Impacts of E-commerce AND Challenges of E-commerce

The introduction of e-commerce has impacted on the traditional means of online exchanges. It is creating a new market place and opportunities for the reorganization of economic processes, in a more efficient way. The open structure of the Internet and the low cost of using it permit the interconnection of new and existing information and communication technologies. It offers businesses and consumers an innovative and powerful information system and another form of communication. This changes the way they search and consumer products, with these products increasingly customized, distributed and exchanged differently. The advent of e-commerce has seen a dramatic impact on the traditional ways of doing business. It has brought producers and consumers closer together and eradicated many of the costs previously encountered. It is evident that the supply industry will benefit from e-commerce which includes those producing computers, networking equipment and the software necessary. It is also evident  that a negative impact will be targeted at direct substitutes, such as retail travel agencies, retailers of software and “bricks and mortar: music stores. However, these impacts will be small compared to the developments imaginable.

As far as e-commerce is concerned it is still in an infancy stage in India. The environment exist today is not much suitable for the fast growth of e- commerce. There are various problems and challenges, which should be resolved  immediately to achieve a fast growth in this area. One of the important challenges faced by this sector is the lack of adequate infrastructure for IT technology and Internet. The penetration of personal computers in India is as low as 3.5 per thousand of population compared to over 6 per thousand in China and 500 per thousand in USA.

Another important reason for not developing e-commerce is the high tariff rate charged by Internet Service Providers [ISPs] Speed and connectivity is also poor. Another problem faced is that e-commerce sites are one of the favorite targets of hackers. If you think that your site is not relevant enough to catch

their attention, you are wrong, and this way of thinking will help you to prepare to face related risks. And the most serious drawback is the absence of effective cyber law at the moment. E-commerce is governed by the UNCITRAI model code, but this is not binding on any country. It is expected that all WTO member countries will soon enact laws to govern e-commerce. Towards this end, India has passed her Information Technology Act in May 2000.However, this Act simply considers the commercial and criminal side of law and fails to consider other multidimensional aspects of e-commerce,

Another cause for the slow growth of e-commerce is the privacy and security issues. Measures like digital signatures, Digital certificates, and fire walls can be adopted to secure safety and protection over the message passed on internet. Payment related problems also continue to block the e-commerce activities. Electronic cash, credit cards etc. are some of the popular payment method used for e-commerce transactions. But unfortunately penetration of e- cash and credit cards not only low, but Indian consumers are suspicious about the threat of fraud played by unscrupulous hackers. In order to minimize this problem experts suggest the use of digital certificate along with credit card to secure their payment activities.