Advantages and Disadvantages of E-Commerce

Advantages and Disadvantages of E-Commerce

The pros and cons of E-Commerce affect three major stakeholders: consumers business organisations, and society.

The following are the advantages and disadvantages of E-Commerce for a consumer.

Advantages of E-Commerce

● E-Commerce system is operated on all days and all the day 24 x 7. Neither consumer nor suppliers need physical store to be opened to do business electronically. People can interact with businesses at the time of their convenience.

● Speed is a major advantage in E-Commerce. Advanced Electronic communications systems allow messages to reach across the world instantaneously. There is no need to wait days for a catalogue to arrive by post. Communication delay is not a part of the Internet or E-Commerce world.

● The Internet is too easy to ‘shop around’ for products and services that may be more cheaper and effective than left to buy only in a Brick and Mortar shop. It provides an opportunity to buy at reduced costs. It is possible to, explore the Internet, identify original manufacturers, thereby bypass wholesalers and achieve a cheaper price.

● The whole world becomes a shop for today’s customers. They can have wide choice by comparing and evaluating the same product at different websites before making a purchase decision.

● Customers can shop from home or anywhere at their convenience. They don’t need a long wait to talk to a salesman. They can read the details regarding model numbers, prices, features etc. of the product from the website and buy at their own convenience. Payments can also be made through online.

Disadvantages of E-Commerce

● E-Commerce is often used to buy goods that are not available locally but from businesses all over the world. Physical goods need to be transported, which takes time and costs money. In traditional commerce, when we walk out of a shop with an item, it’s ours, we have it. We know what it is, where it is and how it looks. But in E-Commerce we should wait to get the product in hand. Some E-Commerce companies handle this by engaging their customer updating status of their shipments.

● Unlike returning goods to a traditional shop returning goods through online is believed to be an area of difficulty. The doubts about the period of returning will the returned goods reach source in time, refunds, exchange and postage make one tiresome.

● Privacy issues are serious in E-Commerce. In E-Commerce generating consumer information is inevitable. Not all the companies use the personal information they obtained to improve services to consumers. Many companies misuse the information and  make money out of it. It is true that privacy concerns are a critical reason why people get cold feet about online shopping.

● Physical product disputes are a major disadvantage in E-Commerce. E-Commerce purchases are often made on trust. This is because, we do not have physical access to the product. Though Internet is an effective channel for visual and auditory information it does not allow full scope for our senses. We can see pictures of the perfumes, but can not smell their fragrance, we can see pictures of a cloth, but not its quality. If we want to inspect something, we choose what we look at and how we look at it. But in online shopping, we would see only the pictures the seller had chosen for us. People are often much more comfortable in buying the generic goods (that they have seen or experienced before and in which there is little ambiguity) rather than unique or complex things via the Internet.

● We couldn’t think of ordering a single ice cream or a coffee from a shop in Paris. Though specialized and refrigerated transport can be used, goods bought and sold via the Internet need to survive the trip from the supplier to the consumer. This makes the customers turn back towards traditional supply chain arrangements for perishable and non-durable goods.

● Delivery ambiguity. Since supplying businesses can be conducted across the world, it can be uncertain whether they are indeed genuine businesses or just going to take our money. It is pretty hard to knock on their door to complain or seek legal recourse. Further, even if the item is sent, it is easy to start bothering whether or not it will ever arrive on time.

Disruptive innovations in E-commerce

The innovations which replace the existing technologies are calledasdisruptiveinnovations.

Disruptive innovation creates a new market. Not all innovations are near disruptive. The first automobiles in the late nineteenth century were a great innovation. But it didn’t affect existing animal-based road transport market until 1908 when Henry Ford introduced affordable motor cars. The term disruptive innovation was first coined by Clayton M in his book “The Innovator’s Dilemma”.

Example: Film cameras market is disrupted by digital camera innovations, floppy disk market is interrupted by CD and USB innovations. E-Commerce itself is a disruptive innovation.