E-Commerce Impact on Business Generation: A Comprehensive Analysis

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E-COMMERCE IN BUSINESS GENERATION
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E-COMMERCE IN BUSINESS GENERATION
Table of Contents
1. Introduction..................................................................................................................................4
1.1 Research Background............................................................................................................4
1.2 Research Rationale................................................................................................................4
1.3 Research Aims.......................................................................................................................4
1.4 Research Objectives...............................................................................................................5
1.5 Research Questions................................................................................................................5
1.6 Expected Outcomes...............................................................................................................6
2. Literature Review........................................................................................................................6
2.1 Advantages of E-Commerce for the Customers....................................................................6
2.2 Disadvantage of E-Commerce for the Customers.................................................................7
2.3 Positive Impacts of E-Commerce for Business Organisations..............................................8
2.4 Negative Impacts of E-Commerce for Business Organisations............................................9
2.5 Issues and Risks that are Associated with E-Commerce.....................................................10
3. Methodology..............................................................................................................................12
3.1 Research Philosophy............................................................................................................12
3.2 Research Approach..............................................................................................................13
3.3 Research Design..................................................................................................................13
3.4 Data Collection....................................................................................................................13
3.5 Sampling Methods...............................................................................................................14
3.6 Target Population.................................................................................................................15
3.7 Setting and Instruments.......................................................................................................16
3.8 Ethical Consideration...........................................................................................................17
3.9 Survey Questionnaire...........................................................................................................17
References......................................................................................................................................22
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1. Introduction
1.1 Research Background
In the modern world of business, the use of technology has been unprecedented due to the sheer
convenience and benefits that come with it. Due to the rapid advancements in technology, newer
concepts have been introduced in business and amongst them, the concept of e-commerce has
been the most successful. As of 2019, over 21.8% of the total population of the world buys
products and services online with e-commerce sales accounting for 11.9% of all retail sales on a
global scale (Rahayu and Day, 2015). As such, many organisations have been able to incorporate
or are planning to integrate e-commerce within their business operations in order to enhance their
revenue generation, profitability, growth, and success.
1.2 Research Rationale
E-commerce has been an integral part of various organisations which has helped in not only their
growth and revenue generation, but it has also helped them in their promotion as well as the
growth of the customer base. However, while there are benefits of e-commerce for both the
customers and the business organisation, there are also disadvantages of e-commerce. The
following research study critically analyses and evaluates the impacts of e-commerce on the
business generation. The study would be useful in generating information and data pertaining to
how e-commerce impacts on the generation of business for different organisations.
1.3 Research Aims
The research aims to evaluate the impacts of e-commerce on the generation of business for
different organisations. The study also aims to evaluate the necessary steps that should be taken
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by the business organisations in order to improve their use of e-commerce services for enhanced
sales and revenue generation.
1.4 Research Objectives
The research objectives for this research study are:
 To evaluate the advantages and positive impacts of e-commerce for the customers and the
business organisation respectively
 To evaluate the disadvantages and negative impacts of e-commerce for the customers and
the business organisation respectively
 To identify the issues and risks that are associated with e-commerce for both the
customers and the business organisation respectively
1.5 Research Questions
The research questions for this research study are:
 What are the advantages and positive impacts of e-commerce for the customers and the
business organisation respectively?
 What are the disadvantages and negative impacts of e-commerce for the customers and
the business organisation respectively?
 What are the issues and risks that are associated with e-commerce for both the customers
and the business organisation respectively?
1.6 Expected Outcomes
The outcome that is expected from this research study is that e-commerce has a positive impact
in the generation of business for various business organisations as well as have high benefits for
the customers which weigh down the disadvantages.
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2. Literature Review
2.1 Advantages of E-Commerce for the Customers
From the research works of Deng and Wang, (2016), it has been found that there are various
advantages of e-commerce for the customers. The biggest advantage is that e-commerce sites are
able to provide a wide range of products and services to the customers which are not easily
available in physical stores as well as in certain locations of the world. Furthermore, customers
are able to buy products from anywhere in the world without needing to move to different places.
As opined by Cui and Pan (2015), it has been found that globally over 21.8% of the total
population of the world buys products and services online using e-commerce sites. Moreover,
sites such as Amazon, Alibaba, and many such e-commerce sites have been able to gain a global
customer base.
Figure 1: Use of E-Commerce through the Platforms
(Source: Benmamoun et al., 2018)
However, as pointed out by Benmamoun et al., (2018), the biggest advantage of using the e-
commerce sites by the customers is that e-commerce sites help to save money for the customers
in their purchases. This is because unlike retail stores where the products have to go through
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multiple middlemen and reach the stores where it is sold at an MRP or max retail price, e-
commerce has no such middlemen involved. As a result of this, the additional cost of the product
is saved which saves money for the customers. As opined by Ramanathan, Ramanathan, and
Karpuzcu (2016), e-commerce is very efficient in delivering their products to the customers
which is also hassle-free as comparatively, the customers have to go through many time-
consuming processes for buying any product in any physical store.
2.2 Disadvantage of E-Commerce for the Customers
While there are some advantages to the use of e-commerce by the customers, there are also some
disadvantages to the use of e-commerce. The biggest disadvantage of e-commerce for the
customers is the uncertainty when buying or ordering a product online using e-commerce sites.
From the research works of Brown (2015), it has been found that on annually over 5% of the
customers who order products from e-commerce sites are unable to get their products even if
they have paid for the product. Another disadvantage related to the use of e-commerce by the
customers is that there is a good probability of receiving products which is totally different than
what the customers ordered. As opined by Hadlington (2018), annually over 28.7% of the
customers, who order from e-commerce sites, receive wrong products. This not only creates
frustration for the customers, but it also wastes their time spent on selecting and ordering their
products. On the contrary, in physical stores, such kind of issues would not have occurred and
the customers would have safely gotten their desired products without any hassle.
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Figure 2: Customer Dissatisfaction of E-Commerce
(Source: Webber and Yip, 2018)
2.3 Positive Impacts of E-Commerce for Business Organisations
From the research works of Rahayu and Day (2017), it has been found that there are various
positive impacts of e-commerce for business organisations. The biggest benefit that is obtained
from the use of e-commerce for business organisations is that e-commerce integration in
business operations helps to reduce inventory management costs. This is because due to the use
of a web-based management system of the organisation, the company is able to easily automate
the inventory management, which helps to minimize the operational costs. As pointed out by
Awiagah, Kang, and Lim (2016), annually over 45% of the inventory management costs are
saved for organisations that are able to incorporate the concept of e-commerce for their business
systems. This helps the organisations to invest more in their operations rather than in inventory,
which can benefit the organisation.
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E-COMMERCE IN BUSINESS GENERATION
As argued Agarwal and Wu (2018), the biggest advantage of the use of e-commerce by business
organisations is that e-commerce is able to help the organisations in reaching the global market
through exposure via the customers on a global scale. Nearly 55% of the companies who have
been able to use e-commerce were able to reach the global markets and gain a large customer
base that allowed them to boost their growth, revenue generation, and profitability. As pointed
out by Bandara and Pathiratne (2017), the use of e-commerce for the business organisations have
been able to reduce various different costs for the organisations. This includes a reduced cost of
labor, a reduced cost to establish storefront as well as reduced advertisement costs. On average,
companies who are able to incorporate have been able to save nearly 42% of their operations
costs which allow them to become more efficient and gain high profitability.
2.4 Negative Impacts of E-Commerce for Business Organisations
On the contrary, while there are positive impacts of the use of e-commerce by the organisations,
there are also some disadvantages to the use of e-commerce. From the research works of
Kostakos (2018), it has been found that the biggest disadvantage is issues pertaining to the
product availability and delivery for the customers. Due to the lack of products or wrong delivery
of products using e-commerce, the organisations receive negative feedback from the customers.
This not only affects the brand image of the customers, but it also affects their customer base
leading to a decline of customers which lead to reduced revenue generation as well as
profitability.
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E-COMMERCE IN BUSINESS GENERATION
Figure 3: Availability and Delivery of Products through E-Commerce
(Source: Brewer et al., 2018)
2.5 Issues and Risks that are Associated with E-Commerce
While e-commerce has mostly positive impacts on the business organisations and also
advantages for the customers, there are also issues and risks that are associated with e-commerce.
Customers
From the research works of Selvadurai, Kisswani, and Khalaileh, (2016), it has been found that
the biggest risk that is associated with e-commerce is cyber crimes and online security. This
includes credit card fraud, data errors, hacking, identity theft, and leaking and sharing of personal
confidential data. This not only puts the customers in a very risky situation, but it could also
affect the customers financially.
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E-COMMERCE IN BUSINESS GENERATION
Figure 4: Risks of E-Commerce for Customers
(Source: Keogh, Gordon, and Marinovic, 2018)
Organisations
For the organisations, the biggest risk that is associated with e-commerce is technical issues.
From the research works of Ha, Coghill, and Maharaj (2012), it has been found that poor
implementation of e-commerce within the business can create an opportunity for hacking which
can hamper the business operations of the company. Another risk is the taxation system where
appropriate sales taxes that have not been paid can result in a significant loss in the prices of the
products. Furthermore, another risk is the SEO uncertainty where the web platforms such as
Google can redo their algorithm and as a result, it can decline the traffic of the e-commerce site.
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Figure 5: Risks of E-Commerce for Organisations
(Source: Tatarinova, Shakirov, and Tatarinov, 2016)
3. Methodology
3.1 Research Philosophy
Research philosophy refers to the mindset of the researcher or the appropriate manner which is
used in order to gain details pertaining to the subject manner of the research study. There are
three main types of research philosophy which are positivism, interpretivism, and realism
(Kumar, 2019). For this research study, positivism research philosophy would be used due to the
fact that the use of positivism would help to analyse the information, data, and facts of the
research study in a logical and critical manner. This would help to evaluate the impacts of e-
commerce on the generation of business for different organisations.
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3.2 Research Approach
The research approach is the format for any research study which is required in order to conduct
the research study. For any research study, there are two main research approaches which are
inductive approach and deductive approach (Kumar, 2019). For this research study, the
deductive research approach is selected for evaluating the impacts of e-commerce on the
generation of business for different organisations. This is because deductive approach would be
helpful in evaluating the concepts and theories that have been obtained from the research study
and would also evaluate the practical application of the concepts and theories studied in the
research study.
3.3 Research Design
Research design is the process for any research study which is used to help explain and elaborate
on the framework of the research topic for the collection as well as the analysis of the data. For
any research study, there are three different types of research design which are exploratory,
explanatory, and descriptive research design (Mackey and Gass, 2015). For this research study
pertaining to the subject topic of evaluating the impacts of e-commerce on the generation of
business for different organisations, the use of descriptive research design would be feasible.
This is due to the fact that the use of descriptive research design would be helpful in evaluating
the details of the events along with their cause and effect relationship.
3.4 Data Collection
Data collection in a research study is the quintessential process which is used to collect data and
information pertaining to the research topic so that the subject matter can be penetrated and
elaborated in an effective manner (Mackey and Gass, 2015). For any research study, there are
two types of data sources, which are primary, and secondary data sources. For the research study,
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