Table of Contents
Introduction and Context
With the high-speed advancement of technology since the past century, the world has taken a drastic change in terms of speed and productivity of businesses. This gives rise to e-commerce whereby business takes advantage of the technologies available to move their business into an online platform. In the online platform, business transactions could be made on a click of a button on the Internet, which greatly improves the productivity and thus increases revenue of the business.
With the advancement of communication technologies, consumers and business partners could easily communicate through the use the online platform available. This includes information of products and services offered by the business that could be easily known to the potential consumers. Negotiation of terms and conditions could be easily done through the online communication which speeds up the signing of contract.
With the advancement of transportation technologies, materials and products could be easily transported from country to country at a larger volume and goods are less likely to get damaged during transportation. More and more perishable goods or materials that were impossible to transport across countries, are made possible with the technology available. For example, transportation of frozen food across country will be impossible as these products will be rotten by the time it reaches the destination. However, with the introduction of mobile refrigerator, frozen food could be transported across country before the product perishes.
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With these technologies available, e-commerce will be more viable and this will make the business able to reach out to a wider market. Hence, the ability of an e-commerce to make use of such technologies will determine the success and failure of the business. This also applies to between business amongst the businesses themselves (B2B) or the consumers (C2C). A B2B platform includes business between a supplier and its distributor. An example of a B2B platform will be SnapCap, a platform which allows businesses to source for capital to start their business. A C2C platform is a business between consumers when they want to resale their old items which other consumers might be interested in. An example of a C2C platform in Singapore will be Carousell, which allow consumers to list the old or new items that they did not want anymore. Interested parties will then contact the seller through the application to strike a deal.
Along technology, the most important feature consumers are looking for is the security of purchasing goods and services that they are buying with their hard-earned money. This is known as product security, which is the most crucial factor that will stop consumers from buying the products or services. This factor greatly determines the success of an e-commerce platform. A platform who is able to optimise both security and technology together will definitely be successful in the e-commerce platform.
With the advancement of technology throughout the years, more and more sophisticated Information Systems are invented to provide a better security to the consumers when they are purchasing online products and services. When it comes to the product security of the platform, businesses will take up various Information System technology to further enhance their product security to improve their reliability to consumers. This is shown in the following areas of the e-commerce procedure:
Payment Gateway
When it comes to purchasing products and services online, security of online payment has always been a huge determining factor in the decision of consumer to purchase the product or services. With the increase in the number of frauds through online payments, this has brought down the trust of consumer has in online payments. Both international and domestic e-commerce platform requires some form of online payment to allow business transactions to occur faster. Third party payment gateways such as, banks and PayPal, have came up as a secure alternative in payments that can safeguard the interest of consumers when purchasing goods and services online. However, with these third party’s payment gateway, it also provides more opportunities for frauds and hacks to occur. Both international and domestic e-commerce platforms have the same issue when it regards to online payment. A study shown in Figure 1 in the chart below, it shows that card fraud has been on the incline from 1993-2014. This proves that as more businesses moves towards e-commerce, more fraud cases will be present.
However, there is a safer payment method that can be used by a local e-commerce platform is called ‘Cash on Delivery’. With the transaction being held locally, business could easily collect payments through cash from its consumers. This is an advantage over international e-commerce platforms as it will be more troublesome and less likely for international businesses to collect payment via ‘Cash on Delivery’.
When it comes to C2C, frauds are more commonly seen as the transaction they have is base solely on trust. This allows fraud to easily occur in this market as information of sellers are incomplete and ambiguous. In payment wise, it is even less safe to do an online banking transfer as it is harder to track the seller based on just their online profile, as online profile could be easily duplicated. In order to safeguard himself/herself, buyers from this market should be doing a face to face meet up to purchase the product. This safeguard both the buyer and seller from frauds.
According to DPO Group. 2017. Top 5 challenges in online payments and how to overcome them. DPO Group, a few measures are already in place to reduce and prevent frauds from occurring internationally. One example is the EMV (Europay, Mastercard, Visa). Each individual card has a embedded EMV chip with are hard to be duplicated even when is its being misused online. This reduce the chance for frauds to occur due to the specific EMV chip each card possesses that will be hard to duplicate. This Is explained in an article by the DPO group.
An e-commerce that makes use of technology security will be able to gain the trust of consumers and hence able to gain a bigger consumer pool, hence making them more successful compared to others.
Product Catalogue
When it comes to purchasing a certain good online, there is always an ambiguity that whether the goods you ordered meets your expectations. The actual goods that comes may be in the wrong size, wrong colour, or even the wrong product. Some products maybe faulty or simply just does not do what it is described it is suppose to do. This also makes it a platform for frauds to occur, whereby sellers claim to be selling an item, but disappears right after the payment has been made. According to Ben Rossi. 2016. The seven types of e-commerce frauds explained. InformationAge, this is known as a merchant fraud.
With this in mind, more and more consumers are looking for a safer way to purchase online while making it sure that they will get the correct product that they ordered online. With the advancement in the technology of the e-commerce, more and more measures are taken by business to ensure that their products are genuine and safe to be purchased.
Product catalogues that are made up of photos that shows the image of the product before the consumer can choose to purchase it. This gives the consumers a sense of protection as they know what exactly they are purchasing and how it actually looks like.
Product information is also widely available throughout the Internet where consumers can search on a product quality with just a click of a button. With this information available, consumers can think twice whether to purchase the item or not and less likely for frauds to occur as it is harder for them to fake a product. This safeguards the consumers as they will be able to judge whether the product is worth buying based on all the information of the product available in the internet.
Along with the product information available, ratings and reviews by critics on the Internet can help the consumer in deciding whether to purchase the product or not. This information could be found in forums and even on the online shopping website itself. All this information is left behind by other consumers which have already bought and tried the product before. If a product does not have any ratings or reviews, it will most probably be a fraud. This furthers help to safeguard the consumers to allow them to decide whether the product is trustable to be bought.
With the introduction of advantage technologies, it causes the advent of Internet of Things (IOT). IO refers to embedding technology on objects to allow them to receive and transmit data as the user uses them. This further provides a better user experience and allow users to modify the product according to their likings. A business that makes these products will definitely have a higher sales rate due to the high flexibility of the product. This makes the e-commerce platform more successful compared to other platform without these products.
When all of the above fails, the consumer still finds that the product does not suit his/her needs even after buying it, they could request for a refund whereby most of the companies should be able to. However, this may be subjected to terms and conditions of the company and the consumer may or may not get back his/her payment.
Shipping or Delivery Issue
Ever since the introduction of steam combustion engine back in 16th century, transportation technologies had taken a huge step in enhancing its speed and efficiency. Transportation of material and goods over different regions of the country could be done in just a few hours. As technology continues to advance till today, transportation has taken another big step forward. Advent of containerisation allows transportation of materials and goods not just within the country, but across countries as well. This caused a huge changed in the business industry whereby international business were made possible. This also allow the e-commerce to rise where consumer can just place an order from any part of the world and have the products delivered to his/her doorstep from wherever the product is made at.
This brings in an issue of trust towards shipping companies to help e-commerce business transport their products to their consumers safely without breaking or damaging the products. According to Alex Lennane. 2018. E-commerce logistics: shopping and shipping. The Load Star. LongRead Vol 10: Pages 4 and 5, it shows that 45% of consumers says that delivery is too expensive and 30% feels that the delivery is too slow. This shows that the quality of delivery is very important especially in terms of speed and precision.
With the advancement of technology, logistics quality has been drastically improved throughout the years. Better tracking service and transportation technology helps to ensure that the safe delivery of products and services to its consumers. This gives the consumer a sense of security as they can be sure that the product they will be receiving is safe and will not get lost. This helps to maintain or improve the business reputation and attract more customers to them, hence, making it more successful compared to the other e-commerce businesses.
Conclusion
Indeed, the advancement of technology has led to a great improvement in speed and efficiency of a business, however, it also caused more issues for the consumers as they are more prone to frauds and scams. As technology advances, methods used by scammers and hackers have also improved as well along with technology. No matter how advanced the technology is, there will always be a loop hole that they can take advantage of.
Reputation of the business is also a determining the success of a business. A business with a good reputation will also meant that it has a huge consumer pool, its ability to attract more customer compared to the others. A good customer experience will attract more new and existing customers. More advanced technology will give the customers a better consumer experience. Examples of big international business will be Amazon, Ebay and Alibaba. They provide a good customer service for their consumers which helps consumers avoid risks from purchasing goods internationally and prevent frauds and scam from happening. Their user interface is so sophisticated just to satisfy all the needs of its customers. With this sophisticated interface and technology, Amazon can filter out fraud sellers and recommend good sellers to the customers.
In summary, with an e-commerce is tied to how advance the technology of the business is, and how they use this technology to create a great experience for the users to attract them.
Critical Reflection
Business Intelligence and Big Data
Business intelligence is the use of various applications, practices and technologies to support improved decision making of the organisation. It allows the organisation to predict future conditions and act on it before it occurs. This requires the analysis of data that are acquired to do so. For example, a volcanic eruption can disturb the normal operations of a e-commerce in its business processes. When volcano erupts, ash clouds are emitted and it covers the sky making it hard for airplanes to see the surrounding route. This causes flights to be delayed and thus cause the delay of transportation of goods purchased by consumers over the online platform. This could be prevented with the help of technologies to predict the eruption of volcanoes. When the eruption can be predicted early, e-commerce companies could take precaution or change its transportation pathway so that it will not affect the transportation of goods to its customers. This shows that with business intelligence, e-commerce business could avoid having a loss due to them unable to transport their goods timely.
Information Technology (IT) Governance
With the advancement of technology in the world, many different IT strategies are available in different companies. For an e-commerce business to thrive, it has to have proper governance structure for the IT decisions making. This includes the processes, customs, rules, procedures, policies and traditions. All these factors are the determining factor in how the business should be controlled. IT decisions must be made based on the goals and objectives of the company, any other unnecessary uses of IT will cause the wastage of resources. An effective IT governance allows the company to achieve good value from its investments in IT and it helps to mitigate IT-related risks. This also meant that managers must understand IT so that the manager could align and integrate the IT organisation with the business. In e- commerce, it is important that the manager is able to choose a proper IT system to integrate with their online platform to give their customers the best user experience. A bad IT system will cause customers to leave a bad impression of the company and revisit of the online store will be avoided.
