TopBackground
E-commerce can be defined as the use of the internet to conduct business transactions nationally or internationally (WTO, 1998). E-commerce has two important roles; first as a more effective and efficient conduit and aggregator of information, and second, as a potential mechanism for the replacement of many economic activities (ECLAC, 2002).
The Internet has also expanded opportunities for B2B and B2C e-commerce transactions across borders. Especially, for business to consumer transactions, the internet brings a potential revolution to global commerce: the individualization of trade. It gives customers the ability to manage a transaction directly with a foreign seller without traveling to the seller’s country. The Internet provides sellers to put their storefronts, in the form of web pages, in front of customers all over the world (Ham and Atkinson, 2001).
The Internet and e-commerce are transforming the way firms operate by redefining operations such as product design and development, production, inventory, distribution, after-sales service support etc. In this process, they alter the roles and relationships of various parties, fostering new networks, services and business models. The results are efficiency improvements, better asset utilization, faster time to market, reduction in total order times, and extended customer service (ECLAC, 2002).
Numbers indicate the importance of the e-commerce growth. In 1999, global e-commerce was worth over $150 billion (Economist, 2000). By 2016, Internet economy will reach 4.2 trillion dollar in the G-20 economies (BCG, 2014). According to eMarketer’s forecasts, worldwide B2C ecommerce sales will reach $2.053 trillion in 2016 (Figure 1). Growth will come primarily from the rapidly expanding online and mobile user bases in developing markets, increases in m-commerce sales, advancing shipping and payment options, and the push into new international markets by major brands.