PROS AND CONS OF E-COMMERCE

Electronic commerce is presently an unavoidable tool of trade in current modern era of great
technology. Undoubtedly, last few years have witnessed a technological revolution
accompanied by the widespread use of the Internet, web technologies and their applications.
Electronic commerce (e-commerce) as part of the information technology revolution became
widely used in the world trade in general and Indian economy in particular. As a symbol of
globalization, e-commerce represents the cutting edge of success in this digital age and it has
changed and is still changing the way business is conducted around the world. The electronic
commerce to become one of the most capable channels for inter-organizational business
processes. Consequently, Internet growth has led to new developments, such as decreased
margins for companies as consumers turn more and more to the internet to buy goods and
demand the best prices. Internet has accurate and an effective instrument in changing the
ways of business activities.
E-commerce stands for electronic commerce and pertains to trading in goods and services
through the electronic medium, via the internet or mobile phone. Through the internet, it
pertains to a website, which sells services and products directly and allows credit card
payments. There have been changes in the methodology with the help of advancements in
technology for business transactions. India, a rapid adaptor of technology with the current
scenario of electronic data exchanges and has taken to e commerce. The information
technology industry observes it as an electronic business application aimed at commercial
transactions. It can involve number of business activities like e-funds transfer, supply chain
management, e-marketing, automated inventory management systems, and automated data
collection systems. It completely uses electronic communications technology such as the
internet, extranets, e-mail, e-books and mobile phones. However, there is no standard
definition for the term e commerce and it named differently by different organizations in
different manner. It is clearly understood to mean the production, distribution, marketing, sale
or delivery of goods and services by electronic means. The Asia Pacific Economic Cooperation (APEC) has adopted a comprehensive definition of e-commerce to include all
business activity using a combination of electronic communications. The United Nations
Economic and Social Commission for Asia and the Pacific (UNESCAP) have also defined ecommerce as the process of using electronic methods and procedures to conduct all forms of
business activity. Dr. Gaurangkumar C. Barot, Assistant professor in commerce &
accountancy, Dr. Apj abdul kalam govt. College (2015)
In the Asian region, Malaysia ranks seventh in terms of the number of internet host after
Singapore, Israel, Hong Kong, Korea, Taiwan and Japan. Mynic (2000) reported that the
number of .COM servers in Malaysia has increased significantly from 100 in 1995 to 4738 in
1999. These .COM servers account for nearly 90% of the total servers in the country. IDC
Market Research (M) Sdn Bhd estimates that the current number of Malaysian Internet users
is about 1.26 million, and is likely to reach 2 million by end of 2000. By 2004, it estimates
that the number of users should approach 4 million. Malaysia accounts for about 1.2% of the
total Internet population in the Asia-Pacific Rim which is relatively small compared to 30%
(USA), 18% (Australia), 14% (Singapore). In 1998, Malaysian spent about RM57mn on ecommerce purchases; a small figure relative to her GDP of RM372bn. IDC estimates that the
number of online buyers in Malaysia will increase from 0.1 mn to 0.87 mn by the year 2003.
Further it is estimated that the majority of buyers are expected to come from the home buyer
sector, followed by the small business buyers (22.9%) and medium/large, government and
educational buyers with each accounting for 18.3%. But when compared with the various

incentive programmes initiated by the government particularly the MSC (Multimedia Super
Corridor) and other schemes, the success has been limited. Mohd Ismail, Multimedia
University, Malaysia (1999)
There are numerous advantages of e-commerce. No Standing in queue or being placed on
hold evermore. For clientele, this is one of the most popular conveniences of ecommerce.
Easier to Compare Prices. There are several shopping search engines and comparison
shopping websites that help consumers locate the best prices. While buyers love this, sellers
find it too restrictive as many of them get filtered out of the consumer's consideration set.
Access to Stores Located Remotely. Especially for people who are not situated in major
urban centres, this can be a big advantage. Likewise, ecommerce opens new markets for
ecommerce businesses. Common Availability of Coupons and Deals. Though there is nothing
about ecommerce that makes it intrinsically oriented to discounts, the way online business
has evolved has led to lowered prices online. This is an advantage for the buyer, but a
disadvantage for the seller. There are also lots of choices since there are no shelf size or store
size limitations, ecommerce businesses are able to list many different items.
If ecommerce businesses can tune into the order processing systems of their suppliers, they
can maintain lower inventories and still not face stock-out situations. Since ecommerce
processes are automated to a large extent, fewer employees are required for lower-end jobs.
Human resources can be used more effectively for higher-level functions. Gain Search
Engine Traffic is close to 100% of Internet users also use search engines. With the right
ecommerce SEO, search engines can act as a great source of qualified free traffic.
Conventional retail focuses on stocking fast-moving goods. Pricey shelf-space dictates that
items that do not move fast should be candidates for removal from the product portfolio. The
economics of ecommerce permits selling slow-moving, and even obsolete, products to be
included in the catalogue.
Since effective logistics is the key to a successful ecommerce business, the ability to trigger
and monitor logistics online is a valuable tool for the ecommerce business. Besides that,
online stores are open all the time and eliminating the limitation of store-timings is a big
convenience for consumers. Auction sites and listing sites allow individuals to buy and sell
from each other. This opens a whole new paradigm of ecommerce. The most famous enabler
of consumer to consumer (C2C) ecommerce is eBay.com. People also no longer does one
need to go and buy a CD of one's favourite music. Within a few minutes, one can download
digital products, such as music, and start using them immediately. Online business has
opened new vistas for consumers. It is now possible to list your requirements online, and
have suppliers bid for your business.
Since there is no need for a physical store, ecommerce businesses save on one of the biggest
cost overheads that retailers have to bear. Conventional wisdom lays a lot of emphasis on the
location of the physical store. But ecommerce has liberated businesses from the shackles of
location. Ecommerce businesses are able to scale up easier than physical retailers, as they are
not bound by physical limitations. Of course logistics get tougher as one grows. However,
with the choice of the right third party logistics provider, one can scale up one's logistics too.
Being liberated from a physical store also entails being liberated from the limitations of shelf
space. This allows ecommerce businesses to "stock" a wide range of products.
Since the ecommerce merchant captures contact information in the form of email, sending out
automated and customized emails is quite easy. Using cookies and other methods of
monitoring a consumer's behaviour, an ecommerce website can customize many aspects of

what the consumer sees. In physical stores, many customers pay with currency notes. For a
large multi-store retailer, this creates the need for careful cash management.
For the tax authority, it creates a problem in being able to accurately evaluate a retailer's
earnings. Electronic payments leave a stronger trail, and this helps the retailer as well as the
tax authority. Because the entire supply chain can be interlinked with business to business
ecommerce systems, procurement becomes faster, transparent, and cheaper. The consumer
experiences the convenience of having goods home-delivered. But the logistics involved with
delivering each individual item adds substantial strain to the ecommerce business operation.
There are also some disadvantages about e-commerce. I miss the personal touch and
relationship that develops with a retail store. In comparison, ecommerce is far more sterile.
There are many products that consumers want to touch, feel, hear, taste and smell before they
buy. Ecommerce takes away that luxury. Ecommerce can only be transacted with the help of
an Internet access device such as a computer or a smartphone. Not just does one need an
access device; one also needs Internet connectivity to participate in ecommerce.
Consumers and businesses alike suffer from credit card fraud. Some doomsayers go so far as
to predict that fraud will lead to the demise of online business. Consumers run the risk of
identity fraud and other hazards as their personal details are captured by ecommerce
businesses. Businesses run the risk of phishing attacks and other forms of security fraud.
If shopping is about instant gratification, then consumers are left empty-handed for some time
after making a purchase on an ecommerce website. Consumers are often taken in by fly-bynight ecommerce websites that look good, but are up to no good. Scam artists often accept
orders and then disappear.
For an ecommerce business, its website is everything. Even a few minute of downtime can
lead to a substantial loss of money, not to mention customer dissatisfaction. Regulators are
still not clear about the tax implications of ecommerce transactions. This is especially true
when the seller and buyer are located in different territories. This can lead to multiplicity of
taxation as well as higher expense on accounting and compliance. Credit card issuers are
quite liberal in permitting chargebacks upon customer request. This puts the ecommerce
businesses in a bad position if the goods have already been delivered.
Substantial information infrastructure is required to run an effective ecommerce website. And
when you factor in denial-of-service attacks, the scale of infrastructure needs to be still
greater. Customers are usually willing to travel to the retail outlet to return/replace goods if
required. But receiving goods back is a bigger nightmare for an ecommerce business. This
has led to the growth of the reverse logistics function. DR. Dharmendra Chahar, MSRIT,
Bangalore, India (2013)
E-commerce is widely considered the buying and selling of products over the internet, but
any transaction that is completed solely through electronic measures can be considered ecommerce. Day by day, E-commerce playing very good role in online retail marketing and
peoples using this technology day by day increasing all over the world. Mobile commerce
involves all kind of electronic transactions by the use of mobile phone. MCommerce is the
term for making business transactions using mobile devices. There are already several
existing MCommerce applications and services nowadays that have been very helpful to us.
Some are mobile banking, location maps, and variety of news, mobile shopping, ticketing and
mobile file sharing. E-commerce security is the protection of e-commerce assets from
unauthorized access, use, alteration, or destruction.