1.0 Introduction

Malaysia is a country in Southeast Asia which comprises many ethnic groups, with Malays being

the majority followed by Chinese, Indians and others. A typical Malaysian is usually literate in 2

to 3 languages or more. English is arguably the common language used on the Internet here as

many western sites or services are popular and frequently accessed. Some of us are also

accustomed to sites from China, Taiwan, Indonesia or even India. Malaysia is one of the key

"Asian Tigers" as a consequence of its energetic efforts to transform itself into an information

age nation. Unlike its larger neighbors, Malaysia's workforce is well under way on the road to

becoming an information dominant economy. The information sector is estimated as constituting

28% of the workforce at the end of 1998; it is expected to grow to 38% of the workforce by the

end of 2003. Malaysia's Gross Domestic Product (GDP) has had annual growth rates in the 7% to

9% range throughout the early to mid-1990s. The Gross Domestic Product (GDP) in Malaysia

expanded 2.40 percent in the third quarter of 2010 over the previous quarter. From 2000 until

2010, Malaysia's average quarterly GDP Growth was 1.20 percent reaching an historical high of

5.70 percent in September of 2009 and a record low of -7.80 percent in March of 2009. Malaysia

is a rapidly developing economy in Asia. Malaysia, a middle-income country, has transformed

itself since the 1970s from a producer of raw materials into an emerging multi-sector economy.

The Government of Malaysia is continuing efforts to boost domestic demand to wean the

economy off of its dependence on exports.1 Nevertheless, exports particularly of electronics and

information remain a significant driver of the economy.

E-commerce has evolved over the years from electronic funds transfers (EFT), comprising of

online shopping and Internet banking, to electronic data interchange (EDI), and comprising

companies' transfer of documents such as purchase orders or invoices. Recent studies foresee a

massive growth of e-commerce in the Asian region especially in Malaysia, Singapore, Hong

Kong, Korea and Australia. Malaysia’s population stands at over 28 million. We have around

30% broadband and 106% mobile penetration as of the end of 2009.2 According to Internet

World Stats, we are number 9 in Asia’s top 10 Internet countries, by having 16.9 million Internet

users. Half of Malaysia’s Internet users are buying or transacting online, which equaled more 1 Source of Internet : http://www.tradingeconomics.com/Economics/GDP-Growth2 Source of Internet : http://www.ibls.com/internet_law_news_portal_view

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than 8 million in 2009.3 Most of the numbers are contributed by airline tickets. Other popular

goods sold online include books, general consumer goods, movie tickets, technology gadgets and

so on. The most preferred online payment method in this part of the world is credit cards

followed by Internet banking. Only now is it becoming apparent how large the potential for E-

Commerce will be in the next few years. With E-Commerce prospects continuing to improve,

most large corporations have already developed preliminary E-Commerce strategies. Although

many SMEs are not following this trend of large corporations, others have found that a modest

investment in a simple Web site can develop into a commitment to E-Commerce as a major

component of the business plan. At this stage of development, E-Commerce is not an essential

operation for every type of SME, but in the near future it may become standard for many.

2.0 E–Commerce Definition

E-commerce which is short for electronic commerce is a way of doing business. Electronic

commerce or e-commerce refers to a wide range of online business activities for products and

services. It also pertains to “any form of business transaction in which the parties interact

electronically rather than by physical exchanges or direct physical contact”.4 E-commerce is

usually associated with buying and selling over the Internet, or conducting any transaction

involving the transfer of ownership or rights to use goods or services through a computer-

mediated network. Though popular, this definition is not comprehensive enough to capture

recent developments in this new and revolutionary business phenomenon. A more complete

definition is E-commerce is the use of electronic communications and digital information

processing technology in business transactions to create, transform, and redefine relationships for

value creation between or among organizations, and between organizations and individuals. An

online source of technical information, defines e-commerce as “conducting business online”, a

definition that encompasses any electronic or paperless exchange of business information over

any information over any communication medium.5

3 Source of Internet : http://www.ibls.com/internet_law_news_portal_view4 Source of Internet : http://www.eicc.co.yu/newspro/viewnews.cgi5 Kenneth C.Laudon & Carol Guercio Traver. E-commerce : business, technology,society. (2004).

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Almost all business enterprise exchange goods, services, and information electronically, only a

tiny fraction of these interactions directly involve retail customers and not all of them use the

internet or the World Wide Web.6 The World Trade Organization (WTO) categorizes e-

commerce applications by reviewing the usage of the Internet. It stated that the Internet can be

used for a multitude of exchanges and transactions, including e-mail, leisure reading and

searching for information (browsing or surfing), advertising and promoting personal or business

causes, linking people in private or professional circles, and publishing, selling, purchasing or

providing services mainly as a means for advertising, communications and public relations,

customer information, online sales and customer support.

E-Commerce basically began in 1994 when Jeff Bezos started Amazon.com out of his own

garage. Well known E-Commerce stores include sites like eBay, Dell, Walmart and many more.

Since 1994, businesses of all shapes and sizes have began launching or expanding their Online

presence. At any given time, there are approximately 8 million consumers worldwide that

actively shop and buy through Web based stores or retailers (nearly one tenth of our world

population). Online studies have claimed that online retail revenues will surpass the quarter-

trillion-dollar mark by 2011.7 According to the Pew Internet & American Life Project, 66 percent

of the adults online have purchased something over the Internet, whether it's books, shoes or a

Caribbean cruise.

But if you extend e-commerce's definition to include researching products and services online

without buying anything, or bidding on an online auction but not winning, then the number of

adults who participate in e-commerce jumps to 93 percent [source: Pew Internet & American

Life Project]. That's just about all of us. Even with a slumping global economy, online retail

sales continue to rise. According to recent forecasts by Forrester Research, online retail sales will

increase 17 percent in 2008 to reach an annual total of $204 billion, with the biggest sellers being

clothing, computers and cars8 . E-commerce's history is short but fascinating. Over the course of

a few decades, networking and computing technology have improved at exponential rates.

Powerful personal computers linked to global information networks have powered a whole new

world of intellectual, social and financial interactions. And this is only the beginning.

6 Kenneth C.Laudon & Carol Guercio Traver. E-commerce : business, technology,society. (2004).7 Source of Internet : http://www.ecommerceoptimization.com/ecommerce-introduction8 Source of Internet : http://www.informationweek.com/TechSearch/Search.jhtml

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3.0 The Difference between E-Commerce and E-Business

E-Commerce is often confused with E-business, with many people believing the two terms are

interchangeable, when in fact this is incorrect. While the words Commerce and Business don't

have much difference in English and in fact are largely interchangeable as nouns describing

organized profit-seeking activity, there is a difference between e-commerce and e-business. The

difference is quite artificial, but different terms do carry different meanings. The first wave of

thinking about electronic business was a reaction to the success of Amazon and Dell in selling

products over the Internet. If we ask any number of information technology professionals what e-

business is and chances are you will get as many definitions. There is a debate among

consultants and academics about the meaning and limitations of both e-commerce and e-

business. Some argue that e-commerce encompasses the entire world of electronically based

organizational activities that support a firm’s market exchanges including a firm’s entire

information system’s infrastructure. Others argue, on the other hand, that e-business

encompasses the entire world of internal and external electronically based activities including e-

commerce.9 In both cases, the e stands for "electronic networks" and describes the application of

electronic network technology - including Internet and electronic data interchange (EDI) - to

improve and change business processes. In e-commerce, information and communications

technology (ICT) is used in inter-business or inter-organizational transactions (transactions

between and among firms/organizations) and in business-to-consumer transactions (transactions

between firms/organizations and individuals). In e-business, on the other hand, ICT is used to

enhance one’s business. It includes any process that a business organization (either a for-profit,

governmental or non-profit entity) conducts over a computer-mediated network.

E-commerce covers outward-facing processes that touch customers, suppliers and external

partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw

materials and supplies for production and procurement of indirect operating-expense items, such

as office supplies. It involves new business models and the potential to gain new revenue or lose

some existing revenue to new competitors.  It's ambitious but relatively easy to implement

because it involves only three types of integration: vertical integration of front-end Web site

applications to existing transaction systems; cross-business integration of a company with Web

9 Kalakota, Ravi and Andrew B. Whinston. . Electronic Commerce: A Manager’s Guide. Addison Wesley Longman, Inc.(1997)

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sites of customers, suppliers or intermediaries such as Web based marketplaces; and integration

of technology with modestly redesigned processes for order handling, purchasing or customer

service.10

E-business is the conduct of business on the internet, in supply chain planning, tracking,

fulfillment, invoicing, and payment. It includes buying and selling as well as servicing customers

and collaborating with business partners. Electronic information is used to boost performance

and create value by forming new relationships between and among business and customers. E-

business goes beyond a website on the internet to affect all aspect of business, from strategy and

process to trading partners and the ultimate consumer. It combines the resources of traditional

information systems with the global reach of the Web.11 E-business includes e-commerce but

also covers internal processes such as production, inventory management, product development,

risk management, finance, knowledge management and human resources. E-business strategy is

more complex, more focused on internal processes, and aimed at cost savings and improvements

in efficiency, productivity and cost savings.  An e-business strategy is also more difficult to

execute, with four directions of integration: vertically, between Web front- and back-end

systems; laterally, between a company and its customers, business partners, suppliers or

intermediaries; horizontally, among e-commerce, enterprise resource planning (ERP), customer

relationship management (CRM), knowledge management and supply-chain management

systems; and downward through the enterprise, for integration of new technologies with radically

redesigned business processes. But e-business has a higher payoff in the form of more efficient

processes, lower costs and potentially greater profits. 

E-commerce and e-business both address these processes, as well as a technology infrastructure

of databases, application servers, security tools, systems management and legacy systems. And

both involve the creation of new value chains between a company and its customers and

suppliers, as well as within the company itself. E-commerce and e-business system blur together

at the business firm boundary, at the point where the internal business systems link up with

10Source of Internet : http://www.computerworld.com/s/article/53015/The_difference_between_e_business_and_e_commerce?11 Elias M.Awad. Electronic Commerce : from vision to fulfillment (2007)

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supplier or customers, for instance. E-business applications turn into e-commerce precisely when

an exchange of value occurs.12

4.0 The Types of E-Commerce

In simple words, e-commerce is doing the work of commerce electronically. Now, it is not that

we have e-commerce between certain groups only; rather we have e-commerce that can be

between many groups. Therefore, we do not have only one type of the e-commerce, but we have

many types of the e-commerce. Our e-commerce can be between business and business, or

between business and consumers, or can be between business and employees, and can be many

more. For the most part, we distinguish different types of e-commerce by the nature of the

market relationship, who is selling to whom. The expectations are P2P and m-commerce, which

are technology-based distinctions.

4.1 Business-to-Consumer (B2C)

B2C (Business to Consumer) refers to a business communicating with or selling to an

individual rather than a company. Even though B2C is comparatively small ($72-$78

billion in 2002), it has grown exponentially since 1995, and is the type of e-commerce

that most consumers are likely to encounter. Within the B2C category there are many

different types of business models.13 Doing business online no longer requires a huge

investment by retailers, thanks to developments in template-based online stores which are

based on packaged applications that are delivered over the internet.

As nearly all online stores will require the same functions: catalogues, order baskets,

payment processing, content management and member management, it makes sense for

those components to be created once and shared by all stores, with each store effectively

‘renting’ its own copy of the applications.

The one area where it's important for online stores to differentiate is their look and feel,

and naturally retailers feel very strongly about their business branding. So the ability to

12 Kenneth C.Laurdon & Carol Guercio Traver. E-commerce : business, technology,society (2004)13 Kenneth C.Laurdon & Carol Guercio Traver. E-commerce : business, technology,society (2004

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create a unique ‘skin’ for each site is an important part of a template-based e-store

offering. Using the latest internet application technology, individual sites can be created

within minutes of the retailer selecting a template and supplying graphics such as logos.

Typically, retailers will pay only a modest monthly rental charge – and retailers require

no specialist hardware or software, other than internet access. These days, a web site

should be a standard part of the promotional and advertising mix for every business,

along with other tools such as Yellow Pages, newspaper advertising and signage.14

4.2 Business-to-Business (B2B)

Having a Web storefront is not a big deal anymore. Everyone has one. The real power of

e-commerce lies not in the direct sale of products to consumers, but in the integration of

relationships among merchants and suppliers for prompt, quality customer service.15

About 80% of e-commerce is of this type, and most experts predict that B2B ecommerce

will continue to grow faster than the B2C segment. The B2B market has two primary

components, e-frastructure and e-markets. E-frastructure is the architecture of B2B,

primarily consisting of the following; logistics consisting transportation, warehousing and

distribution, application service providers consisting deployment, hosting and

management of packaged software from a central facility, outsourcing of functions in the

process of e-commerce, such as Web-hosting, security and customer care solutions,

auction solutions software for the operation and maintenance of real-time auctions in the

Internet, content management software for the facilitation of Web site content

management and delivery and web-based commerce enablers.16 B2B has reportedly done

better than B2C, where steadier growth, higher profits. Even within the B2B market,

there are marked differences between types of software and their successes. Records of

some are distinctly spotty, and sales of the more advanced systems have been badly hit

by the dotcom bust and US recession. Improved management is not simply a matter of

14 Source of Internet : http://www.creativewebstore.com/portfolio/b2c_business_to_consumer15 Elias M.Awad. Electronic Commerce : from vision to fulfillment (2007)

16 Zorayda Ruth Andam. E-commerce and e-business : E-asean task force. (2003)

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installing new software; extensive company reorganization and retraining are required to

obtain even a modest payoff.17

4.3 Consumer-to-Consumer (C2C)

Consumer-to-consumer e-commerce or C2C is simply commerce between private

individuals or consumers. When e-commerce was first introduced, it redefined the

traditional structure of business by giving small firms and individuals the same

opportunity as multi-national corporations. As a result, many individuals established

online organizations that encouraged and assisted commerce between consumers. This

type of e-commerce is characterized by the growth of electronic marketplaces and online

auctions, particularly in vertical industries where firms or businesses can bid for what

they want from among multiple suppliers. It perhaps has the greatest potential for

developing new markets. This type of e-commerce comes in at least three forms

auctions facilitated at a portal, such as eBay, which allows online real-time bidding on

items being sold in the Web, peer-to-peer systems, such as the Napster model and

classified ads at portal site.

Consumer-to-business (C2B) transactions involve reverse auctions, which empower the

consumer to drive transactions. A concrete example of this when competing airlines

gives a traveler best travel and ticket offers in response to the traveler’s post that she

wants to fly from New York to San Francisco. There is little information on the relative

size of global C2C e-commerce. However, C2C figures of popular C2C sites such as

eBay and Napster indicate that this market is quite large. These sites produce millions

of dollars in sales every day.

4.4 Peer-to-Peer (P2P)

Peer-to-peer technology enables internet users to share files and computer resources

directly without having to go through a central Web server. In peer-to-peer’s purest form,

17 Source of Internet : http://www.creativewebstore.com/portfolio/b2b_business_to_business

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no intermediary is required, although in fact, most P2P networks make use of

intermediary “super serves” to speed operations.  In peer-to-peer applications, many or all

of the functions performed in connecting a traditional, server-based, network are off-

loaded to the client machines connected to the network. File sharing is a use of peer-to-

peer technology. It takes advantage of the end users' storage and retrieval capabilities

across individual networks that include other users of a file sharing system (for example,

early Napster and the gnutella network). Think of a WWW model being a 24-hr shopping

mall. The stores are web sites. They are always there. You can always go to the same

place to find the same items. Peer-to-peer is more of a bazaar where the vendors come

and go as they please. You never know what you'll find until you get there. The products

aren't in the same place every time. All these wondering gypsies could pack up and leave

town tomorrow and you'd be out there in the mall again, trying to track down where they

went so you could go, too.18

4.5 M-Commerce

M-commerce (mobile commerce) is the buying and selling of goods and services through

wireless technology, like a handheld devices such as cellular telephones and personal

digital assistants (PDAs). Known as next-generation e-commerce, m-commerce enables

users to access the Internet without needing to find a place to plug in. The emerging

technology behind m-commerce, which is based on the Wireless Application Protocol

(WAP), has made far greater strides in Europe, where mobile devices equipped with

Web-ready micro-browsers are much more common than in the United States.19 Japan is

seen as a global leader in m-commerce. As content delivery over wireless devices

becomes faster, more secure, and scalable, some believe that m-commerce will surpass

wire line e-commerce as the method of choice for digital commerce transactions. This

may well be true for the Asia-Pacific where there are more mobile phone users than there

are Internet users. Industries affected by m-commerce include financial services,

telecommunications, service or retail and information services. If we look, financial

18 Source of Internet : http://www.bx.com/dictionary/ecommerce/Peer-to-Peer19 Source of Internet : http://searchmobilecomputing.techtarget.com/definition/m-commerce

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services, m-commerce used in mobile banking when customers use their handled devices

to access their accounts and pay their bills, as well as brokerage services in which stock

quotes can be displayed and trading conducted from the same handheld device. Then,

in telecommunications, in which service changes, bill payment and account reviews can

all be conducted from the same handheld device. Not only that, service or retail, as

consumers are given the ability to place and pay for orders on-the- fly.

5.0 Advantages of E-Commerce

Any way you look at e-commerce, it has become a mature industry and is still growing. As soon

as you click onto the Net, there will be some attractive banner advertisement invites us to its

Web site and tries to sell their products or services. The concept of e-commerce is fast becoming

advantageous for both the vendor and consumer in today's fast moving and electronically-

connected world. For many businesses, e-commerce is becoming the only option, as companies

become more and more interested in expanding their operations online. E-commerce has many

benefits and advantages not found in the typical brick and mortar location, and therefore,

explains why so many businesses are flocking to the web. E-commerce offers advantages that

include the ability to expand into global markets with a minimum of expense, thus allowing

firms to reach narrow market segments that are geographically scattered. Companies are

interested in E-Commerce simply because it can help increase sales and profits and decrease

costs. Even a small firm that advertises well on the Web can get their message out to potential

customers in every country in the world. E-Commerce has proven to have many benefits and

advantages, therefore, explaining why so many businesses have turned to E-Commerce in the

past few years.

According to Turban et al. (2002, p.17) e-commerce plays a major role in global reach. It

expands the marketplace to national and international markets. E-commerce allows firms to now

reach narrow market segments that are geographically scattered. People in third world countries

are now able to enjoy products and services that were unavailable in the past. "These include

opportunities to learn skilled professions or earn a college degree" (Turban et al. 2002, p.19). E-

Commerce has also made it possible for people living in remote and rural areas to learn skills

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and earn degrees through distance education. It is important to realize that not only does E-

Commerce benefit the seller or the company, but also benefits the buyer or customer. The

advantages of E-commerce will be divided into the benefits it provides to organizations,

consumers, and society.

5.1 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.20 For

business concerns, e-commerce significantly cuts down the cost associated with

marketing, customer care, processing, and information storage and inventory

management. It reduces the time period involved with business process re- engineering,

customization of products to meet the demand of particular customers, increasing

productivity and customer care services. 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. In terms of online ordering and online

auction organizations, the costs could be lower than running an actual shop with the

associated manpower. Extended trading hours is another benefit, the 24 hours a day 7

days a week in 365 days allows business always free to open on the Internet without

overtime and extra cost. Electronic commerce also reduces the burden of infrastructure to

conduct businesses and thereby raises the amount of funds available for profitable

investment.

E-commerce also enables efficient customer care services. Web-based customer service

makes customers happy. Instead of calling a company on the phone, holding for 10

20 Source of Internet : http://wiki.media-culture.org.au/index.php/E-commerce_-_Overview_-_Advantages

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minutes, than connecting to a clerk to tap into your account, customer has direct access

their accounts over the Web. It saves time, even though it might not be cheap.

Competitive distinction alone could easily outweigh the cost of maintaining the Web

infrastructure. In the long run, it is a win-win proposition. For companies that do

business with other firms, adding customer service to the Web is a competitive

advantage.21 On the other hand, It collects and manages information related to customer

behavior, which in turn helps develop and adopt an efficient marketing and promotional

strategy. Other advantages includes the up-to-date company material, current

inventories, improved customers service, better customers communication, increased

operating and trading flexibility.

5.2 Advantages to Consumers

For customers, the advantages occur in the buying process, product research, evaluation

and execution. Electronic commerce gives the customers the opportunity to look for

cheaper and quality products. With the help of e-commerce, consumers can easily

research on a specific product and sometimes even find out the original manufacturer to

purchase a product at a much cheaper price than that charged by the wholesaler.

Shopping online is usually more convenient and time saving than conventional shopping.

Besides these, people also come across reviews posted by other customers, about the

products purchased from a particular e-commerce site, which can help make purchasing

decisions. 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. With the ubiquity in accessing the

Internet, consumers are able to search for shops or perform other transactions anytime in

almost location. Examples are e-books, music and audio clips, software, games, and

distance education delivered via the Internet.

5.3 Advantages to Society

21 Elias M.Awad. Electronic Commerce : from vision to fulfillment (2007)

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E-commerce enables more flexible working practices, which enhances the quality of life

for a whole host of people in society, enabling them to work from home. Not only this,

more convenient and provides happier and less stressful working environments, it also

potentially reduces environmental pollution as fewer people have to travel to work

regularly. For people in Third World countries, many service and products are now

available which were unavailable in the past, the opportunities and higher education

services are more achievable for students. Connects people where it enables people in

developing countries and rural areas to enjoy and access products, services, information

and other people which otherwise would not be so easily available to them. Then, through

e-commerce there will be facilitates on delivery of public services. For example, health

services available over the Internet (on-line consultation with doctors or nurses), filing

taxes over the Internet through the Inland Revenue website. Non-profit organizations,

including government services, also benefit from e-commerce by the online payment

system which supports the payment of tax refunds and pensions quickly and securely.

Public services such as health care, education, and public social service also benefit from

e-commerce. For example, rural doctors and nurses can access professional information

and the latest health care technologies. Overall, e-commerce makes products and services

more easily available without geographic limitations.

6.0 Disadvantages of E-Commerce

Like any system with unique benefits, the Internet and the World Wide Web also have unique

limitations or disadvantages. There was much hype surrounding the Internet and e-commerce

over the last few years of the twentieth century. Isaac Newton’s 3rd Law of Motion, ‘For every

action there is an equal and opposite reaction’ suggests that for all the benefits there are

limitations to e-commerce. These again will be dealt with according to the three major

stakeholders which is organizations, consumers and society.

6.1 Disadvantage of E-Commerce to Organizations

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First of all, lack of sufficient system security, reliability, standards and communication

protocols. There is tangible privacy and security issues that keep people on guard, as

they face a dilemma each time they need to divulge highly personal information online,

as and when they transact online. There are numerous reports of websites and databases

being hacked into, and security holes in software. For example, Microsoft has over the

years issued many security notices and ‘patches’ for their software. Several banking and

other business websites, including Barclays Bank, Powergen and even the Consumers’

Association in the UK, have experienced breaches in security where ‘a technical

oversight’ or ‘a fault in its systems’ led to confidential client information becoming

available to all. In terms of privacy, according to a September 2003 study of major

Web sites by the Federal Trade Commission (FTC), only 20 percent met FTC standards

for protecting consumer privacy, but the study also found a 90 percent compliance rate by

Internet companies for posting their privacy policies.22

Rapidly evolving and changing technology, so there is always a feeling of trying to ‘catch

up’ and not be left behind. The organization will pressuring the workers to innovate and

develop business models to exploit the new opportunities which sometimes leads to

strategies detrimental to the organization. The ease with which business models can be

copied and emulated over the Internet increases that pressure and curtails longer-term

competitive advantage. Facing increased competition from both national and international

competitors often leads to price wars and subsequent unsustainable losses for the

organization. Therefore, got some problem with compatibility of older and new

technology between the businesses. There are problems where older business systems

cannot communicate with web based and Internet infrastructures, leading to some

organizations running almost two independent systems where data cannot be shared. This

often leads to having to invest in new systems or an infrastructure, which bridges the

different systems. In both cases this is both financially costly as well as disruptive to the

efficient running of organizations.

22 Elias M.Awad. Electronic Commerce : from vision to fulfillment (2007)

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Another disadvantage of e-commerce is that it is not suitable for perishable commodities

like food items. People prefer to shop in the conventional way than to use e-commerce

for purchasing food products. So e-commerce is not suitable for such business sectors.

The time period required for delivering physical products can also be quite significant in

case of e-commerce. A lot of phone calls and e-mails may be required till you get your

desired products. However, returning the product and getting a refund can be even more

troublesome and time consuming than purchasing, in case if you are not satisfied with a

particular product.

6.1 Disadvantage of E-Commerce to Consumer

Many people don’t understand the awesomeness of shopping online. They are too afraid

to buy something on the web because they doubt if the store is reliable, curious if the

product is as good as it looks like on the site, afraid that you would steal their money.

Online store doesn’t provide the opportunity to actually touch, wear or sit on the product.

Therefore selling such products as apparel and furniture online might be tricky. Cost of

computing equipment. Not just the initial cost of buying equipment but making sure that

the technology is updated regularly to be compatible with the changing requirement of

the Internet, websites and applications.

Lack of security and privacy of personal data. There is no real control of data that is

collected over the Web or Internet. Data protection laws are not universal and so websites

hosted in different countries may or may not have laws which protect privacy of personal

data. Physical contact and relationships are replaced by electronic processes. Customers

are unable to touch and feel goods being sold on-line or gauge voices and reactions of

human beings. A lack of trust because they are interacting with faceless computers.

6.3 Disadvantages of e-commerce to Society

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As people become more used to interacting electronically there could be an erosion of

personal and social skills which might eventually be detrimental to the world we live in

where people are more comfortable interacting with a screen than face to face. So there

will be breakdown in human interaction. Next, there is a potential danger that there will

be an increase in the social divide between technical haves and have-nots – so people

who do not have technical skills become unable to secure better-paid jobs and could form

an underclass with potentially dangerous implications for social stability. Reliance on

telecommunications infrastructure, power and IT skills, which in developing countries

nullifies the benefits when power, advanced telecommunications infrastructures and IT

skills are unavailable or scarce or underdeveloped. As new technology dates quickly how

you do dispose of all the old computers, keyboards, monitors, speakers and other

hardware or software? So, there will be will wasted resources. Facilitates Just-In-Time

manufacturing where this could potentially cripple an economy in times of crisis as

stocks are kept to a minimum and delivery patterns are based on pre-set levels of stock

which last for days rather than week. Difficulty in policing the Internet, which means that

numerous crimes can be perpetrated and often go undetected. There is also an unpleasant

rise in the availability and access of obscene material and ease with which pedophiles

and others can entrap children by masquerading in chat rooms.23

7.0 Conclusion

There is no one commonly agreed definition of e-commerce. Thus, there is a need to clarify

terms being used and explain the context in which they are being applied. E-commerce has an

impact on three major stakeholders, namely society, organizations and customers (or consumers).

There are a number of advantages, which include cost savings, increased efficiency,

customization and global marketplaces. There are also limitations arising from e-commerce

which apply to each of the stakeholders. These include information overload, reliability and

security issues, and cost of access, social divisions and difficulties in policing the Internet.

Successful e-commerce involves understanding the limitations and minimizing the negative

23 Source of Internet : http://www.sagepub.com/upm-data/9598_019964Ch1.pdf

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impact while at the same time maximizing the benefits. Thus, on evaluating the various pros and

cons of electronic commerce, we can say that the advantages of e-commerce have the potential to

outweigh the disadvantages. A proper strategy to address the technical issues and to build up

customers trust in the system, can change the present scenario and help e-commerce adapt to the

changing needs of the world.

BIBLIOGRAPHY

Elias M.Awad. Electronic Commerce : from vision to fulfillment. Pearson Prentice Hall.

(2007)

Kalakota, Ravi and Andrew B. Whinston. Electronic Commerce: A Manager’s Guide.

Addison Wesley Longman, Inc.(1997)

Kenneth C.Laudon & Carol Guercio Traver. E-commerce : business, technology, society.

Library of Congress Cataloging-in-Publication Data.(2004).

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Zorayda Ruth Andam. E-commerce and e-business : E-asean task force. (2003)

http://searchmobilecomputing.techtarget.com/definition/m-commerce

http://wiki.media-culture.org.au/index.php/E-commerce_-_Overview_-_Advantages

http://www.bx.com/dictionary/ecommerce/Peer-to-Peer

http://www.computerworld.com/s/article/53015/

The_difference_between_e_business_and_e_commerce?

http://www.creativewebstore.com/portfolio/b2c_business_to_consumer

http://www.ecommerceoptimization.com/ecommerce-introduction

http://www.eicc.co.yu/newspro/viewnews.cgi

http://www.ibls.com/internet_law_news_portal_view

http://www.ibls.com/internet_law_news_portal_view

http://www.informationweek.com/TechSearch/Search.jhtml

http://www.sagepub.com/upm-data/9598_019964Ch1.pdf

http://www.tradingeconomics.com/Economics/GDP-Growth

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