How Globalization Of E-commerce Is Helpful For Business
Electronic commerce, commonly known as e-commerce and e-comm., is the buying and selling of products or services over electronic system such as internet and other computer networks. E-commerce is commonly used for net banking, online shopping etc…
This paper examines how globalization of e-commerce is impacting business in general. With the increase of internet-based technologies, it has been the reason for recent stimulus globalization. In this Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of ecommerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms. E-commerce ensures better business in the SMEs and sustainable development of economics for developing countries.
E-commerce allows companies to increase their sales in domestic and foreign operations and the flexibility afforded by the technology also provides less costly opportunities to locate operations strategically. E-commerce not only reduces communication costs, but also increases flexibility in locating activities. Research point indicates that internet technology has led to an increase in international trade (Freund and Weinhold, 2002, 2004). This is the evidence of how it suggests profits from foreign operations have also increased in recent years (Hilsenrath, 2005). In the emerging global economy, e-commerce has increasingly become a necessary component of business strategy being a strong catalyst for economic development.
Integration of information and communications technology (ICT) in business has evolved the relationships within organizations and those between and among organizations and individuals. The controversial current social and economic trends are globalization and the widespread adoption of information and communication technologies (ICTs). Many argue that these two trends are closely associated, each driving the other forward, and both being driven by other common forces, such as trade liberalization, deregulation, migration, and the expansion of capitalism and democracy (c.f., Held et al., 1999). Pohjola (2002) argues that the twin forces of globalization and the ICT revolution are combining to create the so-called New Economy, marked by higher rates of economic and productivity growth.
“Technology is both driven by and a driver of globalization, as both forces continually reinforce one another” cited by (Bradley et al., 1993).Specifically, the use of ICT for ecommerce in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs. Prior to development in the Internet and Web-based technologies, the distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down.
Together with the appropriate strategy and policy approach with e-commerce enables small and medium scale enterprises to compete with large capital-rich businesses. On another plane, developing countries are given increased access to the global marketplace, where they compete with and complement of the more developed economies. Most of the developing countries are already participating in e-commerce, either as sellers or buyers. However, to facilitate e-commerce growth in these countries based on globalization phenomenal, the relatively under-developed information infrastructure must be improved. Significantly, economic trend of the past decade is the growing use of the Internet for conducting business.