your FAQ page.
This promotes customer confidence
and saves your valuable time. A
prospective client may be somewhat
hesitant in asking questions and this
hesitancy may translate into a lost
sale.
Conclusion
E-commerce has grown
significantly during the pass 5 years
E-commerce has not only changed
the way consumers view their
purchasing power but also help
skyrocketed the economy. More and
more businesses are during their
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business over the web. E-commerce
is a helpful technology take gives the
consumer access to business and
companies all over the country and
the world but with this access there
comes a price. Once consumers
and businesses realize some of the
dangers of e-commerce, there could
fewer incidents of identity theft
and credit card fraud. Hopefully in
the future, these issues can be
solved. There are still some
limitations of EC, and they can be
categorized as technological and
non-technological. As time passes,
these barriers should have less and
less meaning, as capacity, security,
accessibility continue to improve
through technological innovations.
On the other hand, there are
numerous benefits of EC to
organizations, consumers, and
society. Because these benefits are
substantial, it proves that EC is here
to stay and cannot be ignored.
References
Books references
• E-Commerce: Fundamentals
and Applications England:
John Wiley & Sons
• E-commerce A managerial
perspective international
edition by Efraim Turban,
david king, Jae Lee,
H.michael Chung
• E-commerce A managerial
perspective 4th edition by
Efraim Turban, david king,
Jae Lee, H.michael Chung
WEB references
• http://www.marcbowles.com/c
ourses/adv_dip/module10/cha
pter10/amc10_ch10_three2.ht
m
• http://www.smartimeinc.com
• http://blog.edynamo.com/tag/e
commerce-advantages/
• http://www.parliament.the-
stationery-
office.co.uk/pa/cm199899/cm
select/cmtrdind/187/187ap42.
htm
• http://www.apluskb.com/script
s/What_are_the_Benefits_and
_answer709.html
Articles and journals
• http://www.tamingthebeast.
net/articles/ecommerce.htm
• E-Commerce
Journal,www.ecommerce-
journal.com/news/canadian_e
_commerce_bashful_steps_a
head, retrieved April 28,
2008., retrieved April 28, 2008
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