Shaping of e-Commerce, Globally — $US3.5 Trillion by 2019: Battle Ground for e-Retail Sales in 21st Century…

Global e-Commerce sales are soaring: According to eMarketeer; global e-Commerce sales are projected to reach $US1.67 trillion representing 7.3% of overall global retail sales, in 2016… Another projection estimates global e-Commerce sales to eclipse $US3.5 trillion, which would account for about 12% of the global total retail sales of over $US28 trillion by 2019…

According to Jaz Frederick; China e-Commerce market is the world largest with $US589.61 billion, in 2015… According to Matthew Brown; U.S. e-Commerce market is the second largest with $US341.7 billion, in 2015…

To put e-Commerce into perspective– the number of websites dedicated to some type of e-Commerce activity is increasing, but it’s still relatively small number as compared to the total website on the Internet… According to Netcraft; there are over 600 million websites on Internet and about 7.4 billion web pages referenced on the Internet…

In comparison, it’s estimated there are about 2 million e-Commerce sites worldwide; and about 500K in North America, and about 1 million in Europe, and about 500K in rest of world… With this growing consumer acceptance, many businesses are trying to figure out the best, most viable e-Commerce ‘business model’ for their enterprise…

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In the article e-Commerce Business Models by Richard Lazzera writes: e-Commerce business models are perhaps the most discussed and least understood aspect of the Internet. There is much talk that the Internet has changed traditional business models, but there is little clear-cut evidence of exactly what this means– in most basic sense, a business model is the method of doing business by which a company can sustain itself…

The business model spells-out– how, what, why… a company makes money by specifying where it’s positioned in the value chain, e.g.; typically, business models are divided into several major types, including; Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-Business (C2B), Business-to-Administration (B2A), Consumer-to-Administration (C2A)… where ‘Administration’ is usually defined as–government, or institutions, or non-profits… 

In selecting an e-Commerce business model there are questions that must be asked and things that must be consider, e.g.; Who are the target customers? There are a million types of e-Commerce stores, all with subtle differences and nuances, and all presumably targeting some segment of an– industry, market… e.g.; consumers vs. business vs. government vs. institutions… What are the products or services being offered? There are different types of products, services… e.g.; physical goods, digital goods, services…

What is the competitive strategy? Deciding how to compete is the critical decision and it shape the very structure of the business model, e.g.; is competitiveness based on– price, quality, value…? Moreover, a firm may combine several different business models as part of its overall Internet business strategy…

According to José Fernandes; main advantage of e-Commerce is its ability to reach a global market without necessarily requiring a large financial investment… Which means– limitations are not defined geographically– that targets markets are enabled to make global choices, or obtain the necessary information to compare ‘value’ from all potential suppliers, regardless of locations.

By embracing direct interaction with targeted market groupings, e-Commerce shortens the engagement chain, and sometimes even eliminating it completely… However, e-Commerce businesses do have disadvantages, e.g.; strong dependence on information and communication technologies (ICT)… Lack of legislation that adequately regulates e-Commerce activities, nationally and globally. Also, there is always potential risks, e.g.; lack of security, loss of privacy… in conducting  transactions…

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In the article Business Model Innovation by Renee Hopkins writes: Although business leaders embrace the concept of e-Commerce business model innovation, many are finding it increasingly difficult to integrate an e-Commerce business model with their existing traditional operating model, e.g.:

  • Business models don’t last as long as they used to: Companies are increasingly vulnerable to being disrupted by new business models that plays by a completely different set of rules… Hence for a business model to endure it must be flexible enough to change and adapt to changing competitive environments…
  • Business models are the new strategic imperative: Create a strategic sandbox–connected to but stay autonomous from the core business– where you play around/ experiment by combine and recombine capabilities in ways that are not constrained by the existing business model…
  • Much of what leaders understand about business models is wrong: Business model innovation has evolved by using traditional ‘best practice’ approaches… But much of these so-called– ‘gospel’ or ‘best practice’ methodologies just don’t apply to the Internet business models…

e-Commerce business modeling must be an evolutionary process based on– leveraging human-centrics and storytelling, e.g.:

  • Shift: Look at the world through the eyes of customers and their work-to-be-done…
  • Create: Explore and imagine new experience for customers that creates value…
  • Deliver: Create a strategic sandbox that combine and recombine capabilities…
  • Capture: Develop adaptable resources– fuel, refresh, re-invent, grow…
  • Prototype and Test: Build low-fidelity version of the business model and test in the real world before deployment, i.e.; create, learn, evolve, test, test again– repeat…

In the article e-Commerce Fraud is Growing Trend by John Rampton writes: The true cost of dealing with e-Commerce fraud is growing– retailers are losing $3.08 for every dollar of fraud they incurred, in 2014. This is up from $2.79, in 2013… Also the increase use of mobile platforms is driving fraud even higher. In addition, e-Commerce has brought ‘friendly fraud’ to an all-new level, as customers seem to find it easier than ever to reverse transactions. Charge-backs are designed to protect customers from scams, but in recent years customers have begun using it in the place of refunds.

The perception that ‘the customer is always right’ seems to extend to payment companies, who put the burden of proof on retailers when making decisions on a dispute. Unfortunately, an estimated 86% of charge-backs are fraudulent, which is bad news both for retailers and customers…

It’s important to understand that e-Commerce is ‘not just a website’– it’s building a business… The e-Commerce website is merely the commercial delivery channel… and an effective Internet website begins by understanding, defining– business strategy, goals, metrics… then, crafting a site that is tailored to meet those objectives… More important,   e-Commerce strategy is not business as usual, the Internet has a different set of rules– a different rulebook– to compete successfully… A sustainable Internet business requires the delivery of ‘real economic value’ and as important a ‘grand customer experience’…

Hence, when businesses don’t understand or embrace basic Internet rules, then failure is the most likely outcome… According to Allen Burt; everyone has opinion about what a business model should look like, and however its defined, created… it must be– re-evaluate, updated, changed, or even scrapped)… as often as necessary– its anticipation of a changing environment that the key to business sustainability… Markets, customers, competitors, resources… are in a constant state of flux and an Internet business model must change accordingly to be sustainable…

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According to Mark Hayes; first and foremost business venture must know its profit margins… and a business must deploy an effective and realistic pricing strategy, both from the perspective of the customer and the business… and to assume that the lowest price will always win is an assumption for failure… In fact, low pricing usually ends-up in pricing battles, where nobody wins… According to Evans and Wurster; e-Commerce companies (in fact, all companies) must ‘be prepared’ to repeatedly– rethink, revise, and sometimes radically change– the basic structure of their– organization, business model, strategy, talent pool…

Leadership must understand that an e-Commerce business model can be disrupted at any time… Hence, ‘be prepared’— is motto that every business must live by: Yes; ‘be prepared’ to completely re-think the existing business model… Yes; ‘be prepared’ to develop a completely different– strategy, value proposition, skill-set… Yes; ‘be prepared’  for any unanticipated market activities…

According to Helen Thomas; the trend that is shaping e-Commerce: Go Local! Go Mobile! Go Cashless! Get Video-Share-Social Media! Get Relevant-Insightful-Original Content!