E-Business: Meaning, Benefits & Limitations

Our lives are dependent on the next purchase we make with just a few clicks. We are living in an era of e-business, a phenomenon unlike we have ever seen before. Let us not think of it to be just an online storefront but understand its dynamism and the ecosystem it has created. e-business is now reshaping industries worldwide. What has been the breakthrough innovation of the new world system and what are the challenges of e-business? Let us explore the world of e-business and unveil the opportunities and obstacles of this digital revolution.

What is the concept of e-business?

 If you conduct your business activities over the Internet or on any other computer network, you have done e-business or Electronic Business. Business activities like trade, commerce, and industry, all forms of businesses can be done electronically today and this is fast becoming a way of life. Even for merchants, using the Internet and other computer networks and technologies is a superior form of customer service as it increases sales and significantly reduces costs. Effective and efficient computer networks with more security are mainly used for e-business.

What are the benefits of e-business?

There are several benefits of e-business, which include

• Simple setup:
  A simple website or online store can be created with user-friendly platforms without extensive IT knowledge.
• No physical infrastructure required:
  you don't need a physical location or inventory to operate the business. Online retailers, digital product sellers, or service-based businesses can operate from anywhere.
• Networking is crucial:
  Building relationships and connections is more crucial for growth than financial capital. A strong network of customers and partners can lead to increased sales and business opportunities.
• 24/7/365 Operations:
  The business can operate round-the-clock, catering to customers worldwide and providing flexibility to business owners. Online shopping platforms, digital services, and customer support can be available at any time.
• Work from anywhere at any time:
  Employees or business owners can work remotely, providing flexibility in work location and hours.
• Seamless communication with stakeholders:
  Effective and efficient communication channels exist between the business, customers, and suppliers. Email, instant messaging, and online platforms facilitate quick and easy communication.
• Instant Exchange of information:
  Information can be shared and accessed digitally with ease. Online document sharing, data transfer, and collaboration tools enhance efficiency.
• Quick electronic fund transfers:
  Financial transactions can be processed rapidly and securely through digital platforms. Online payments, digital wallets, and bank transfers streamline financial operations.
• Easy Global Market Access:
  E-commerce platforms and online marketplaces allow businesses to expand their reach. The business can reach customers and suppliers across geographical boundaries.
• Minimal Paperwork:
  Digital documents and processes replace traditional paper-based systems. Electronic invoices, contracts, and records reduce storage and processing time.
• Prompt Approval Processes
  Administrative tasks and regulatory compliance can be handled efficiently through digital platforms. Online government portals and digital document submission streamline bureaucratic processes.

What are the limitations of e-business?

There are some limitations of e-business and they are discussed here:

Lack of Human Interaction

• Limited Personal Touch: E-commerce often lacks the face-to-face interaction essential for certain products or services.

Speed and Reliability Issues

• Delivery Delays: Physical goods delivery can slow down the overall process.
• Technical Glitches: Website or system failures can hinder user experience and sales.

User Challenges and Concerns

• Digital Divide: Not everyone is tech-savvy, limiting e-commerce reach.
• Identity Verification: Online transactions can pose challenges in verifying parties involved.
• Cybersecurity Threats: Risks of fraud, data breaches, and hacking can deter customers.

Organizational Challenges

• Resistance to Change: Implementing e-commerce can face opposition within organizations.
• Privacy and Ethical Concerns: Electronic monitoring of employees raises privacy and ethical questions.

What are the advantages and disadvantages of e-business for businesses, from the merchant’s point of view?

The table here tries to explain the advantages and disadvantages:

Here are some added advantages:

Saving Time and Cost

- Streamlines purchasing and dispatch

- Reduces operational costs

Scalability

- Easier to expand online operations

Reviews & Ratings

- Customers can leave and read reviews

- Enhances products and services

Increased Profit Margin

- Lower setup and operational costs

- Better financial management tools

Targeted Marketing

- Cost-effective digital advertising

- Better ROI compared to traditional methods

What are the advantages and disadvantages of e-business for customers?

Here’s summarising the advantages and disadvantages of e-business for consumers:

Here are some added advantages:

Easy to Manage Business Internationally 

International transactions are facilitated, reducing the need for physical office visits

Anonymity

E-businesses can provide privacy and protection of personal data.

Immediate Price Comparison

Consumers can easily compare prices across different online platforms to find the best deals

FAQs

Q1. What is the scope of e-commerce?

Ans. E-business contains the management functions of planning, organising, marketing, and production conducted electronically. Moreover, functions that are also covered are inventory management, product development, human resource management, and accounting and finance.

Q2. What is the role of e-commerce in the economy of the country?

Ans. e-commerce influences the economy significantly by nurturing innovation, encouraging global expansion, increasing productivity, creating jobs, driving better shopping experiences, and shaping the business environment overall.

Q3. What is the risk in conducting e-business?

Ans. Some risks that concern e-business are mainly transaction risks, data storage and transmission risks, and intellectual property and privacy risks.

Q4. What is the objective of e-business?

Ans. The key objectives of an e-business strategy usually include the following: Achieving Targets, Strengthening Consumer Loyalty, Client Maintenance, and Management.