Importance of the E-commerce in Modern Day Business

Electronic Commerce has changed the mode of business within a very few years of time. The importance of E-commerce is undeniable in the modern-day business of every industry. Regardless of the industrial specialization it provides equal opportunity to every firm to reduce it costs and to customers provide numerous choices of buying their desired products. In this paper the impacts of e-commerce on the industrial structures, value chain of the industry and the customer's behaviors towards the technological acceptance of the online shopping and intentions with the evidence from the past studies (Vakeel, Das, Udo, & Bagchi., 2017).

Impacts of E-commerce on Industrial Structure and Value Chain

Industry Structure:

E-commerce has changed the industry structure in almost every industry regardless of the type of industries and firms in practice of selling their products. The industry structure based on the nature of the agents or players in an industry and their bargaining power, which is quite heavily modified with e-commerce practices in the industries. The industry structure based on the five major forces in the market like rivalry or competition between existing competitors, bargaining power of suppliers, bargaining power of buyers, threats of new entrants and threat of substitute products (Traver & Ludon, 2018).

When we talk about the industrial structure, in fact, we consider the business environment in the relevant industry, while the revolution of e-commerce has changed the relative strengths of the five forces which are called Porter’s five forces of business. E-commerce is playing a progressively more significant role in numerous industries. The new expertise it fetches influences not just price but also the mechanism of industry structure, with contrary effects across industries.

Industry Structural Analysis:

The industrial structure changed with the revolution of the e-commerce as in the traditional industry structure there was a long process of the delivery of the products and even takes much time and lower productivity level was considered in the industries. E-commerce has reduced the role of third party involvement in the selling and purchasing of the products (Kabanda & Brown., 2017). The industrial structure has almost six generic players as suppliers, manufactures, distributors, transporters, retailers and customers, the e-commerce has reduces the role of distributors, and retailers as the direct business activity through the online markets, which means that the E-commerce has reduced the costs and prices of the products as the margin of the distributors and retailers will not be included in the price that customer will pay for the products (Choshin & Ghaffari., 2017).

Industry Value Chain:

As we know value chain is a set of activities that industries of firms perform to produce a product or service from the raw materials. Every single activity of the production process adds an economic value to the final product. The practice of E-commerce has revolutionized the in this way that it reduces the costs of information, and provided the opportunities to each of the industrial component to maximize their positions or margins. Especially for the manufacturer that it reduces the role of the retailers and distributors as E-commerce allow him to connect with customers directly and even with his suppliers through Business to Business approach the business relationships takes place with reduced costs due to the benefits of E-commerce (Sila, 2015).

Similarly other components of the industrial structure could also get benefit from the E-commerce practices as the retailers and distributors could also use it to reduce their costs and majorly customers makes direct purchases which provide them to get most of it from the purchased products with lower prices with comparison to traditional industrial structure (Rüßmann, et al., 2015).

Firm Value Chain:

Firm’s value chain is also affected positively by the E-commerce practice in the industry. The E-commerce provides the firm the opportunities to increase the organizational proficiencies and positioning the product differently. By using the online platforms for the outsourcing the some of the industrial activities in order to specialize in particular products and gaining the benefits from the experience of other specialists in the industry.

The E-commerce enabled the firms to get engaged with the industry as it banded them together in aggregate purchases, creating industrial exchanges and many other opportunities which have increased the value of all the components of the firm’s value chain as the activities of the firm with the modifications due to E-commerce practice will gain more value and add more value to the firm’s final products (Li, Frederick, & Gereffi., 2018). The basic activities of the firm as inbound logistics, operations, outbound logistics, sales and marketing and after sale services, which enhance the value of the product and with the effect of the E-commerce every aspect or component is now more efficiently working in the firm’s activities.

Changing Purchasing Patterns on Social commerce:

The effectiveness of the e-commerce practices have changed the purchasing behavior of the people towards the manual purchasing to social commerce.

Consumer’s Social Commerce Shopping Behaviors:

The advancement in the technology has made the people advance than ever before, now people require ease in every activity of life with the help of the modern technology. So in the field of business the social commerce has gain much greater than the tradition mechanisms of the business. According to Zhou, et al., (2013) the social platforms of the business and purchasing the products like Facebook has revolutionized the way of the shopping and business as it is making profits for the manufacturers, and providing ease to consumers to gain their desired values from the products (Zhou, Ping Zhang, & Zimmermann., 2013). Social commerce is no longer will work as the just media publicity or a business craze. It turns out to be a recognized practice, which has changed the mode of shopping in the modern day business.

According to Lo, et al., (2016) users with durable buying goal lean to accumulate and click through on more comfortable. on the other hand, as consumer’s move toward the time of buy their commotion turn into more topically paying attention and procedures move from save to investigate. They elaborated that the social commerce have changed the way of thinking of customers towards the products as they have more opportunity to get engaged with retailers or manufacturers directly and gain what they want to get (Lo, Dan Frankowski, & Leskovec., 2016). The purchasing behavior also tends towards the reviews or remarks of other customers on the social platforms of the products or firms, as positive remarks increase the craze of the customers to buy that product and vice versa.

The online shopping of the brands and products has provided the opportunity to make choice to avail the best products with the same range of products. But with the advancement of the technology like Social commerce people become more concerning about their privacy of data and security and even fraudulent activities might decrease the dependency of consumers on the social commerce as well as E-commerce (Ramanathan, Subramanian, & Parrott., 2017).

Technology Acceptance Model:

The technological advancement has revolutionized every aspect of life and business. With the increasing technology people are becoming more dependent of the technology and use it for their ease. Technology acceptance model is an information system theory which measures that how people perceive the technological changes in the products or systems (Marangunić & Granić., 2015).

Here in the modern mode of the commerce or we can say it ecommerce which is form of technology in the process of buying and selling the products. The modernization in any field is always accepted. Instance, the example of E-commerce is best fits for the technology acceptance model. According to Fayad and Paper (2015) E-commerce is distinct as all characteristic of commerce and marketplace procedures facilitated by the Internet (Fayad & Paper., 2015). E-commerce is speedily becoming a practicable resource of accomplishing business, as substantiation by the marvelous quantity of capital spend online, which shows the technological acceptance in the business and buying behaviors of customers.

Similarly according to Han and Jin (2009) the source and progress of TAM in the e-commerce are evaluated, recapitulated and compared correspondingly to find the measures of the people to accept the technology in the business or market (Han & Jin., 2009). The consumers are getting more equipped with the technology which is providing the opportunity to manufacturers and customers to gain maximum from what they are paying for.

According to Johar and Awalluddin (2011) the technology acceptance model is producing the right information as increasing the use of internet in the daily life, the need of the internet use for the shopping and selling the products is eventually providing the evidence of acceptance of the E-commerce or online shopping (Johar & Awalluddin., 2011). So we can conclude that the technology is accepted now in the shopping behaviors of customers and by the retailers or manufacturers as well.


The use of the E-commerce have revolutionized the business modes and purchasing behaviors of the customers. The direct relationships through online sales and purchases are paying off to both consumers and manufacturers. It is found that the importance of the social commerce is undeniable in the modern day business and the firms who didn’t adopt this practice will face issues in establishing the positions to their products and heavy costs in operating the business will shut down the business as they competition due to E-commerce has be so high, so the organization could not obtain their potential without utilizing this opportunity.


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