Home ›› 12 Oct 2021 ›› Editorial
Michael Aldrich was an English inventor, innovator and entrepreneur. In 1979 he invented online shopping to enable online transaction processing between consumers and businesses, or between one business and another, a technique known later as e-commerce. In 1980 he invented the Teleputer, a multi-purpose home infotainment centre that was a fusion of PC, TV and Telecom networking technologies. In 1981 he developed the concept of interactive broadband local loop cable TV for mass market consumer telecommunications. Michael Aldrich is considered the developer of the predecessor to online shopping. In 1979, the entrepreneur connected a television set to a transaction processing computer with a telephone line and called it "teleshopping", meaning shopping at distance. From the mid-nineties, major advancements were made in the commercial use of the Internet.Amazon which launched in 1995, started as an online bookstore and grew to become nowadays the largest online retailer worldwide, selling food, toys, electronics, apparel and more. Other successful stories of online marketplaces include eBay. In 1994, IBM, with its agency Ogilvy & Mather , began to use its foundation in IT solutions and expertise to market itself as a leader of conducting business on the Internet through the term "e-business."
E -commerce is online selling - set up a website and sell your products and services.
Gartner defines digital commerce as:
The buying and selling of goods and services using the Internet, mobile networks, and commerce infrastructure. It includes the marketing activities that support these transactions, including people, processes, and technologies to execute the offering of development content, analytics, promotion, pricing, customer acquisition and retention, and customer experience at all touchpoints throughout the customer buying journey.
During the ongoing pandemic, the mode of e-commerce business gained popularity among the consumer households. The fact that Work from Home was popularised giving momentum to this mode. The salient features which attract e commerce include, among others :
1. Wide range of products and services
Electronic commerce through internet enables the customers to choose a product or service of their choice from any vendor anywhere in the world. Due to space constraint, a vendor can stock only a minimum amount of goods in the physical store. A virtual store enables a business organization to stock a lot of goods without considering the inventory cost. Hence, a business also provides a lot of choice to consumers to choose a product of his /her choice.
2. Convenience
Customers can buy any product from anywhere in the world without moving away from their workplace or home through internet. Due to bad weather, people may restrict their shopping even if necessity arises. E-commerce provides convenience to buy goods or services without causing any physical constraints to the consumers.
3. Saves money
The cost incurred by the business on the middlemen generally falls on the consumer. Since the middlemen are eliminated, the customer is free from bearing the cost of the middlemen. To attract customers and to combat competitors, several business organizations offer product and services at cheaper price. Certain goods like e-books, music audio clips, software can be purchased and delivered through internet. It saves cost for the buyers.
4. Saves time
Time saving is one of the prime benefits of online shopping. Time taken for selection, buying and paying for an online product may not take more than 15 minutes; the products are delivered to customers’ door steps within a week. It saves delivery time for the buyers.
5. Adequate information
Internet is used as a main vehicle to conduct transactions in e-business. Internet allows customers to search for product information, compare the prices and benefits and finally evaluate its value before committing purchase. Through internet, customers can get their queries clarified and track their delivery status when the goods are being sent to them. If any doubts arise while handling the products, the customers can easily contact the business through internet.
E-commerce makes up 2.8 percent of Walmart’s total sales, but Walmart has seen a lot of success by combining customers’ in-store experience with the mobile experience. Even as Walmart has continued to grow its physical company through acquisitions or launching of new branches, the head office has been working at improving the digital experience. The new advancements include the company’s pick-up services for customers who prefer to shop online but pick up their purchases from any of Walmart’s brick and mortar retail locations.
Amazon was one of the earliest companies to see the potential for mobile commerce. These days, it’s leading the pack in terms of innovation and mobile sales. It’s one of the best e-commerce apps on the list to date. Part of that is due to its overall reputation as a trustworthy online retailer. However, beyond that, the company has been working to grow its mobile commerce business so far in advance of its competition that nearly everyone else is now playing catch-up. These days, around 42 percent of Amazon’s smartphone visits originate from its mobile app. The rest is made up of people visiting the website. Still, app users make up almost 85 percent of the mobile time spent on Amazon, according to retailers.
The company launched a free application - IKEA Place - in 2017 that integrated with its latest product catalog. Back then, the application allowed users to identify their own unique style through a series of tests, and they were able to create an augmented reality to see how the furniture would look in their homes. IKEA knew technology is moving rapidly. In an era when innovations like AI, they didn’t want to take the back seat. It was a fun and interactive way for people to use the app and for people who liked to plan, it made buying furniture a less scary ordeal. They could make sure the colors matched and that the dimensions were right before even setting foot in a store.
Currently, the following four types of eCommerce are popular in Bangladesh:
Business-to-Business (B2B);
Business-to-Consumer (B2C);
Consumer-to-Consumer (C2C); and
Business-to-Employees (B2E).
In order to facilitate eCommerce and encourage the growth of information technology, Bangladesh enacted the Information and Communication Technology (ICT) Act of 2006. The Act, amended in 2013, includes provisions for imprisonment and/or fines for those committing cyber-crimes. Enactment of the Act has had significant implications for eCommerce and mobile commerce users and companies in Bangladesh. The growth of the industry has been inhibited by low usage of credit and debit cards (cash remains the major payment method) and the unavailability of or restrictions on major online transaction sites such as PayPal.
In 2018, the Alibaba Group acquired Daraz Group, one of the leading eCommerce companies in Bangladesh. Daraz announced in June 2020 it would invest $59 million in Bangladesh by 2021 to improve the company’s eCommerce logistics infrastructure, including its warehouse and sorting center.
Traditional models of commerce that have now transformed into online platforms include:
B2B: A business-to-business model involves selling one’s products to an intermediate buyer who then sells the product to the final customer. B2B e-commerce includes distribution services, procurement services, digital/online marketplace like services, etc. A wholesaler might place an order on the company website and sell it through physical retail stores.
B2C: In the business-to-consumer model, the manufacturer deals directly with the consumer. The consumer can choose a product and place an order(s) on the company’s website without an intermediary or a marketplace.
C2C: Portals such as OLX and Quickr enable consumers to communicate their needs and obtain the same from each other without the involvement of a third-party. E-commerce has made it possible for strangers to trade and deliver products.
C2B: The reverse version of traditional commerce models, the consumer-to-business model is relatively new. Here, consumers provide services to businesses thereby creating value for them. This can be seen in forums where consumers provide ideas for product development to companies or give their feedback which is then used for advertisement purposes.
The first and foremost issue faced by any eCommerce startup is choosing the niche. It is almost impossible to incorporate everything under a single domain unless you are one of the big players.That being said, there is also a lack of market data. What kind of product are customers interested to buy online? What products sell more? And which niche has the largest online transacting customer base? All of these essential data aren’t readily available. While on average, people under 30 prefer to shop online, that also presents the unique challenge of tailoring the product to their needs. Categorizing a customer base while the majority of the country is interested in offline shopping is a key challenge.
The writer is MD and CEO of Community Bank
