Electronic commerce refers to paperless exchange of business information between organizations and individuals and extends to any form of buying and selling by consumers and companies over a computer network. E-commerce uses information technology to improve relationship between partners. It is opening up new business possibilities and with the outreach of the internet; it is expected to lead to paradigm shift in the dynamics of business and banking. It allows people to transcend the barriers of time and distance and take advantages of global markets and opportunities. Thus an e-commerce via information highway represents a strategic window of opportunity to promote job creation and entrepreneurship and opening up a new world of possibility and progress.
E-commerce minimizes transaction costs by reducing the intermediation of third parties in putting through transactions. Transaction time is also reduced as the transactions are conducted electronically. As e-commerce lowers transaction costs, business efficiency also improves. E-commerce allows electronic sharing of data between and within organization which can result in an improvements of products as well as process. This leads to an increase in business efficiency. Customers can access services such as banking, insurance and travel reservations without stepping out of their homes or offices. Such technological advances involving e-commerce facilitates the developments of new electronic markets.
Banks are an integral part of the value chain in retail and service industries. It is the banks which enables transactions to take place by processing the exchange of money. However, the very nature of retailing is beginning to change with the advent of ‘virtual’ shopping based on distribution of services via multimedia electronic networks.
The concept of home shopping has proved particularly successful. Catalogue shopping has long been established, mainly due to the great distance between customers and retail outlets. In the recent years TV based home shopping with orders being taken over phone has become big business in the U.S.
However, while TV home shopping gives the potential buyer the chance to see the product, it is still a sequential service. Catalogues give buyers more information and random access, but they lack the ability to really show off the goods.
A new approach is to provide goods, and specially services, via multimedia computer networks. These services can be used to give customers direct access to manufacturers and service provider alike. Products can be investigated and orders can be taken via the same system. Unlike home shopping, these new computer based systems, offer access to services as well as manufactured goods. It is the addition of the services, such as banking services, which seem to have been the key factor in attracting users. The basic delivery channels include:
2. Private access networks
3. Interactive TV
4. Modem to modem banking
E-commerce, among other things, process secure payment through automated financing, banking and account inquiries. It refers to the use of computers and electronic networks to conduct business over the internet or another electronic network.
E-commerce is regarded in the United States, Europe, Japan and some of the newly industrializing countries as a prerequisite for the conduct of business in the knowledge societies of the future. Countries that do not implement electronic business networks will almost certainly find themselves disadvantaged in the conduct of trade and in their financial affairs.
E-shopping practice in the context of Bangladesh
According to the findings of Md. Kabirul Islam & Md. Fokhray Hossain on Online vs. Traditional Shopping in Bangladesh:
• More than half a dozen business to consumer (B2C) websites are running business to sell products online and organize home delivery in Dhaka city and some selected district headquarters in Bangladesh. Although, it is pleasing, online store in Bangladesh appears uncomplicated to go through the websites and place order for buying.
• Online shopping is more expensive for the customers.
• The concept of online shopping is not that much popular yet in Bangladesh because customers are very much used to traditional shopping.
Professor Rafiqul Islam
Faculty of Business & Economics (FBE)