Brief idea about E-commerce

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The impact of e-commerce on business

activity

Selling through websites is the fastest growing method of trading worldwide. There are two main forms of e-

commerce:

 Business to business (B2B) trading where companies trade and exchange

information using the World Wide Web.

 Business to consumer (B2C) trading where companies deal directly with customers

through web pages, and ordering is carried out online.

There are many different types of products and services that are traded on line including books, CDs, cars,

holidays, and insurance.

In response to e-tailing and e-trading, most businesses have now set up their own websites.

Trading online

Trading online enables businesses to reach much wider audiences while cutting the costs of traditional retailing

methods. For example, an e-tailer does not have to spend so much on an expensive High Street presence.

Although the outlay on developing a good website is substantial the potential benefits can be enormous. One

group of businesses that have been particularly successful as a result of the development of the web are

specialist suppliers of items such as paintings, photographs, confectionery, and other items. An individual

working from home can now advertise and sell their produce worldwide.

E-commerce: barriers to its growth in Pakistan

Doing business online is yet another application of internet, which is changing the way business is done. The term electronic

commerce or E-commerce may loosely be defined as doing business over the internet, selling goods and services which are

delivered offline as well as products which can be “digitised” and delivered online such as computer software, videos, and music.

E-commerce in its wider sense encompasses all transactions involving business organisations, governments, or consumers that are

done online through internet. However, the narrower view of E-commerce focuses only on transactions between Business and

Consumers (Business to Consumer E-commerce or B-to-C E-commerce) and among two or more businesses (Business to

Business E-commerce or B-to-B E-commerce).

Banking, entertainment, telecommunications, and manufacturing industries globally have already started using E-commerce

business models, and have been reaping the benefits in terms of greater revenues and lesser costs.

Within these industries, Internet is used for four major tasks with respect to E-commerce: Firstly, attracting new customers through

online marketing and advertising; secondly, serving existing customers via customer service and support function; thirdly,

developing new markets and distribution channels for existing products; lastly, developing new information-based “digitised”

products, which are then transmitted online.

Like every new technology, the potential uses of E-commerce were at first over-hyped, leading to the Dot Com Boom of 1996-2000,

which was briefly followed by a crash that kicked many companies out of business; thereby, temporarily tarnishing the promising

role of internet as an effective and state-of-the-art medium of business. However, with the survivors of the crash and the new

comers doing well these days, the quantum of business online is expanding with rapid pace.

In Pakistan the size of E-commerce is small and uncertain at the moment. Yet as in most developed countries of the world, it is

expected that with the realisation of full potential of this new mode of commerce in future, it is bound to gain a sizable chunk of

business in Pakistan as well, due to the several potent advantages that E-commerce enjoys over the conventional mode of

commerce like its open structure that surpasses all geographical barriers, low costs of transactions, low barriers to entry and

improved access to information, besides more efficient management of supply and distribution.

However, currently the growth of E-commerce in Pakistan is hampered by a number of factors, which are discussed below. These

barriers must first be removed for E-commerce to grow in the country.

1. MISCONCEPTIONS ABOUT E-COMMERCE IN PAKISTAN Most people in Pakistan have developed wrong conception of E-

commerce. They take a very limited view of E-commerce, restricting it to only those products which may be “digitised” and

transmitted online through internet and the payments for which is also made online through credit cards.

This narrow view excludes the other three main functions of E-commerce outlined above ie attracting new customers, serving

existing customers, and developing new markets and distribution channels for existing products. This misconception is among the

main reasons that have held most Pakistani entrepreneurs with existing conventional business back from entry into the

‘cyberspace’.

2. MISTRUST: Among the most important impediments to the growth of E-commerce in Pakistan is the issue of trust. Counterfeiting

and distribution of below par products in the face-to-face transactions is a common problem in the country. How can people be

expected to trust the sellers whom they do not know, and who would deliver goods online/offline after the payment is made.

The issue of trust is further aggravated by the lack of confidence people have with respect to the security and privacy of their

personal information like credit cards, home addresses, phone numbers etc. The emergence of trustworthy web-based companies,

with support/guarantees from Government or trustworthy multinational companies, in the county is required to dispel these fears of

the consumers.

3. TRADITIONALIST NATURE OF PAKISTANI SOCIETY: A large number of people in Pakistan will take a long time to come

round to the idea that they can order goods and make payments through internet from their homes without physically going out. This

is due to the fact that on-site commerce has a socialising effect, which is altogether absent from E-commerce. In a strongly

relationship-oriented society like Pakistan, people tend to form individual relationships and long term associations with the

businessmen and vendors.

These relationships are maintained over the years and may not be easily replaced by the anonymity of the E-commerce

transactions. Moreover, most of the retail business in Pakistan is conducted through small local enterprises rather than chains of

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The impact of e-commerce on business activity Selling through websites is the fastest growing method of trading worldwide. There are two main forms of e-commerce: Business to business (B2B) trading where companies trade and exchange information using the World Wide Web. Business to consumer (B2C) trading where companies deal directly with customers through web pages, and ordering is carried out online. There are many different types of products and services that are traded on line including books, CDs, cars, holidays, and insurance. In response to e-tailing and e-trading, most businesses have now set up their own websites. Trading online Trading online enables businesses to reach much wider audiences while cutting the costs of traditional retailing methods. For example, an e-tailer does not have to spend so much on an expensive High Street presence. Although the outlay on developing a good website is substantial the potential benefits can be enormous. One group of businesses that have been particularly successful as a result of the development of the web are specialist suppliers of items such as paintings, photographs, confectionery, and other items. An individual working from home can now advertise and sell their produce worldwide. E-commerce: barriers to its growth in Pakistan Doing business online is yet another application of internet, which is changing the way business is done. The term electronic commerce or E-commerce may loosely be defined as doing business o ...
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