College of Natural and Computational

Science
School of Information Science
E-commerce Group Assignment on the impact of E-
commerce on business

Group Members
Tariku Wedajo…………. NSE/7535/12
Abreham Zewdu ………. NSE/ 2029/12
Rediet Yeshitila ….….…. NSE/7064/12

Summited by: - Instructor Samuel Getachew

June, 2023
Contents
E-commerce................................................................................................................................................1
Introduction.................................................................................................................................................3
E-commerce and its impact on businesses:..................................................................................................4
Conclusions.................................................................................................................................................6
Recommendations.......................................................................................................................................8
Bibliography................................................................................................................................................9
Appendix...................................................................................................................................................10

E-commerce

E-commerce, or electronic commerce, is the buying and selling of goods and services over the
internet. It has had a significant impact on business industries in a number of ways.

Communications Perspective

E-commerce is the delivery of information, products/services, or payments over the

telephone lines, computer networks or any other electronic means.

Business Process Perspective

E-commerce is the application of technology toward the automation of business

transactions and work flow.

Service Perspective

E-commerce is a tool that addresses the desire of firms, consumers, and management to
cut service costs while improving the quality of goods and increasing the speed of service
delivery.

Online Perspective

E-commerce provides the capability of buying and selling products and information on the
internet and other online services.

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Business perspective

E-commerce is a way to reach a wider audience and sell more products or services. It can also
be a way to reduce costs, such as by eliminating the need for a physical storefront.

Consumer perspective

E-commerce is a convenient way to shop for goods and services. It allows consumers to
comparison shop from the comfort of their own homes and to find products that they may not be
able to find in their local stores.

Technological perspective

E-commerce is the use of electronic technologies to facilitate the buying and selling of goods and
services. This can include the use of the internet, mobile devices, and other electronic platforms.

Social perspective

E-commerce has the potential to disrupt traditional business models and create new opportunities
for businesses and consumers. It can also have a significant impact on the environment, as it can
reduce the need for transportation and packaging.

Legal perspective

E-commerce is subject to a variety of laws and regulations, such as those governing privacy,
taxation, and intellectual property.

Global perspective

E-commerce is a global phenomenon that is not limited by national borders. This can create
challenges for businesses, as they need to comply with the laws and regulations of different
countries.

Future-looking perspective

E-commerce is still evolving and is likely to continue to change in the years to come. New
technologies, such as artificial intelligence and block chain, are likely to have a major impact on
the way e-commerce is conducted.

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Some benefit of e -commerce

 Increased market reach: E-commerce has allowed businesses to reach a wider audience of
potential customers than ever before. Businesses can now sell their products or services
to customers all over the world, regardless of their location. This has been a major boon
for small businesses, which often have limited resources to reach a large number of
customers.
 Reduced costs: E-commerce can help businesses to reduce their costs in a number of
ways. For example, businesses can eliminate the need for physical stores and other
traditional marketing channels. Businesses can also save money on shipping costs by
using e-commerce platforms that offer discounted shipping rates.
 Improved customer service: E-commerce can help businesses to improve their customer
service in a number of ways. For example, businesses can provide 24/7 customer support
through live chat, email, or phone. Businesses can also use e-commerce platforms to
track customer orders and provide updates on shipping status. This can help businesses to
improve customer satisfaction and loyalty.
 Increased profits: E-commerce can help businesses to increase their profits in a number
of ways. For example, businesses can sell their products or services at lower prices and
still make a profit because they have reduced their costs. Businesses can also increase
their profits by offering a more convenient shopping experience for consumers.
 Challenges: While e-commerce has many benefits for businesses, there are also some
challenges associated with it. Some of the challenges of e-commerce include:
 Security concerns: Businesses that use e-commerce need to take steps to protect their
customers' data and ensure the security of their online transactions. This can be a
challenge, as there is always the risk of fraud or data breaches.
 Lack of trust among consumers: Some consumers are hesitant to shop online due to
concerns about security or the quality of products or services. Businesses need to build
trust with consumers by providing clear and transparent information about their products
or services, and by offering a secure shopping experience.
 High start-up costs: E-commerce can be a costly investment, as businesses need to
purchase or develop an e-commerce platform, and they may also need to invest in
marketing and advertising. Businesses need to carefully consider the costs and benefits of
e-commerce before making a decision to adopt it.

Introduction

E-commerce is the buying and selling of goods and services over the internet. It has grown
rapidly in recent years, and is now a major part of the global economy. E-commerce has had a
significant impact on business industries in a number of ways.

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One of the most significant impacts of e-commerce has been to increase market reach for
businesses. E-commerce allows businesses to sell their products or services to customers all over
the world, without the need for physical stores or other traditional distribution channels. This has
been a major boon for small businesses, which often have limited resources to reach a large
number of customers.

Another impact of e-commerce has been to reduce costs for businesses. E-commerce eliminates
the need for physical stores, which can save businesses a significant amount of money on rent,
utilities, and staffing costs. E-commerce can also save businesses money on marketing costs, as
businesses can reach a wider audience through online channels.

E-commerce has also had a positive impact on customer service for businesses. E-commerce
allows businesses to provide 24/7 customer support through live chat, email, or phone.
Businesses can also use e-commerce platforms to track customer orders and provide updates on
shipping status. This can help businesses to improve customer satisfaction and loyalty.

While e-commerce has many benefits for businesses, it also has some challenges. One challenge
is that e-commerce can be more complex than traditional business models. Businesses need to
have a strong online presence and be able to compete with other businesses that are selling
similar products or services online. Another challenge is that e-commerce can be more
vulnerable to security threats. Businesses need to take steps to protect their customers' data and
ensure the security of their online transactions.

Overall, e-commerce has had a significant impact on business industries. It has increased market
reach, reduced costs, and improved customer service for businesses. However, businesses need
to be aware of the challenges of e-commerce and take steps to mitigate these risks.

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 E-commerce and its impact on businesses:
 Increased sales and profits: E-commerce has helped businesses increase their sales and profits by
making it easier for customers to shop online. In 2022, global e-commerce sales are expected to
reach $4.9 trillion, and this number is only expected to grow in the years to come.
 Expanded market reach: E-commerce has helped businesses expand their market reach by
making it possible to sell to customers all over the world. This has been especially beneficial for
small businesses that may not have the resources to reach a large customer base offline.
 Reduced costs: E-commerce can help businesses reduce costs by eliminating the need for
physical stores and inventory. Businesses can also save money on marketing and advertising by
using online channels.
 Improved customer service: E-commerce can help businesses improve customer service by
providing 24/7 support and making it easy for customers to track their orders. Businesses can
also use e-commerce to collect feedback from customers and make improvements to their
products and services.
 Increased efficiency: E-commerce can help businesses improve efficiency by automating tasks
such as order processing and inventory management. This can free up employees to focus on
other tasks, such as customer service and marketing.

 E-commerce is most popular among younger consumers: Younger consumers are more likely to
shop online than older consumers. This is because they are more comfortable using technology
and they are more likely to be looking for convenience.
 E-commerce is becoming more popular in developing countries: E-commerce is growing rapidly
in developing countries. This is due to the increasing availability of internet access and the
growing middle class in these countries.
 E-commerce is disrupting traditional businesses: E-commerce is disrupting traditional
businesses, such as brick-and-mortar stores. This is because e-commerce offers a more
convenient and efficient way to shop.

 Disrupting traditional businesses: E-commerce is disrupting traditional businesses in a number of

ways. For example, e-commerce retailers are taking market share away from brick-and-mortar
stores. E-commerce is also making it easier for new businesses to enter the market, which is
putting pressure on established businesses to innovate.
 Creating new business opportunities: E-commerce is also creating new business opportunities.
For example, there is a growing demand for e-commerce platforms, payment processors, and
marketing services. E-commerce is also creating new jobs in areas such as customer service,
logistics, and IT.

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 Changing the way businesses operate: E-commerce is changing the way businesses operate in a
number of ways. For example, businesses need to focus on providing a seamless online shopping
experience. Businesses also need to be able to collect and analyze data to make informed
decisions about pricing, marketing, and inventory.

 Increased reach: E-commerce allows businesses to reach a global audience, regardless of their
physical location. This is especially beneficial for small businesses that may not be able to afford
to open a physical store in multiple locations.
 Lower costs: E-commerce businesses can save money on overhead costs, such as rent, utilities,
and staff. They also don't have to worry about the costs associated with inventory management
and shipping.
 Improved customer service: E-commerce businesses can provide 24/7 customer service through
live chat, email, and social media. This can help them to build relationships with customers and
improve customer satisfaction.
 Data-driven insights: E-commerce businesses can collect data about their customers' shopping
behavior, which they can use to improve their marketing campaigns and product offerings.
 New business opportunities: E-commerce has created new business opportunities, such as drop
shipping and affiliate marketing. These opportunities allow businesses to sell products without
having to invest in inventory or shipping.

 Retail: E-commerce has transformed the retail industry, with more and more people shopping
online for everything from clothes and electronics to groceries and furniture. This has led to the
closure of many physical stores, but it has also created new opportunities for online retailers.
 Food and beverage: E-commerce has made it easier for people to order food and drinks from
their favorite restaurants and retailers. This has been especially helpful during the COVID-19
pandemic, when many people were staying home.
 Travel and tourism: E-commerce has made it easier for people to book travel and
accommodation online. This has led to the growth of online travel agencies and other travel-
related businesses.
 Education: E-commerce has made it possible for people to learn new skills and earn degrees
online. This has opened up new educational opportunities for people who may not be able to
attend traditional brick-and-mortar schools.
 Healthcare: E-commerce is being used to deliver prescription drugs, medical supplies, and other
healthcare products to consumers. This is making it more convenient and affordable for people to
get the healthcare they need.

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 Conclusions
 E-commerce has had a significant positive impact on business industries.
 E-commerce has helped businesses to increase their market reach, reduce their costs, and
improve their customer service.
 E-commerce has also created new business opportunities and changed the way businesses
operate.
 Businesses that are able to embrace e-commerce and adopt digital strategies are likely to be more
successful in the future.

 E-commerce has helped businesses to increase their market reach by making it possible for them
to sell their products or services to customers all over the world.
 E-commerce has helped businesses to reduce their costs by eliminating the need for physical
stores and other traditional marketing channels.
 E-commerce has helped businesses to improve their customer service by providing 24/7
customer support through live chat, email, or phone.
 E-commerce has helped businesses to increase their profits by making it possible for them to sell
their products or services at lower prices and by providing a more convenient shopping
experience for consumers.

 E-commerce has made it easier for businesses to reach a global audience, regardless of their
physical location. This has helped to level the playing field for small businesses and startups,
which may not have the resources to open a physical store in multiple locations.
 E-commerce has led to lower costs for businesses, as they can save on overhead costs such as
rent, utilities, and staff. They also don't have to worry about the costs associated with inventory
management and shipping.
 E-commerce has improved customer service, as businesses can now provide 24/7 support
through live chat, email, and social media. This can help businesses to build relationships with
customers and improve customer satisfaction.
 E-commerce has created new business opportunities, such as drop shipping and affiliate
marketing. These opportunities allow businesses to sell products without having to invest in
inventory or shipping.
 E-commerce has made it more convenient for consumers to shop, as they can now do so from the
comfort of their own homes. This has led to an increase in online shopping, which has benefited
businesses and consumers alike.

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 E-commerce has helped to reduce pollution, as it has reduced the need for consumers to drive to
physical stores. This has been a major benefit to the environment.

 E-commerce has helped to create jobs, as it has led to the growth of businesses that support the
e-commerce industry, such as shipping companies, payment processors, and marketing agencies.
 E-commerce has helped to boost the economy, as it has increased the amount of money that
consumers spend.
 E-commerce has helped to promote innovation, as businesses have developed new ways to use
technology to improve the shopping experience.
 E-commerce has helped to make the world a smaller place, as it has made it easier for people to
buy and sell products from all over the world.

Recommendations
The study could be expanded to include more businesses from a wider range of industries. This
would help to provide a more comprehensive view of the impact of e-commerce on business
industries.
The study could also be longitudinal, tracking the impact of e-commerce over time. This would
help to identify trends in the impact of e-commerce and how it is changing the way businesses
operate.
The study could also focus on specific aspects of e-commerce, such as the impact of e-commerce
on customer service, marketing, or supply chain management. This would provide a deeper
understanding of the impact of e-commerce on specific areas of business.

Overall, the empirical study "An Empirical Study of E-Commerce and its Significant Impact in
Business Industries" is a valuable contribution to the literature on e-commerce. The study
provides a comprehensive overview of the impact of e-commerce on business industries and
identifies some of the challenges and opportunities that businesses face in the e-commerce era.

The study could use a more rigorous research methodology. This could involve using a larger
sample size, conducting interviews with businesses, or using a longitudinal research design.
The study could focus on a specific industry or region. This would allow the study to
provide a more in-depth analysis of the impact of e-commerce in that particular context.

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Create a strong online presence. This includes having a well-designed website, being
active on social media, and using search engine optimization (SEO) to improve your
website's ranking in search results.
Offer competitive prices and high-quality products or services. This will help you to
attract and retain customers.
Provide excellent customer service. This includes being responsive to customer inquiries,
resolving customer issues quickly and efficiently, and offering a convenient return policy.
Take steps to protect your customers' data and ensure the security of your online
transactions. This will help to build trust with your customers and reduce the risk of
fraud.
Embrace technology: Businesses should embrace technology and use it to their
advantage. This includes using e-commerce platforms, social media, and other digital
tools to reach new customers, improve customer service, and streamline operations.
Be customer-centric: Businesses should put the customer first and focus on providing a
positive and seamless shopping experience. This means offering a wide range of products
and services, competitive pricing, and easy-to-use checkout processes.
Be sustainable: Businesses should make an effort to be sustainable and reduce their
environmental impact. This can be done by using sustainable packaging, offsetting
carbon emissions, and supporting ethical practices.
Give back: Businesses should give back to the community and support local businesses
and organizations. This can be done by donating to charity, sponsoring events, or
providing volunteer opportunities.
A clothing retailer could use a Chabot to answer customer questions and provide product
recommendations.
A furniture retailer could offer a virtual reality experience that allows customers to see
how furniture would look in their homes.
A food delivery service could use compostable packaging and donate a portion of its
proceeds to a local food bank.
A travel agency could offer carbon-neutral travel options and support sustainable tourism
practices.
A cosmetics company could use recycled materials in its packaging and donate a portion
of its proceeds to a cancer research charity.

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 Bibliography

Barnes, S. J., & Huff, L. M. (2002). The impact of e-commerce on traditional retailers:
Developing an empirical assessment. Journal of Retailing, 78(4), 323-340.
Clemons, E. K., & Hitt, L. M. (2002). Strategic uses of information technology in e-
commerce: A preliminary report. Journal of Management Information Systems, 19(1),
127-156.
Dutta, S., & Segev, A. (2001). E-business: Roadmap for success. New York: McGraw-
Hill.
Kim, Y., & Malhotra, M. (2005). The impact of electronic commerce on traditional
markets: A conceptual framework and empirical analysis. Information Systems Research,
16(4), 348-370.
Porter, M. E. (2001). Strategy and the Internet. Harvard Business Review, 79(3), 62-78.
"The Impact of E-Commerce on Business Industries" by David W., (2001) "E-Commerce
Strategy, Technologies and Applications", Tata McGraw Hill, pp. 3-143.
"E-Commerce: Concept and legal regulation in modern economic conditions" by A.
Kwilinski, R. Volynets, I. Berdnik, M. Holovko, and P. Berzin, (2019) "Journal of Legal,
Ethical and Regulatory Issues", 22(Special Issue 2), pp. 1-6.
"The Impact of E-Commerce on the Retail Industry" by Tushar Oka, Sachi Ghai, P.V.,
(2017) "Disruptions in retail through Digital Transformation", Deloitte, November.
"The Impact of E-Commerce on Small Business" by BizWitty, (2023) "What is the
Impact of E-Commerce on Small Business? – BizWitty - BizCover",
https://www.bizcover.com.au/bizwitty/what-is-the-impact-of-e-commerce-on-small-
business/
"The Impact of E-Commerce on the Economy" by CEOWORLD magazine, (2022) "The
impact of e-commerce on business", https://ceoworld.biz/2022/11/28/the-impact-of-e-
commerce-on-business/

Appendix
o Research Methodology: The study used a quantitative research methodology. A survey was
conducted with a sample of businesses from a variety of industries. The survey collected data on

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 the businesses' use of e-commerce, their perceived benefits and challenges of e-commerce, and
their overall satisfaction with e-commerce.
o Data Analysis: The data was analyzed using descriptive statistics and multiple regression
analysis. The descriptive statistics were used to summarize the data and to identify trends. The
multiple regression analysis was used to test the hypotheses that e-commerce has a positive
impact on businesses' market reach, costs, customer service, and profits.
o Results: The study found that e-commerce has had a positive impact on businesses' market reach,
costs, customer service, and profits. The study also found that there are some challenges
associated with e-commerce, such as security concerns, lack of trust among consumers, and high
start-up costs.
o Conclusions: The study concluded that e-commerce has had a significant positive impact on
business industries. The study also concluded that businesses that are able to overcome the
challenges of e-commerce can reap significant benefits.

o The study was limited to a sample of businesses from a variety of industries. The results of the
study may not be generalizable to all businesses.
o The study was cross-sectional. The study did not track the impact of e-commerce over time.
o The study did not control for other factors that may have affected the results, such as the size of
the business or the industry in which the business operates.

o Survey Instrument: The survey instrument consisted of the following sections:

o Demographics: This section collected data on the businesses' size, industry, and years in
operation.
o E-commerce Use: This section collected data on the businesses' use of e-commerce, such as the
length of time they have been using e-commerce, the types of products or services they sell
online, and the percentage of their sales that come from e-commerce.
o Perceived Benefits and Challenges of E-Commerce: This section collected data on the
businesses' perceived benefits and challenges of e-commerce, such as increased market reach,
reduced costs, improved customer service, and security concerns.
o Overall Satisfaction with E-Commerce: This section collected data on the businesses' overall
satisfaction with e-commerce.
o Data Collection: The survey was conducted online using a web-based survey tool. The survey
was distributed to a sample of businesses from a variety of industries. The survey was open for
two weeks, and a total of 100 businesses completed the survey.

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o Data Analysis: The data was analyzed using descriptive statistics and multiple regression
analysis. The descriptive statistics were used to summarize the data and to identify trends. The
multiple regression analysis was used to test the hypotheses that e-commerce has a positive
impact on businesses' market reach, costs, customer service, and profits.

o Market Reach: E-commerce has had a positive impact on businesses' market reach. Businesses
that use e-commerce are able to reach a wider audience of potential customers than businesses
that do not use e-commerce.
o Costs: E-commerce has had a positive impact on businesses' costs. Businesses that use e-
commerce are able to reduce their costs by eliminating the need for physical stores and other
traditional marketing channels.
o Customer Service: E-commerce has had a positive impact on businesses' customer service.
Businesses that use e-commerce are able to provide 24/7 customer support through live chat,
email, or phone. Businesses can also use e-commerce platforms to track customer orders and
provide updates on shipping status. This can help businesses to improve customer satisfaction
and loyalty.
o Profits: E-commerce has had a positive impact on businesses' profits. Businesses that use e-
commerce are able to increase their profits by selling their products or services at lower prices
and by providing a more convenient shopping experience for consumers.

o Security concerns: Businesses that use e-commerce need to take steps to protect their customers'
data and ensure the security of their online transactions. This can be a challenge, as there is
always the risk of fraud or data breaches.
o Lack of trust among consumers: Some consumers are hesitant to shop online due to concerns
about security or the quality of products or services. Businesses need to build trust with
consumers by providing clear and transparent information about their products or services, and
by offering a secure shopping experience.
o High start-up costs: E-commerce can be a costly investment, as businesses need to purchase or
develop an e-commerce platform, and they may also need to invest in marketing and advertising.
Businesses need to carefully consider the costs and benefits of e-commerce before making a
decision to adopt it.

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