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How E-Commerce Has Transformed Business?

2015-06-20 来源: 51due教员组 类别: Report范文

As is known to us, Internet has been witnessing one of the greatest shopping frenzies with the famous “11.11” Festival drawing near. No very many internet purchasers, for example Taobao users and Jingdong favors, can manage to resist the temptation of buying online. In the contemporary world, the widespread of E-commerce has already made our life much easier and more convenient with the development of internet. We can buy commodities online, order airplane tickets, movie tickets as well as ordering dinners before we go to the restaurant-- it seems that we can get everything done on the internet. At the same time, the business is no longer what it is. Considered as one of the sale aspect of the e-business, the electronic commerce has already revolutionized trade as a routine activity by bringing the marketplace to your home or the office, thus saving you time and energy. With the growth of the Internet community and multiple and diverse accesses to the Internet that the single user is granted, more and more commercial entrepreneurs have realized the significance of online commerce, i.e. electronic commerce (ecommerce). And merchandise retailing is among aspects of business which has already been through significant transformation. This report, aimed at giving general picture of E-commerce, including the nature of it, influential factors during its developments and a daring prediction of its future prosperity, will focus on the analysis of the development of merchandise retailing so as to better our understanding of e-commerce.
   From the discussion above we can sense the strong relationship between E-Commerce and our life, making it necessary for us to know more about the its nature before we get deep into our very topic. E-commerce is an abbreviation of Electronic commerce, also known as E-commerce or ecommerce, and refers to the process of selling and buying products and services over the internet or other electronic system (Website 1). The normal function of E-commerce depends on technologies, like automated data system, World Wide Web and E-mail, to realize the transaction’s life cycle(Website 1). World Wide Web is the most important part of e-commerce, for it is in this media that goods and service are presented through variously designed e-commerce websites to match the taste of a particular target audience. That is why customers can order what they want and what they need by using e-payment options like credit card. There are two kinds of items, virtual and physical items involved in the ecommerce operations according to the nature of the product. Virtual items are those that we pay for reading newspapers and magazines, get the access to websites to watch movies or acquire some privileges, or playing online gaming.       Physical items are tangible products, such as clothes, shoes and snakes we buy on the internet. The virtual items are growing quickly. However, the majority of the e-commerce transactions are related to physical items. As for the parties who are engaged in the online transaction, it can be divided into business-to-customer, and the abbreviation is B2C and business-to-business, with B2B as an abbreviation which has been widely used. B2C model is just like the business entities such as online stores offering products and services to customers and B2B model explains the relationship between retailers, wholesalers and business entities. With the development of the web technologies, people can get the wanted items much easier than in the past because the attention to the new set up selling model, and more and more people will be involved in the ecommerce.
   And the recent years have already seen a tremendous increase of online shoppers, with the scale of development of ecommerce websites took a leap into next level and the year of 2013 being known as digital year (Website 2). Based on information in Website 2, we can see that industries are now turning into online businesses, which took a leap in last 5 years and smart phones further enabled this digital revolution and took drastic impact on online stores, thus enabling us to purchase almost anything online through our mobile phones As Chen (2005) says in her study on the current situation of E-commence, “although the time when E-commence can become the mainstream mode remains to be proved, its potential is immense”, for, on the one hand, “the potential consumers are increasing rapidly”, and on the hand, just as data quoted from Anderson Consulting Company shows, “by the end of 2003, the total transaction value of E-commerce B2B and B2c, might probably has reached 4 billion dollars, with B2B increasing in an average annual rate of 194%, and B2C of 274%...In recent world, no other markets other than E-commerce market has such a rate of increase”(247). And it is necessary to point out that, according to Liu, under the background of the 2008 financial crises, when the economic environment was rapidly deteriorated, it was E-commerce mode, B2B as well as B2C that help a large quantity of medium-sized and small enterprises to recover themselves. Apart from the economic booming in B2B and B2C purchasing and procurement, which is a strong evidence of the prevailing E-commerce, we can also see how E-commerce is applied in other areas, like merchandise retailing, which this report is going to discuss in detail later, advertising, financial services or media and entertainment.
   Amazed by the prevailing influence of E-commerce, it is not a wide guess that many people might be interested in factors that make possible or hinder this influence. The development of internet and scientific policies are among reasons accounting for its success, which this report will illustrate in detail in discussion of the prospect of E-commerce later. And despite the great realistic and potential advantages, it is now confronted by a lot of challenges. In case of risks, we should put enough attention to all of them, on which Xu and Zhou have done a lot of discussions. According to them, it is the logistics factor, which is biggest challenge for it requires a large scale of basic construction while in China, the development is relatively delayed (29). Apart from this, the anxiety about the security of paying-online and usual manner of taxing also prevents a more rapidly development. To attain a substantial development, the enforcement of law is necessary and our government is striving hard while there still exits no specific laws on electronic commerce (29). Inevitably, for individual enterprises, they have their own responsibility. We must admit that most of them have been not able to gain accesses to an adequate Internet network, especially some medium-sized and small enterprises which fail in develop International Internet Commerce System and cannot afford importation for it is too expensive (29). As for the cultivation of specialized talents, we still have a long way to go.
   Confronted by such challenges, a lot of people have done a lot of discussions, all trying to find a way. As for the problems mentioned above, Liu Jun’s (2008) study has provides his suggestion, which I think is of great significance. According to him, we must make development plans and microscope instructions for electronic commerce, for E-commerce, as a newly-arisen mode of commerce, although it is developing in a considerable speed, it still lacks a mature manner of sale method, making it necessary to be put in the guidance of government. Then, it is the reinforcement of the infrastructure. This is based on the fact that information internet is the very basis of E-commerce and the necessary infrastructure efforts include “the establishment of information transportation channel, the study of information transportation equipments exploitation of information technology etc” (83). Besides the cultivation of more specialized talents and the conduct as well as the modeling function of government is of great significance. In this point, according to Liu Jun, government should accomplish as soon as possible the informatization of government, promote the efficiency as well as the transparency and enhance the communication between government and society. What’s more, the application of E-commerce should be encouraged within government, aiming at the internalization of official procurement (83).
In order to gain a further and better understanding of how enterprises make use of E-commerce and how it works out great benefits, I would like to take a close look on the relationship between E-commerce and merchandise retailing. It is the application of Internet technology arouses the fourth revolution in retailing business by bringing into existence of a quantity of stores on line:
   The rapid expansion of ecommerce has made it possible for almost all big retail companies to set up their own online stores with regularly updated content. Thus, it is now easier than ever to obtain an item from the latest collection of your favorite clothes brand, or be among the first to take advantage of a starting clearance campaign. Moreover, the ecommerce fashion is gradually 'infecting' smaller retail companies, which find it as a good chance to expand their reach to potential customers and increase the selling volumes. This trend is stimulated by the attractive low-cost ecommerce hosting services offered by different hosts on the web (Website 3).
   The tremendous function of E-commerce, which is abstract in above description can be illustrated in detail in the case of BaiSheng Corporation’s implement of SCM (supply chain management). Within these ten years, BaiSheng gains a surprising leap, with about 40 purchase centers and supermarket and nearly 100 stop or specialty stores, having already become the biggest and the most successful retailing corporation in Malaysia. However, its glory doesn’t come easily. It is in debt to electronic commerce. According to Cai (2003), before the use of SCM, individual store remains isolated from each other without much connection, each procuring commodity independently. In such a way, “each individual store is like an information-isolated island, making impossible the functioning of the scale and corporation advantages” (188). And a great change came in 1999 when the headquarters of BaiSheng in China started to establish its supply chain with the use of internet. After a careful study in which they found out that there were 3000 to 4000 large and medium-sized enterprises would like to accept the way of doing business with related supermarkets through Internet, they invested 200000000 RMB in establishing a supply chain. Baisheng was rather careful during the whole process and keeps up with an analysis of the actual market situation in China. They at first adopted B2B instead of B2C with good reason. “To Baisheng, B2C was dedicated directly to consumers”, which demanded of an understanding or estimation of how many of them had access to Internet and were also willing to buy online. And because of the fact they were not sure of such information, B2C was banned for the sake of economic benefits. By comparison, B2B deals with business between different business sectors. Taking into consideration that they are rather familiar with their suppliers and even ERP, they made up their mind to begin their first trying of electronic commerce with the application of B2B.
   Despite great difficulties and challenges, like the level differences among their suppliers and opposition coming from within because of persisting influence of the traditional business mode and “the incoherence of article code” and “connector standard” (Cai, 2003: 188-189) which prevented each individual store from identifying with each other and thus isolated themselves, etc., BaiSheng eventually achieve a great development and place itself in a win-win situation. With the platform of E-commerce, for suppliers, they can easily pay attention to the exact situation of their own products, including “the analysis of the storage of each commodity, the analysis of selling, the ABC analysis and also the analysis of benefits as well as the history statistics of selling” (189). And blessed with such an easy way to gain all those significant dates, they can be more flexible and efficient in making future strategies. I want to be more specific in this point. Along with Amazon and other E-commerce enterprises, Baisheng is also confronted by the question of how to solve the question of personalization. Personalization is one of the biggest challenges retailers face and “[f]or most retailers, the toughest hurdle is to have enough data on an individual to actually help personalize the experience” (Website 4). Getting these data points is the biggest challenge that retailers face. And the E-commerce platform makes this the collection of necessary information much more easily, in which way retailers can “have significant data for the small amount of regular, routine customers for an e-commerce site, including clicks, purchase history, shopping cart information, shares and Likes, and more”. And after gaining this information, Retailers can go on to face “challenges on how to store and organize this data, and then turn this into personal recommendations” (Website 4). Hence the great benefits E-commerce bring to Baisheng.
   And when it comes to purchasers, it helps save about two thirds of the human resources. Take manner of payment for example. In traditional business mode, “it takes a lot of human resources, material powers, many as well as time”, while “in the platform of E-commerce all can be done in a pretty short time”, and for suppliers, all they need to do is to get the report form on WEB then both sides can get the money things done quite efficiently. In general, we can see that it was only after a sufficient study of the feasibility of that Baisheng resorted to E-commerce. It is always making good use of the advantages of SCM and prevents its disadvantages. What’s more, its application of E-commerce comes into effect during different periods. And only it is proved that E-commerce runs pretty well will it takes further step in fear of risk. Besides, during that process, Baisheng is always striking for a better management of retailing chain, including “plan making, attracting investment, procurement, selling, storing account checking and payment” and trying to “connect suppliers, dealers, deliverers, banks and consumers together with internet” (200). That is the reason of its success, and its success exemplifies the great benefits E-commerce can bring to enterprises. With Baisheng as an example, we can better understand the chances the mode of E-commerce gratifies to the retailing business. In all, the benefits can be generalized as follows. It helps in creating a more convenient way in handling the information of purchasers and even their commodities, in reducing the price   when blessed with an effective prediction of the market and without the pressure of storing, and in promoting the service efficiency.
   Until now, this report has given us a clear idea about what E-commerce is, how it works and factors influencing it with the help of the a focused discussion on retail. So, there comes a question of great concerning to ever person, especially business man and policy makers in government, that is, whether E-commerce can manage to hold its momentum so as to maintain its credit among a variety of procurers and consumers. Based on related statistics and crucial information, I think E-commerce will play a more and more important role in economic development. My prediction has supportive arguments. Firstly, it is because ever since the 2008 Economic Crises, the total transaction value has always been being increasing without indicative of the possibility of dropping. We can take the transaction value of E-commerce in China during 2008 and 2013 as example, during which period, the overall value is increasing year by year. What’s more, the time has already seen a rising proportion the E-Commerce contributes to the total business s transaction value. Similarly, the proportion keeps enlarging with 2013 reaching a scale which accounts for 17.9% of the total commerce value (Liu, 2011:233). And Chart 1 (Website 5), which is the recounting of the huge market potential in online discount retail and B2C market is also a convincing evident. It is necessary to be pointed out that “[t]his chart from Vipshop’s investor presentation from May 2014 reflects the online discount retailer’s bullish outlook on the market, which was recently confirmed by their results from the second quarter of this year”(Website 5).  So, judging from such a great momentum and taking into the rather good economic environment, it is not too optimistic to come to the prediction that the prospect of E-Commerce is rather good.

Chart 1
   What’s more, related policies on E-commerce can also prove a bright future for it. Again, we take China for a good example. China has already put into effect a series of laws and regulations for electronic commerce, in 2004 it is The Code Of The Electronic Signature, the first law in information service industries, in 2006 it is 2006-2020 National Informatization Development Strategy which describes in detail different and systematic development mode for electronic business, in 2007, it is The 11th Five-year Plan of the Electronic Commerce Development which makes us clear about the significance of electronic commerce and establish the overall goal in the development of it, in 2011, it is The Third Party E-commerce Transaction Platform Service Specification which aims at regulating all kind of activities in order to protect the rights of both enterprises and customers (Liu, 2011: 233), and perfect information foundation facilities, formulate policies, so as to inject more impetus. And apart from reasons above, the rapidly developing mobile internet and the increasing number of Internet users can also attribute to the prospect of E-Commerce. According to Wang, “the emergence of mobile internet” has makes ‘on-line’ possible without the limitedness of time and space, and helps extend ‘pay-online’ to every aspect of life and the market that relies on computer internet will become a mini market” (287). The popularity of Alipay is a good illustration. And when it comes to new possible development tendency in the future, scholars like Chen Juan (2005) has given some convincing prediction. To Chen, there are six main tendencies, i.e. “deepening”, “specialization”, “internationalization”, “regionalization and further integration” (248).
   With the development of Internet and Information technology, E-commerce has revolutionized the business mode, with a diversity of enterprises applying it. Despite its great success, there still exist a lot of factors hindering its future development, like the vulnerability of information Infrastructure, the lacking of specialized talents, and influence of persisting traditional business mode. However, with the great support of government and rapidly developing technology as well as the impetus of foreign business, the E-commerce is booming. Under such backgrounds, enterprise like Baisehng has already benefited a lot from a daring application of B2C, a story exemplifies the closely related relationship between E-commerce and Retailing. Based on good reason, personally, I hold that there is a much brighter future for electronic commerce. Surely, e-commerce will remain one of the greatest factors contributing the prosperity not only of enterprise but also to the whole society by granting individuals plenty of convenience.
Website 1: http://fontera.co.za/ecommerce/
Website 3: http://www.ntchosting.com/encyclopedia/internet/e-commerce/
Website 4: http://techcrunch.com/2012/01/29/the-ecommerce-revolution-is-all-about-you/
Website 5: http://www.resonancechina.com/tag/ecommerce/
Chen Juan, “The Current Situation and Trend Analysis of Electronic Commerce in China”, Market Modernization, Nov. 2005 (Ⅱ): 247.
Cai Ping, “The Functions of E-commerce on Retailing Chain: the Story of Baisheng;s application of SCM”, Modern Information, Jan. 2004 (1): 188-189.
Liu Dianwei, “The Current Situation, Problems and Solutions in the Development of E-Commerce in China”, Special Zone Economy, Dec. 2011: 233-234.
Liu Jun, “An Analysis of the Current Situation and Development Tread of Electronic Commerce”, Gansu Science and Technology, 24 (11), Jun. 2008: 82-83.
Jin Xueyin, Lu Huaming, “The Development of E-commerce in Retailing and the Future Strategies”, Modern Business: 16.
Wang Yan, “The Influence of Mobile Internet on Electronic Commerce”, Information Technology: 287.
Xu Shujie, Zhou Lianqiu, “Factors influencing the Development of Electronic Commerce and Tragedies”, Town Enterprises in China: 29.

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