Page 41 - Electronic Commerce

Chapter 1

Internet. The predictions for continued global online business are based in part on the
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growing numbers of people using inexpensive devices such as mobile phones and tablet
computers to access the Internet. This growth is expected to be especially dramatic in highly
populated countries such as China, India, and Brazil. In fact, online retail sales in China
exceeded those in the United States for the first time in 2010. Most experts expect to see
global online business grow at a sustained rate of 15 percent to 25 percent through 2015.
An important change brought about by fully operational handheld devices is that the
Internet becomes truly available everywhere. This constant availability can change buyer
behavior in many ways (discussed in Chapters 3 and 4) and it can provide new
opportunities for online businesses that could not exist without such broad-based
connectivity. In Chapter 5, you will learn how the pervasiveness of computers (laptops
and tablets) and mobile phones that can access the Internet is changing B2B electronic
commerce, and you will learn about the growing opportunities for B2C mobile commerce
in Chapter 6.

Widespread Social Networking
The Web 2.0 technologies that enabled part of the growth in electronic commerce that
occurred in the second wave will play a major role in the third wave. For example, social
networking sites such as Facebook and microblogging technologies such as Twitter can be
used to engage in social commerce.
Social commerce is the use of interpersonal connections online to promote or sell
goods and services. Because a handheld device connected to the Internet can put a user
online virtually all the time, businesses can use social interactions to advertise, promote,
or suggest specific products or services. Internet Retailer notes that sales driven by social
commerce activities in 2013 were under $1 billion but expects an increase to $20 billion
by 2016. You will learn more about social networking, microblogging, and social
commerce in Chapter 6.

Increased Participation by Small Businesses
Large businesses—both existing businesses and new businesses that had obtained large
amounts of capital early on—dominated the first wave. The second wave saw a major
increase in the participation of small businesses (those with fewer than 200 employees) in
the online economy. Still, more than 30 percent of small businesses in the United States
do not have Web sites. In other parts of the world, this percentage is much higher. The
third wave of electronic commerce will include the participation of a significantly larger
proportion of these smaller businesses.
One way that smaller businesses can obtain funding for operations is by using Web
sites and social commerce activities for raising capital. Web sites used to gather multiple
small investors together for specific business funding activities are called crowdsourcing
sites. These allow businesses to post their ideas and solicit funding for them from the
general public, replacing banks and private investors as the source of the money they
need for expansion or creating new products and services. You will learn more about
these funding opportunities in Chapter 12. Providing services that help smaller companies
use electronic commerce will also be a substantial area of growth in the third wave.

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