E-commerce: the
medium is the mart
1. Introduction
The number of people using the Internet is
growing exponentially world over. There were
20 million users four years ago, and the figure
today is estimated at 150 million. The
Internet has become an enormously popular
marketing paradigm that facilitates anything
consumers want to shop for or buy on the
Web, cutting out the middlemen of
distributors, retailers, travel agents, stores,
etc. E-commerce could be defined as
computer to computer, individual to
computer or computer to individual business
relationships enabling an exchange of
information or value. In e-commerce trading
partners interact through electronic
communications and automated computer
systems. Some form of e-commerce has
existed among a significant number of large
companies for about two decades in the form
of Electronic Data Interchange (EDI). The
technologies used for e-commerce include
EDI, e-mail (interpersonal and integrated
messaging), electronic bulletin board systems,
electronic catalogues, electronic forms,
finance and banking technologies, smart
cards, funds transfer, digital cash, etc.
The author
Siriginidi Subba Rao is Head of Information Technology
at the Central Leather Research Insitute, Chennai, India.
Keywords
Internet, Electronic data interchange, Security, Legislation,
India
Abstract
Defines and lists the technologies as Electronic Data
Interchange, e-mail, bulletin board systems, electronic
catalogues and forms, smart cards, etc. used for the
e-commerce. Discusses the benefits of buying over the
Internet and new business ecosystem that resulted as an
outcome of informed buying. Highlights the trading over
the Internet with predictions and select examples from
various sectors. Presents the survey results for security
issues and legislation from international organizations
and governments, and solutions with the use of
cryptography and digital certification. Also, discusses
e-commerce scenarios in the Indian context, with a three
step evolutionary process and the trends that dictate the
future course of retailing. Concludes that organizations
need to orient their businesses to this new market
paradigm to tap potential customers. It is only a matter of
time before the waves of this change wash on Indian
shores.
Electronic access
The current issue and full text archive of this journal is
available at
http://www.emerald-library.com
53
5. Security
In order to make e-commerce work for the
customer, one has to ensure adequate security
for the transactions. In many people's minds,
entering their credit card details over the Web
represents a major threat. In many ways, this
is actually no more of a threat than paying by
credit card in a restaurant, or booking a train
ticket over the phone. One of the reasons why
it could be perceived as a threat is due to
absence of physical element to purchase
compared with a purchase in a shop where
one could see and feel the item. Fraud could
take many forms, such as using Web
resources to fraudulently obtain invalid credit
card numbers that nevertheless pass through
security checks. In principle, hackers could
intercept a transaction, or alter the content of
a transaction whilst it is in process. Many of
these threats could be overcome by using
appropriate security measures (Town, 1999).
5.1 Surveys
Pollara, a survey and management consultant
firm in 1997 found that 56 per cent of
Canadian Internet users, who have not
conducted online transactions, have concerns
about the security of their credit card
information.
Another recent study conducted by
Consumers International, a federation of 245
consumer organizations in 110 countries and
financed by the European Union showed the
need for massive improvement in cyber
retailing. As part of the study, the
representatives bought more than 150 items
from Web sites based in 17 countries, and
tried to return them. Results showed that 8
per cent of the items never arrived, many sites
did not provide clear information about
delivery charges, a minority disclosed whether
the laws of the seller's country or the buyer's
country would apply in the event of a dispute,
53 per cent had a return policy, 13 per cent
committed not to sell customers' personal
data to a third party and 32 per cent provided
information on how to complain if there was a
problem with a transaction.
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6. Indian scenario
The Indian Market Research Bureau reported
India's e-commerce potential will be at
US$11.54 billion (Rs 50,000 crore) in the
next two years. Web retailing will open up a
gold mine for consumers and retailers in
India. It has carved its own niche with
everything from flowers to chocolates to real
estate available on the Web. The three major
forces that forced Web retailing into the
limelight world wide include:
(1) exponential increase in the number of
consumers hooked onto the Internet;
(2) consumers, themselves having less and
less time at their disposal to spend on
shopping; and
(3) continuous improvements in hardware
and software technology.
PriceWaterhouse Coopers (PwC), India's
largest professional services firm conducted
an E-Business Survey involving 64 bluechips
in fast moving consumer goods, financial
services, entertainment, infotech sector,
power, telecom, etc. PwC's research indicates
that CITIBANK, ICICI bank, Mico Bosch,
Henkel, Rediff, Bajaj Auto, Maruti Udyog
will be among the key players propelling the
e-business boom in corporate India.
A majority of small and medium businesses
in India are family owned and would not
invest in IT unless they see a perceptible and
viable opportunity to make profits and
expansion for their businesses with least risk
and minimum investment. These are
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7. Conclusion
Organizations need to think how to orient
their businesses to this new market paradigm,
the Internet. This is no longer a choice but a
fundamental business need. By taking the
necessary steps to ensure the security of
financial transactions over the Internet,
businesses will be able to expand into the
huge and as yet untapped source of potential
customers. And let Indian businesses not be
under the misapprehension that all this will be
happening only in the developed world. It is
only a matter of time before the waves of this
change wash on Indian shores.
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Further reading
Amazon can be found at http://www.amazon.com
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