Description of e-commerce challenges by modern authors

The main economic power of Internet is that geographic boundaries disappear for the enterprise. Thus, an e-commerce initiative can easily become a global e-commerce initiative. Nevertheless, before conducting e-business on a global scale, enterprises operating on the website should consider a range of international economic, technological, social and legal issues. To benefit from e-commerce, it’s important for business to overcome e-commerce inhibitors and problems. Revealed from the literature e-commerce issues in this paper are classified, summarized and presented as — technological, managerial, and business-related.

Modern authors, such as Alaa Hassan — a passionate e-commerce advisor and founder of modern e-commerce training academy prove that most of the barriers to e-commerce implementation have already been overcome. And most of the remaining can only be overcome through the joint initiative of e-commerce corporations and institutions that regulate it. In his blog, the author gives an example of 10 most common challenges faced by e-commerce businesses:

1. Dilemma of finding the right products for selling — many e-shops have a limited catalog of products what greatly reduces its profits.

2. The problem of selecting the target audience of clients — along with the rapidly changing and modernizing world, online customers learn to look for the goods they need and not pay attention to unnecessary information. Very often online shops begin its work without having of market analysis and not choosing the target audience of customers, which leads to its rapid collapse.

3. Generate targeted traffic — digital marketing channels are developing. Retailers can no longer rely on one type of channel to drive traffic to their online store.

4. Capturing of high-quality sources — online stores spend a significant amount of money sends traffic to their online store. With a conversion rate of 1% to 3%, they should make great efforts to generate potential customers to maximize their marketing efforts. Not all potential customers are created the same way.

5. Supporting ideal prospects — having a large list of emails is worthless if stores are not actively communicating with subscribers.

6. Converting shoppers into paying consumers — managing traffic quality and tipping tips is key if shops want to close sales. At some point its need to convert these potential customers to pay for marketing campaigns.

7. Saving consumers — attracting new customers is more expensive than maintaining current ones.

8. Achieve profitable long-term growth — increasing sales is one way of doing business, but ultimately the profit is most important.

9. Choosing of right technology and partners — some online stores may encounter growth problems because its technology limits its selves or its managers hired wrong partners / agencies to help them manage projects. Moreover, retailers who want to grow should be built on a good technological basis. They have to choose the right shopping cart solution, inventory management software, e-mail software, CRM system, analytics and more.

10. Attracting and hiring the right people — online stores can have vision and aspiration, but there remains one real fact — its need the right people to help in realizations.

All of the above facts have been summarized also by Makoto Yokoo professor of Kyushu University in Tokyo and were presented in the form of a table of risks for the implementation of e-commerce in professor’s book “Electronic Commerce: Theory and Practice”.

Table 3: Disadvantages of e-commerce

For organizations:

possible doubts of the parts about the affiliation of a project to the company (negative anonymity),

some complexity in the conduct and legitimization of the enterprise on the Internet.

For consumers:

mistrust of the consumer to services sold through the Internet,

the inability to “touch” the goods by hand,

waiting for delivery of purchased products,

possible difficulties and costs of returning goods.

For society:

attractive fraud platform (reducing of network security),

displacement from the market of commercial offline enterprises.

For the state:

the shortfall in the state budget tax payments.

The emergence and development of e-commerce is not much more “revolutionary” event than the emergence of direct sales technology, taking orders and selling over the phone, selling through the distribution of printed catalogs, selling through special television programs. Some of these technologies may be completely superseded by e-commerce technologies in the future, some will exist in parallel. But without significant breakthroughs (technical, organizational, intellectual, etc.), e-commerce will remain what it is today — just another weapon in the rich arsenal of professional marketers.


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