WHAT IS E-COMMERCE? THE IMPORTANCE OF E-COMMERCE IN THE 4.0 DIGITAL AGE
The 4.0 industrial revolution has created breakthroughs in fields such as artificial intelligence manufacturing, robotics, and internet development. Along with the rapid growth of the information technology system, the demand for the growth of e-commerce is increasing significantly. In recent years, e-commerce has had a profound impact on the success of businesses. This form is becoming a potential new trend in the current market.
What is e-Commerce?
In English, e-Commerce stands for Electronic Commerce, also written as eCommerce. This is a business model that allows companies and individuals to conduct business through the Internet platform.
According to the definition of WTO - World Trade Organization, the term "e-commerce" is understood as the production, marketing, sale or distribution of goods and services by electronic means.
Essentially, trade plays an important role in the movement of goods and services between businesses, groups and individuals; it is an indispensable part of any business activity.
Similarly, the e-commerce model allows users to exchange various products in the market, covering a small area or the entire world at any time. This is the most prominent difference compared to traditional business models so far.
Some common industries that are applying the e-commerce model
Some common industries that are applying
- Mobile commerce.
- Electronic remittance.
- Supply chain management.
- Internet marketing.
- Online transaction.
- Electronic Data Interchange (EDI).
- Inventory management system
What is an E-Commerce Website?
What is an E-commerce Website?
E-Commerce Website is a portal that facilitates online transactions, buying, selling, or supplying goods and services. Since the 1960s, the world has recognized the emergence of e-commerce in data exchange transactions on value-added websites. Today, with the explosion of the Internet, specifically through social media platforms such as Website, Facebook, Youtube, Pinterest, e-Commerce has had the opportunity to make a significant leap and become popular all over the world.
E-commerce transaction form for business
- Online shopping services for direct-to-consumer retail through websites, mobile apps, live chat, chatbots.
- Providing or participating in online marketplaces, handling sales from business-to-consumer (B2C) or consumer (C2C) sales of third parties.
- Buying and selling products, services from business to business (B2B)
- Electronic data exchange between businesses (B2B)
- Marketing to potential customers and establishing by email or fax.
Common types of E-commerce activities
Electronic mail (E-mail) is a method of exchanging digital messages through electronic mailboxes. It is widely used, especially in businesses or government agencies. Electronic mail plays a role as an online communication form via the Internet, with optimization features such as attaching documents, images, videos, etc.
2) Electronic Payment
In the 4.0 era, electronic payment methods have developed significantly, representing a technological breakthrough in the banking system in Vietnam, making it easy for customers to make transactions at any time, without being limited by space and time.
This is a form of paying for a certain service through an online transaction model, just by completing a few simple steps right on the Internet platform.
3) Buying and selling tangible goods
The Internet is now being maximized and gradually becoming an optimal tool for competing in the retail business of intangible goods. The trend of "online shopping" has become more and more popular in recent years and has almost become an indispensable habit in the daily life of consumers.
Looking back at the time of the pandemic in Vietnam, consumers had new awareness and quickly adapted to life changes. Online shopping on e-commerce sites has been continuously developing, from essential goods such as food, fruit, household appliances to high-value assets such as computers, phones, motorbikes, etc. …
Currently, there are 4 basic payment methods in Vietnam
- Payment by card.
- Payment via payment gateway.
- Payment via e-wallet.
- Pay via smartphone devices.
Today, with the development of digital, electronic payment forms have expanded into many new areas such as:
- Electronic wallet
- Digital Banking.
- Financial Electronic Data Interchange.
- Internet Cash
- Cash of Delivery
The importance of E-commerce in the current Vietnam Market
Currently, e-commerce is proving to have a significant impact on the Vietnam market. So what are the positive points that e-commerce brings? Let's find out with us!
1) Outstanding advantages of E-Commerce
a) No limitation of distance
When developing a traditional business model, you will have to be busy searching for premises, building and decorating stores. However, when choosing to sell on the e-commerce platform, you only need to provide products online and distribute them to customers through simple and fast methods, without incurring excessive costs for operations.
With the e-Commerce model, business management can be done via the Internet platform with any device, information is always updated online and processed promptly on the website.
b) No limitation of time
While traditional businesses have fixed opening and closing hours, with e-Commerce, you can keep your store open 24/7 so that customers can access and make purchases whenever they want. A store is ready to serve 24/7, even on holidays, sounds fascinating, doesn't it!
c) Cost savings
One of the attractive points of e-Commerce for businesses is the significant reduction in operating costs. Expenses such as hiring staff and renting physical space will be minimized This is also an opportunity for businesses to increase market share.
d) Effective inventory management
The quantity of goods on the e-commerce platform is effectively controlled, providing a favorable condition for the distributor to quickly grasp the inventory situation. Therefore, warehouse operating costs are significantly reduced, and inventory management tools of E-commerce also support distributors in having more time to make timely decisions. This feature is considered as a great advantage of e-commerce compared to traditional business models.
2) Limitations and challenges of E-commerce
a) Waiting time
When making purchases on online platforms, there is a problem that you need to wait for a period of time from a few days to a few weeks, depending on the shipping company, before receiving the product. This is different from traditional shopping, where customers can experience the product immediately after payment. However, this obstacle is being solved by same-day delivery services.
b) The difference between the model - actual product and the problem of building customers’ trust
Regardless of attractive product images displayed on social media, there is no guarantee that you will receive exactly the type of product that you want to buy. Sometimes, there will be some differences in color, size, or pattern compared to the displayed images. Usually, images are edited to make the product more visually appealing. E-commerce platforms have frequently disappointed consumers when the received item does not meet their expectations.
Therefore, businesses participating in the e-Commerce model need a clear strategy and direction to avoid harming their reputation. Building trust with customers successfully leads to a large number of loyal customers for businesses.
c) Safe and Security
Using e-Commerce involves the risk of encountering security issues for businesses, such as consumers’ trust in the platform, the level of security of the information technology system and difficulties in protecting customer data against the risk of data theft attacks...
The e-commerce industry has always been considered a highly competitive environment. Businesses have to compete not only with domestic competitors but also with competitors all around the world.
Therefore, compared to competitors in the international market, e-commerce businesses in Vietnam still need to put in much more effort to expand globally.
e) Hình thức thanh toán Payment methods
The payment system using internet-based applications is the advantage of e-Commerce because of its speed and convenience. On the other hand, there are still many risks associated with the payment methods upon receiving goods, also known as Cash On Delivery (COD).
It can be said that e-commerce has been bringing significant development opportunities for businesses. If you haven't established your own online store on e-Commerce platforms yet, it's time to do so!
To keep up with the strong development of e-commerce nowadays, business owners need to enhance their knowledge and update information on appropriate technology solutions. Alternatively, you can immediately contact M&M Communications to receive useful information and advice on the most optimal e-commerce solutions for businesses.