E-Commerce:

Issues, Opportunities,
Challenges, and Trends

ABSTRACT

E-commerce is a business model that allows organizations to explore global markets. The objective of
this study is to identify all the key points involved in e-commerce business, along with several sub-
themes related to e-commerce, namely the concept of e-business and e-marketing. Next, it was noted
that e- commerce could express the connections between many purchase actors but is mainly used
through the B2C model. The adoption of e-commerce is linked to different internet techniques and
tools, which has several advantages and risks. This study also highlights the connections of e-
commerce with globaliza- tion, e-marketplaces, and platforms. Finally, the authors present the KPIs
in terms of sales, marketing, and customer service that the e-sellers should take into account when
they are defining the e-commerce strategy and the age segmentation criteria that must be used to
create homogeneous groups of e-buyers.

INTRODUCTION

In the last decades, the landscape of commercial exchanges at a global level has undergone enormous
changes with the great evolution of information technologies, communication systems and the
Internet providing an increasing approximation between buyers and sellers. The COVID-19 pandemic
has given a new and stronger impetus to E-Commerce, leading many end consumers, who until that
moment had never made online purchases, to see this form of commerce as one of the main
mechanisms to meet their needs during the period of confinement, a trend that remained rooted in
consumer habits in the post-pandemic period.
In the last 30 years, consumption habits have evolved considerably. Consumers are now
considerably more active, intensely sharing their shopping experiences, debating changes and
transformations in so- ciety or simply analyzing, sometimes quite critically, the attitudes of a
company, or the way in which a particular product or service is made available (Adolpho, 2012).
With the impact of new technological developments and the growth of the Internet, consumer
behavior has changed from a passive position to more active and interactive ways, starting to express
their opinions and feelings. A simple opinion or comment of a consumer now has a relevance never
seen before (Marques, 2014) because it can reach thousands, or even millions of other consumers,
with an ease that until just 15 years ago, it was very dif- ficult to imagine possible (Fonseca, 2015;
Kotler et al., 2016), so costumer opinions have a fundamental weight on communication strategies of

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companies. Nowadays, consumers read the comments of other consumers and share their experiences,
instead of the passive attitudes practiced previously, which went through simply consulting the
information provided by companies. Additionally, with recent technological advances, consumers now
enjoy the benefits of access to innovative tools, which allow better access to commercial and
corporate communication initiatives, from virtually anywhere on the planet and at any time. These
new capabilities made available to consumers provide the power to search and select the best
information, which supports better purchase decisions, reinforcing their power in the commercial
transaction (Marques, 2014). The online consumer is at the center of the purchase decision process
and is now much more demanding than the traditional consumer (Fonseca, 2015; Kotler et al., 2016) .
Today the purchase process is much easier and democratized, being made available virtually to all
consumers, through more sophisticated computers or even through a simple smartphone with Internet
access. So is necessary to deep understand the electronic commerce, its determinants, types, benefits
and risks, the places where that form of commerce takes place (e-marketplaces and platforms) and
main costumers. So, in this chapter we will explore those themes.

DEFINITION OF E-COMMERCE, E-BUSINESS AND E-MARKETING

The spread of information systems and increasing access to the Internet has led many businesses to
migrate to digital platforms. The prefix “e-” was added to well-known business terms, indicating that
that word now relates to an electronic environment. Three of these terms should be clarified at the
outset, given that some may consider them synonymous, when they are not: e-Business, e-Commerce
and e-Marketing. Pereira (2016) defined e-Business as a business model that consists of a set of
processes and transac- tions that involve all systems of the company, through a digital platform. This
form of business allows greater control of the company’s activities because all transactions are
monitored through that digital platform, but does not cover commercial transactions, being an
exchange of values between the bound-

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aries of the organization. Clarifying, Nogueira (2018) says that e-business can be defined as the
online business, through the Internet, that allows supporting all processes involved in the business,
such as organizational communication, cooperation and also the integration of all activities, the
management of relationships with customers, suppliers and as well as with other stakeholders.
From these definitions, it can be said that e-business is a very complex system where daily
business activities are performed through electronic supports and it can include any part of a company
operations, such as production, product design and engineering, purchasing, price manipulations,
customer manage- ment, marketing, sales, online stores, invoicing and packaging, payment
operations, order management, shipping and drop shipping, etc. It can be said that e-business is not
limited to technology-related products and services, so it can benefit all types of business, helping
companies to compete globally, promote and sell all around the world 24 hours/7 days, cutting costs
and transaction times and improving customer management, communication, and support.
The definition of e-Commerce is not consensual. For example, on a simplest manner, Salvador
(2013) says that Online commerce or Electronic Commerce or, for short, e-Commerce is a
commercial transaction carried out through electronic devices, where goods, services or information
are exchanged. In a more wider view, Albertin (1999) defines e-Commerce as the realization of the
entire value chain of business processes in an electronic environment, through the intensive
application of communica- tion and information technology, meeting business objectives.
Gunasekaran et al. (2002) underlines the role of e-Commerce as a key factor for the success of the
companies, saying that e-Commerce is an electronic business process used for negotiation, selling and
acquisition of products or services through Internet platforms between several entities, in order to
achieve organizational objectives. In same way, Pereira (2016) consider the e-Commerce as an
activity that is based on commercial exchanges between individuals and organizations, in these
exchanges are involved the buying and selling of products, which are integrated with technology.
These e-commerce definitions show that there are no major differences between online and offline
transactions. The biggest difference between e-Commerce and traditional commerce is at the level of
technology and information management, currently fundamental for the success of the projects. In the
Web environment, companies must follow some traditional techniques to influence decision-making
power, but they must adapt the most appropriate marketing strategies, in order to create unique
experiences and develop products and services adapted and attractive to their targets. Marketers must
now combine some elements that go beyond the traditional view of the marketing mix and its 4 P’s
(Constantinides et al., 2010). In e-Commerce, the post-sales phase of consumer buying process
assumes an even greater importance than in the traditional purchase-sale process. Therefore, the
Internet has become a strong ally of the consumer, since it is a tool that allows collecting various
information about the purchase process, in an accessible way to all consumers, even those less
familiarized with the use of tools and computer devices (Gosling et al., 2020).
El-Gohary (2010) defined e-Marketing as the process of marketing products, services or
information through electronic means, in order to satisfy the consumers’ needs and also the
organizational objec- tives. Taherdoost and Jalaliyoon (2014) presented a more profound definition of
e-marketing, saying that this concept is related to the whole marketing process carried out through the
digital medium and is composed of direct and indirect e-marketing, including all the processes of
company-consumer relation- ships, brand expansion strategies etc.
Meng (2009) highlighted the link between e-marketing and e-Commerce, considering that the first
concept is the main activity of the second, given that e-marketing allows expanding e-Commerce by

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allowing all marketing methods to be applied in e-Commerce, through digital means, to implement
the activities of an online business.
E-marketing is the activity that uses all the marketing methods applied to e-Commerce, through
digital means, to implement the activities in the online business. This concept is considered the main
activity of e-Commerce, which allows it to expand (Meng, 2009).
Knowing the meaning of e-Commerce, it should be clarified that this word could refer to many
different relationships between the actors of online buying and selling process. In next section, those
relationships are explained.

Increase Trends of e-commerce in India

India has an internet user base of about 475 million as of July 2019, about 40% of the population.
This number is expected to be 627 million by the end of 2019. Despite being the second-largest user
base in world, only behind China (650 million, 48% of population), the penetration of e-commerce is
low compared to markets like the United States (266 million, 84%), or France (54 M, 81%), but is
growing, adding around 6 million new entrants every month. The industry consensus is that growth is
at an inflection point.

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail
activities. Demand for international consumer products (including long-tail items) is growing faster
than in-country supply from authorised distributors and e-commerce offerings. Long tail business
strategy allows companies to realize significant profits by selling low volumes of hard-to-find items
to many customers, instead of only selling large volumes of a reduced number of popular items. The
term was first coined in 2004 by Chris Anderson.

In 2017, the largest e-commerce companies in India were Flipkart, Snapdeal and Amazon. In 2018,
Amazon beat Flipkart and was recorded the biggest ecommerce in india in terms of revenue.

Trends that are Driving E-Commerce in India

Indians are known for their ‘street smart’ economic mindset that enables them to find solutions to im-
pregnable challenges despite the constraints.

This is the similar ‘innovative mindset’ which is making Indian entrepreneurs embrace analytics,
digitization, and technology to develop platforms and deliver services and products to the end
customer creating a new online buying behavior.

In the context, India’s retail opportunity is substantial and affected by several factors such as the
rising standards of living, hyper-connected young population, upwardly mobile middle class, the
explosion of social media platforms, deeper internet penetration, and increased smartphone
penetration. So, significant growth of e-Commerce is expected in the next two years.

GST to Enhance the Growth of e-Commerce

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GST is expected to enforce a single comprehensive indirect tax regime that will be applicable across
on the supply of goods and services across all states. The implementation of GST is expected to
include the service tax, central excise duty, and additional customs duty at the central level and CST,
VAT, and entry tax at the state level. It will enhance operational efficiency of the e-commerce
industry in the many ways like the transparency and simplification of taxes across the borders in
India, elimination of the incidence of double-taxation, and improvement in the efficiency of the
supply chain

E-Commerce is changing the lives of millions, but there are also a number of people who prefer
offline shopping. If e-commerce is to make a huge impact in the coming years then these trends will
definitely affect the business.

Increase in the Internet Penetration

The e-commerce industry in India has been growing with the rise in internet penetration due to major
improvements in the telecom infrastructure. While the 3G and 4G services are making a way into
India along with declining data tariffs, internet data spend is growing significantly. Even when India
ranks the lowest in Asia at internet speed, the data rates in India are 3 times cheaper than in the US
and 2 times cheaper than in China. Government schemes such as a National Optical Fiber Network
(NOFN) can significantly increase internet penetration in the rural communities as well as provide a
means for e-commerce companies to tap the huge market potential there.

Growth in Smartphone Adoption

Smartphone growth has been massive over the years and is expected to exhibit more growth in the
coming years. The smartphone’s adoption in India is propelled by several factors such as low prices
due to high competition, ease of accessibility to content, and prevalence of internet enabled services.
According to a report, India has the highest share of globally 41% of mobile-based e-commerce sales.
Almost 70-75% of the online traffic of e-commerce sites comes from mobile phones, the leading e-
commerce companies stated and thus higher revenues are coming from mobile applications like 50%
for Flipkart while 70% for Quikr.

Evolution of New Payment Solutions

Cash on Delivery (CoD) has been the most popular mode of payment for Indian e-commerce
transactions. Cash transactions result in high administration cost even for the e-commerce companies.
Hence, to address these challenges, new digital payment solutions are evolving. Further, the Indian
government’s initiative has extended banking facilities through the ‘Jan Dhan Yojana’ scheme which
has added over 110 million debit cards thereby providing these customers access to electronic
payments. The electronic wallets have been launched and also digital payment products from
traditional banks for faster transactions to ease the payment process in e-commerce.

Partnerships of Logistics Space with Hyper-local Companies and India Post

Customers are getting next-day delivery of products. Due to the challenges in terms of return orders,

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higher standards of customer service, and handling huge volumes of delivery, the industry has seen
the rise of several third-party logistics service providers that handles last-mile deliveries. There is an
increasing number of partnerships of e-commerce companies with the third-party logistics service
providers in order to reach mainly in tier two and three cities. Also leading e-commerce players to
have their own logistics arms for enhanced customer experience and for greater control on deliveries.

Gaining Momentum of Government Initiatives

The Government of India has been active in leveraging and embracing e-Commerce digital platforms
to transform and organize traditional offline markets such as those of agricultural product. The Gov-
ernment has launched an e-commerce platform to link the farmers with the vegetable markets of vari-
ous states to sell the agro commodities. Also, flagship initiatives such as Start-up India, Digital India,
Skill India, and Innovation Fund are contributing to the growth of the e-commerce industry.

Investments/ Developments
Some of the major developments in the Indian e-commerce sector are as follows:

 In November 2020, Amazon India announced collaboration with Hindustan Petroleum Corpo-
ration Limited. Under this partnership, customers will be able to book and pay for their LPG
cylinders until the delivery.
 In November 2020, Reliance Retail Ventures Ltd. (RRVL), a subsidiary of Reliance Industries
(RIL), acquired a minority stake of Urban Ladder Home Decor Solutions Pvt. Ltd. for Rs.
182.12 crore (US$ 24.67 million).
 In November 2020, Flipkart acquired Scapic, an Augmented Reality (AR) firm, to boost user
experience.
 In November 2020, Amazon India has opened ‘Made in India’ toy store, in line with the gov-
ernment’s ‘Atmanirbhar Bharat’ vision. The store will allow thousands of manufacturers and
vendors to sell toys driven by the Indian culture, folk tales and toys that promote creative
thinking and are locally crafted & manufactured.
 In October 2020, Amazon India collaborated with the Indian Railway Catering and Tourism
Corporation (IRCTC) to enable users to book and reserve train tickets on Amazon.
 In October 2020, Flipkart acquired a 140-acre land at Rs. 432 crore (US$ 58.87 million) to es-
tablish their largest fulfilling centre in Asia, in Manesar, Gurgaon, in a bid to scale their ful-
filment infrastructure to cater to increased demand post COVID-19.
 In October 2020, Amazon India invested over Rs. 700 crore (US$ 95.40 million) into its pay-
ment unit, Amazon Pay.

Market size and growth

India’s e-commerce market was worth about $3.9 billion in 2009. As per “India Goes Digital”, a re-
port by Avendus Capital, the Indian e-commerce market is estimated at ₹28,500 Crore ($6.3 billion)
for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel
market in India had a growth rate of 22% over the next 4 years and reach ₹54,800 crore ($12.2 bil -
lion) in size by 2015. Indian e-tailing industry is estimated at ₹3,600 crore (US$800 million) in 2011
and estimated to grow to ₹53,000 crore ($11.8 billion) in 2015. The market went up to $12.6 billion
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in 2013. In 2013, the e-retail segment was worth US$2.3 billion. About 79% of India’s e-commerce
market was travel related in 2013. According to Google India, there were 35 million online shoppers
in India in 2014 Q1 and was expected to cross 100 million mark by end of year 2016.

Government initiatives

Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in
India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of
such programs will likely support growth of E-commerce in the country. Some of the major initiatives
taken by the Government to promote E-commerce in India are as follows:

 Government e-Marketplace (GeM) signed a Memorandum of Understanding (MoU) with

Union Bank of India to facilitate a cashless, paperless and transparent payment system for an
array of services in October 2019.

 Under the Digital India movement, Government launched various initiatives like Umang, Start-
up India Portal, Bharat Interface for Money (BHIM) etc. to boost digitisation.

 In October 2020, Minister of Commerce and Industry, Mr. Piyush Goyal invited start-ups to re-
gister at public procurement portal, GeM, and offer goods and services to government organ-
isations and PSUs.

 In October 2020, amending the equalisation levy rules of 2016, the government mandated for-
eign companies operating e-commerce platforms in India to have permanent account num-
bers (PAN). It imposed a 2% tax in the FY21 budget on the sale of goods or delivery of ser-
vices through a non-resident ecommerce operator.

 In order to increase the participation of foreign players in E-commerce, Indian Government

hiked the limit of FDI in E-commerce marketplace model to up to 100% (in B2B models).

 Heavy investment made by the Government in rolling out fibre network for 5G will help boost
E-commerce in India.

E-business Models Based on the Relationship of Transaction Parties

e-commerce has a great deal of advantages over “brick and mortar” stores and mail order catalogs.
Consumers can easily search through a large database of products and services. They can see actual
prices, build an order over several days and email it as a “wish list” hoping that someone will pay for
their selected goods. Customers can compare prices with a click of the mouse and buy the selected
product at best prices.

Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a
way to be found by customers without expensive advertising campaign. Even small online shops can
reach global markets. Web technology also allows to track customer preferences and to deliver
individually-tailored marketing.

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History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet
companies to allow electronic transactions. Thanks to their founders we now have a handsome
ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5
largest and most famous worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and
Hewlett Packard. According to statistics, the most popular categories of products sold in the World
Wide Web are music, books, computers, office supplies and other consumer electronics.

Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle,
Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American
ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its
position as a successful business model, however, in 2003 the company made its first annual profit
which was the first step to the further development.

At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of
goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear,
health products, etc. The original name of the company was Cadabra.com, but shortly after it become
popular in the Internet Bezos decided to rename his business “Amazon” after the world’s most
voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time Magazine in
recognition of the company’s success. Although the company’s main headquarters is located in the
USA, WA, Amazon has set up separate websites in other economically developed countries such as
the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and
operates retail web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA,
Bebe Stores, Target, etc.

Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and
nowadays the company gets about 40% of its sales from affiliates and third party sellers who list and
sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring the
film “The Stolen Child” with 20th Century Fox.

Evolution of E-Commerce

E-Commerce was introduced 40 years ago and, to this day, continues to grow with new technologies,
innovations, and thousands of businesses entering the on-line market each year. The convenience,
safety, and user experience of E-Commerce has improved exponentially since its inception in the
1970’s.

1960-1982

Paving the way for electric commerce was the development of the Electronic Data Interchange(EDI).
EDI replaced traditional mailing and faxing of documents with a digital transfer of data from one
computer to another.

1982-1990

It was apparent from the beginning that B2B online shopping would be commercially lucrative but

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B2C would not be successful until the later widespread use of PC’s and the World Wide Web, also
known as, the Internet. In 1982, France launched the precursor to the Internet called, Minitel.

90’s to Present

In 1990 Tim Berners Lee, along with his friend Robert Cailliau, published a proposal to build a
“Hypertext project” called, “WorldWideWeb.

 1994

Netscape arrived. Providing users a simple browser to surf the Internet and a safe online transaction
technology called Secure Sockets Layer.

Since 1995, many innovative applications, ranging from direct online sales to e-learning experiences
had been developed. Almost every organization in the world has a Web site. Two of the biggest
names in e-commerce are launched:Amazon.com and eBay.com.

 1998

DSL, or Digital Subscriber Line, provides fast, always-on Internet service to subscribers across
California. This prompts people to spend more time, and money, online.

 In 1999, the emphasis of e-commerce shifted from B2C to B2B.

 In 2001, from B2B to B2E, e-government, e-learning, and m-commerce.
 In 2005, social networks started to rise and so did E-Commerce and wireless applications.

Advantages and Disadvantages of E- Commerce

ADVANTAGE OF E-COMMERCE
Today, e-Commerce has revolutionized the way companies are doing business. Now, consumers can
purchase almost anything online 24*7 a day and get an ultimate shopping experience.

(i) Convenience & Easiness

For many people in the world, e-Commerce becomes one of the preferred ways of shopping as they
enjoy their online because of its easiness and convenience. They are allowed to buy products or ser-
vices from their home at any time of day or night.

The best thing about it is buying options that are quick, convenient and user-friendly with the ability
to transfer funds online. Because of its convenience, consumers can save their lots of time as well as
money by searching their products easily and making purchasing online.

(ii) Offer Product Datasheets

Consumers can also get description and details from an online product catalog. For your customers, it
is very much important to get information about the product no matter whether the time of day and
day of the week. Through information, your customers and prospects are making decision to purchase
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your products or not.

(iii) Attract New Customers with Search Engine Visibility

As we all know that physical retail is run by branding and relationships. But, online retail is also
driving by traffic that comes from search engines. For customers, it is not very so common to follow a
link in the search engine results and land up on an ecommerce website that they never heard of.

(iv) Comprise Warranty Information

No matter whether you are looking to choose including warranty information with product
descriptions and datasheets or providing it from within an ecommerce shopping cart, you need to
make sure that customers must be aware of important terms and conditions that are associated with
their purchase.

(v) Decreasing cost of inventory Management

With e-commerce business, the suppliers can decrease the cost of managing their inventory of goods
that they can automate the inventory management using web-based management system. Indirectly,
they can save their operational costs.

(vi) Keep Eye on Consumers’ Buying Habit

The best thing is e-commerce retailers can easily keep a constant eye on consumers’ buying habits
and interests to tailors their offer suit to consumers’ requirements. By satisfying their needs
constantly, you can improve your ongoing relationship with them and build long-lasting relationships.

(vii) Competence

For effective business transactions, e-commerce is an efficient and competence method. Setting-up
cost is extremely low as compare to expanding your business with more brick and mortar locations.
Very few licenses and permits are required to start-up an online business than physical store. You can
save your lots of money by using fewer employees to perform operations like billing customers,
managing inventory and more.

(viii) Allow Happy Customers to Sell Your Products

With lots of customers’ reviews and product ratings, you can easily increase your sells as new cus-
tomers find that your products are good and effective. Make sure that you mention your clients’ testi-
monials, reviews and product ratings as such things can help your new customers to purchase your
products.

(ix) Selling Products across the World

If you are running a physical store, it will be limited by the geographical area that you can service, but
with an e-Commerce website, you can sell your products and services across the world. The entire
world is your playground, where you can sell your complete range of products without any geograph-
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ical limits. Moreover, the remaining limitation of geography has dissolved by mcommerce that is also
known as mobile commerce.

(x) Stay open 24*7/365

One of the most important benefits that ecommerce merchants can enjoy is store timings are now
24/7/365 as they can run e-commerce websites all the time. By this way, they can increase their sales
by boosting their number of orders. However, it is also beneficial for customers as they can purchase
products whenever they want no matter whether it is early morning or mid-night.
DISADVANTAGES OF E-COMMERCE
Running an E-Commerce business is not all rainbows and unicorns. There are challenges unique to
this business model — knowing them will help you navigate the choppy waters and avoid common
pitfalls:

(i) Lack of Personal Touch

Some consumers value the personal touch they get from visiting a physical store and interacting with
sales associates. Such personal touch is particularly important for businesses selling high-end
products as customers not only want to buy the merchandise but also have a great experience during
the process.

(ii) Lack of Tactile Experience

No matter how well a video is made, consumers still can’t touch and feel a product. Not to mention,
it’s not an easy feat to deliver a brand experience, which could often include the sense of touch, smell,
taste, and sound, through the two-dimensionality of a screen.

(iii) Price and Product Comparison

With online shopping, consumers can compare many products and find the lowest price. This forces
many merchants to compete on price and reduce their profit margin.

(iv) Need for Internet Access

This is pretty obvious, but don’t forget that your customers do need Internet access before they can
purchase from you! Since many eCommerce platforms have features and functionalities that require
high-speed Internet access for an optimal customer experience, there’s a chance you’re excluding
visitors who have slow connections.

(v) Credit Card Fraud

Credit card fraud is a real and growing problem for online businesses. It can lead to chargebacks that
result in the loss of revenue, penalties, and bad reputation.

(vi) IT Security Issues

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More and more businesses and organizations have fallen prey to malicious hackers who have stolen
customer information from their database. Not only could this have legal and financial implications
but also lessen the trust customers have in the company.

(vii) All the Eggs in One Basket

E-Commerce businesses rely heavily (or solely) on their websites. Even just a few minutes of
downtime or technology hiccups can cause a substantial loss of revenue and customer dissatisfaction.

(viii) Complexity in Taxation, Regulations, and Compliance

If an online business sells to customers in different territories, they’ll have to adhere to regulations not
only in their own states/countries but also in their customers’ place of residence. This could create a
lot of complexities in accounting, compliance, and taxation.
E-Commerce in India, Transaction to E-Commerce in India
India has an internet users base of about 450 million as of July 2017, 40% of the population. Despite
being the second-largest user base in world, only behind China (650 million, 48% of population), the
penetration of e-commerce is low compared to markets like the United States (266 million, 84%), or
France (54 M, 81%), but is growing at an unprecedented rate, adding around 6 million new entrants
every month. The industry consensus is that growth is at an inflection point.

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail
activities. Demand for international consumer products (including long-tail items) is growing much
faster than in-country supply from authorized distributors and e-commerce offerings.

In 2015, the largest e-commerce companies in India were Flipkart, Snapdeal, Amazon India, and
Paytm.

Government initiative

Since 2014, the Government of India has announced various initiatives namely, Digital India, Make in
India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of
such programs will likely support the e-commerce growth in the country. Some of the major
initiatives taken by the government to promote the e-commerce sector in India are as follows:

Reserve Bank of India (RBI) has decided to allow “inter-operability” among Prepaid Payment
Instruments (PPIs) such as digital wallets, prepaid cash coupons and prepaid telephone top-up cards.

Finance Minister Mr Arun Jaitley has proposed various measures to quicken India’s transition to a
cashless economy, including a ban on cash transactions over Rs 300,000 (US$ 4,655.1), tax incentives
for creation of a cashless infrastructure, promoting greater usage of non-cash modes of payments, and
making Aadhaar-based payments more widespread.

The e-commerce industry been directly impacting the micro, small & medium enterprises (MSME) in
India by providing means of financing, technology and training and has a favourable cascading effect
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on other industries as well. The total size of e-Commerce industry (only B2C e-tail) in India is
expected to reach US$ 101.9 billion by 2020.

Technology enabled innovations like digital payments, hyper-local logistics, analytics driven
customer engagement and digital advertisements will likely support the growth in the sector. With the
increase in the number of electronic payment gateways and mobile wallets, it is expected that by the
year 2020, cashless transaction will constitute 55 per cent of the online sales. The growth in e-
commerce sector will also boost employment, increase revenues from export, increase tax collection
by ex-chequers, and provide better products and services to customers in the long-term.

TRANSACTION TO E-COMMERCE IN INDIA

Much has been said about India’s accelerated digital transformation. Like the fact that we are the
world’s fastest-growing internet market, adding 40 million users per year on average. In fact, despite
the digital divide, India boasts the second highest active internet user base with 1 out of 3 people
online.

The corollary to this story is the country’s red-hot ecommerce pie, which according to a new study
has the potential to become far bigger, driven by more than 500 million Indians who will constitute
the next wave of online consumers. The size of the opportunity up for grabs is a whopping Rs 3.44
lakh crore.

The report, titled ‘Unlocking Digital for Bharat: $50 Billion Opportunity’, released by Bain &
Company, Google and Omidyar Network, claims that India has the potential to unlock over $50
billion in online commerce in India by driving awareness, usage and transactions among the current
and next set of internet users and shoppers.

But the road to get there is far from smooth. Based on a survey of 3,400 customers, the study puts the
spotlight on some major barriers holding India back, beginning with India’s small transacting user
base. Only 40 per cent of India’s 390 million internet users transact online. The remaining 60 per cent
do their research online but complete the transaction offline.

In addition, there is the worrying number of dropouts. According to the report, 54 million users –
across the affluent socioeconomic segments that comprise 80% of the user base alone – stop after the
first online purchase due to issues with user experience.

Significantly, it takes three to four months for a typical Indian internet user to make the first online
transaction and among users who have been on the internet for two or more years, 61 percent transact
online. The number of “transactors” drops to 27% among new users, who have been online for just 4-
6 months. This underscores the need for ecommerce players to retain customers through content,
experience and fostering trust.

The study points out that India can “double the current product transactor base” by retaining the
number of people who give up after a trial purchase and by beefing up its current numbers. For the
latter, one can start by focussing on the 160M content consumers who draw the line at online

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transactions, which has the potential to boost ecommerce by $14-18 billion.

Then there is the massive non-user base, just waiting to be tapped. The report estimates 370 million
non-internet users across India’s affluent socioeconomic strata and 620 million across the mostly-
untapped lower income segments. While the latter are out of the scope of the survey, their sheer
numbers spell a massive future opportunity.

“Digital India is at a very interesting point – a large internet user base with significant variations
across demographics, and only a small portion actually transacting online. While online spends are
still low given lower per capita incomes, there is huge potential to unlock value by addressing user
concerns at various stages of the digital curve,” said Arpan Sheth, partner, Bain & Company, and one
of the authors of the report. “However, the path won’t be easy for businesses and they will have to
innovate and be patient to monetize this user base and generate value.”
B2C and B2B Internet Marketing
B2B stands for Business to Business marketing, which is based on same B2C (Business to Customer)
marketing practices, but it has slight modifications due to the nature and characteristics of B2B
commerce industry. Although, there certainly is some overlap between these two marketing strategies
but a few key differences are also there which can either make or break your overall online marketing
campaign. The B2B audiences are tech savvy, accustomed to being bombarded with information and
they are short on time. The exploitation of social media marketing in case of businesses is also
different from the one used for the customers. On the other hand, digital marketing, in the case of
B2C, is all about entertainment and fun for selling products and services.

1. Past vs. Present

In the past, there were much more differences between these two types of marketing strategies
because the primary method of research and point of contact differed greatly. The ground level basis
was used by marketers to reach the customers. On the other hand, businesses used to be more formal
and restricted in their methods of reaching out.

But today, the situation is completely different; both the businesses and the consumers are capable of
working and researching their problems on the internet. A whole new expanse has opened up the
opportunity for reaching out and making contact with potential new customers. In the realm of digital
marketing, the method of reaching out and contact is nearly identical. A few significant changes
suggest that the marketers have to make use of industry jargons for excellent effects on B2B
platforms. The B2B marketing process is designed for efficiency and expertise seeking audiences.
The B2B purchase process is more rational and logical as compared to the emotionally triggered
consumer choices in case of B2C marketing.

2. B2B vs. B2C Audience

The B2B buyers are top managers or owners of their respective companies. They are more sophistic-
ated and gain an in-depth understanding of the service being offered by the marketers from an organ-
isational perspective. They have an interest in a particular offer with an objective to grow their own

14
company. Therefore, the marketers, when conveying a message through digital media, have to define
how the managers or business owners can boost profits, save money and stay competitive in the long
run using their product. In such case, the content must have to be thoroughly researched, and the mar-
keters are required to give the audience a reason to utilise their product and service being marketed
before it’s too late.

However, typical B2C buyers look for the best price available. They tend to purchase from the most
trusted retailer. So, in this case, the marketing content and the website have to convey a feeling of
confidence and security to the buyer. That is why the design of the site and the substance matters the
most. The consumers are likely to opt for trusted sources for purchase. Therefore, in the case of B2C
marketing, the digital marketers have to give priority to trust, security and brand loyalty.

3. Size of the Market

The size of the market is another important consideration in the field of digital marketing. When we
talk about B2C marketing, the target market is larger and takes a major sector of the public, i.e., mil-
lions of customers are included in this case. On the other hand, in B2B marketing, you are targeting a
particular niche, i.e., the number of clients is in thousands only. Hence, the differences in the size of
the markets for both cases suggest that the content has to be appealing to the particular market that the
company is aiming to target.

4. Marketing Material – Thought Leader or Entertainer?

B2B marketing means you must have to understand the operational activities of the organisations
which you are targeting. It is also essential to know who will be looking at your content and website.
In B2B sector, there is a tremendous thrust for knowledge because the business owners are focused on
growth and expansion of their companies. Your product will get an active appreciation if it is capable
enough to contribute to their development. You have to provide the marketing material to lay out the
foundation about how your product and services can save time, money and resources of your client.
To captivate B2B customers, you must have to provide the relevant content which the businesses are
actively searching for, and relate it with your offerings.

Whereas, B2C marketing is all about entertainment. Your customers are not going to follow the posts
having too much of sales pitch. Only the genuinely exciting, emotional and funny content can keep
the masses happy and content. In the case of B2C marketing, the marketers must have to utilise the
social media channels with a personalized and lively touch. By just being a mere faceless corporate
entity will only make you lose a significant number of customers in the long run.

From a client’s perspective, B2B and B2C both are just types of marketing to people like you and me.
However, being a professional doesn’t mean that you cannot have fun. Marketing to the public does
not say you cannot take advantage of B2B methods. Though both are different, you can utilise both at
the same time.

5. Social Media Matters

B2B digital marketing strategy has a slightly different perspective involving long term relationship
when compared to the social media strategy in B2C digital marketing. B2C companies flock to Face-
book to reach wider audiences, on the other hand, B2B companies gravitate towards LinkedIn as a
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way to establish networks with active connections. In B2B digital marketing, the utilization of newer
and trendier social media networks like Snapchat is not suitable in any way because teenage con-
sumers are the possible demographics of this type of social platform. I am not saying that B2B mar-
keters do not or should not use Facebook for promotional activities. My point is that they have to opt
for the best social media marketing approach that targets the exact relevant audience for them.

6. B2B Marketing Builds Relationships

The ultimate target of B2C marketing is to ‘sell’ the products and services to target consumers. On the
other hand, B2B marketers tend to look for ways to establish long term ongoing relationships with
their customers. The main aim of B2B marketing is to focus on generating lead and keeping up the
long term relationship through emails, blogging and other strategies. B2B is all about building trust
and sharing information with each other. It means that the marketers should communicate with their
contacts for building a mutually beneficial relationship.

7. Businesses Want Facts

B2C marketing requires making use of various exciting videos and tweets to entertain the target audi-
ences. However, in the case of B2B marketing, the sole purpose of marketers is to spread information.
The target market of corporate buyers includes industry savvy customers, and they seek information
that can help them to grow their businesses. Facts and figures drive business customers. They want lo-
gic instead of a typical advertising strategy. If you are building an online media campaign, then it is
important to keep in mind the interests and needs of your customers. Try to use info graphics, factual
links and statistical reports to back up your claims.

8. Sales Cycle
Capturing the attention of your audience in both cases is entirely different from each other. In the case
of B2B marketing, the marketers try to capture the attention of smaller markets over the longer period
as compared to the marketing done in the case of B2C approach. The sales cycle in case of B2C mar -
keting is relatively lower than the sales cycle in case of B2B. Similarly, business transactions need
more consideration as compared to B2C operations and require a high level of trust and bond between
the customer and the supplier. The sales cycle for B2B typically starts with driving traffic to the web -
site for finding potential clients. Whereas, the B2C sales cycle is based on a single step purchase. In
this case, the customer wants a brand to be perfect. So, for B2C marketing, you should give your cli-
ents a reason to buy your product.

9. Brand Value
By providing a branded content, the organizations want to create a favourable impression on their
consumers. A little piece of an interesting content sufficiently evokes an emotional and political re -
sponsiveness among the customers. For instance, Procter & Gamble is successfully creating a forward
thinking impression on its consumers. It markets products for entertainment and opts for emotional re-
sponse option from them. This behavior reflects their B2C digital marketing strategy. On the other
hand, in the case of B2B digital marketing, the marketers tend to provide a general overview. For this
purpose, e-Books, whitepapers and other forms of downloads, such as template and documents, can
be used to add more worth to your brand. These valuable sources incredibly contribute in enhancing
your brand promotions.

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Moreover, to increase brand value, developing online public relations is considered as an integral part
of B2C marketing, but it is not sufficient in the case of B2B marketing. In the case of B2C marketing,
the marketers strive to get mentioned in various industry publications and blogs for to be read by their
target audiences. In this instance, applying some fruitful strategy for media coverage can be a better
option. Other than that, you can communicate via interviews, arrange meetings and write advertorials
to increase your PR. Whereas, in the case of B2B marketing, a routine surveillance of industry related
media outlets is required to enhance public relations.

10. B2B Content is More Accurate and Industry-Driven

The content is an integral part of digital marketing. Whether it is B2B marketing or B2C marketing,
content plays a significant role in marketing and advertising your brand over the internet. While shar-
ing or writing the content for B2C audiences, the marketers should have to keep it short. They need to
make it as much humorous and catchy as possible to appeal a large number of readers. On the con -
trary, in the case of B2B marketing, a more detailed, informative and lengthy content is required be-
cause the marketers are expected to show off their digital expertise, they have to inform and inspire
their prospective buyers.
e-commerce Sales Life Cycle (ESLC) Model
E-Commerce sales life cycle includes the following stages:

Pre-sale:

Online promotions are done to create excitement about the products that are being sold through online
advertisements.

Transaction:

The customers place their order for the products. The process should be user-friendly and secure.

Delivery:

This stage involves delivering the product to the consumer. Care should be taken in delivery with
proper packaging and speedy delivery to make the customer happy.

After sales:

This stage involves following up with the customer to let him know that the product has been
delivered or if he is satisfied. The feedbacks from the customer can be furthers used in improving
services by the company.

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Stages
Stage 1: Start-up & fast growth

Most ecommerce businesses go through an initial period of fast and in some cases unexpected growth.
This is usually to do with the popularity of the product they sell or market demand rather than the im -
plementation of their ecommerce platforms. Many businesses will choose platforms such as BigCom-
merce, Shopify or Magento. It’s important that your business stays agile and responds quickly to
change.

You don’t want to get caught up in complicated systems or handcuffed by too much process. Brands
often enjoy quick impact in this honeymoon period, before growth slows down and progression is
halted by a kind of invisible ceiling. This sees businesses moving into the second stage of the
ecommerce lifecycle, which is a growth plateau.

Stage 2: Plateauing growth or consolidation

Businesses reaching this second stage of the ecommerce lifecycle tend to panic and look for quick-fix
solutions to perceived issues. You need to understand that it’s natural for there to be a levelling off of
growth after the early spike. Once your business has gained traction, brand awareness and initial
momentum, it’s time to reflect on your progress, analyse your data and gain key insights to make
measured and strategic changes to your ecommerce website and your marketing.

It’s important for business owners to assign ample time and resources to research, to systemise and
strategise to work out the best ways to move to the next level and start achieving renewed growth.

18
Stage 3: Renewed growth

Many business owners think that the solution to the issue of plateauing growth is a quick fix or a swift
change of direction, which can be an ecommerce platform move or, perhaps, the recruitment of a new
ecommerce manager.

This is not necessarily thinking strategically. A replatforming project might indeed be the answer
perhaps to a more advanced or modern ecommerce platform, like BigCommerce but you need to
make a clear business case (including extensive research and risk assessments) before deciding to
migrate platforms. Check out Space 48’s golden rules of replatforming blog to learn more.

In this third stage of the ecommerce lifecycle, the attempts to reinvigorate your company’s
momentum and growth should always be strategic. In my experience, the solution to plateauing
growth may only require realigning your business goals with changing customer trends, keeping up-
to-date with new technology and channel strategies.

Research and analysis is required to optimise processes and improve customer experience. This will
steer your strategy. Research may reveal issues and you might find you need to replatform, but there
needs to be sound reasoning behind decisions to implement technology and tools.
Concept of e-Money, Electronic Payment System and It’s Type
Broadly, electronic money is an electronic store of monetary value on a technical device. The
definition of electronic money is becoming more scientific and specific with developments associated
with it. The European Central Bank defines e-money in the following words. “E-money can be
defined as amount of money value represented by a claim issued on a prepaid basis, stored in an
electronic medium (card or computer) and accepted as a means of payment by undertakings other than
the issuer” (ECB).

E money is a monetary value that is stored and transferred electronically through a variety of means a
mobile phone, tablet, contactless card (or smart cards), computer hard drive or servers. Electronic
money need not necessarily involve bank accounts in transaction but acts as a prepaid bearer
instrument. They are often used to execute small value transactions.

Different Systems of Electronic Money:

Electronic Money includes three different systems namely:

 Centralized Systems,
 Decentralized Systems, and
 Offline Anonymous Systems.

Centralized Systems:

There are many centralized systems that directly sell their e–currency to end users is Web Money, Pay
Pal, Hub Culture Ven, and CashU but Liberty Reserve sells only via 3rd party digital currency

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exchangers.

Decentralized Systems:

Electronic Money includes some decentralized systems. They are:

(i) Bitcoin: Bitcoin is a Peer to Peer Electronic Money system with maximized inflation limit.

(ii) Ripple Monetary System: Ripple Monetary system is a system that is developed to distribute
electronic money system independent to local currency.

Offline Anonymous System:

Offline Anonymous System can be done ‘offline’. In this electronic money system, the merchants do
not need to have interaction with banks before receiving currency from the users. Instead of that, the
merchants can collect spent money by users and deposits the money later to the bank. The merchant
can deliver his storage media in bank for exchanging the electronic money to cash.

Electronic Money

Scrip or money that is exchanged only through electronically is referred to as electronic money.
Electronic Money is also referred as e–money, Electronic Cash, Digital Money, Electronic Currency,
Digital Currency, e–currency, Digital Cash, and Cyber Currency. Electronic Money uses Internet,
Digital Stored Value systems, and Computer Networks.

Some of the examples of electronic money are Direct Deposit, EFT (Electronic Funds Transfer),
Virtual Currency, and Digital Gold Currency.

Types of Electronic Currencies:

There are two types of electronic currencies namely: Hard Electronic Currency and Soft Electronic
Currency:

 Hard Electronic Currency does not allow reversing charges i.e. it supports only Non–Revers-
ible transaction. The advantage of this type is that it reduces the operating cost of e–currency
system.
 Soft Electronic Currency allows payment reversals. The payment is reversed only in case of
dispute or fraud. The payment reversible time will be 72 hrs or even more. Some examples
of this type are Credit Card and Pay Pal.

Electronic Money systems are developing day by day. Some of the developments are: it can be used
with Secured Credit Cards for wide range facilities and the bank accounts that are linked can be used
with an internet to exchange currency with Secure Micropayment system like Pay Pal.

Electronic Payment System

An e-payment system is a way of making transactions or paying for goods and services through an
20
electronic medium, without the use of checks or cash. It’s also called an electronic payment system or
online payment system.

The electronic payment system has grown increasingly over the last decades due to the growing
spread of internet-based banking and shopping. As the world advances more with technology
development, we can see the rise of electronic payment systems and payment processing devices. As
these increase, improve, and provide ever more secure online payment transactions the percentage of
check and cash transactions will decrease.

Electronic payment methods

One of the most popular payment forms online are credit and debit cards. Besides them, there are also
alternative payment methods, such as bank transfers, electronic wallets, smart cards or bitcoin wallet
(bitcoin is the most popular crypto currency).

E-payment methods could be classified into two areas, credit payment systems and cash payment sys-
tems.

1. Credit Payment System

 Credit Card: A form of the e-payment system which requires the use of the card issued by a fi-
nancial institute to the cardholder for making payments online or through an electronic de-
vice, without the use of cash.
 E-wallet: A form of prepaid account that stores user’s financial data, like debit and credit card
information to make an online transaction easier.
 Smart card: A plastic card with a microprocessor that can be loaded with funds to make trans -
actions; also known as a chip card.

1. Cash Payment System

 Direct debit: A financial transaction in which the account holder instructs the bank to collect a
specific amount of money from his account electronically to pay for goods or services.
 E-check: A digital version of an old paper check. It’s an electronic transfer of money from a
bank account, usually checking account, without the use of the paper check.E-cash is a form
of an electronic payment system, where a certain amount of money is stored on a client’s de -
vice and made accessible for online transactions.
 Stored-value card: A card with a certain amount of money that can be used to perform the
transaction in the issuer store. A typical example of stored-value cards are gift cards.

Advantages of electronic payment systems:

 Time savings: Money transfer between virtual accounts usually takes a few minutes, while a
wire transfer or a postal one may take several days. Also, you will not waste your time wait-
ing in lines at a bank or post office.

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 Expenses control: Even if someone is eager to bring his disbursements under control, it is nec-
essary to be patient enough to write down all the petty expenses, which often takes a large
part of the total amount of disbursements. The virtual account contains the history of all
transactions indicating the store and the amount you spent. And you can check it anytime
you want. This advantage of electronic payment system is pretty important in this case.
 Reduced risk of loss and theft- You can not forget your virtual wallet somewhere and it can not
be taken away by robbers. Although in cyberspace there are many scammers, in one of the
previous articles we described in detail how to make your e-currency account secure.
 Low commissions: If you pay for internet service provider or a mobile account replenishment
through the UPT (unattended payment terminal), you will encounter high fees. As for the
electronic payment system: a fee of this kind of operations consists of 1% of the total
amount, and this is a considerable advantage.
 User-friendly: Usually every service is designed to reach the widest possible audience, so it has
the intuitively understandable user interface. In addition, there is always the opportunity to
submit a question to a support team, which often works 24/7. Anyway you can always get an
answer using the forums on the subject.
 Convenience: All the transfers can be performed at any time, anywhere. It’s enough to have an
access to the Internet.

Disadvantages of electronic payment systems:

1. Restrictions: Each payment system has its limits regarding the maximum amount in the ac-
count, the number of transactions per day and the amount of output.

1. The risk of being hacked: If you follow the security rules the threat is minimal, it can be
compared to the risk of something like a robbery. The worse situation when the system of
processing company has been broken, because it leads to the leak of personal data on cards
and its owners. Even if the electronic payment system does not launch plastic cards, it can be
involved in scandals regarding the Identity theft.

1. The problem of transferring money between different payment systems: Usually the majority
of electronic payment systems do not cooperate with each other. In this case, you have to use
the services of e-currency exchange, and it can be time-consuming if you still do not have a
trusted service for this purpose. Our article on how to choose the best e-currency exchanger
greatly facilitates the search process.

1. The lack of anonymity: The information about all the transactions, including the amount,
time and recipient are stored in the database of the payment system. And it means the intelli -
gence agency has an access to this information. You should decide whether it’s bad or good.
2. The necessity of Internet access: If Internet connection fails, you can not get to your online
account.

Electronic Payment System, Types of Electronic Payment System

An e-payment system is a way of making transactions or paying for goods and services through an
22
electronic medium, without the use of checks or cash. It’s also called an electronic payment system or
online payment system. Read on to learn more.

The electronic payment system has grown increasingly over the last decades due to the growing
spread of internet-based banking and shopping. As the world advances more with technology devel-
opment, we can see the rise of electronic payment systems and payment processing devices. As this
increase, improve, and provide ever more secure online payment transactions the percentage of check
and cash transactions will decrease.
Methods of Electronic Payment System
One of the most popular payment forms online is credit and debit cards. Besides them, there are also
alternative payment methods, such as bank transfers, electronic wallets, smart cards or bitcoin wallet
(bitcoin is the most popular crypto currency). E-payment methods could be classified into two areas,
credit payment systems and cash payment systems.

1. Credit Payment System

 Credit Card: A form of the e-payment system which requires the use of the card issued by a
financial institute to the cardholder for making payments online or through an electronic de-
vice, without the use of cash.
 E-wallet: A form of prepaid account that stores user’s financial data, like debit and credit card
information to make an online transaction easier.
 Smart card: A plastic card with a microprocessor that can be loaded with funds to make trans-
actions; also known as a chip card.

1. Cash Payment System

 Direct debit: A financial transaction in which the account holder instructs the bank to collect a
specific amount of money from his account electronically to pay for goods or services.
 E-check: A digital version of an old paper check. It’s an electronic transfer of money from a
bank account, usually checking account, without the use of the paper check. E-cash is a form
of an electronic payment system, where a certain amount of money is stored on a client’s de -
vice and made accessible for online transactions.
 Stored-value card: A card with a certain amount of money that can be used to perform the
transaction in the issuer store. A typical example of stored-value cards are gift cards.

Advantages of electronic payment systems

(i) Time savings: Money transfer between virtual accounts usually takes a few minutes, while a wire
transfer or a postal one may take several days. Also, you will not waste your time waiting in lines at a
bank or post office.

(ii) Expenses control: Even if someone is eager to bring his disbursements under control, it is
necessary to be patient enough to write down all the petty expenses, which often takes a large part of
the total amount of disbursements. The virtual account contains the history of all transactions
23
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indicating the store and the amount you spent. And you can check it anytime you want. This
advantage of electronic payment system is pretty important in this case.

(iii) Reduced risk of loss and theft: You can not forget your virtual wallet somewhere and it can not
be taken away by robbers. Although in cyberspace there are many scammers, in one of the previous
articles we described in detail how to make your e-currency account secure.

(iv) Low commissions: If you pay for internet service provider or a mobile account replenishment
through the UPT (unattended payment terminal), you will encounter high fees. As for the electronic
payment system: a fee of this kind of operations consists of 1% of the total amount, and this is a
considerable advantage.

(v) User-friendly: Usually every service is designed to reach the widest possible audience, so it has
the intuitively understandable user interface. In addition, there is always the opportunity to submit a
question to a support team, which often works 24/7. Anyway you can always get an answer using the
forums on the subject.

(vi) Convenience: All the transfers can be performed at anytime, anywhere. It’s enough to have an
access to the Internet.

Disadvantages of electronic payment systems

(i) Restrictions: Each payment system has its limits regarding the maximum amount in the account,
the number of transactions per day and the amount of output.

(ii) The risk of being hacked: If you follow the security rules the threat is minimal, it can be
compared to the risk of something like a robbery. The worse situation when the system of processing
company has been broken, because it leads to the leak of personal data on cards and its owners. Even
if the electronic payment system does not launch plastic cards, it can be involved in scandals
regarding the Identity theft.

The problem of transferring money between different payment systems- Usually the majority of
electronic payment systems do not cooperate with each other. In this case, you have to use the
services of e-currency exchange, and it can be time-consuming if you still do not have a trusted
service for this purpose. Our article on how to choose the best e-currency exchanger greatly facilitates
the search process.

(iii) The lack of anonymity: The information about all the transactions, including the amount, time
and recipient are stored in the database of the payment system. And it means the intelligence agency
has an access to this information. You should decide whether it’s bad or good.

(vi) The necessity of Internet access: If Internet connection fails, you can not get to your online
account.
Security Issues in E-Commerce: Need and Concept
In spite of its advantages and limitations E-commerce has got some security issues in practical. E-
24
commerce security is nothing but preventing loss and protecting the areas financially and
informational from unauthorized access, use or destruction. Due the rapid developments in science
and technology, risks involved in use of technology and the security measures to avoid the
organizational and individual losses are changing day to day. There are two types of important
cryptography we follow for secured E-commerce transactions.

Symmetric (private-key) cryptography: This is an encryption system in which sender and receiver
possess the same key. The key used to encrypt a message is also used to decrypt the encrypted
message from the sender.

Asymmetric (public-key) cryptography: In this method the actual message is encoded and decoded
using two different mathematically related keys, one of them is called public key and the other is
called private key.

Security is an essential part of any transaction that takes place over the internet. Customers will lose
his/her faith in e-business if its security is compromised. Following are the essential requirements for
safe e-payments/transactions:

 Confidentiality: Information should not be accessible to an unauthorized person. It should not

be intercepted during the transmission.
 Integrity: Information should not be altered during its transmission over the network.
 Availability: Information should be available wherever and whenever required within a time
limit specified.
 Authenticity: There should be a mechanism to authenticate a user before giving him/her an ac-
cess to the required information.
 Non-Repudiability: It is the protection against the denial of order or denial of payment. Once
a sender sends a message, the sender should not be able to deny sending the message. Simil-
arly, the recipient of message should not be able to deny the receipt.
 Encryption: Information should be encrypted and decrypted only by an authorized user.
 Auditability: Data should be recorded in such a way that it can be audited for integrity require-
ments.

e-Commerce Security can be divided into two Broad Types:

(1) Client-Server Security

Client-server securities are popular because they increase application processing efficiency while
reducing costs and gaining the maximum benefit from all resources working together. These benefits
are gained by splitting processing between the client machine/software and server machine/software.
Each process works independently but in cooperation and compatibility with other machines and
applications (or pieces of applications).

All independent processing must be performed to complete the requested service. Cooperation of
application processing produces another client-server advantage, it reduces network traffic. Since
each node (client and/or server) performs part of the processing within itself, network communication
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can be kept to a minimum. For example, static processes, like menus or edits, usually take place on
the client-side. The server, on the other hand, is responsible for processes like updating and reporting.

(2) Data and Transaction Security

Secure Electronic Transaction (SET) is a system for ensuring the security of financial transactions on
the Internet. It was supported initially by Mastercard, Visa, Microsoft, Netscape, and others. With
SET, a user is given an electronic wallet (digital certificate) and a transaction is conducted and
verified using a combination of digital certificates and digital signatures among the purchaser, a
merchant, and the purchaser’s bank in a way that ensures privacy and confidentiality. SET makes use
of Netscape’s Secure Sockets Layer (SSL), Microsoft’s Secure Transaction Technology (STT), and
Terisa System’s Secure Hypertext Transfer Protocol (S-HTTP). SET uses some but not all aspects of
a public key infrastructure (PKI).
Electronic Data Interchange And It’s components and Communication Process
ELECTRONIC DATA INTERCHANGE
Electronic data interchange (EDI) is the concept of businesses communicating electronically certain
information that was traditionally communicated on paper. The two classic examples of such informa-
tion are purchase orders and invoices. Standards for EDI exist to facilitate parties transacting such in-
struments without having to make special arrangements.

EDI has existed for more than 30 years, and there are many EDI standards (including X12, EDI -
FACT, ODETTE, etc.), some of which address the needs of specific industries or regions. It also
refers specifically to a family of standards.

In 1996, the National Institute of Standards and Technology defined electronic data interchange as
“the computer-to-computer interchange of strictly formatted messages that represent documents other
than monetary instruments.

EDI implies a sequence of messages between two parties, either of whom may serve as originator or
recipient. The formatted data representing the documents may be transmitted from originator to recip-
ient via telecommunications or physically transported on electronic storage media.” It distinguishes
mere electronic communication or data exchange, specifying that “in EDI, the usual processing of re-
ceived messages is by computer only.

Human intervention in the processing of a received message is typically intended only for error condi-
tions, for quality review, and for special situations. For example, the transmission of binary or textual
data is not EDI as defined here unless the data are treated as one or more data elements of an EDI
message and are not normally intended for human interpretation as part of online data processing.EDI
can be formally defined as the transfer of structured data, by agreed message standards, from one
computer system to another without human intervention.
COMPONENTS OF EDI
The following components and tools are necessary for performing EDI ARE-

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  Trade Agreement

A legally binding trade agreement between you and your trading partner.

 Standard Document Format

The standard agreed upon format for the documentto be electronically transmitted.

 EDI Translation Management Software

Software used to convert the documentyour application’s format into the agreed upon standard
format. For optimum performance the translation software should be on the same platform as your
business application.

 Communications Software

A programming tool that enables you to writecommunications protocols, or a separate application. It

can be a module to thetranslator or a separate software application.

 Modem

A hardware device used to transmit electronic information betweencomputer systems. The higher the
baud rate, the faster the communications will be.

 VAN

Stands for Value Added Network. A network to which you can connect totransmit data from one
computer systems to another. One network can act as agateway to another.

 Point-to-Point

A direct communication link from one computer to another. Sometrading partners offer a direct con-
nection to their EDI computer. Trading partnersmay opt for this method of communication instead of
using a VAN.
ADVANTAGES OF EDI

 Save Money

The cost of paper and paper processing is incredibly high compared to a properlyimplemented EDI
program. RJR Nabisco estimates that processing a paper purchaseorder costs the company $70. Pro-
cessing an EDI purchase order reduces the cost to amere 93 cents.

 End Repetition

If your trading partner wants a copy of a document, instead of calling you they simplycheck their
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mailbox. This results in a great time savings from not having to copy andfax/mail copies of business
documents.

 Save Time

EDI also saves time over paper processing since the transfer of information fromcomputer to com-
puter is automatic. There is no need to rekey information with EDI. Andthe chance for error drops to
near zero, with no data entry.
EDI COMMUNICATION PROCESS
By moving from a paper-based exchange of business document to one that is electronic, businesses
enjoy major benefits such as reduced cost, increased processing speed, reduced errors and improved
relationships with business partners. Learn more about the benefits of EDI here. »

Each term in the definition is significant

Computer-to-computer– EDI replaces postal mail, fax and email. While email is also an electronic ap-
proach, the documents exchanged via email must still be handled by people rather than computers.
Having people involved slows down the processing of the documents and also introduces errors. In-
stead, EDI documents can flow straight through to the appropriate application on the receiver’s com-
puter (e.g., the Order Management System) and processing can begin immediately. A typical manual
process looks like this, with lots of paper and people involvement:

Manual EDI (Electronic Data Interchange) Document Exchange

The EDI process looks like this — no paper, no people involved:

EDI (Electronic Data Interchange) Document Exchange

Business documents – These are any of the documents that are typically exchanged between busi-
nesses. The most common documents exchanged via EDI are purchase orders, invoices and advance
ship notices. But there are many, many others such as bill of lading, customs documents, inventory
documents, shipping status documents and payment documents.

Standard format– Because EDI documents must be processed by computers rather than humans, a
standard format must be used so that the computer will be able to read and understand the documents.
A standard format describes what each piece of information is and in what format (e.g., integer,
decimal, mmddyy). Without a standard format, each company would send documents using its com-
pany-specific format and, much as an English-speaking person probably doesn’t understand Japanese,
the receiver’s computer system doesn’t understand the company-specific format of the sender’s
format.

There are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and
ebXML. And, for each standard there are many different versions, e.g., ANSI 5010 or EDIFACT ver-
sion D12, Release A. When two businesses decide to exchange EDI documents, they must agree on
the specific EDI standard and version.
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Businesses typically use an EDI translator – either as in-house software or via an EDI service pro-
vider – to translate the EDI format so the data can be used by their internal applications and thus en -
able straight through processing of documents.

Business partners – The exchange of EDI documents is typically between two different companies,
referred to as business partners or trading partners. For example, Company A may buy goods from
Company B. Company A sends orders to Company B. Company A and Company B are business part-
ners.
 Steps the Sender Must Take
Document Preparation

Information necessary to produce a business document (purchase order, invoice, etc.) is collected in
an electronic file.

Outbound Translation

The electronic file is converted by the sender’s translation software into the standard format (follow-

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ing ASC X12 standards and Rail Industry Guidelines).

Outbound Communication

The sender’s computer connects to a VAN. Upon successful receipt, the VAN processes and routes
the transaction to the electronic mailbox of the receiver.
 Steps the Receiver Must Take
Inbound communication

The receiver’s computer connects with the VAN and receives any files waiting in its electronic “in”
box.

Inbound translation

The receiver’s translation software “maps” or translates the electronic file from the ASC X12 stand -
ard message format into a format that the receiver’s internal system can understand.

Document processing

The receiver’s internal document processing system takes over and the newly received document is
handled according to normal internal procedures.

TYPES OF E-COMMERCE

In business planning, it is important and beneficial to know the different types of e-Commerce that
exist. According to the element of negotiation, namely the type of market and the commercial
relation- ship between the participants in the negotiation, the E-Commerce can be divided into
different types of business models platforms. For Turban et al. (2015) cite by Pereira (2016) there are
seven kinds of E-Commerce platforms: B2C (business-to-consumer), B2B (business-to-business),
C2B (consumer- to-business), and C2C (consumer-to-consumer), P2P (Peer to Peer), B2E (Business
to Employee) and G2B / C2G (Government to Business / Consumer to Government). Laudon and
Traver (2016) cite by Nogueira (2018) consider that e-Commerce can be divided into six types, in
which the first 3 coincide with the three of the seven indicated by Turban et al. (2015) (B2C, B2B and
C2C), but add another three that eminently take into account the support in that e-Commerce
originates from: Mobile e-Commerce (M-commerce); Social e-Commerce and Local e-Commerce. In
this section, it will be clarified what is meant by each of these business models.
Business-to-Consumer (B2C) E-Commerce: is the form of electronic business model that regulates
the relationship between the company and the final consumer and consists mostly in direct selling
prod- ucts and / or services between companies and final consumers, through Internet without
intermediaries, namely in the purchase relationship, in the whole process since the attraction of
customers, and even the supply of products, being that all the selling activity is responsibility of the
company only (Henriques, 2012; Turban et al., 2015). Authors such as Ho et al. (2007) mentioned
that B2C e-Commerce has been growing over time, due to technological advancement and market
advancement.
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 Business-to-Business (B2B) E-Commerce: this a form of e-Commerce that allows business
commercial transactions of products and services between organizations, with the aim of a greater cost
reduction, since there is the possibility of integrating supply chains through the digital platforms
where this busi- ness is inserted, achieving an optimization of all processes (Henriques, 2012).
Carvalho and Encantado (2006) divided this form of electronic commerce into three major areas: e-
Marketplace, e-Procurement and e-Distribution: the first area refers to portals where third parties
(buyers and sellers) are grouped to establish commercial links to purchase and sell products and / or
services; the e-Procurement are portals where partners establish external relations with companies
that intend to maintain commercial connections, allowing to share information between companies,
increase the proximity between customer and supplier and vice versa and reducing time and cost in
supply chain transaction; the e-Distribution refers to intern portals (intranet) for collaborators
(employees or other companies of the group) which are designed to integrate the companies with their
distributors, subsidiaries and representatives and are

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used by the company employees or other companies of the group to communicate with any
department of the company;
Consumer-to-Consumer (C2C) E-Commerce: is an e-Commerce business model that controls
trans- actions from consumers to consumers. In C2C the consumer position does not prevent him
from acting as a seller (Pereira, 2016), so is the consumer-seller that prepares the product for the
market, makes the product available for auction or for sale at a stipulated price, then, to connect to the
consumer-buyer, uses a digital platform that usually is operated by a third party. These third party can
intervene in that transactions but it will only assume the role of mediator by providing a space for the
negotiation and transaction to be carried out (like auction websites and mobile apps), or search engine
or for the provi- sion of information or for the payment-receipt, receiving a commission for this role
of mediator, not being responsible either for the transaction of the product or for any logistical
activity related to it. Some of these third parties are OLX®, Coisas.com®, Standvirtual®,
Imovirtual®, Airbnb® (Pereira, 2016); Consumer-to-Business (C2B) E-Commerce: this platform
serves to foster a consumer-business re- lationship, in which the consumer gives feedback regarding
the company’s activity, in order to create
value to the company, an example, the suggestion of a new product (Henriques, 2012);
Peer to Peer (P2P) E-Commerce: this e-Commerce model consists of a temporary network that
enables a specific group of Internet users, with access to files installed in each other’s hard disk, share
them without passing through a servitor web central. This technology represents a low financial return
and is most often associated with piracy and online virtual crimes (Pereira, 2016);
Business to Employee (B2E) E-Commerce: the B2E is defined as the electronic online commerce
form that handles all the processes between company-employee, including the relationship between
both, the activities carried out for attracting and keeping qualified teams, performing recruitment ac-
tions, communicate benefits and advantages offered, training opportunities, among others. This
strategy covers seven elements from the employee’s point of view: competence management;
learning process; recruitment process; content management; websites; knowledge management, and
corporate portals. It is therefore considered an online business model focused on the employee and
also on adding value to it (Pereira, 2016);
Goverment to Business (G2B) / Government to Consumer (G2C) and (G2G) E-Commerce: in this
form of e-Commerce all existing relationships between company and governments are regulated, for
example, the platforms provided by the government that allow companies and consumers to pay
taxes, license vehicles, among other activities, through an online method (Pereira, 2016);
Mobile e-Commerce or M-Commerce: refers to the use of smartphones and tablets to make online
commercial transactions, using apps and mobile networks and wireless networks, where the activities
are varied, from shopping for products, price comparations, booking trips, checking the bank account,
making transfers from anywhere, among others. It is a business model that has shown a marked
growth in recent times (Nogueira, 2018);
Social e-Commerce: this e-Commerce form takes place on social networks, and focuses improving
online shopping tools, notifications about pages where the content is evaluated through the number of
“likes” and “shares”, recommendations of “friends” on social media, among others (Nogueira, 2018);
Local e-Commerce: is a business model that aims to reach a certain group of consumers, according
to their geographical area. It is mainly characterized by local vendors that use marketing to attract
more customers, such as Uber (Nogueira, 2018).

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 Many other classifications of e-Commerce can be found, but the authors normally identify three in
a consensual manner: B2B, B2C and C2C. In next section it will be presented some of the main
benefits and risks of the adoption of e-Commerce for consumers, companies, and society.

BENEFITS AND RISKS OF E-COMMERCE

Offering several opportunities to be present in a worldwide global market, the use of e-commerce
brings plenty of benefits and advantages when compared to the traditional purchase process, but also
some risks and limitations that needed to be highlighted.
Niranjanaurth et al. (2013) and Turban et al. (2015) identified a set of benefits inherent in e-
Commerce, which are steadily increasing and that can be organized in three levels: consumers,
organizations and society. According to those authors, the main benefits associated with e-Commerce
at the consumer level are related to: the inventory, given that a diverse set of sellers and products is
available; ubiquity, because you can buy at any time, regardless of where you are; the prices of the
products, which are more accessible given the high competition and the ease with which the
consumer can compare them; the possibility of buying and selling to other consumers and, finally, the
absence of waiting lines for the purchase of products.
At the level of organizations, Niranjanaurth et al. (2013) mentioned that the main benefits
identified are: get access to the global market, allowing suppliers and consumers a worldwide level
with low as- sociated costs; reduction of costs inherent to processing, physical storage and
distribution of products; reduction of the number of employees, namely, of the sales team, and, also,
flexibility of schedules. One of the key benefits is that e-Commerce can be developed through new
business models and also that the initial investment for the business is low cost. As for society,
Niranjanaurth et al. (2013) and Turban et al. (2015) identified the following benefits: the existence of
a greater number of public services, through e-government platforms and the increase in quality of
life, due to affordable prices.
In addition to the existence of numerous benefits related to e-Commerce at three levels (consumer,
organization and society), there is also a set of limitations of technological and non-technological
nature related to e-Commerce, which should be taken into consideration when implementing an e-
Commerce strategy. For Niranjanaurth et al. (2013), Turban et al. (2015) and Miyazaki and
Fernandez (2018) the main non-technological limitations are the lack of physical touch with the
product; the resistance to change; the scarcity of collaboration in the value chain and the fact of a
large investment in security and privacy of the information transmitted of consumers in e-Commerce,
viruses, and password spying, bogus stores. Additionally, for those researchers the main
technological limitations are the requirement to establish universal standards of quality, security, and
reliability; the need to use special platforms, increasing the costs associated with e-Commerce; a high
degree of dependence on website operation; and the high need for B2C businesses to use automated
warehouses to be able to respond to consumer orders. The benefits and limitations pointed to the
adoption of e-Commerce, in most of the cases, have a connection to the environment in this kind of
activity is conducted: the Internet. So, in next section, we
will explain de relationship of e-Commerce and Internet.

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E-COMMERCE, INTERNET AND 5G

The birth of Internet is thought to took place in late 1960 by the Department of Defense of United
States of America, “to connect researchers, government workers and defense contractors who were
providing systems and data to government agencies” (Anil, 2019a, p. 2). This network grew rapidly
worldwide, connecting billions of computers and its users allowing the exchanges between companies
and persons of many business, educational and research networks. Currently, it is estimated that more
than 4 billion individuals are connected to the Internet worldwide, of which more than 85% are
online, at least once a day. Of these, about 93% connect through their mobile devices. Consumers
now spend more time on their mobile devices and consuming digital media. Accessibility to the
Internet and mobile devices and digital innovation is causing profound changes in consumer behavior
and strongly influencing the way they interact in the purchasing process. In 2016, the European
average regarding the use of the Internet and the existence of e-shoppers was 43% (Pereira, 2016) but
this number increased greatly with the COVID-19 pandemic. The relevance of Internet and e-
Commerce is so big that, for example, about 94% of the Portuguese population with Internet access
has already carried out at least one online transaction and the classes of goods and services most
traded by the Portuguese are touristic products and services, event tickets, fashion products, books,
music, office supplies and technology products (Nielsen, 2019). Off course, the Internet is not just a
new communication channel, it is a new type of channel where interaction is the key to success (Boas
& Sousa, 2022). With the old security problems solved by tech- nological advances, Internet-based
platforms have now become the biggest business channels (Lin & Rauschnabel, 2016; Ryan & Jones,
2009). It has also developed changes in the way persons and the organizations communicate, work,
obtain information and access product and service offerings (Caro et al., 2011). As a result, the world
has become smaller, extraordinarily more dynamic. What now sepa- rates an person from any
information and anywhere in the world is just a click on his device (Kotler et al., 2016). For example,
in the tourism sector, the Internet has quickly become the main communication and purchase channel
worldwide, as it uses standardized communication processes, facilitating the ap- prehension of
knowledge of the product or service to be acquired, regardless of the country that provides the offer
and of the product/service offered (Veloso et al., 2020), allowing the creation of a new type of
relationship between companies and consumers. The Internet is rendering obsolete some communica-
tion channels and some forms of commerce, which used to be successful but that nowadays
consumers
no longer adhere to them, for the benefit of e-Commerce (Gretzel, 2018).
The Internet contributes to e-Commerce with many tools and technologies. Anil (2019a) classi-
fies Internet technologies in five categories: Web Pages, Web Browsers, Hypertext Markup language
(HTML) and HTML Tags. A web page is a single unit of information, often called a document that is
available via the World Wide Web (www), that is created using HTML standardized codes or “tags”
used to define the structure of information on a web page, which can be viewed in a web browser (e.
g. Google Chrome, Safari, Microsoft Edge, Mozilla Firefox, Samsung Internet, Opera). Anil (2019a)
also indicates that there are five Internet tools: Search Engines, E-mail, Newsgroups, Internet Relay
Chat (IRC) and Video Conferencing. In e-commerce the main Internet tools used are the E-mails
which are electronic messages sent from one computer to another and which may be business related
and include attachments with images or other documents; and Search Engines (e. g. Google, Bing,
Yahoo, Duck Duck Go) which are websites that help search the Internet for other websites based on
keywords provide.
The growing number of online sales encourages companies to feel increasingly encouraged to

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create a digital presence, but quickly can be realized that, with the monstrous number of potential
competitors

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existing globally, it’s not enough to have an online store. It is necessary for the products to be
advertised and for the company’s website to be found. Thus, in E-commerce it is also necessary,
when defining your action strategy, to consider digital Ad platforms and SEO techniques.
As Google is the search engine most used worldwide. So, the natural choice for the advertising
man- agement of ads for most companies is Google Ads, which allows you to create and generate
Search Ads (in which sponsored links are featured prominently in results at the beginning and end of
the Google search page (SERP (Search Engine Results Page)) when the potential consumer enters a
keyword or based on their cookies), Display Ads (in which an ad banner appears somewhere in a
content page such as on a blog, websites, news pages), Youtube Ads (where ads appear at the
beginning, during or at the end the exhibition of a video chosen by the user), Gmail Ads (these are
personalized ads that are viewed directly in the email inbox) and in Ads in Apps like the Play Store
(these are the ads that look specifi- cally in mobile apps).
Google Ads is considered by e-Commerce businesses as a marketing tool that offer sales support
through a tool that facilitates the management of ads and their associated costs for companies that use
e-Commerce business models. This tool works through keywords, whereby, when these keywords are
mentioned in the search engine by consumers, Google sends ads related to that searches, allowing
busi- nesses to reach various customers from all corners of the globe (Tricahyadinata & Za, 2017).
For this Google tool to work so that businesses achieve success, there are some prerequisites to take
into account, such as: defining keywords, defining the type of match and search terms, increasing ad
ranking (organiz- ing a group of keywords, and also creating an appealing ad (Tricahyadinata & Za,
2017).
Another digital tool that companies can use to put their websites in first positions of Google
Search page is Search Engine Optimization (SEO). This process involves technical improvements in
the web- site structure of the company, coding of the text during writing and content creation, and
strategies for promotion and brand awareness. These is a processes that allows to alter the web page
to make it more visible, putting algorithms into the search engines (Weideman, 2007). Some of
technical improvements that can be made in website structure are putting the e-commerce store on
https system, which secure that customer information is secure; have pages with fast load time and
mobile responsive; high-quality backlinks and compelling meta-descriptions; alt tags on the images;
user-friendly URL structure, etc. The improvements of SEO of writing and content creation, could be
including appealing expressions like “Free Shipping” or “On Sale” to maximize page CTR; describe
all products in-depth through a rich text with a minimum of 1,000 words of content using 3-5 times
the main keywords; make post that compare products, display videos with product demos, etc. For
promoting e-commerce store and increasing brand awareness should be present some texts or videos
with personal recommendations or 5-star system re- views, have an affiliate program, sponsor a local
event or conference, display social sharing buttons, etc. Due to de development of the Internet tools
and techniques and its application to e-Commerce, seller can have a global digital presence and the
customers can made their purchase in any place of the world at any time of the day, so we should better
understand the contribute of the e-commerce to the globalization phenomenon. According to Kumar
(2018), 5G cellular services are expected to be commercially avail- able in developed countries later
this year. These services, on their own or in combination with other technologies, are likely to have a
transformative impact on e-commerce activities. The development of 5G networks, platforms, and
devices certainly require high investments. There are, however, important economic benefits as well
as psychological or intangible benefits associated with 5G. The faster speed of 5G networks and high-
resolution screens of 5G-enabled devices might lead to a higher degree of customer willingness to
engage in e-commerce activities, more time spent on e-commerce websites, and

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more purchases online. The features of 5G can also lead to a higher degree of effectiveness of
ecommerce vendors’ activities such as online advertising. Finally, faster speeds and higher-resolution
screens are also associated with a higher degree of enjoyment (psychological or intangible benefits)
when consumers engage in e-commerce activities.

E-COMMERCE AND GLOBALIZATION

E-Commerce has no barriers or borders. It is a completely transnational form of trade. E-Commerce is

based on the phenomenon of globalization, to which it contributes decisively. That’s why e-Commerce
is changing the economic structure of countries. The world is moving towards the knowledge
economy or e-economy (Anil, 2019b). Globalization is a key factor in the development of e-Commerce.
Organizations with a global presence use e-Commerce more intensively than companies with smaller
structures. Com- panies that face competition on a global scale are subject to greater competitive
pressure and, therefore, more quickly adopt new technologies such as e-Commerce, as a way of
maintaining competitiveness, maintain or increase their market share and develop more efficient ways
of working. Companies with global operations are more sensitive to aspects related to optimizing
their operations and reducing total costs. Commercial activity based on online platforms allows for
greater speed and control of transac- tions, greater optimization of logistics and also allows the
collection of valuable information regarding the operations and customers involved, reducing the
overall costs of the operation and simplifying all the processes involved. Globalization has different
impacts on the adoption of e-Commerce in B2B and B2C commerce, with global companies being
more involved in the B2B channel. As a result, B2C e- Commerce can be a greater opportunity for
companies with regional or local operations (Semerikov et al., 2019), namely if the seller selected the
right platform or e-marketplace to adopt a e-Commerce strategy.

E-COMMERCE AND E-MARKETPLACES AND PLATFORMS

To have a digital presence in the global market provide by the use of Internet, the seller as to choose
if he wants to have his own online store or just sell through a e-marketplace or both.
An e-commerce platform is an end-to-end software application where sellers and buyers come together
to make transactions. For potential buyers, e-commerce platforms are used to search for products, add
them to a shopping cart and, at the end, complete the purchase by checking out. These platforms, for
sellers, are services that encompasses e-Commerce website builders where online stores can be
created, equipped with customer service infrastructure and stock management and accounting systems.
The most popular platforms are Shopify, BigCommerce, Magento, WooCommerce (including
WooCommerce website builders like Elementor), Wix, Squarespace and Yo!Kart.
Sellers have numerous advantages when using an e-commerce platform, for example, having
control over the structure of the website, they have direct control over all its features, design and
navigation, be- ing able to easily introduce data collection mechanisms on the website. customers for
future marketing campaigns and to increase brand awareness and controls third-party access to the
store, preventing com- petitors from displaying their ads there, for example. However, these platforms
also have disadvantages as all the financial and time effort needed to build and maintain the online
store falls on the seller, who also has to promote initiatives that bring traffic to the store and customer
engagement.

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Thus, choosing an e-commerce platform is one of the first and most important decisions that the
seller must make, since there are several market opportunities and risks. Table 1 presents the main e-
commerce platforms, their features, and tools:

Table 1. Main E-Commerce Platforms. Source: Amorim and Traina (2018, p. 7)

Platform Features Tools

- CloudShop
Software as a This platform is provided by other entities, and carries monthly fee costs, its installation - Tray commerce
Service (SAAS) is fast, however, the e-Commerce business organization has little customization power. - UOLHost
- Mercado livre
- SAP Hubris
Licensed It is a platform acquired from a third party, through the request of a license for its use.
- Oracle
This platform is developed by the organization and needs a qualified and specialized
- Customized by the
Proprietary team to implement and monitor it.
e-Commerce company
It represents high costs for the company and requires some time for implementation.
- Mangento
This platform is easy to access, contains a free download, the company can customize - OpenCart
Open Source
it, but needs a qualified team (not very expensive), for its implementation and - PrestaShop
(Free Software)
customization. - WooCommerce
- OsCommerce

A Marketplace is the place where buyers and suppliers of certain offers and demands of goods or
services meet. The greater diversity of suppliers and product offers in a given location, common to
all, favors greater demand from customers, given the greater variety of offers available. Examples of
this are local markets, supermarkets and hypermarkets, shopping centers and the like (Kotler &
Armstrong, 2018). The convenience provided by the Internet and ease of access to digital platforms,
from virtually any- where and from mobile devices, allowed expanding the concept and developing
platforms that created high-scale digital marketplaces. E-marketplaces are websites or apps that
facilitates shopping from many different sources because, although the marketplace’s operator doesn’t
have any inventory, it provides a place where sellers can show their products to customers and enable
transactions. In E-marketplaces there are a very high and varied offer of products and services, to
which are added the advantages of online shopping: convenience, ease of comparison of the different
offers, easy access to information regarding the different offers, access to experts and other
consumers, simplicity in completing the purchase and payment process with an optimized logistics
chain for a quick shipment of the purchased product in a
short time, regardless of the consumer’s geographic location.
Due to the wide variety offered, e-marketplaces generate much higher consumer traffic than indi-
vidual or single-brand e-Commerce stores. In this way, they generate habits of consultation and
frequent purchase, make consumers loyal to the purchase and payment processes, as a result of greater
trust and familiarity with the entire purchase process and after-sales service, especially in the event of
incidents and the need for complaints and returns. of purchased products. The high availability of
products facilitates the creation of product bundled offers, the offer of promotions, cross-selling
strategies and price bun- dling policies. Thus, it becomes simple to define strategies to increase the
potential of the customer and increase the value of the purchase. The success of these e-marketplace
companies is now in plain sight.

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 Given their high success, nowadays e-marketplaces are no longer exclusive to large e-Commerce
websites and apps with truly global structures, such as Amazon©, Aliexpress©, Ebay©, Etsy© or
Google Shopping©. We are now witnessing a rapid evolution from traditional e-Commerce stores to
an e-marketplace logic, even those with a regional or local scope. This fact is due to these e-
Commerce sites generate high traffic and, therefore, suppliers of other products, whose sharing of
traditional sales channels would be incompatible, now see the possibility of exploring new
opportunities in the digital channel, taking advantage of the high number of visits (traffic) that these
sites offer. E-marketplace platforms offer high advantages to all actors involved in the buying and
selling process. The creators of the e-marketplace globally benefit from the high volumes of traffic
generated, the greater presence of customers and suppliers. Customers are offered the advantages of
convenience, trust, diversity, simplic- ity and confidence in the purchase process, that are the most
identified determinants of the success of the e-commerce, as we will see. To the external suppliers,
the e-marketplaces offers immediate access to a wide range of consumers, duly qualified leads, to
which it is possible to develop sophisticated segmentation and targeting strategies, as well as to
develop various sales strategies, with cross selling, promotions, among others. It is also possible to
access all metrics related to the traffic generated on the e-marketplace, to correct or align promotion
strategies according to the needs at any given moment, and in real time. In next section, those metrics
are identified.

KPIs AND PERFORMANCE METRICS IN E-COMMERCE

The decision to build and maintain an online store or the use of marketplaces must be based on the
definition of the objectives to be achieved by the selling company. To verify that these objectives are
achieved, KPIs must be defined.
Key performance indicators (KPIs) represent a strategic objective, that is, they evaluate
performance related to an established goal. Implemented within e-Commerce, Ahmed et al. (2017)
states that KPIs can be divided by:

• Sales KPI’s: in the sales department, the objectives to be defined to understand the sales
revenues per hour/day/week/month/year, to understand what the shopping cart abandonment rate
is (when the consumer selects products to buy and in the process of making a purchase decision,
gives up), what the average order size is, and also what the conversion rate is
• Marketing KPI’s: in marketing department the objectives to be defined are to understand the
per- centage of clicks on advertisements, what is the time of each consumer on the website, the
number of page views, compare the number of one-time visitors and the number of recurrent
visitors, and also the rejection rate.
• Customer service KPI’s: in customer service department the objective refers to goals directly
related to counting the level of customer service email and email marketing adherence and also
counting consumer interaction and feedback.

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DETERMINANTS OF E-COMMERCE

A seller, when defining his form of digital presence, through his own online store or through market-
places, and, consequently, the KPIs to be achieved, must keep in mind the elements that contribute to
the success of the online purchase process. The existing literature on e-Commerce allows us to
identify a set of determinants that emerge as explanatory variables of the online shopping process.
Vieira et al. (2020) isolated a set of ten determinants of online shopping behavior: offer of products
and services on- line, website quality, confidence, convenience, price, online experience, social media
platforms, reviews from other consumers on e-Commerce sites, Word-of-Mouth (WOM) and
Electronic-Word-of-Mouth (EWOM). Those determinants of e-commerce are detail below.

• Offer of products and services online: Technological advances and the availability of the
Internet have made consumers less loyal to brands and more demanding about the products and
services they consume as they can now easily compare their experiences with those of other
consumers. With consumers more informed and aware of their purchase decisions, the offer of
products and services tends to be much larger and more varied, also leveraged on the resources
that Internet technology makes available, namely the global availability of offers on digital
platforms. As a result, consumers have a greater and more varied offer that, in itself, encourages
consumption and the purchase of goods and services online.
• Website quality: websites must be well-built, simple to use, intuitive, rich in information for
the online shopping process. The consumer, when interacting with the e-Commerce platform,
intends to complete the purchase process with the least effort, in the shortest possible period of
time, and with the greatest confidence in the entire purchase process. Online shopping platforms
must pro- vide information that is clear and simple to understand and must be very easy for the
consumer to operate. There is a positive and significant relationship between the ease of use of
online shopping platforms and purchase intentions.
• Confidence: this determinant is fundamental, simply no consumer will buy if there is no trust in
the entire purchase process. However, there is no evidence that opportunistic behaviors exist in
e-Commerce platforms (Chen et al., 2007). The concept of trust is extended here to encompass
ethical and social behaviors. Thus, the consumer will not follow dirty companies. Commercial,
social and ethical behavior does not generate the confidence necessary for the decision and con-
summation of the purchase process, given that the perception of risk will be globally high. Often
the perception of lack of trust is simply due to a lack of communication between the company
and its target consumers.
• Convenience: the use of online shopping technologies results from the recognition of the advan-
tages of using these means, namely convenience (easy access to the purchase process) but also
the reduced effort and time spent in the purchase process. Online consumers associate e-
Commerce with the convenience resulting from the simplicity of searching and comparing the
different alter- natives, and the complete management of the entire purchase process, until its
conclusion.
• Price: in any purchasing process, regardless of the channel, price decisions are one of the most
important and valued by consumers. For many years, price was one of the most important deter-
minants for evaluating the quality of offers. Nowadays, the importance of price in purchasing
deci- sions varies according to the products and services offered, being less evident in highly
differenti- ated goods, goods whose comparability is difficult and when there are no substitutes,
as well as in

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 luxury goods. However, this determinant is fundamental for some generations of consumers, the
younger generations, who still have less purchasing power. In e-Commerce, price is a
fundamental and highly sensitive determinant, due to the ease of comparison of different offers
by consumers. On the other hand, this channel allows for very quick price adjustments,
sometimes in real time, thus allowing an immediate response to initiatives by competing
companies.
• Online experience: The success of companies in e-Commerce is strongly dependent on the
qual- ity and intensity of the shopping experiences provided to consumers on the Marketplace
and, therefore, strongly dependent on the quality of the technologies used. The consumer, when
choos- ing an online purchase process, seeks advantages in relation to other purchase channels,
namely in relation to purchases in physical stores, in order to better satisfy their needs. These
advantages can, for example, go through the simplicity and ease of use of the e-Commerce
platform, speed of completion of the purchase process, speed of delivery, confidence transmitted
throughout the purchase process.
• Social media platforms: used by most online consumers, are an important means of
disseminat- ing information, often in real time, changing the way we all communicate today.
These platforms allow the dissemination and sharing among consumers of information regarding
consumption or experiences obtained. This fact allows everyone to be active content promoters.
• Reviews from other consumers on e-Commerce sites: some authors consider this to be the
first step in the online purchase process. When consumers share their online shopping
experience, they form their opinion and attribute a certain value to the experience. Other
consumers capture this perceived value as added value in the product offering to better support
their purchase decisions.
• Word-of-Mouth (WOM) and Electronic-Word-of-Mouth (EWOM): WOM and EWOM
have, nowadays, a very high impact on the performance of companies, in terms of their
reputation. This relevance is due to the use of social networks, in which consumers often share
their experiences, whether positive or negative. WOM can be defined as traditional information
sources, which in- volve family and friends, in order to collect information and opinions about a
particular product or service, using informal communication (Ladhari et al., 2011). EWOM is
similar, changing only the means used to share opinions, in this case using digital media and
online platforms, with par- ticular relevance to social media, blogs and specialized forums.

Although Vieira et al. (2020) did not point out the available payment methods and the activities
of logistics, distribution and transport as decisive elements in e-commerce, these activities are also
decisive factors for the success or failure of companies operating through electronic commerce.
Regarding payment methods, Mota (2021) attests that they are a differentiating factor of e-
Commerce and there are a large diversity of payment methods that could be used to bring security,
confidence and convenience to e-buyer, namely:

• Bank transfer: this is not a widely used method, because there is the sharing of confidential
information and the receipt of the value is a lengthy process, since the company establishes a
pay- ment deadline, and the consumer can pay up to the limit of that deadline. Many times, this
process incurs costs related to bills;
• ATM reference: this is already a more flexible method, as it can be made through cell phone
ap- plications or ATM services, at any time, using the reference and entity sent by the company.
This method is also interconnected with MbWay and Mbnet;

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• MbWay or Paypal or Credit Card: these are the most used methods, since they are practical
and easy to use, once the payment is made through these applications the other party
immediately receives the amount. These methods do not incur any transfer costs;
• Ifthenpay: is a payment system through ATM references and Mbway, without associated costs,
and with a high level of security;
• Online platforms: these are platforms on the Internet that allow you to make payments and
money transfers, in a simple way, but with some costs, considered low, namely: Strip and Skrill;
• Adyen: is a global payment company, which allows businesses to accept mobile, e-Commerce
and point of sale payments.

We can see that there are numerous payment methods for e-Commerce businesses, however, in
Por- tugal, the recommended payment methods are ATM, PayPal, Mbway and bank cards
(credit/debit). In general, the least recommended method is bank transfer (Mota, 2021).
Regarding to de logistics, it is the activity that shortens the distance between the company and the
consumer and is responsible for the entire process of distribution and handling of products, so that
they arrive at the right time and in the right conditions to the right consumer, focusing on keeping the
consumer loyal to the brand. To do that, the company needs to have minimum stocks and an
information system that is capable to deal with security of data exchange, payment methods, high
number of little orders and the fractioned deliveries to geographically dispersed locations which
makes route planning difficult and increasing drastically delivery costs (Pereira, 2016). Other
challenge of e-commerce logistics is the fact that there is a higher number of order returns, it happens
many times due to the fact that at the time of purchase decision making there is no possibility of
physical touch (Alves, 2005).
So, if the company wants to be successful in e-commerce activity, it should decide if the logistic,
distribution and transport activities are performed by the company itself or with the collaboration of
other companies. Thus, it is necessary for e-Commerce companies to take into account that if they
need strategic business partners (win-win), there will be involved at least three parts: the e-Commerce
com- pany itself (responsible for the whole process of purchasing goods and interacting with the
consumer), the logistics operator (this is responsible for processing orders and deliveries) and a
delivery company (responsible for getting the right product to the right destination at the right time)
(Alves, 2005).
Bornia et al. (2006) identified five tools to apply in e-Commerce logistics:

1. Postponement (postponement of logistics): this tool aims to delay production as long as

possible to decrease the error in sales forecasts. A warehouse cannot only create product stock but
must also involve activities of pre-finishing the packaging of the product (assemble, pack, and
move) and thus the concept of postponement is put into practice, this concept also advocates that
the differentiation of the product takes place in the final stage before the order is sent for
delivery.
2. Dematerialization: dematerialization is based on the replacement of material flows with
informa- tion flows, such as software.
3. Resource exchange: this concept is the integration of systems between partners so that
everyone has access to information on all activities and operations taking place.
4. 4. Leveraged shipments: this tool aims to calculate costs in relation to the number of orders
and their respective destinations and also the kilometers traveled with the deliveries. The
formula to perform this calculation was defined, which is:

42
 total order volume
DVD =
distance traveled per
trip

5. CAM model: this strategy can only be applied when the e-Commerce company operates simul-
taneously in the traditional market, in order to facilitate the delivery process and in turn
minimize the costs associated with this factor, the delivery of orders is made at the physical
point of the company, and the customer has to pick up at that same physical point.

The seller, even considering all the determinants of e-commerce success identified here, must also
be aware that some of the buyers of his products may not be online or, state-of-the-art, the level of
adoption of information technologies. and the internet is not identical for all ages of the customer
market. Thus, in the last section of this work, we intend to clarify the age segmentation that must be
carried out in the final consumer market so that an e-seller can best define its e-commerce strategy.

DIFFERENT GENERATIONS OF CONSUMERS AND E-COMMERCE

According to Étienne et al. (2008) the segregation of populations in generations allows a better
charac- terization of groups of individuals who, born in similar historical periods, have very similar
cultural and social patterns, which result in very similar perceptions, interests and behaviors.
However, generations are quite different in these attitudes and behaviors. These cannot be defined
only by a small sample of individuals of the same age, but also by a set of values, concepts and
lifestyles, which each generation shares in common (Silva, 2017). There seems to be some consensus
in the international literature, which results in the identification of five different generations.
However, the limits that separate each of them are not completely coincident, which is otherwise
understood, given the difficulty in establishing these boundaries precisely. The five generation
identified are: the Silent Generation (before 1945), the Baby Boomers (born between 1946 and 1964),
Generation X (born between 1965 and 1977), Generation Y (born between 1978 and 1994) and
Generation Z (born between (1995 and 2009) and Generation Alpha (those born after 2010) (Chaney
et al., 2017; Williams & Page, 2011).
Of these, the most recent generations, Generation Y and, above all, Generations Z and Alpha,
assume a particularly relevant behavior in e-Commerce since they are generations of consumers who
are born and grow up “connected to the Internet”. In particular, the natives of Generations Z and
Alpha, have great difficulty in conceiving a World without permanent and ubiquitous access to
digital networks, a reality they have never known. If the natives of Generation Alpha are still not very
relevant given their reduced purchasing power, the natives of Generation Z now assume enormous
relevance. Also called “screen addicts”, homo sapiens digitalis, digital natives or post-millennials,
this generation was born under the influence and advent of new technologies, smartphones, tablets,
wi-fi, online gaming and social networking, creating a huge cleavage between this generation and
previous generations, in particular with the Baby Boomers (Barclays, 2013; Meirinhos, 2015). It is a
generation characterized by mastery of new technologies, innovative capacity, enthusiasm and
entrepreneurial spirit. But they are also defenders of high ethical and deontological standards, as well
as staunch defenders of environ- mental causes and sustainability. They use the Internet to share
information, express opinions, share consumption desires (Vizcaya-Moreno & Perez-Canaveras,

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2020). The consumption behaviors of the

44
natives of this generation are different. They favor the discovery of new experiences, are enthusiastic
in sharing experiences, are prudent with regard to the money paid for the purchase of goods or
services, making purchase decisions only after intensive research on the best offers and the best value
for money (Berkup, 2014; Posner, 2015). Digital natives are much less sensitive to traditional
marketing techniques and communication through conventional media. However, marketing strategies
must try to reach these consumer groups, as they already represent an important percentage of the
total consumers, which will gradually increase in the future.
Despite the growing interest in the consumption behaviors of younger generations, the scientific
information available on these generations of consumers is still relatively underdeveloped. This fact is
surprising since the younger generations already have an important impact on consumption in
general, despite their purchasing power being more limited than, for example, Generation X.
Generation Z already represents a significant consumer force: for example, in the tourism sector, in
2015 around 23% of all tourists were between 16 and 29 years old and around 33% of total hotel
reservations were made by this group of consumers. The total number of young consumers is
expected to double in the short term in the coming years (Cavagnaro et al., 2018; Monaco, 2018).
Therefore, the younger generations of consumers represent a high opportunity for companies. Not only
because of their already high purchasing power and decision-making power in the purchase process,
but also because these generations will gradually replace the still predominant generations of older
consum- ers. Therefore, companies must take into account the most appropriate communication
processes and channels, in order to reach this specific target, which will be the predominant generation
of consumers in the next decade. As generations of Internet natives, digital marketing should be
carefully designed taking into account this reality and e-Commerce assumes a particularly high
prominence in these consumers, who should be the priority target in the use of this sales channel
(Cavagnaro et al., 2018).
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CONCLUSION

With this article, we can conclude that e-Commerce is a very complex business, and that in order for
it to be successful, it is necessary to pay attention to several elements, which are diversified from one
another, but are all interconnected. It was also possible to realize that e-Commerce is a global market,
but that it has been in constant evolution in recent times, and that the adhesion to this means of
business has been growing sharply. E-Commerce has proven to be an ideal medium for more assertive
positioning of companies and successful launches of others.
This business model has many benefits for both consumers and companies, all of which can
reduce the effects of the business limitations identified during the research.
In addition to being a very complex market, it is also a multipurpose market, since it can be
applied in diversified ways, from business-consumer, consumer-consumer, business-government,
among others.

KEY TERMS AND DEFINITIONS

5G: 5G is the 5th generation mobile network. It is a new global wireless standard after 1G, 2G,
3G, and 4G networks. 5G enables a new kind of network that is designed to connect virtually
everyone and everything together including machines, objects, and devices.
Consumer Behavior Online: The study of individuals, groups, or organizations and all the
activities associated with the purchase, use and disposal of goods and services, including the consumer’s
emotional, mental, and behavioral responses that precede or follow these activities in the online
environment.
Digital Marketing: Is the marketing of products or services using digital technologies, mainly on
the Internet, but also including mobile phones, display advertising, and any other digital medium.
E-Commerce: The term electronic commerce (e-commerce) refers to a business model that allows
companies and individuals to buy and sell goods and services over the Internet. E-commerce operates
in four major market segments and can be conducted over computers, tablets, smartphones, and other
smart devices.
Online Relationship: Is an integrative and multidimensional concept, such as relationship quality
in an offline context.
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