English for specific purposes 1 advantages and disadvantages of e commerce for businesses

THUONG MAI UNIVERSITY FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS ENGLISH FOR SPECIFIC PURPOSES 1 Advantages and disadvantages of e-commerce for businesses Lecturer: Master Nguyen Th

THUONG MAI UNIVERSITY FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS

ENGLISH FOR SPECIFIC PURPOSES 1

Advantages and disadvantages of e-commerce for businesses

Lecturer: Master Nguyen Thi Xuan Phương

Group: Group 2 Class: 241_ENTI1011_46

Ha Noi, 14 October 2024

PEER ASSESSMENT

No Full name Duties Assessment Mark

1 Trieu Thi Ngoc Bao

Leader, division of work among members, make content, Powerpoint and present 4.1.1.5, 4.1.2.1, and 4.1.2.2

2 Nguyen Thi Hong Anh

Powerpoint and present 4.1.1.1, 4.1.1.2, 4.1.1.3, and 4.1.1.4

3 Nguyen Viet Anh

Powerpoint and present 4.2.2.4, V, VI

4 Nguyen Gia Bao

Powerpoint and present 4.2.2.1, 4.2.2.2, and 4.2.2.3

TABLE OF CONTENTS

I INTRODUCTION 3

II DEFINITION 4

2.1 What’s e-commerce? 4

2.2 Major types of e-commerce 4

2.2.1 Business to Consumer (B2C) 4

2.2.2 Business to Business (B2B) 4

2.2.3 Consumer to Consumer (C2C) 5

2.2.4 Consumer to Business (C2B) 5

III CURRENT SITUATION 6

3.1 Pre-pandemic e-commerce 6

3.2 During-pandemic e-commerce 6

3.3 Post-pandemic e-commerce – The current situation 7

IV ADVANTAGES AND DISADVANTAGES OF E-COMMERCE FOR BUSINESSES 8

4.1 Advantages 8

4.1.1 Related to financial issues 8

4.1.2 Not related to financial issues 10

4.2 Disadvantages 10

4.2.1 Causes from within the company 10

4.2.2 Causes outside the company 13

V SOLUTION 17

VI CONCLUSION 18

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I INTRODUCTION

As we know, the internet has become an indispensable part of our lives, and e-commerce has become a powerful tool for businesses to reach a global audience and expand their opportunities

E-commerce, the electronic, online buying and selling of goods and services, has revolutionized the way businesses operate It opens up new markets, reduces costs, and increases convenience for both consumers and businesses However, like any technological advancement, e-commerce also has its own disadvantages

In this presentation, we will explore both the advantages and disadvantages

of e-commerce for businesses and look into the opportunities it presents However, we'll also discuss the challenges that businesses will face

By understanding the pros and cons of e-commerce, businesses can make wise decisions about whether and how to integrate it into their strategies

Now let’s cut to the chase!

II DEFINITION

2.1 What’s e-commerce?

According to Forbes, e-commerce (electronic commerce) is the exchange of goods and services and the transmission of funds and data over the internet E-commerce relies on technology and digital platforms, including websites, mobile apps and social media to make buying and selling possible

Also, as Amazon states, Ecommerce or "electronic commerce" is the trading

of goods and services online The internet allows individuals and businesses to buy and sell an increasing amount of physical goods, digital goods, and services electronically Some businesses sell exclusively online or use ecommerce to expand the reach of their other distribution channels Either way, ecommerce is thriving and can be a profitable venture

2.2 Major types of e-commerce

E-commerce takes several forms A company can sell to its customers, other businesses or the government Customers can also sell to businesses, government agencies or other customers However, there are four primary types of e-commerce that describe the electronic transactions that can take place over the internet

2.2.1 Business to Consumer (B2C)

This popular e-commerce model involves companies selling their products or services directly to the end user, the consumer who needs it

2.2.2 Business to Business (B2B)

This e-commerce type refers to the exchange that occurs between businesses Here, an e-commerce business sells to another business An example is software-as-a-service, such as web hosting or accounting software for smooth business operations B2B e-commerce can also be raw materials or machinery exchange over the internet

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2.2.3 Consumer to Consumer (C2C)

Some e-commerce platforms are like digital marketplaces connecting consumers An example is eBay, which allows a consumer to list and sell their products to another consumer

2.2.4 Consumer to Business (C2B)

For this type of e-commerce, consumers sell their products and services to businesses For example, a photographer sells their photos to companies so that they can use them for ads or social media campaigns

III CURRENT SITUATION

Before diving into the current situation of businesses applying e-commerce,

we should note that the COVID-19 pandemic was a significant event that deeply impinges on the whole situation of global e-commerce

The COVID-19 pandemic accelerated the adoption of eCommerce, transforming the retail landscape significantly

3.1 Pre-pandemic e-commerce

Prior to the pandemic, e-commerce was experiencing steady growth, driven

by factors such as the rise of internet penetration, growing smartphone adoption and improved logistics and delivery infrastructure

The increasing availability of affordable internet connections enabled more consumers to access online marketplaces and websites Mobile devices became essential tools for online shopping, making it convenient for consumers to shop anytime, anywhere Advancements in logistics and delivery services, including same-day and next-day delivery options, enhanced the overall online shopping experience

However, brick-and-mortar stores still dominated the retail landscape, particularly for categories like groceries and apparel

3.2 During-pandemic e-commerce

The pandemic acted as a catalyst for the rapid expansion of e-commerce, as consumers sought to minimize physical contact and avoid crowded spaces Government-imposed restrictions forced consumers to stay at home, leading to a significant increase in online shopping Concerns about contracting the virus prompted many consumers to opt for contactless shopping options like curbside pickup and home delivery As physical stores faced closures and restrictions, consumers turned to online channels for essential goods and services

During this period, e-commerce saw unprecedented growth, with many businesses adapting their operations to meet the increased demand

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3.3 Post-pandemic e-commerce – The current situation

While the pandemic-driven surge in e-commerce has slowed down, online shopping has become an integral part of consumer behavior

For the time being, consumers are increasingly taking a hybrid approach, combining online and in-store shopping experiences Retailers are focusing on omnichannel strategies to provide a seamless customer experience across all channels e-commerce is expected to continue growing in categories such as electronics, fashion, and home goods The increased volume of online orders has put pressure on logistics and delivery networks, leading to challenges such as delivery delays and higher shipping costs

Global e-commerce significantly turns over a new leaf It’s reported that global e-commerce sales growth is set to outpace that of retail sales every year from 2023 to 2027—an indication of shoppers’ preference for online shopping More people are buying and selling online, and e-commerce revenue keeps increasing, so it’s no surprise that e-commerce was set to bring in $5.9 trillion at the end of 2023, according to oberlo.com and statista.com It’s also stated by statista.com that the global ecommerce growth rate for 2024 is forecast at 8.8%, bringing global ecommerce sales worldwide to $6.33 trillion

Having witnessed a peak in online sales and a big change down the road, e-commerce will surely remain an integral part of most companies in the future

IV ADVANTAGES AND DISADVANTAGES OF E-COMMERCE FOR BUSINESSES

4.1 Advantages

4.1.1 Related to financial issues

4.1.1.1 Easily display and sell company products

The ability to easily display and sell company products is one of the key advantages of e-commerce, providing businesses with a flexible and powerful platform to reach a broader audience In traditional brick-and-mortar setups, showcasing products is limited by physical space, location, and often, the cost associated with maintaining a storefront However, e-commerce removes these barriers by offering businesses the ability to create expansive online catalogs where they can display a wide variety of products without the constraints of shelf space This allows companies to display detailed product descriptions, high-quality images, customer reviews, and even videos, giving potential buyers a comprehensive understanding of what they are purchasing before committing Selling products online also means that businesses can use data analytics to track consumer behavior and tailor their product offerings to match the preferences and needs of their target audience The ease of selling products online is also enhanced by the automation of various processes such as payment, order processing, and shipping

4.1.1.2 Price is flexible

E-commerce has revolutionized the way customers shop by offering greater flexibility in pricing, making it easier for them to purchase products at competitive and often more affordable prices Unlike traditional shopping, where customers would need to physically visit different stores to check prices, e-commerce allows them to do so in a matter of minutes, ensuring they can find the best deals available Additionally, e-commerce platforms often feature exclusive discounts, flash sales, and promotional codes that further reduce the cost of products Moreover, many e-commerce platforms provide multiple payment options, such as

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installment plans or «buy now, pay later» schemes, making it easier for customers

to manage their finances and afford products they may not be able to pay for upfront

4.1.1.3 Easily expand customer files

Perhaps the biggest advantage of e-commerce is the fact that it allows you to reach a massive audience Your physical storefront can only get so many visitors in

a day, especially if you live in a smaller town or a rural area With e-commerce, you can reach customers who live in remote or rural areas where traditional brick-and-mortar stores may not be accessible Moreover, you can target customers who live in different regions, speak different languages, and have different cultural preferences With an e-commerce store, you can reach potential customers all throughout the world and show them your products E-commerce platforms offer several features that can make the shopping experience more comfortable and convenient for customers This is particularly advantageous for customers who cannot visit physical stores due to time constraints, distance, or other reasons 4.1.1.4 Operating costs are not high

Running an e-commerce store is a lot more cost-effective than running a physical store Operating a physical store can be expensive due to high real estate and rental costs, especially in prime locations However, e-commerce platforms have made it possible to save on these expenses, enabling businesses to invest more

in other critical areas of their operations In addition, e-commerce allows

A typical example here is Sysco One of the largest food distributors in the world, Sysco has built an e-commerce platform to provide products and services to restaurants, hotels and other food businesses This distributor, through its website, can reach a large number of customers from different markets and also easily display its new products

4.1.2 Not related to financial issues

4.1.2.1 Easy customer care

E-commerce also makes it easier and more convenient to communicate with customers, so that suppliers can quickly support and advise customers In addition, personalized customer care will create closer relationships with customers, making the customer care process more effective

Apple can be mentioned for example Apple Store online provides professional customer support services, helping customers choose the right products and solve technical problems

4.1.2.2 Enhance customer experience

The processes from ordering, shipping, payment, to delivery have been systematized to help consumers easily use one to avoid errors, creating a good customer experience

In addition, the display of related products will be based on past consumer behavior, thanks to e-commerce software Consumers will quickly find the item they are looking for quickly, which will make them feel comfortable and easy to make a transaction to promote the ability to buy again

For example, Booking.com: This platform provides detailed information about hotels, along with pictures and reviews from customers, helping customers make the best decision

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4.2 Disadvantages

4.2.1 Causes from within the company

4.2.1.1 Customers cannot shop because the website has an error

This is a limitation of e-commerce in that consumer purchasing activities take place mainly on e-commerce websites Therefore, if the website has problems

or errors, it will affect the customer experience, making it impossible to continue shopping on the website

Website is a sales tool, a good tool, ensuring quality, the business can easily gain many rewards Website needs to ensure high quality hosting, convenient to use, optimal features and high security to optimize customer experience Technical errors of e-commerce platforms can cause a decrease in shop revenue E-commerce platforms are intermediaries connecting customers with shop owners Therefore, when doing business on e-commerce sites, shop owners will have to rely heavily on e-commerce platforms, especially technology During Flash Sale, sale storms, customers access massively, causing the e-commerce site system to fail, which can prevent customers from accessing your shop, leading to a decrease in the number of orders

For example, on the morning of 22 March 2022, many users were suddenly unable to access the Shopee e-commerce platform to make purchases

Accordingly, many Shopee users were extremely confused when they