Mirror Magazine

Mirror Magazine

The age of e-commerce
Unless you have been hibernating for the past decade or so, you would have encountered e-commerce of some form or another, and as I pointed out last week, even an ATM transaction involves e-commerce just as much as buying a book online at Amazon.com does. Yet have you wondered what the hype about electronic commerce is all about? After all, commerce is a fairly simple concept! Whether it is something as simple as a person making and selling toffees on a street corner, or as complex as a contractor building Sri Lanka’s largest shopping complex.

All of commerce at its simplest level relies on buyers, sellers and producers. When you get down to the actual elements of commerce and commercial transactions, things get slightly more complicated, because you have to deal with the details. However, these details boil down to a finite number of elements in most typical commercial activities. Let’s consider a retail transaction.

If you would like to sell something to a customer, at the very core of the matter is the something itself. You must have a product or service to offer. The product can be anything from ball bearings to back rubs. You may buy the product from a producer or distributor or you may be the producer. You must also have a place from which to sell your products. Place can sometimes be very ephemeral. For example a phone number might be the place. For most physical products we tend to think of the place as a store or shop of some sort. Communi-cation technology has changed the face of commerce so much that a telephone number, e-mail address or a website could be ‘places’ where commerce happens. The similarities of traditional commerce and e-commerce end there.

Electronic commerce brings with it many opportunities as well as considerable challenges. You need to figure out a way to get people to come to your place. You need a mechanism to showcase your products. Once a purchase has been made, you need to deliver the product or service to the customer, and a way to accept money. This is difficult in an environment where the buyer and seller are a long distance apart – perhaps even across different countries. Some businesses do not require you to pay for the product or service at the time of delivery, and some products and services are delivered continuously (water, power, phone and pagers are like this).

That gets into the whole area of billing and collections. Customers who are unhappy about their purchase sometimes want to return the product and get a refund or buy something else instead. Or there may be instances where the seller will have to honour a warranty concerning a defect in the product. E-commerce can become a very complex operation under such circumstances.

The internet, however, provides a good platform for the delivery of customer support and after-sales service. Many products today are so complicated that they require customer service and technical support departments to help customers use them. Computers are a good example of this sort of product. On-going products like cell phone service may also require on-going customer service, because customers want to change the service they receive over time and the web is an effective medium of providing such services.

We will discuss how present electronic business systems overcome or avoid these challenges and how future developments could pave the way for more and more businesses to ‘go online.’ The ideas in your head today could revolutionise the world of tomorrow. Write in and share your views with us at technopage@gmail.com

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