- E-commerce can make life more convenient for customers and is a source of competitive advantage
- It also provides the potential for small businesses to reach large audiences
- However, setting up an e-store can be costly and some consumers may be concerned about security risks of purchasing online
- The opportunities and threats of e-commerce can be considered for both the business and the consumer
Opportunities and Threats of E-commerce to Business
Opportunities of E-Commerce for Business
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Threats of E-Commerce for Business
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- Websites offer a direct and cheap promotional method for businesses
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- Competition comes from many businesses around the world, allowing customers to easily switch brands
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- Businesses can easily make online purchases of supplies and materials from other businesses
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- Large warehouses and efficient stock control systems are essential to fulfilling online orders
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- An easy-to-use and well thought out website can encourage customers to buy more
- E.g. Automation suggests complimentary products often purchased at the same time
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- E-commerce is not suitable for businesses selling personal services such as beauty services or home improvements
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- Dynamic pricing techniques can easily be implemented so profit can be maximised during periods of high demand
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- The lack of face-to-face contact with consumers means businesses miss out on instant and useful market research feedback
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Opportunities and Threats of E-commerce to Customers
Opportunities of E-Commerce for Customers
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Threats of E-Commerce for Customers
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- Competition drives prices down and allows customers to easily 'shop around' and compare prices
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- Poor connections or technical difficulties can sometimes deter or stop customers from using the website to make purchases
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- Electronic payment using credit and debit cards is relatively easy
- E.g. Using 'one-click' platforms such as Apple Pay
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- Customers in low income countries may not be able to access the products due to poor infrastructure limiting potential market size
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- E-commerce is convenient as it allows customers to shop from anywhere in the world
- E.g. when travelling, 24 hours, on many different devices
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- Many consumers are concerned about identity theft or fraudulent use of credit cards if they buy goods online
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- Customers can buy from worldwide retailers so have increased choice
- Chinese e-tailers Shein and Temu are increasingly popular in the UK
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- Products cannot be handled or tried out before purchase which means customers frequently return them because they are unsuitable
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