BACKGROUND STUDY

Online shopping is defined as purchasing items from Internet retailers as opposed to a shop or store. Buying books at Amazon.com
instead of your local book store is an example of online shopping.

Online shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a
seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store,
online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's
mobile optimized online site or app.

An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center; the
process is called business-to-consumer (B2C) online shopping. In the case where a business buys from another business, the process is
called business-to-business (B2B) online shopping. The largest of these online retailing corporations are Alibaba, Amazon.com,and
eBay.[1] Retail success is no longer all about physical stores. This is evident because of the increase in retailers now offering online
store interfaces for consumers. With the growth of online shopping, comes a wealth of new market footprint coverage opportunities
for stores that can appropriately cater to offshore market demands and service requirements.

ADVANTAGES
1. Convenience
Online stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other
establishments such as internet cafes and schools provide internet access as well. In contrast, visiting a conventional retail store
requires travel and must take place during business hours.

2. Information and reviews

Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual
product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other
experimentation).

Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or
manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide
which product to buy.
3. Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors
(though some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price
comparison services and discovery shopping engines can be used to look up sellers of a particular product or service.

DISADVANTAGES
1. Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud than face-to-face transactions.
Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. However,
merchants face less risk from physical theft by using a warehouse instead of a retail storefront.

A number of resources offer advice on how consumers can protect themselves when using online retailer services.
These include:c

1. Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is
comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight
programs such as a trust mark or a trust seal.
2. Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness
of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair
and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and
handling charges.
3. Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it
will not share private information with others without consent.
4. Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on
the credit card information entry screen will start with "HTTPS".
5. Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the
lines: "I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be
site specific and easy to remember.
2. Lack of full cost disclosure
The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not
be easy to see the total cost up front. Additional fees such as shipping are often not be visible until the final step in the checkout
process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not
include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian based
Wishabi attempts to include estimates of these additional cost,[30] but nevertheless, the lack of general full cost disclosure remains a
concern.

3. Privacy
Privacy of personal information is a significant issue for some consumers. Many consumers wish to avoid spam and telemarketing
which could result from supplying contact information to an online merchant. In response, many merchants promise to not use
consumer information for these purposes

https://sites.google.com/site/popularityofonlineshopping/home/online-shopping/research-objective/research-design/background-study-2
Online shopping
From Wikipedia, the free encyclopedia

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"Web store" redirects here. For the W3C storage standard, see Web storage.

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over
the Internet using a web browser. Consumers find a product of interest by visiting the website of the retailer directly or by searching among
alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of
2016, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet
computers and smartphones.
An online shop evokes the physical analogy of buying products or services at a regular "bricks-and-mortar" retailer or shopping center; the
process is called business-to-consumer (B2C) online shopping. When an online store is set up to enable businesses to buy from another
businesses, the process is called business-to-business (B2B) online shopping. A typical online store enables the customer to browse the
firm's range of products and services, view photos or images of the products, along with information about the product specifications,
features and prices.
Online stores usually enable shoppers to use "search" features to find specific models, brands or items. Online customers must have
access to the Internet and a valid method of payment in order to complete a transaction, such as a credit card, an Interac-enabled debit
card, or a service such as PayPal. For physical products (e.g., paperback books or clothes), the e-tailer ships the products to the customer;
for digital products, such as digital audio files of songs or software, the e-tailer usually sends the file to the customer over the Internet. The
largest of these online retailing corporations are Alibaba, Amazon.com, and eBay.
Terminology
Alternative names for the activity are "e-tailing", a shortened form of "electronic retail" or "e-shopping", a shortened form of "electronic
shopping". An online store may also be called an e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online
storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile device-optimized
website or software application ("app"). These websites or apps are designed to enable customers to browse through a companies'
products and services on tablet computers and smartphones.

History
History of online shopping
One of the earliest forms of trade conducted online was IBM's online transaction processing (OLTP) developed in the 1960s and it allowed
the processing of financial transactions in real-time. [2] The computerized ticket reservation system developed for American
Airlines called Semi-Automatic Business Research Environment (SABRE) was one of its applications. Here, computer terminals located in
different travel agencies were linked to a large IBM mainframe computer, which processed transactions simultaneously and coordinated
them so that all travel agents had access to the same information at the same time. [2]
The emergence of online shopping as we know today developed with the emergence of the Internet. [3] Initially, this platform only functioned
as an advertising tool for companies, providing information about its products. It quickly moved on from this simple utility to actual online
shopping transaction due to the development of interactive Web pages and secure transmissions. [4] Specifically, the growth of the internet
as a secure shopping channel has developed since 1994, with the first sales of Sting album 'Ten Summoner's Tales'.[5] Wine, chocolates,
and flowers soon followed and were among the pioneering retail categories which fueled the growth of online shopping. Researchers found
that having products that are appropriate for e-commerce was a key indicator of Internet success.[6] Many of these products did well as they
are generic products which shoppers did not need to touch and feel in order to buy. But also importantly, in the early days, there were few
shoppers online and they were from a narrow segment: affluent, male, 30+. Online shopping has come along way since these early days
and -in the UK- accounts for significant percents (depending on product category as percentages can vary).
Growth in online shoppers
As the revenues from online sales continued to grow significantly researchers identified different types of online shoppers, Rohm &
Swaninathan[7] identified four categories and named them "convenience shoppers, variety seekers, balanced buyers, and store-oriented
shoppers". They focused on shopping motivations and found that the variety of products available and the perceived convenience of the
buying online experience were significant motivating factors. This was different for offline shoppers, who were more motivated by time
saving and recreational motives.
Digital High Street 2020[8]

Michael Aldrich, pioneer of online shopping in the 1980s.

English entrepreneur Michael Aldrich was a pioneer of online shopping in 1979. His system connected a modified domestic TV to a real-
time transaction processing computer via a domestic telephone line. He believed that videotex, the modified domestic TV technology with a
simple menu-driven human–computer interface, was a 'new, universally applicable, participative communication medium — the first since
the invention of the telephone.' This enabled 'closed' corporate information systems to be opened to 'outside' correspondents not just for
transaction processing but also for e-messaging and information retrieval and dissemination, later known as e-business.[9] His definition of
the new mass communications medium as 'participative' [interactive, many-to-many] was fundamentally different from the traditional
definitions of mass communication and mass media and a precursor to the social networking on the Internet 25 years later. In March 1980
he launched Redifon's Office Revolution, which allowed consumers, customers, agents, distributors, suppliers and service companies to be
connected on-line to the corporate systems and allow business transactions to be completed electronically in real-time. [10] During the
1980s[11] he designed, manufactured, sold, installed, maintained and supported many online shopping systems, using videotex technology.
[12]
 These systems which also provided voice response and handprint processing pre-date the Internet and the World Wide Web, the IBM
PC, and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.
The first World Wide Web server and browser, created by Tim Berners-Lee in 1989,[13] opened for commercial use in 1991.[14] Thereafter,
subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut,
[14]
 Netscape's SSL v2 encryption standard for secure data transfer, and Intershop's first online shopping system. The first secure retail
transaction over the Web was either by NetMarket or Internet Shopping Network in 1994.[15] Immediately after, Amazon.com launched its
online shopping site in 1995 and eBay was also introduced in 1995. [14] Alibaba's sites Taobao and Tmall were launched in 2003 and 2008,
respectively. Retailers are increasingly selling goods and services prior to availability through "pretail" for testing, building, and managing
demand.

International statistics
Statistics show that in 2012, Asia-Pacific increased their international sales over 30% giving them over $433 billion in revenue. That is a
$69 billion difference between the U.S. revenue of $364.66 billion. It is estimated that Asia-Pacific will increase by another 30% in the year
2013 putting them ahead by more than one-third of all global ecommerce sales. [needs update] The largest online shopping day in the world
is Singles Day, with sales just in Alibaba's sites at US$9.3 billion in 2014. [16][17]
 Statistics on online retail sales

Country % Retail Sales Online

United States 9.8%[18]

Canada 2.8%[19]

Australia 7%[citation needed]

United Kingdom 20%[20]

Customers
Online customers must have access to the Internet and a valid method of payment in order to complete a transaction. Generally, higher
levels of education and personal income correspond to more favorable perceptions of shopping online. Increased exposure to technology
also increases the probability of developing favorable attitudes towards new shopping channels. [21]
Customer buying behaviour in digital environment
The marketing around the digital environment, customer's buying behaviour may not be influenced and controlled by the brand and firm,
when they make a buying decision that might concern the interactions with search engine, recommendations, online reviews and other
information. With the quickly separate of the digital devices environment, people are more likely to use their mobile phones, computers,
tablets and other digital devices to gather information. In other words, the digital environment has a growing effect on consumer's mind and
buying behaviour. In an online shopping environment, interactive decision may have an influence on aid customer decision making. Each
customer is becoming more interactive, and though online reviews customers can influence other potential buyers' behaviors. [22]
Subsequently, risk and trust would also are two important factors affecting people's' behavior in digital environments. Customer consider to
switch between e-channels, because they are mainly influence by the comparison with offline shopping, involving growth of security,
financial and performance-risks In other words, a customer shopping online that they may receive more risk than people shopping in stores.
There are three factors may influence people to do the buying decision, firstly, people cannot examine whether the product satisfy their
needs and wants before they receive it. Secondly, customer may concern at after-sale services. Finally, customer may afraid that they
cannot fully understand the language used in e-sales. Based on those factors customer perceive risk may as a significantly reason
influence the online purchasing behaviour.[23]
Online retailers has place much emphasis on customer trust aspect, trust is another way driving customer's behaviour in digital
environment, which can depend on customer's attitude and expectation. Indeed, the company's products design or ideas can not met
customer's expectations. Customer's purchase intension based on rational expectations, and additionally impacts on emotional trust.
Moreover, those expectations can be also establish on the product information and revision from others. [24]

Product selection
Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using
a shopping search engine. Once a particular product has been found on the website of the seller, most online retailers use shopping cart
software to allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical shopping cart or basket in a
conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is
collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only
needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores
may rely on consumers to phone or e-mail their orders (although full credit card numbers, expiry date, and Card Security Code,[25] or bank
account and routing number should not be accepted by e-mail, for reasons of security).
Payment
Online shoppers commonly use a credit card or a PayPal account in order to make payments. However, some systems enable users to
create accounts and pay by alternative means, such as:

 Billing to mobile phones and landlines[26][27]

 Bitcoin or other cryptocurrencies
 Cash on delivery (C.O.D.)
 Cheque/ Check
 Debit card
 Direct debit in some countries
 Electronic money of various types
 Gift cards
 Invoice, especially popular in some markets/countries, such as Switzerland
 Postal money order
 Wire transfer/delivery on payment
Some online shops will not accept international credit cards. Some require both the purchaser's billing and shipping address to be in the
same country as the online shop's base of operation. Other online shops allow customers from any country to send gifts anywhere. The
financial part of a transaction may be processed in real time (e.g. letting the consumer know their credit card was declined before they log
off), or may be done later as part of the fulfillment process.

Product delivery
Once a payment has been accepted, the goods or services can be delivered in the following ways. For physical items:

 Shipping: The product is shipped to a customer-designated address. Retail package delivery is typically done by the public postal
system or a retail courier such as FedEx, UPS, DHL, or TNT.
 Drop shipping: The order is passed to the manufacturer or third-party distributor, who then ships the item directly to the consumer,
bypassing the retailer's physical location to save time, money, and space.
 In-store pick-up: The customer selects a local store using a locator software and picks up the delivered product at the selected
location. This is the method often used in the bricks and clicks business model.
For digital items or tickets:

 Downloading/Digital distribution:[28] The method often used for digital media products such as software, music, movies, or images.
 Printing out, provision of a code for, or e-mailing of such items as admission tickets and scrip (e.g., gift certificates and coupons).
The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify
their eligibility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar
amount, and for the correct number of uses).
 Will call, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a
play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which
allow customers to buy tickets online, the popularity of this service has increased.

Shopping cart systems

Simple shopping cart systems allow the off-line administration of products and categories. The shop is then generated as HTML files and
graphics that can be uploaded to a webspace. The systems do not use an online database. [29] A high-end solution can be bought or rented
as a stand-alone program or as an addition to an enterprise resource planning program. It is usually installed on the company's web server
and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a
large extent. Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops simultaneously from
one back office. Examples are BigCommerce, Shopify and FlickRocket. Open source shopping cart packages include advanced platforms
such as Interchange, and off-the-shelf solutions such as Magento, osCommerce, WooCommerce, PrestaShop, and Zen Cart. Commercial
systems can also be tailored so the shop does not have to be created from scratch. By using an existing framework, software modules for
various functionalities required by a web shop can be adapted and combined. [30]

Design
Customers are attracted to online shopping not only because of high levels of convenience, but also because of broader selections,
competitive pricing, and greater access to information. [31][32] Business organizations seek to offer online shopping not only because it is of
much lower cost compared to bricks and mortar stores, but also because it offers access to a worldwide market, increases customer value,
and builds sustainable capabilities. [clarification needed][33]
Information load
Designers of online shops are concerned with the effects of information load. Information load is a product of the spatial and temporal
arrangements of stimuli in the web store.[34] Compared with conventional retail shopping, the information environment of virtual shopping is
enhanced by providing additional product information such as comparative products and services, as well as various alternatives and
attributes of each alternative, etc.[35] Two major dimensions of information load are complexity and novelty.[36] Complexity refers to the
number of different elements or features of a site, often the result of increased information diversity. Novelty involves the unexpected,
suppressed, new, or unfamiliar aspects of the site. The novelty dimension may keep consumers exploring a shopping site, whereas the
complexity dimension may induce impulse purchases.[35]

Consumer needs and expectations

According to the output of a research report by Western Michigan University published in 2005, an e-commerce website does not have to
be good looking with listing on a lot of search engines. It must build relationships with customers to make money. The report also suggests
that a website must leave a positive impression on the customers, giving them a reason to come back. [37] However, resent research[38] has
proven that sites with higher focus on efficiency, convenience, and personalised services increased the customers motivation to make
purchases.
Dyn, an Internet performance management company conducted a survey on more than 1400 consumers across 11 countries in North
America, Europe, Middle-East and Asia and the results of the survey are as follows:

 Online retailers must improve the website speed

 Online retailers must ease consumers fear around security
These concerns majorly affect the decisions of almost two thirds of the consumers. [39]
User interface

An automated online assistant, with potential to enhance user interface on shopping sites.

The most important factors determining whether customers return to a website are ease of use and the presence of user-friendly features.
[40]
 Usability testing is important for finding problems and improvements in a web site. Methods for evaluating usability include heuristic
evaluation, cognitive walkthrough, and user testing. Each technique has its own characteristics and emphasizes different aspects of the
user experience.[40]

Market share
The popularity of online shopping continues to erode sales of conventional retailers. For example, Best Buy, the largest retailer of
electronics in the U.S. in August 2014 reported its tenth consecutive quarterly dip in sales, citing an increasing shift by consumers to online
shopping.[41] Amazon.com has the largest market share in the United States. As of May 2018, a survey found two-thirds of Americans had
bought something from Amazon (92% of those who had bought anything online), with 40% of online shoppers buying something from
Amazon at least once a month. The survey found shopping began at amazon.com 44% of the time, compared to a general search engine
at 33%. It estimated 75 million Americans subscribe to Amazon Prime and 35 million more use someone else's account.[42]
There were 242 million people shopping online in China in 2012. [43] For developing countries and low-income households in developed
countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.
Advantages
Convenience
Online stores are usually available 24 hours a day, and many consumers in Western countries have Internet access both at work and at
home. Other establishments such as Internet cafes, community centers and schools provide internet access as well. In contrast, visiting a
conventional retail store requires travel or commuting and costs such as gas, parking, or bus tickets, and must usually take place during
business hours. Delivery was always a problem which affected the convenience of online shopping. However to overcome this many
retailers including online retailers in Taiwan brought in a store pick up service. This now meant that customers could purchase goods online
and pick them up at a nearby convenience store, making online shopping more advantageous to customers. [44] In the event of a problem
with the item (e.g., the product was not what the consumer ordered or the product was not satisfactory), consumers are concerned with the
ease of returning an item in exchange for the correct product or a refund. Consumers may need to contact the retailer, visit the post office
and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to
compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com includes labels for free
return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United
Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer
Protection (Distance Selling) Act 2000).[45] A 2018 survey in the United States found 26% of online shoppers said they never return items,
and another 65% said they rarely do so.[46]

Information and reviews

Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product
and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).
Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or
manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which
product to buy. Some stores even allow customers to comment or rate their items. There are also dedicated review sites that host user
reviews for different products. Reviews and even some blogs give customers the option of shopping for cheaper purchases from all over
the world without having to depend on local retailers. In a conventional retail store, clerks are generally available to answer questions.
Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions. Even if an online
store is open 24 hours a day, seven days a week, the customer service team may only be available during regular business hours.
Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors (though
some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison
services and discovery shopping engines can be used to look up sellers of a particular product or service. Shipping costs (if applicable)
reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-
mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently
large orders. Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping
experience.

Disadvantages
Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud than face-to-face transactions.
When ordering merchandise online, the item may not work properly, it may have defects, or it might not be the same item pictured in the
online photo. Merchants also risk fraudulent purchases if customers are using stolen credit cards or fraudulent repudiation of the online
purchase. However, merchants face less risk from physical theft by using a warehouse instead of a retail storefront. Secure Sockets
Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the
merchant. However, one must still trust the merchant (and employees) not to use the credit card information subsequently for their own
purchases, and not to pass the information to others. Also, hackers might break into a merchant's web site and steal names, addresses and
credit card numbers, although the Payment Card Industry Data Security Standard is intended to minimize the impact of such
breaches. Identity theft is still a concern for consumers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to
require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce
service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks. Phishing is another
danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into
feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are
server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the
company issuing the seal. The purpose of these seals is to increase the confidence of online shoppers. However, the existence of many
different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
 Sticking with well-known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there
is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry
oversight programs such as a trust mark or a trust seal.
 Before buying from a new company, evaluating the website by considering issues such as: the professionalism and user-
friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information;
whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive
shipping and handling charges.
 Ensuring that the retailer has an acceptable privacy policy posted. For example, note if the retailer does not explicitly state that it will
not share private information with others without consent.
 Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on
the credit card information entry screen will start with "HTTPS".
 Using strong passwords which do not contain personal information such as the user's name or birthdate. Another option is a "pass
phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, since they do not consist of
words found in a dictionary, and provides a variety of upper, lower, and special characters. These passwords can be site specific and
may be easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems
that shoppers potentially face include identity theft, faulty products, and the accumulation of spyware. If users are required to put in their
credit card information and billing/shipping address and the website is not secure, customer information can be accessible to anyone who
knows how to obtain it. Most large online corporations are inventing new ways to make fraud more difficult. However, criminals are
constantly responding to these developments with new ways to manipulate the system. Even though online retailers are making efforts to
protect consumer information, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and
scams to protect consumer identity and finances. Product delivery is also a main concern of online shopping. Most companies offer
shipping insurance in case the product is lost or damaged. Some shipping companies will offer refunds or compensation for the damage,
but this is up to their discretion.

Lack of full cost disclosure

The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not be
easy to see the total cost up front. Additional fees such as shipping are often not visible until the final step in the checkout process. The
problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional
fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian-based Wishabi attempts to
include estimates of these additional cost,[47] but nevertheless, the lack of general full cost disclosure remains a concern.
Privacy
Privacy of personal information is a significant issue for some consumers. Many consumers wish to avoid spam and telemarketing which
could result from supplying contact information to an online merchant. In response, many merchants promise to not use consumer
information for these purposes, Many websites keep track of consumer shopping habits in order to suggest items and other websites to
view. Brick-and-mortar stores also collect consumer information. Some ask for a shopper's address and phone number at checkout, though
consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without
their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash or
through a bank (money transfer, in which case there is also proof of payment).

Product suitability
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Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music,
movies, office supplies, education, communication, software, photography, and financial transactions. Other successful marketers use drop
shipping or affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory. Some non-digital
products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve
embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items
which can fit in a standard mailbox—such as music CDs, DVDs and books—are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also
seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at
consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A
factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular
version of a product needs, for example by providing parts lists keyed by serial number. Products less suitable for e-commerce include
products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings—most
notably clothing—and products where colour integrity appears important. Nonetheless, some web sites have had success delivering
groceries and clothing sold through the internet is big business in the U.S.
Aggregation
High-volume websites, such as Yahoo!, Amazon.com, and eBay, offer hosting services for online stores to all size retailers. These stores
are presented within an integrated navigation framework, sometimes known as virtual shopping malls or online marketplaces.

Impact of reviews on consumer behavior

One of the great benefits of online shopping is the ability to read product reviews, written either by experts or fellow online shoppers. The
Nielsen Company conducted a survey in March 2010 and polled more than 27,000 Internet users in 55 markets from the Asia-Pacific,
Europe, Middle East, North America, and South America to look at questions such as "How do consumers shop online?", "What do they
intend to buy?", "How do they use various online shopping web pages?", and the impact of social media and other factors that come into
play when consumers are trying to decide how to spend their money on which product or service. According to the research, [48] reviews on
electronics (57%) such as DVD players, cellphones, or PlayStations, and so on, reviews on cars (45%), and reviews on software (37%)
play an important role in influencing consumers who tend to make purchases online. Furthermore, 40% of online shoppers indicate that
they would not even buy electronics without consulting online reviews first.
In addition to online reviews, peer recommendations on online shopping pages or social media websites play a key role [49] for online
shoppers when they are researching future purchases. [50] 90% of all purchases made are influenced by social media. [5

https://en.wikipedia.org/wiki/Online_shopping
Background Of Online Shopping

Since about 1990, online shopping has emerged into every corner of life, linking people to the culture of capitalism in
frequent and daily ways.

It lets us buy what we want, when we want at our convenience, and helps us to imagine ourselves buying, owning,
and having positive outcomes by the goods available out there on the web. Shopping has been a way of identifying
oneself in today's culture by what we purchase and how we use our purchases.

In 1994, advances took place such as Online Banking, after that, the next big development was the opening of an
online pizza shop by Pizza Hut. In 1995, Amazon started up with online shopping, then in 1996, eBay opened up for
online shopping as well.At first, main users of online shopping were young men with a high level of income and a
university education. This profile is changing. For example, in USA in the early years of Internet there were very few
women users, but by 2001 women were 52.8% of the online population.
History of Ecommerce
One of the most popular activities on the Web is shopping. It has much allure in it — you can shop at your leisure, anytime, and in your pajamas. Literally anyone
can have their pages built to display their specific goods and services.

History of ecommerce dates back to the invention of the very old notion of "sell and buy", electricity, cables, computers, modems, and the Internet. Ecommerce
became possible in 1991 when the Internet was opened to commercial use. Since that date thousands of businesses have taken up residence at web sites.

At first, the term ecommerce meant the process of execution of commercial transactions electronically with the help of the leading technologies such as Electronic
Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic transactions.
The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation
electronically.

Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for
example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet. In 2000 a great number of business companies in the United
States and Western Europe represented their services in the World Wide Web. At this time the meaning of the word ecommerce was changed. People began to
define the term ecommerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment
services. Although the dot-com collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the "brick and mortar" retailers
recognized the advantages of electronic commerce and began to add such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin,
two supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers to buy groceries online). By the end of 2001, the largest
form of ecommerce, Business-to-Business (B2B) model, had around $700 billion in transactions.

According to all available data, ecommerce sales continued to grow in the next few years
and, by the end of 2007, ecommerce sales accounted for 3.4 percent of total sales.

Ecommerce has a great deal of advantages over "brick and mortar" stores and mail order
catalogs. Consumers can easily search through a large database of products and services.
They can see actual prices, build an order over several days and email it as a "wish list"
hoping that someone will pay for their selected goods. Customers can compare prices with
a click of the mouse and buy the selected product at best prices.

Online vendors, in their turn, also get distinct advantages. The web and its search engines
provide a way to be found by customers without expensive advertising campaign. Even
small online shops can reach global markets. Web technology also allows to track
customer preferences and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first Internet companies to allow electronic transactions. Thanks to their
founders we now have a handsome ecommerce sector and enjoy the buying and selling advantages of the Internet. Currently there are 5 largest and most famous
worldwide Internet retailers: Amazon, Dell, Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories of products sold in the
World Wide Web are music, books, computers, office supplies and other consumer electronics.

Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezos and was
one of the first American ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost its position as a successful business
model, however, in 2003 the company made its first annual profit which was the first step to the further development.

At the outset Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games,
music CDs, MP3s, apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but shortly after it become popular in the Internet
Bezos decided to rename his business "Amazon" after the world's most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year by Time
Magazine in recognition of the company's success. Although the company's main headquarters is located in the USA, WA, Amazon has set up separate websites
in other economically developed countries such as the United Kingdom, Canada, France, Germany, Japan, and China. The company supports and operates retail
web sites for many famous businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.

Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from
affiliates and third party sellers who list and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently sponsoring the film "The
Stolen Child" with 20th Century Fox.

According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year. The most popular feature of the web site
is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars. Amazon.com is also well-known
for its clear and user-friendly advanced search facility which enables visitors to search for keywords in the full text of many books in the database.

One more company which has contributed much to the process of ecommerce development is Dell Inc., an American company located in Texas, which stands
third in computer sales within the industry behind Hewlett-Packard and Acer.

Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was the first company to record a million dollars in online sales. The
company's unique strategy of selling goods over the World Wide Web with no retail outlets and no middlemen has been admired by a lot of customers and imitated
by a great number of ecommerce businesses. The key factor of Dell's success is that Dell.com enables customers to choose and to control, i.e. visitors can
browse the site and assemble PCs piece by piece choosing each single component based on their budget and requirements. According to statistics, approximately
half of the company's profit comes from the web site.

In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and 8th on its annual Top 20 list of the most successful and admired
companies in the USA in recognition of the company's business model.

History of ecommerce is a history of a new, virtual world which is evolving according to the customer advantage. It is a world which we are all building together
brick by brick, laying a secure foundation for the future generations.

ecommerce-land.com/history_ecommerce.html
PROBLEMS ENCOUNTERED:

With all the eCommerce business challenges faced by your online business, how do you
find the best solutions? In this post, we’re going to share solutions to 7 common online
business problems so you can identify them, fix them, and get back to running your
business.

Problem #1: Online Identity Verification

When someone visits your website, how do you know if that person is genuinely
interested? Are they entering their real name and contact information? For all you
know, all of the information they enter could be fake.

If you don’t use online identity verification, it’s difficult to tell the difference.

Solution:
Take steps to verify customer information and ensure the information isn’t false.

You can use software solutions such as LexisNexis that can identify fraudulent
attempts. LexisNexis quickly verifies identifies and uses multi-layered authentication
for fraud control. Some of its top features include electronic identity verification, SSN
verification, instant authentication, and identity checks. Overcome these eCommerce
business challenges by staying a step ahead of the hackers.
This way, you can control fraud attempts without sacrificing a positive customer
service experience.

Problem #2: Competitor Analysis

In the super competitive eCommerce business world, there are many competitors
offering similar products and services. So, how do you set yourself apart?

For example, let’s take a look at Etsy, an eCommerce website that sells handmade or
unique items.

A quick search for “2019 calendar” shows 31,208 results!

With so many shops offering similar products, you’ll need to figure out how to stand out
from the competition.

Solution:
Conduct thorough competitor analysis to find out what products your competitors are
offering, and how much they’re selling it for. What platforms are they using to connect
with customers? How are they generating leads? Do they have any promotions going
on?
Figure out what products are high in demand and remove or deprioritize the ones that
aren’t. Offer exceptional customer service to set your business apart.

Problem #3: Customer Loyalty

Did you know that it can cost up to 5 times more to acquire a new customer than
retaining an existing one?

Or that the success rate of selling to a current customer is 60-70% compared to only 5-
20% success rate of selling to a new customer?

And that’s why maintaining customer loyalty is so important.

Solution:

To maintain customer loyalty, you MUST provide excellent customer service. Create
positive experiences for your customers so they trust you. After all, if your customers
are happy, it’s likely they’ll purchase from you again.
Here are a few tips to maintain customer loyalty:

 Be transparent. Display address, phone numbers, and contact information on your

website. Make sure it’s easy for customers to find.
 Blog regularly. Why? Because people trust blogs. It gives a human angle to your
business, and help sets you apart from your competitors.
 Send emails. Many customers prefer email as their preferred choice of business
communication. With optin tools such as exit-intent, you can easily capture
emails and connect with your customers. You can even personalize your popups
with customer names to make visitors feel welcomed.
Problem #4: Product Return and Refund Policies
According to ComScore, more than 60% of online shoppers say that they look at a
retailer’s return policy before making a purchase. And, 2 in 5 customers said they
abandoned shopping carts because of delivery dates. 🤯

That’s not all.

ComScore also found that about half of online shoppers weren’t willing to wait more
than 5 days for delivery.

In another research, data shows that 89% of online shoppers have made a return in the
past 3 years and  77% of those returns come from repeat customers.

This tells us that product return and refund policy is important to customers and that
means it should be important to you.

REI, Nordstrom, and Costco are great examples of businesses that overcame
these eCommerce business challenges. Well-known for their excellent return policies,
they give customers peace of mind knowing that they can easily return products they
aren’t fully satisfied with.
Solution:

Never hide or try to trick customers about your return policy. Be transparent and make
sure customers can easily find details about the return process. Make sure the policy
is easily accessible on your website, and include FAQs to make things easier for your
customer to understand. And finally, avoid words that are difficult to understand.

Nordstrom lets customers know how easy it is to make a return in just a few words.

Don’t forget to include details so customers will know exactly what to expect. Done
right, and you can even win a loyal customer.
Problem #5: Price and Shipping

Remember our 2019 calendar example earlier from Etsy?

Although our search came up with 31,208 results, many of the calendars were priced
differently.

And that’s the price BEFORE the cost of shipping.

Giant online retailers like Amazon can offers products for a similar price, but offer free
shipping because they have the resources to do so. They have shipping warehouses
located around the world, and ship orders from the nearest facility.

As a smaller online business, how can you overcome these eCommerce business
challenges?
Solution:

Get creative and look beyond big-name carriers. Look into using a local delivery or
courier company that will deliver the product quickly to your customers at a
competitive rate.
Apps like Roadie provide door-to-door delivery for just about anything at more
competitive prices than major couriers. A crowd-sourcing service, it provides an
innovative delivery option at a low cost.
Problem #6: Retailers and Manufacturers

Many online businesses buy their products from retailers and manufacturers.
Unfortunately, many times these retailers and manufacturers also sell the same
products directly to customers.

Solution:

Include a statement in your contract that restricts the manufacturer from selling
directly to customers.

Another solution is to give priority to those who are less likely to sell directly to
customers. That way, your manufacturer won’t also be your competitor.

Problem #7: Data Security

Of all the eCommerce business challenges today, technical issues in eCommerce can
be one of the most difficult to overcome.

And if those technical issues are related to data security, it can be a nightmare.
Attackers can not only infect your website with viruses, but they can also expose
confidential data.
Remember that massive Facebook security breach? The attack exposed personal
information of approximately 50 million users. Hackers tried to obtain private user
information like name and hometown.
Solution:

First, regularly back up your data in case it gets stolen.

Next, install security plugins when possible to prevent your website from getting
hacked. For example, if you’re using WordPress, installing a WordPress security
plugin can significantly boost security.
Some common security plugins include  Wordfence, BulletProof Security, and All In
One WordPress Security and Firewall. Take a look at our picks for the best WordPress
security plugins in 2019.
That’s it! 7 simple solutions to the problems you face as an eCommerce business
owner. As you’ve learned, there are multiple challenges faced by businesses online.
But with a few simple solutions, you can resolve those issues and focus on running
your business instead. Now, check out these eCommerce stats that will help you build
a successful online store.
For more helpful content, make sure you follow us on Facebook, YouTube,
and Twitter.
Abstract
E-business is global business. Although technological advancement and high
connectivity in the developed nations promised sound returns to firms engaged in the E-
business, to realize optimum benefits from E-businesses, it requires active participation
of all nations round the world. Governments worldwide are faced with the challenge of
transformation and the need to reinvent government systems in order to deliver efficient
and cost effective services, information and knowledge through information and
communication technologies. There is an ever increasing role and demand for
successful implementation of E-business and E-government initiatives within developing
nations. It is essential to examine problems or barriers experienced by developing
countries in their quest for developing sound E-business and E-government framework.
Thus, Malaysia is chosen as the case study for this purpose. Malaysia is a fast
transforming country with reference to E-business and E-government initiatives.
However, before Malaysia can maximize the true value potential of E-business and E-
government initiatives, issues such as creating more awareness amongst citizens ‘vis
and vis’ E-business and E-government applications, enhancing collaboration between
government and corporations and improving existing technical infrastructure, must be
given further consideration.

INTRODUCTION
E-business is a term broadly used to express various commercial activities conducted through
Internet, extranet and intranet such as E-shopping, E-education, E-banking, E-financing, etc, is
on the fast track of becoming the most popular used cliché. In the E-business world, firms in
the North American region, particularly the United States, are labeled as the leaders to conduct
their businesses over the Net. However, it is estimated that these North America-based web
sites could reach only 5% of the world’s population and 25% of global purchasing power
(Davenport, 2000).
E-business deals with connectivity, where the state of the communications infrastructure is
eminently important. Connectivity is also the main activity that  developing countries are
seriously lacking that they are struggling to build and to catch up with the developed nations.
Without adequate access to connectivity, the construction of a successful E-business world
could hardly be a reality. Realizing fact that there is a big gap between the developed and
developing nations in terms of the readiness of IT infrastructure for E-business, many efforts
carried out at the international level by international organizations have been conducted. For
instance, the UN Development Program and the private Markle Foundation have recently
launched a two-year effort, called the Global Digital Opportunity Initiative, to help 12
underdeveloped economies build or improve their IT infrastructure (EIU Forum, 2002).
INTRODUCTION
E-business is a term broadly used to express various commercial activities conducted through
Internet, extranet and intranet such as E-shopping, E-education, E-banking, E-financing, etc, is
on the fast track of becoming the most popular used cliché. In the E-business world, firms in
the North American region, particularly the United States, are labeled as the leaders to conduct
their businesses over the Net. However, it is estimated that these North America-based web
sites could reach only 5% of the world’s population and 25% of global purchasing power
(Davenport, 2000).
E-business deals with connectivity, where the state of the communications infrastructure is
eminently important. Connectivity is also the main activity that  developing countries are
seriously lacking that they are struggling to build and to catch up with the developed nations.
Without adequate access to connectivity, the construction of a successful E-business world
could hardly be a reality. Realizing fact that there is a big gap between the developed and
developing nations in terms of the readiness of IT infrastructure for E-business, many efforts
carried out at the international level by international organizations have been conducted. For
instance, the UN Development Program and the private Markle Foundation have recently
launched a two-year effort, called the Global Digital Opportunity Initiative, to help 12
underdeveloped economies build or improve their IT infrastructure (EIU Forum, 2002).

How can the global E-business architecture be constructed so that it will eventually lead all
nations to develop their own national E-business model in order to merge into the new
business world and compete more efficiently? What is the role of the governments in
stimulating E-business initiatives in the context of developing nations? How can E-government
initiatives complement successful E-business models? What factors drive successful E-
business and E-government models within developing nations? These questions motivate the
writing of this paper.
In order to examine the issues mentioned earlier, it is imperative to look at the problems,
barriers or obstacles experienced in the developing nations in implementing an effective E-
business and E-government practices. Internet is global and connectivity is global, but local
conditions matter.
E-business defined: Seth and Rajendra (1997) cite that globalization, rapid development
in technology and rising consumer expectation for product and service quality on all accounts
are factors that led many conventional businesses to rethink their respective business models
(Seth and Rajendra, 1997). To succeed in ever increasing competitive conditions, it is vital for
businesses to offer superior business models (Kalakota and Winston, 2001; Seth and Sisoda,
1997; Peterson et al., 1997) i.e., delivery of products and service at the convenience of
consumers, not sellers. Access to bandwidths, increase in level of technical sophistication and
ever increasing processing capability of electronic mediums (Seth and Rajendra, 1997;
Hoffman et al., 1996) are driving forces for the possible exponential growth of online buying
behavior.

Specifically, Seth and Rajendra (1997) the following factors as forces driving changes in
consumer behavior by examining both supply and demand side of the marketing equation.
Supply side:
Enhancement in product technology, e.g., through utilization of CAD/CAM techniques, JIT system
which to the consumers these outcomes translate to greater manufacturing and service
distribution efficiency, significant increase in level of customization and overall increase in
• product/service delivery choices for consumers.

Enhancement in Distribution technology e.g., POS, EDI and Computer Assisted Logistics (CALS).
These technologies are capable of reducing inventories, minimize defects while improving overall
• efficiency of logistics and warehousing transportation systems.

Demand side
Stemming from a macro perspective, key factors changing overall nature of consumer buying
behavior and demand for products and services are:
 • Declining growth rate for new born babies globally,

Rising levels of middle aged people in developed nations e.g. Japan and
• USA,

Increasing levels of women forming the workforce in many economies of

• the world,

Continuous changes in lifestyles, income levels and ethnic diversity (Seth

• and Rajendra, 1997).

These forces cumulatively resulting into issues such as higher stress levels amongst
consumers, more concern on privacy and individual rights and focus on public safety.
Based on the demand pull and supply push, conventional business models in developed
nations are slowly being replaced by more advanced and sophisticated electronic based (E-
business) models. In a highly simplistic manner, E-business can be defined as the combination
of business processes, infrastructure, human resources and entrepreneurial idea/concept
that are combined together to produce a superior or high performing business model. The word
“superior” model here refers to a business that is able to offer goods and services to
consumers at a significantly higher speed, lower cost than before on most cases, at locations
throughout the world and at anytime consumers intend to purchase the good and/or services
(Kalakota and Marcia, 2000; Bakos, 1991; Burke, 1997; du Plessis and Boon, 2004).
E-business has become a standard method of operations for many companies throughout the
world. Establishing and operating an E-business, particularly one that involved significantly
large volumes of transactions, requires cross-functional expertise e.g., technical, marketing,
customer relations and advertising skills. Examples of traditional sectors that have utilized
information and communication technology to redesign strategy and product/service offering
are banking and finance, print and publication, education, manufacturing and retail.
As a result, society in general is able to pay bills, write cash checks, apply for loans, open
banking accounts, trade stock, mortgage homes and manage their assets and daily chores
online. Increasingly, hard cash (money) is being replaced by technology that offers greater
convenience e.g., smart cards and digital cash. In more advanced countries, all consumers
require to shop and fulfill other daily payment related obligation is Internet connectivity, a
computer and any form of digitally accepted payment. And from a distribution point of view, the
role of Internet (with emphasis on a greater degree of virtualization to offer consumers with the
benefit of E-business services) and web based models are seen to be rapidly growing amongst
the developed nations e.g., US and Europe.

E-government defined: E-government is defined as a way for governments to use the

most innovative ICT, particularly Web-based Internet applications, to provide citizens and
businesses with more convenient access to government information and services, to improve
the quality of the services and to provide greater opportunities to participate in democratic
institutions and processes (Fang, 2002). He argues further that, this includes transactions
between Government and Business (G2B), Government and Citizen (G2C), Government to
Employee (G2E) and among different units and levels of government.
E-government is not just about government web pages and E-mail. It is not just about service
delivery over the Internet (Donnelly and McGruirk, 2003). It is not just about digital access to
government information or electronic licensing and payment. Harris states that the challenge
for E-government will be to incorporate governance itself and shift the way political and social
power is organized and used’. In other words, the challenge for E-government will be to do the
following:

• Provide citizens with access to government information

• Deliver government services to citizens

Provide a portal for processing government information between citizens and

• businesses with government

Facilitate citizen participation in government, creating digital citizens in a digital

• democracy

Government in an E-business context: Figure 1  provides an illustration of the role of

governments in an E-business context. To enhance E-business activities within an economy,
governments can play a dual role. The first role is to facilitate and nurture E-business initiatives
within the economy. This includes facilitation in terms of providing the relevant infrastructure,
talent/skills development initiatives, favorable policies (e.g., taxation, rules and regulations)
that support the growth of E-business. In the case of Malaysia, the facilitation process is done,
for example through various guarantees given to businesses that intend to establish E-
business initiatives, under the multimedia super corridor master plan ( http://www.mdc.com.my ).
Apart from playing the role of facilitators, governments can also become active participants of
an E-business initiative. For example, governments can use electronic procurement solutions,
when dealing with its suppliers. In Malaysia, this is done through a project called E-perolehan
(http://home.eperolehan.com.my/en/default.aspx ).
E-perolehan is an electronic procurement system. It facilitates the procurement activities for
the government of Malaysia, by streamlining the procurement activities. The system is driven
by the Electronic Data Interchange (EDI) process. The E-perolehan system enables among
others,

• Suppliers to display their products on the world wide web

Receive, manage and process purchase orders and receive payment from government agencies
• via the Internet (http://home.eperolehan.com.my/en/about/overview3. aspx)

Government and E-
Fig. 1: business
 Fig. Changing nature of business
2: environments

Figure 2  shows the changing nature within business environments. Key lessons from the
framework above are summarized as follows. Initially, governments and businesses globally
took and insidE-out approach to business and government services rendered. Businesses sold
products based on what was manufactured. In terms of distribution channel, there was very low
level, of online/virtual channels being used. Governments on the other hand offer various
services to business and participate in transaction such as procurement through traditional
mechanisms.
Demand for products and government services were based on products that were available in
traditional market places. Then came the marketing and selling wave based on what
consumers wanted i.e. manufactures are taking an outsidE-in approach i.e., they manufacture
what solution(s) customers are looking for in a product. Products/services are also made
available online to increase convenience for buyers. Governments too, particularly in Western
societies, launched first and second generation web portals to offer various services to
businesses and societies in general. This has led to leading edge Internet driven business
strategies that have given birth to Portals and Vortals (Vertical Portals). Demand from
customers is based on how products/services can offer solution to daily problems.

The next wave will lead E-business into greater heights. Companies will involve all partners in
its supply chain to find out exactly, what the intention of every customer is. This is why,
intention based portals are emerging. Demand for products will be based on what consumers’
intent to have i.e., what they want, when they want it and how they want it. And the challenge
for managers in making sure that they proactively respond to competition is in obtaining
accurate information about customer intentions.
In a similar fashion, to respond proactive to the changing nature within the business sector,
governments need to move rapidly into the E-space and create value added service and
engage in strategic partnership with businesses. This could pave the way towards a concept
called Government Value Networks (GVNs). GVNs could foster intention based business
models i.e., governments and their respective business counterparts, engaging in intentions
based business/service models- i.e., accurate understanding of each others requirements. The
information and transactional flow within the GVNs is expected to be more efficient. Examples
are Business-to-Government procurement systems in Malaysia, via   a project called   E-
perolehan (E-procurement).
To be able to respond to changing competitive pressures, tightly integrated E-business
architecture is important. To succeed in the future, both businesses and governments are
required to establish flexible and scaleable E-business and E-government architectures that
can:

Improve customer service and overall operations quality through company wide integrated
• applications,

• Better link technology to business/government objectives

• Establish applications at a faster pace

Establish/build E-business and E-government applications that require minimal amount of

• training or cultural change and

• Achieve superior standard for overall company wide performance (Gates, 2000)

E-business and E-government landscape in Malaysia: The E-business and E-

government landscape in Malaysia, was initiated primarily through the Multimedia Super
Corridor (MSC) project, launched in 1996, by former Prime Minister of Malaysia, Tun Mahatir
Mohammed. The MSC story began alongside the Vision 2020 goals within Malaysia. The
Vision 2020 statement is a national objective and commitment to assist Malaysia in becoming a
fully developed nation by the year 2020.
Malaysia is rapidly loosing its competitive advantage to other emerging economies within the
region. The government in 1996 recognized soon thereafter that bringing Malaysian average
income up to that of a fully developed state by 2020 (estimated to be about US$10,500) will not
be achieved by focusing mainly on significant increases in manufacturing (projected to grow by
approximately 7% per year and topping out at 38% of GDP in the mid-1990’s). To enhance
Malaysian wages to that of a fully developed country would require another strategy and
another engine of economic growth. Hence, the MSC was launched in 1996.

The MSC is considered a long-term strategic initiative (1996-2020) which involves the
partnership between the Government (as the chief architect of its vision) and the private sector
(as the main drivers for its implementation). This reflects that the creation of MSC is a
necessity, as the new engine of growth for the economy as well as to ensure Malaysia is
moving in tandem with the rest of the world in embracing the IT revolution. Basically, the MSC
is a dedicated corridor (15 kilometers wide and 50 kilometers long) which stretches from the
Kuala Lumpur City Center in the north to the new Kuala Lumpur International Airport (KLIA) in
the south. Besides offering the ICT initiatives, the corridor aims to attract the world’s leading
ICT companies to locate their multimedia industries, undertake R&D, develop new products
and technologies and export from this corridor as their base. The corridor is also providing the
ideal growth environment for the local entrepreneurs to transform themselves into world-class
companies. These companies would be given the MSC status, which entitles them to a series
of benefits, as per guided by the bill of guarantees (http://www.mdc.com.my ).
A total of seven flagship areas were launched within the MSC. These are:

• Electronic government
 National multipurpose card
• (MyKad)

• Smart school

• Telehealth

• R&D clusters

• E-business

• Technopreneur development

E-government initiatives in Malaysia: The Malaysian Administrative Modernization

and Management Planning Unit (MAMPU) has started laying the groundwork to initiate nine
strategic initiatives to kick off the Public Sector ICT Strategic Plan (The Star, 27/10/2003). The
aim of the initiatives is to enable all government agencies to operate in a fully integrated
electronic environment. The identified nine strategic initiatives are:
• Citizen centric portal

Business community
• portal

• Local government
 system

Land and property

• system

• Online income tax

Integrated financial
• management system

• Government to employee portal

• E-learning

• E-social services

For the year 2004/2005, the government’s focus would be on rolling out more pilot projects
nationwide and the implementation of E-court and E-land (The Star Press, 2003). The E-
procurement project is expected to be rolled out to 3 500 government procurements sites
nationwide in addition to current 1,500 sites that are already connected. The Generic Office
Environment (GOE) project would be rolled out to 14 agencies with a base of more than 2,000
users. The Human Resource Management Information System (HRMIS) project, once
implemented in the 10 pilot agencies would be rolled out to all other agencies nationwide in
stages. In addition, there will be some services which will be improved in year 2004/2005 such
as:
 Road Transport Department (RTD) summons enquiry and
• payment services

• RTD Learners Drivers’ License issuance and renewal services

• Electronic scheduling and theory test

• Royal Malaysian Police traffic summons/enquiry services

Tenaga Nasional and Telekom Malaysia: utility bill enquiry and

• payment services

Issues within E-business initiatives: Malaysia’s global ranking in terms of its E-

readiness has declined. In 2004, Malaysia was positioned 33rd in the ranking is classified as
the followers in E-business framework. However, in the 2005 E-readiness report published by
the Economic Intelligence Unit, Malaysia is currently ranked 35 in the global E-readiness
ratings (Economic Intelligence Unit, 2005).
To further enhance Malaysia’s ability to compete on a global basis given the advent of
Knowledge Economy and new business architecture, the relevant policy makers can adopt
several key measures. Firstly, prE-requisites for successful development of E-business and E-
commerce applications must be in place. In this context, rapid development of infrastructure
and skills to meet the demands of a new economy has to be in place. Efforts such as creation
of knowledgE-based society should be given priority in every five-year economic master plan.
Secondly, Small and Medium Size Enterprises (SME’s) in Malaysia should be encouraged and
led to joint ventures and collaborative partnerships with global players involved in similar
activities. In this context, efforts within the MSC e.g., venture capital funding, grant schemes
and establishment of Incubator centers should continue.

There is need for greater collaboration and smart partnership between the world of academia
and corporate sector in Malaysia. In this context, issues such as competitive reward schemes
for research and local publication in addition to development of prototype business models
could be established. In other words, we need to raise both the level and standard of research
conducted in Malaysia to assist all efforts in creating strong base of knowledge workers. On a
similar note, greater collaboration between both public and private institution of higher
education and the corporate sectors is encouraged. In this regard, the role of practical training
and education syllabus based on demands/requirements of a Knowledge based economy
needs to be established. Thirdly to propel E-business and E-commerce, efforts to ensure that
issue such as limited public awareness, rapid development of Cyberlaws, privacy and online
transaction security needs to be addressed.
Issues within E-government initiatives: Despite early leadership, Malaysia’s E-
government initiatives face major challenges in moving to higher level of maturity and impact.
Major factors include:
• Lack of broadband infrastructure hindered roll out

• Low usage of Mykad beyond identity functions

 Slow adoption of E-government applications due to lack of integration and insufficient
• engagement of key stakeholders (especially users and citizens).

• Low PC ownership and low ICT literacy among the members of the society.

The information provided by government agencies via the E-government sites is stale and not
• current.

• The sites are not easy for the novices to navigate.

Implementation of Telehealth did not succeed due to inadequate change management and
• inappropriate Build Own Operate business model.

The need for educational reform at all levels i.e., primary, secondary and university education
in order to create a knowledgeable society (Hazman et al., 2003).
Implication to theory and practice: Successfully realizing the vision for E-government
means fundamentally changing how government operates and implies a new set of
responsibilities for public servants, businesses and citizens. The new services, information and
channels for government to interact with the different constituencies will require all parties to
become familiar with new technologies and develop new skills. The landscape of the E-
government applications as follows:
E-government will encompass the entire gamut of government operations, impacting citizen-
government (C2G), business-government (B2G) and government-government (G2G)
transactions. The important benefit from implementing E-government is the applicability of
services to a large cross section of end-users, improve the quality of services, be cost-effective
and demonstrate real productivity gains for government. However, the following factors are
crucial to ensure successful E-business and E-government initiatives for developing nations,
based on our experience in Malaysia:

• The existence of clear objectives for E-government and E-business initiatives by the government.

The ability of governments to nurture small and medium size enterprises (SMEs) in utilizing and E-
business and E-government applications. Overtime, through this process, assist the SMEs to
• become regional and eventually world class players.

The ability of governments to streamline the national education policies to ensure that nations are
• equipped with sufficient knowledge workers required to support and sustain E-business ventures.

The ability of governments to invest in relevant infrastructure such as broadband technology and
• make this accessible and affordable to the business communities.

Awareness of both business and governments about the existence of information and
• communication technologies that can streamline business and government service processes.

CONCLUSIONS
Several pre-requisites for successful development of E-business and E-government
applications must be in place, in the context of developing nations. Firstly, rapid development
of infrastructure and skills to meet the demands of a new economy has to be in place. Efforts
such as creation of knowledgE-based society should be given priority in every five-year
economic master plan.
To ensure successful deployment of E-business and E-government initiatives in the small and
medium size enterprises (SME’s), should be encouraged and led to joint ventures and
collaborative partnerships with the government of Malaysia. In the case of E-perolehan in
Malaysia, greater collaborative efforts between the SMEs and the Malaysian government are
needed before the true value of this E-procurement system can be realized.
There is also a need for greater collaboration and smart partnership between the world of
academia and corporate sector to proper E-business and E-government initiatives. In this
context, issues such as competitive reward schemes for research and local publication in
addition to development of prototype business models could be established. In other words, in
the case of Malaysia, there is a need to raise both the level and standard of research
conducted in Malaysia to assist all efforts in creating strong base of knowledge workers. On a
similar note, greater collaboration between both public and private institution of higher
education and the corporate sectors is encouraged. In this regard, the role of practical training
and education syllabus based on demands/requirements of a Knowledge based economy
needs to be established. Only then, can the value proposition of E-business and E-government
initiatives be experienced in Malaysia.

https://scialert.net/fulltextmobile/?doi=itj.2007.428.434
Top Ten Problems
Faced by Business
We never like to rely on one source to fuel our analyses of the problems facing business today,
so we’ve integrated our own interviews with corporate CEOs along with other
inputs, research and thinking to create this list of the top 10 problems for businesses to solve.

1. Uncertainty

All human beings, but it seems business leaders in particular, find great discomfort in
uncertainty. Uncertainty in the global economy, uncertainty in the credit markets, uncertainty
in how new regulations will affect business, uncertainty about what competitors are doing, and
uncertainty about how new technology will affect the business—these are just the start of a
never-ending list. The bottom line is that uncertainty leads to a short-term focus.
Companies are shying away from long-term planning in favor of short-term results, with
uncertainty often the excuse. While this might feel right, we believe that a failure to
strategically plan five years into the future can end up destroying value. The problem to be
solved, therefore, is to balance the need for a more reactive, short-term focus with the need
for informed, long-term strategies.

A failure to strategically plan five years into the future can

end up destroying value.
2. Globalization

In interviews conducted by the Lean Methods Group, seven of 10 Fortune 500 CEOs cite the
challenges of globalization as their top concern. Understanding foreign cultures is essential to
everything from the ability to penetrate new markets with existing products and services,
to designing new products and services for new customers, to recognizing emergent,
disruptive competitors that only months earlier weren’t even known. The problem to be solved
is to better understand international markets and cultures through better information
gathering and analysis of what it all means.Similarly, the incredible degree of government
intervention in nearly all major economies of the world is leading to much greater uncertainty
(see No. 1 above) in the global marketplace, making international operations ever harder to
manage.
Big companies are struggling with innovation and a better
innovation process is at the top of the agenda for most
CEOs.
3. Innovation

Interestingly, we haven’t found that many companies are looking to create more innovative
cultures. At least not the big companies (Global 1000) anyway, though that changes some as
companies get smaller. This finding was a big surprise when we did our first studies in 2009
and little has changed since. It seems big companies are struggling with innovation and a
better innovation process is at the top of the agenda for most CEOs, but the idea of a more
innovative culture appears too frightening to many. The problem to be solved is how
to become more innovative while still maintaining a sense of control over the
organization.

4. Government Policy & Regulation

A changing regulatory environment is always of concern in certain industries, but uncertain

energy, environmental and financial policy is complicating the decision making for nearly all
companies today. It’s true that things seem to have settled down over the past couple of
years, but have they really? We find that they haven’t; it’s simply that dealing with an
unknown regulatory environment is fast becoming the new normal and companies are deciding
to get on with it—whatever “it” may be—despite the angst. Whether a demand from customers
or shareholders to become more “green,” the threat of increased costs due to new carbon
taxes, constant talk of changes to corporate tax rates, or the impending healthcare mandate
for businesses in the US, much is unsettled. The problems to be solved are to understand the
meaning of regulation and government policy in your industry, its implications for your
business, and to develop the skills necessary to deal with it.

5. Technology

The pace of technological improvement is running at an exponentially increasing rate. While

this has been true for several decades, the pace today makes capital investment in technology
as much an asset as a handicap because a competitor may wait for the next-generation
technology, which may only be a year away, and then use it to achieve an advantage. Of
course waiting to be that competitor can be equally risky. What’s a CEO to do? Similarly, the
ability for even the best of technologists to stay informed about emerging technology is in
conflict with the need to master a company’s current technology. The problem to be solved is
to develop a long-term technology strategy while remaining flexible enough to take
advantage of unforeseen technology developments.

There’s no doubt that life and business have gotten more

complex, even as certain tasks and activities have become
easier due to information technology.
6. Diversity

A particular subset of human capital planning is found so often in our research that it is worth
its own mention. Diversity brings many challenges, as it makes it far more likely that people do
not agree, and the lack of agreement makes running a business very difficult. At the same
time, the lack of diversity within many large company leadership teams leads to a narrow view
of an ever-changing and diverse world—contributing to groupthink, stale culture and a
tendency to live with the status quo for too long. The problem to be solved is to first define
what diversity (and we’re not talking about satisfying government statisticians) really means in
your company, then foster the expansion of differing ideas and viewpoints while
ensuring a sufficiently cohesive environment that efficiently gets things done.

7. Complexity

There’s no doubt that life and business have gotten more complex, even as certain tasks and
activities have become easier due to information technology. The pace of change is
quickening. The global economy is becoming still more connected, creating a much larger and
more diverse population of customers and suppliers. Manufacturing and services are
increasingly targeted at smaller, specialized markets due to the flexibility that IT provides in
these areas. The 3D printing revolution is a perfect example. We know from our knowledge of
the patterns of evolution that, in reality, systems tend to become more complex as they
evolve, then become simplified again. The problem is how to develop better systems-
thinking capability so you can design your business models, processes, products and
services in a way that minimizes unnecessary complexity.

8. Information Overload

It is said that the only true constant is change, and in today’s world nothing is changing more,
or growing faster, than information. A March 2010 estimate put global Internet traffic at 21
exabytes—21 million terabytes. In 2016, global traffic reached 1.1 zettabytes. Every day, 2.5
quintillion bytes of data are created. The ability of companies, much less individuals, to
consume and make sense of the information that is available (and necessary) to make good
decisions is becoming a nearly insurmountable challenge. The problem to be solved is to deal
with this mountain of information with both technology and human know-how, then
to convert this information into valuable knowledge.

9. Supply Chains

Because of uncertainty in demand and the need to stay lean, companies are carrying smaller
inventories than ever. At the same time, uncertainty in supply, driven by wildly changing
commodity prices, an apparent increase in weather-related disruptions, and increasing
competition for raw materials makes supply chain planning more challenging than ever.
Smaller suppliers that, five years after the global financial crisis, still struggle to get the credit
they need to keep up with their larger customers’ demand exacerbates an already unwieldy
situation. The problem to be solved is to develop a supply-chain strategy that not only
ensures the lowest costs, but also minimizes the risk of crippling supply-chain disruptions.

The lack of sophisticated approaches to information

acquisition, analysis and the development of unique insight
leaves many companies at a disadvantage.
10. Strategic Thinking & Problem Solving

While the first nine biggest problems faced by business are a direct result of research, the 10th
is really the Lean Methods Group’s own conclusion based on the prior nine. The lack of
sophisticated approaches to information acquisition, analysis and the development of unique
insight leaves many companies at a disadvantage; they lack a long-term strategic imperative
and instead jump from one strategy to the next on a year-to-year basis. Everyday problem-
solving competency among today’s business leaders is also limiting their ability to adequately
deal with the first nine problems. This is why corporate managers tend to jump from one fire to
another, depending on which one their executives are trying to put out, and in many cases the
fast-changing business environment is what ignites these fires in the first place. So what is the
problem to be solved? We believe, to navigate the future, companies must resolve
that strategic thinking and problem solving are the keys to successful business, then
develop a robust capability at all levels.
https://www.leanmethods.com/resources/articles/top-ten-problems-faced-business/

We live in a world increasingly propelled by technological change. The next big thrust in a quest to make our lives better, simpler and more productive
is electronic commerce (or E-commerce). What is E-commerce? Who will use it? What are the barriers to its successful implementation? How will a
viable consumer model be constructed?

While I will examine the technology that makes this e-commerce possible, I will also examine the issues of trust and image in e-commerce. It is not
possible to separate the issues of technology, security, and trust. The whole image that secure, Web-based commerce needs polishing if it will ever
meet expectations. One prediction claims that e-commerce will achieve revenues of $200 billion globally by the end of the year 2000. Considering
that in 1995 approximately $131 million of goods were purchased online, the jump to $200 billion is staggering.

The technologies that make the World Wide Web and e-commerce possible have some potentially negative components. Privacy issues are a major
concern for many, since there are the means to collect consumer information easily with digital tools. Transaction security is equally important as
well. These issues need timely resolution with government and business working together to ensure the privacy of consumers and the fidelity of
transactions. Business and government need to develop a set of specific standards that are part of a uniform business code for transacting business
on the Internet.

Without cooperation, government agencies will step in and deal in a reactionary mode to abuses that are either taking place or imagined.

https://firstmonday.org/ojs/index.php/fm/article/view/601/522