THE GROWTH OF

E-COMMERCE &
ITS IMPLICATIONS
OF HR SYSTEM

MGT-702 GROUP
TERM PAPER

Prepared By

Name: Asaduzzaman Munna, ID-

21174002
Name: Mohammad Arif Chowdhury,
ID-21174020
Name: MD. Tahmidur Rahman, ID-
21174032
Name: Sharmin Sultana Shammi, ID-
21174011
 THE GROWTH OF E-COMMERCE & ITS IMPLICATIONS OF HR SYSTEM

Executive Summary
This term paper is about the faster growing sector of e-commerce and how it is also affecting the
whole process of HRM as well. Electronic commerce technologies has significant implications
for the way organizations manage their human resource functions. At the beginning, there will be
an introduction of e-commerce, advantages and its growth. Finally, its implication on HRM.

Introduction

Ecommerce: (or electronic commerce) is the buying and selling of goods (or services) on the
internet. It encompasses a wide variety of data, systems, and tools for online buyers and sellers,
including mobile shopping and online payment encryption.

Most business with an ecommerce presence use an ecommerce store and/or and ecommerce
platform to conduct online marketing and sales activities and to oversee logistics and fulfillment.

Ecommerce was introduced about 40 years ago in its earliest form. Since then, electronic
commerce has helped countless business grow with the help of new technologies, improvements
in internet connectivity, added security with payment gateways, and widespread consumer and
business adoption.
Advantages of E-commerce:

Ecommerce has many different advantages from faster buying to the ability to reach large
audiences 24/7. Let’s take a look in detail at some of the top perks it has to offer.

1. Faster buying for customers

For customers, ecommerce makes shopping from anywhere and at any time possible.

That means buyers can get the products they want and need faster without being constrained by
operating hours of a traditional brick-and-mortar store.

Plus, with shipping upgrades that make rapid delivery available to customers, even the lag-time
of order fulfillment can be minimal (think Amazon Prime Now, for example).

2. Companies can easily reach new customers.

Ecommerce also makes it easier for companies to reach new, global customers. An ecommerce
store isn’t tied to a single geographic location, it’s open and available to any and all customers
who visit it online.

With the added benefit of social media advertising and email marketing, brands have the
potential to connect with massive relevant audiences who are in a ready-to-buy mindset.

3. Lower operational costs.

Without a need for a physical storefront (and employees to staff it), ecommerce retailers can
launch stores with minimal operating costs.

As sales increase, brands can easily scale up their operations without having to make major
property investments or hiring a large workforce. This means higher margins overall.

4. Personalized experiences.

With the help of automation and rich customer profiles, you can deliver highly personalized
online experiences for your ecommerce customer base.

Showcasing relevant products based on past purchase behavior, for example, can lead to higher
average order value (AOV) and makes the shopper feel like you truly understand them as an
individual.
 Timeline of Ecommerce Growth

 1969: CompuServe is founded

Founded by electrical engineering students Dr. John R. Goltz and Jeffrey Wilkins, early
CompuServe technology was built utilizing a dial-up connection. In the 1980s, CompuServe
introduced some of the earliest forms of email and internet connectivity to the public and
dominated the ecommerce landscape through the mid-1990s.

 1979: Michael Aldrich invents electronic shopping

English inventor Michael Aldrich introduced electronic shopping by connecting a modified TV

to a transaction-processing computer via telephone line. This made it possible for closed
information systems to be opened and shared by outside parties for secure data transmission and
the technology became the foundation for modern ecommerce.

 1982: Boston Computer Exchange launches

When Boston Computer Exchange launched, it was the world’s first ecommerce company. Its
primary function was to serve as an online market for people interested in selling their used
computers.

 1992: Book Stacks Unlimited launches as first online book marketplace

Charles M. Stack introduced Book Stacks Unlimited as an online bookstore. Originally, the
company used the dial-up bulletin board format. However, in 1994 the site switched to the
internet and operated from the Books.com domain.

 1994: Netscape Navigator launches as a web browser

Marc Andreessen and Jim Clark co-created Netscape Navigator as a web browsing tool. During
the 1990s, Netscape Navigator became the primary web browser on the Windows platform,
before the rise of modern giants like Google.

 1995: Amazon launch

Jeff Bezos introduced Amazon primarily as an ecommerce platform for books.

  1998: PayPal launches as an ecommerce payment system

Originally introduced as Confinity by founders Max Levhin, Peter Thiel, Like Nosek and Ken
Howery, PayPal made its appearance on the ecommerce stage as a money transfer tool.By 2000,
it would merge with Elon Musk’s online banking company and begin its rise to fame and
popularity.

 1999: Alibaba launches

Alibaba Online launched as an online marketplace with more than $25 million in funding. By
2001, the company was profitable. It went on to turn into a major B2B, C2C, and B2C platform
that’s widely used today.

 2000: Google introduces Google AdWords as an online advertising tool

Google Adwords was introduced as a way for ecommerce businesses to advertise to people using
Google search. With the help of short-text ad copy and display URLs, online retailers began
using the tool in a pay-per-click (PPC) context. PPC advertising efforts are separate from search
engine optimization (SEO).

 2004: Shopify launches

After trying to open an online snowboarding equipment shop, Tobias Lütke and Scott Lake
launched Shopify. It’s an ecommerce platform for online stores and point-of-sale systems.

 2005: Amazon introduces Amazon Prime membership

Amazon launched Amazon Prime as a way for customers to get free two-day shipping for a flat
annual fee.

The membership also came to include other perks like discounted one-day shipping and access to
streaming services like Amazon Video and members-only events like “Prime Day.”

This strategic move helped boost customer loyalty and incentivize repeat purchases. Today, free
shipping and speed of delivery are the most common requests from online consumers.

 2005: Etsy launches

Etsy launched, allowing crafters and smaller sellers to sell products (including digital products)
through an online marketplace. This brought the makers community online expanding their reach
to a 24/7 buying audience.
  2009: BigCommerce launches

Eddie Machaalani and Mitchell Harper co-founded Big Commerce as a 100% bootstrapped
ecommerce storefront platform. Since 2009, more than $25 billion merchant sales have been
processed through the platform, and the company now has headquarters in Austin, San Francisco
and Sydney.

 2011: Google Wallet introduced as a digital payment method

Google Walletwas introduced as a peer-to-peer payment service that enabled individuals to send
and receive money from a mobile device or desktop computer.

By linking the digital wallet to a debit card or bank account, users can pay for products or
services via these devices.

Today, Google Wallet has joined with Android Pay for what is now known as Google Pay.

 2011: Facebook rolls out sponsored stories as a form of early advertising

Facebook’s early advertising opportunities were offered to Business Page owners via sponsored
stories. With these paid campaigns, ecommerce businesses could reach specific audiences and
get in the news feeds of different target audiences.

 2011: Stripe launches

Stripe is a payment processing company built originally for developers. It was founded by John
and Patrick Collison.

 2014: Apple Pay introduced as a mobile payment method

As online shoppers began using their mobile devices more frequently, Apple introduced Apple
Pay, which allowed users to pay for products or services with an Apple device.

 2014: Jet.com launches.

Jet.com was founded by entrepreneur Marc Lore (who sold his previous company, Diapers.com,
to Amazon.com) along with Mike Hanrahan and Nate Faust.

The company competes with Costco and Sam’s Club, catering to folks looking for the lowest
possible pricing for longer shipping times and bulk ordering.
  2017: Shoppable Instagram is introduced

Instagram Shopping launched with ecommerce partner BigCommerce. Since then, the service
has expanded to additional ecommerce platforms and allows Instagram users to immediately
click an item, and go to that item’s product page for purchase.

 2017: Cyber Monday sales exceed $6.5B.

Ecommerce set a new record when online sales broke $6.5 billion on Cyber Monday ; a 17%
increase from the prior year.

2020: COVID-19 Drives Ecommerce Growth.

COVID-19 outbreaks around the globe pushed consumers online to unprecedented levels. By
May of 2020, ecommerce transactions reached $82.5 billion, a 77% increase from 2019. It would
have taken four to six years to reach that number looking at traditional year-over-year increases.

Consumers have moved online to make purchases normally made in physical stores, such as food
and household items, apparel, and entertainment. Many consumers say they’ll continue to use
online storefronts until a COVID-19 vaccine is available.

Impact of Ecommerce Growth

Ecommerce has come a long way since the CompuServe launch in 1969. Changes in technology
have certainly driven ecommerce growth, along with global circumstance. Today, ecommerce
must meet consumers’ expectation for safety and convenience.

Covid-19 outbreaks around the globe pushed consumers online to unprecedented levels.

 The United Parcel Service Inc. rode a pandemic-fueled surge in ecommerce to higher
profits and a 13% jump in revenue during the June 2020 quarter. During that same
quarter, UPS saw a 65% increase in deliveries to residences.

 In 2019, U.S. e-retail sales on Amazon increased by 19.1% and amounted to over 222.6
billion U.S. dollars.
 By the end of 2020, U.S. spending online is expected to reach approximately $375
billion. Experts forecast that by the end of 2024, online spending will surpass $476
billion.
Consumers are switching their mindset to think digital first and in a survey of the US, UK &
Canada, 43.2% of consumers plan to do more of their shopping online over the coming months
( Dinozo, 2020). In the UAE, like many businesses around the world, both traditional retailers
and digital start-ups with strong e-commerce presence have shown their ability to maintain
business during the turbulent first months of 2020.

Consumers have moved online to make purchases normally made in physical stores, such as food
and household items, apparel, and entertainment. Many consumers say they will continue to use
online storefronts until a Covid-19 vaccine available.

The impact of ecommerce is far and wide with a ripple effect from small business to global
enterprise.

 Large retailers are forced to sell online:

For many retailers, the growth of ecommerce has expanded their brands’ reach and positively
impacted their bottom lines. But for retailers who have been slow to embrace the online
marketplace, the impact has been different.

In February of 2019, online sales narrowly surpassed general merchandise stores for the first
time, including department stores, warehouse clubs and supercenters. Because Amazon Prime
took away the price of shipping, more consumers are comfortable with online shopping.
  Ecommerce helps small businesses sell directly to customers.

For many small businesses, ecommerce adoption has been a slow process. However, those
who’ve embraced it have discovered ecommerce can open doors to new opportunities.

Pre-pandemic, small businesses were working to expand their ecommerce presence. Today, 23%
of small business owners feel they’ll have to strengthen their ecommerce capabilities in order to
survive in a post-pandemic world. Another 23% of small business owners have created a website
or updated their existing one since COVID-19 lockdowns began.

 B2B companies start offering B2C-like online ordering experiences.

B2B cpanies are working to improve their customer experiences online to catch up with B2C
companies. This includes creating an omnichannel experience with multiple touch points and
using data to create personalized relationships with customers.By 2026, B2B transactions are
expected to reach $63,084 billion.

 The rise of ecommerce marketplaces.

Ecommerce marketplaces have been on the rise around the world since the mid-1990s with the
launch of giants we know today, such as Amazon, Alibaba, and others. Amazon in particular is
known for its unique growth strategy that has helped them achieve mass-adoption and record-
breaking sales. But Amazon doesn’t do this alone. As of 2020, 52% of products sold on Amazon
were sold by third-party sellers (i.e. not Amazon)
  Supply chain management has evolved.

Some warehouses are now offering value-added services to help make ecommerce and retail
operations more seamless and effective.

These services include:

 Separation of stock/storage for online vs. retail sales.

 Different packaging services.
 Inventory/logistics oversight.

 New jobs are created but traditional retail jobs are reduced.

Jobs related to ecommerce are up 2x over the last five years, far outpacing other types of retail in
regard to growth.

 Customers shop differently.

Ecommerce (and now omni-channel retail) has had a major impact on customers. It is
revolutionizing the way modern consumers shop. Millennials are the largest demographic of
online shoppers (67%), but Gen X and baby boomers are close behind at 56% and 41%
participating in online shopping activities respectively.

 Social media lets consumers easily share products to buy online.

Researchers have discovered that ecommerce has made an interesting social impact, especially
within the context of social media.

Today, ecommerce shoppers discover and are influenced to purchase products or services based
on recommendations from friends, peers and trusted sources (like influencers) on social networks
like Facebook, Instagram and Twitter.

 Global ecommerce is growing rapidly.

By 2022, ecommerce revenue in the U.S. alone is expected to reach $479 billion, with the toys,
hobby and DIY vertical seeing the largest growth.
 Ecommerce and its implication on HR system

E-commerce technologies are changing the way work tasks are conducted and thus have
significant implications for the way organizations manage their human resource functions.
Although the impact of IT on work and employment has been the subject of research, little
attention has been paid to e-commerce and its effect on work organization and HR management.
At the point when a business first chooses to actualize e-business methodologies and operations,
it regularly utilizes the personnel it has for doing so. However, as the strategy increases in
magnitude, the organization will need to change in order to better embrace and ‘live’ a more
efficient and productive organizational restructuring for maximum desired results. In doing as
such, the human resource for the organization can turn out to be critically imperative to
achievement. The quantity of required experts expected to cooperate with a specific result to
expand capability turns into a great test.

Experts speak on the attributes an HR professional must have to be successful in the fast-paced
e-commerce environment. Being a human resource professional in India's high-pressure e-
commerce industry can be tricky. The HR professional should have ability and experience for
active participation in business decisions to do well in e-commerce.

The person should also have the ability to look at the larger picture and strive for continual
improvisation and optimization of human resources in all processes. Seven important Human
Resource traits for e-commerce industry:
1. Team player with an ability to create the feeling of 'one team, one goal'.

2. Strong understanding of different industries, their talent landscapes and how to map them to
the e-commerce ecosystem.

3. Ability and experience for active participation in business decisions.

4. Ability to do the right communication with the right people at the right time in the right
manner.

5. Continual improvisation and optimization at all times in all processes.

6. Adaptability and ability to mould as per evolving business situations.

7. Ability to look at the larger picture

HR plays increasingly integral role in designing and supporting change in Ecommerce:

 Building agility

One of the greatest factors contributing to the strength of the e-commerce sector is the ability to
constantly scan and read the environment to seize growing opportunities at pace, for example by
leveraging market data around consumer preferences and strategically responding to this.

HR Insights: In the on-going quest for organizational agility, many HR functions are becoming
more attuned to external economic and social contexts and leveraging people analytics to build
organizational awareness. HR can support numerous organizations to build an integrated people
strategy that is adaptable, agile and forward thinking, focusing on both organizational design and
organizational development as strategic priorities.

 Know your audience

The e-commerce sector superbly optimizes services for its consumer audiences, for example
reading the need for digital natives who are most likely to increase their on-line shopping habits
to have near instant shopping support and solutions.

HR Insights: Getting to know your people population doesn’t have to be segregated to a small
pipeline of perceived talent. One accessible approach is to look at remote and virtual talent
assessment solutions such as remote assessment centres, multi-media virtual interviews and
exploration of career aspirations and personality preferences through tools that are mobile
friendly. Many progressive organizations elevating opportunities to engage existing employees
as well as prospective ones. Some innovative approaches include engagement through game-
based assessments and competitions to enable the solving of real business case challenges.
Ultimately, engagement in assessment and learning is likely to enable individuals to show their
true potential and for organizations to learn more about their people. Utilizing integrated and
simplified reporting to identify trends, strengths and growth opportunities can all clarify HR’s
purpose and focus.

 Expand autonomy and choice

In e-commerce, effective companies have been focusing on evolving consumer trust and brand
loyalty through product quality and AI powered support. Tapping into tailored choice and
recommended product ranges is proving an effective way to increase consumer spend and
product reach.

HR insights: Most organizations are seeking to encourage their people to become more
autonomous in their learning and to optimize budgets for people development. Neuroscience
confirms that enabling people to have a level of choice and autonomy in their development goes
a long way in building a growth mindset and optimizing learning. In fact, recent CIPD research
identifies that only 47% of UK employees believe their job offers good ways to develop their
skills (CIPD, 2020). Therefore, identifying how your people learn best will really support
diagnosis of the best learning solutions before prescribing.

 Coaching-on-demand
HR System can be developed as coaching-on-demand solution which offers individuals and
organizations the freedom to tap into affordable world-class coaching provision when they need
it, providing an autonomous ‘credit’ system which is accessible and can support optimization of
value.

 Supporting autonomy in learning

Many organizations are expanding accessibility to development and learning support to all
employees which can really aid balancing formal and informal learning through social and
digital learning practices.

The role of HR in the e-commerce sector is best described in terms of agility, quirkiness
and thinking out of the box when it comes to hiring, retention and rewards and recognition
policies.

Hiring and retaining good workers is a significant expense for companies, enough that offering
these mini-payouts is viewed as a way of weeding out workers who might not be completely
committed for the longer run.

 In addition, human resource departments need to establish a sense of collaboration and

commonality among whatever system or combination of systems is chosen.  This can be
done by not only making roles challenging and stimulating, but also by sharing skills and
cross training employees. In many of the conventional sectors, HR is supposed to be very
process driven and rigid. There are companies, which are ready to let go of a talent but
not bend rules. Such rigid HR policies are a complete ‘No’ in the e-commerce sector.
Keeping in mind the thinking process and the behaviour patterns of the young,
aspirational, socially overactive and highly opinionated workforce today, E-commerce
firms are coming up with market- leading and differentiated people practices.
Organizations in ecommerce ecosystem, especially, must follow their own set of
management rules for surviving in a volatile market. Earlier this year, Snapdeal
introduced a new performance review system (GROW - Goal setting, Regular feedback
& appraisal, Own your development and Win with the company) in which the company
decided to undertake appraisals every trimester instead of annual performance reviews.
The new system also encourages employees to give their feedback as an effort to manage
their expectations.
 The general perspective is that bigger firms more often than not have spending plans that
are more vulnerable to all choices. Since staff pros with e-business learning and
experience can be popular with the huge number of transitioning organizations, it turns
into a test for organizations to retain skilled people. It can likewise turn out to be
extremely costly as experts usually demand hefty salaries. The importance of retaining
solid performers becomes even more critical when time, money and resources have gone
into training them in new areas of skill development.

 Creating and holding such staff can be such a colossal test and potential budgetary
presentation, a developing pattern among organisations is to outsource the work. This is
commonly done in two positions: outside-in and back-to-front. The outside-in
configuration for e-commerce includes outsourcing a few tasks where there isn't
sufficient in-house learning or experience. As the ventures thrive, the organisation adds to
these abilities for future needs.

 "From employee-friendly maternity benefits policies to an environment promoting

workforce flexibility, with no time or location constraints, what were traditionally
thought to be superfluities, are now being viewed as hygiene factors,” says, Vishalli
Dongrie, senior director and head of human capital consulting, Deloitte. Chief people
officer Mekin Maheshwari at Flipkart says, that employees will now be able to take
continuous six months unpaid leave for a career break or any other commitment. The
leave can also be taken if the employee wants to recover from any personal loss and then
re-join work but can avail this after completing two years’ work span in Flipkart. This is
mainly to allow employees put in their best focused work commitment to the
organization.

 Vital objective that must be tended to in setting up the fitting blend of experts inside of an
e-business structure includes adaptability. Adaptability fundamentally implies that the
framework or organisation must have the capacity to handle any alterations in requests
being asked. For instance, like a spring however inverse in development, the e-business
framework (counting the organisation) must have the capacity to contract or grow as
required by the interest on it. Where a spring contracts with included weight (the
interest), an e-trade framework would in principle need to extend to handle the increment
in limit. The spring's development is just used to exhibit the development taking into
 account impacting conditions. On the other hand, the fundamental message is that a
supportable e-trade framework must have the capacity to handle variance sought after.

CONCLUSION

In the conclusion, a big challenge for the e-commerce industry is that it doesn’t have a readily
employable workforce to bank on.  This means, it has to employ people who are the closest fit,
train them, make them conducive to the new environment and also constantly motivate them to
be able to retain them for the longest period. HR in the e-commerce sector has to be always on
their toes. The e-commerce industry works 24x7, 365 days, which means that the workforce is on
the job round the clock. In such a scenario, HR in this sector is no longer defined by pre-
determined office hours. Since the employees in e-commerce work round the clock, it is the duty
of HR to support them with everything that keeps them motivated.
 REFERENCES
https://www.ijariit.com/manuscripts/v4i6/V4I6-1356.pdf

https://www.peoplematters.in/article/strategic-hr/hr-strategies-in-e-commerce-industry-
14591
https://yourstory.com/2015/10/e_commerce-hr-role/amp
https://www.slideshare.net/syedkshah2/impact-of-e-business-on-human-resource
inkedin.com/pulse/what-can-hr-learn-from-e-commerce-sector-digital-tara-cherniawski
https://www.bigcommerce.com/articles/ecommerce/#growth-of-ecommerce
• Global retail e-commerce market size 2014-2023 | Statista

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