The Business Impact of Ecommerce Solutions on the Global Business Market

Ecommerce is, to a great extent, online commerce. It encompasses almost every aspect of trade including stocks and bonds trading, banking, online transaction processing, electronic funds transfer, inventory management, supply chain management and retail trading. The impact of ecommerce on global trade is, therefore, immense and includes:

Challenge of New Technology

Old school companies that had made a significant investment in physical infrastructure have to change tact or risk losing their business to new companies based on new technology. New companies relying on technology are able to establish and grab substantial market share based on their focus on customer experience. They can obtain real-time customer responses and act on them without having to conduct expensive market studies.

Security Issues

Ecommerce comes with a new generation of security threats. To counter these threats, each ecommerce business needs to put in place measures to deal with at least five challenges:

  • Technical attacks-perpetrators usually target services hosted on high profile web servers for instance banks, large online retailers and credit card payment gateways. There are various technical attacks such as denial of service attacks, smurf attacks, teardrop attacks, phishing attacks, distributed denial of service attacks and brute force attacks.
  • Privacy-all information should be kept out of reach of unauthorized persons to prevent identity theft and impersonation.
  • Non-repudiation-there must be a way of ascertaining that any information sent was received by the intended party to minimize incidences of breach of contract.
  • Integrity-there is need to have in place a mechanism of ensuring that information sent is received in its original form and not altered during transmission.
  • Authentication- the sender and recipient should be able to identify themselves to each other.

Impact and Implications of Dealing with Customers On-line

Dealing with customers online is advantageous because the trader can personalize services depending on real-time feedback obtained from customers. Customer service can be done on any available channel including brand websites, Facebook, email, twitter, and Instagram, all of which are being used to connect brands with customers.

Greater Competition

New businesses based on ecommerce model are able to compete more favourably with old established businesses than before. with social media and smartphones, consumers can discover small and new businesses that they would otherwise never have heard of. A small store in the street can set up an online shop and compete worldwide. Cloud technology, mobile and social media are making it easy for entrepreneurs to start businesses and get them off the ground faster than ever. Additionally, one does not even need an office in town as it is possible to start a business from home, provided you have a website to place your goods for sale. Consumers from any part of the world are able to access products from anywhere. All these factors put together have diminished the market power of the hitherto monopolies that had dominated certain areas of business.

Retraining of Staff

While ecommerce has had many benefits, there are associated costs especially for the traditional companies which have been forced to retrain their staff. It is worth noting that retraining of staff to ensure that they are abreast with ecommerce related technology is not optional as failure to do so would mean losing business to technology-based startups.

Lower Overheads

Ecommerce has reduced overheads because it does not need setting up of expensive equipment, perform physical record keeping or pay rent for expensive high street stores. Instead, ecommerce relies on technology and what you need most are a website and some few computers. Storage of your products can be done in more affordable location.

New Supply Chains

Supply chain refers to the chain of suppliers, processes, and systems that bring a product to the consumer. Increased use of ecommerce has increased the need for digitization and integration of supply chains.


Governments and policy makers across the globe have had to come up with legislation and policy directives to regulate ecommerce. The EU has been in the forefront and has published payment directives as well as online dispute resolution rules.

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