e commerce notes Flashcards
What is e commerce
Use of internet and web to transact business
Digitally enabled commercial trasnaftions between and among organizations and individuals (resulting revenue for a firm)
Periods in the development of e commerce
All of the dot comes were overvalued by the stock market, in order to main an online busines, needed a huge investment in tech but the sales were not enough at that time to cover costs
Crash→ amazon barely survived the crash
The iphone was a big thing-> changed a lot because now customers didnt have to go back home to get access to the internet, they could buy something on the go
Consolidation→ companies began to be more careful and strategic about how the spent money and invested funds and attracted customers
More access to internet, faster→ could sell interactive content like movies music
Traditional businesses during COVID 19 had to manage serving clients on online channels (restaurants, grocery stores, etc) → ecommerce became integral
Retail e commerce in the us
Canada follows similar proportions, but with smaller numbers
Overall us market retail: 7 trillion
Us retail e commerce; 1.05 trillion
E retail still represents under 15% of total us retail
Things that have been sold in person mostly and only a little online still
Is this surprising? Maybe not, theres older people who dont shop
Covid gave online retail e commerce a push
The relative size of different types of e commerce in the us
There are different types of ecommerce → B2B selling to business clients (biggest portion of e commerce because they buy in bigger volumes and will pay more )
Smaller segment growing is consumer to consumer→ facebook market place
This type of ecommerce is growing
e commerce trends in the recent years
1) Covid 19 fueled the surge in demand for retail e commerce and m commerce
2) E commerce growth rates have been faster in the developing countries than in north america and europe
3) As mobile app ecosystem and social ecommerce continue to grow, so does mobile and social advertising spending by businesses ( as opposed to spending on traditional media)
4) Explosive growth of on demand service firms, such as instacart, doordash and others which attract billions in capital and garner mutli billion dollar valuations
5) Flood of small businesses and entrepreneurs into an online space, often using infrastructures created by platforms such as amazon, facebook, apple, google, ebay
6) Continued growth in big data and data analytics which companies can utulize as a competitive advantage in identifying purchase patterns as well as consumer interests and intentions in milliseconds
7) Concerns increase about increasing market dominance of facebook, amazon and google leading to calls for gvt regulations
8) Surveillance of online communications by both repressive regimes and western democracies grows, thus concerns over commercial and governmental privacy invasion increase
9) Government introduced e-commerce regulations, including tax and consumer privacy laws (government is quite late to the game, and playing catch up)
10) Online security represents a major concern as security attack son businesses are frequent and their number is growing
Covid 19 fueled the surge in demand for retail e commerce and m commerce→
businesses have invested a lot into e commerce to have more presence
E commerce growth rates have been faster in the developing countries than in north america and europe
→ in china and india ecommcerce is growing at a much faster rate→ emerging markets are much faster in terms of developing their ecommerce→ middle class is growing
Here we have very good access to the internet, how come we are not shopping as actively as people in emerging markets? Physical retail stores are not as present in emerging countries → we have very good physical infrastructure, but ine emerging markets they do not have very much available to them need to order online
No easy access to physical stores but not enough access to cares, roads arent good
Developing countries will leap frog onto online shopping
As mobile app ecosystem and social ecommerce continue to grow, so does mobile and social advertising spending by businesses ( as opposed to spending on traditional media)
Spending more time viewing → businesses follow with advertising, when they do marketing, they want to catch their attention.now there is a shift in inrceae in viewing time, bsuinsses spend more on advertisement budget on those channels
Concerns increase about increasing market dominance of facebook, amazon and google leading to calls for gvt regulations
First mover advantages
Amazon used to be cheap→ amazon over the years has captured market share over profits, became very powerful now it is in a position to raise the prices
Anti trust authorities are eyeing these companies
Government introduced e-commerce regulations, including tax and consumer privacy laws (government is quite late to the game, and playing catch up)
Amazon was able to operate in a grey area bc they werent attached to a specific state so could avoid paying taxes to the gvt but now this is changing bc gvt are trying to regulate it more
E commerce impact on profitability of industries (5 forces)
porters
Threat of substitutes
gives us access to information and substitutes we didn’t even know existed
Ex: don’t want to go to university but can take an online course to gte the knowledge
Bargaining power of buyers
Can compare prices –> takes away companies ability to tak avdnatage of information
Businesses cannot overcharge
More knowledge about other possible lower priced alternatives
Bargaining power of suppliers
Increased because they can choose to do business with companies globally
Suppliers its easier to find buyers
Its also easy for buyers to find suppliers
Greater vertical integration→ manufacturers can sell directly to consumers or companies, cutting out intermediaries
Barriers to entry
Easy to create a website and deliver to consumers
More rivalries because easier for competitiors to enter industries
