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The advantages and limitations of e-commerce can be classified as technological and nontechnological.
According to the research done by CommerceNet in 2000 of the top 10 barriers to E-commerce, the main disadvantage of E-commerce is the lack of a business model, lack of trust and key public infrastructure, slow navigation on the Internet, the high risk of buying unsatisfactory products, and most of all lack of security.
For the E-commerce system itself, there is no universally accepted standard for quality, security and reliability. The software of e-commerce development tools are always evolving, and have difficulties in integrating the Internet and E-commerce software with parts of the existing applications and databases.
For general users of e-commerce, the accessibility to Internet, such as Digital Divide, is unstable, expensive and insufficient in porticular areas. This will generate limitations for business in accessing wider markets. Another problem is that if a business system's scalability is not sufficient and upgradeable, it will result in degradation, slowdown, and eventually loss of customers. (Turban, 2004:19, Awad, 2003:18).
The lack of trust is one main reasons why customers are unwilling to accept E-commerce due to privacy and security concerns. According to a 2000 Economist article, there were 95 percent of Americans showed reluctance to release their credit card number via the Internet. Some C2C action organizations are under an unencrypted payment environment, in which a customers' number number might be stolen in the payment process. However, recent payment systems such as PayPal can solve this kind of problem (Turban, 2004:52). The danger of hackers accessing customer files and corrupting accounts is also related to privacy and legal issues (Awad, 2003:18).
For some customers, it is hard to change their habit of viewing merchandise online; those customers resist traditional ways of purchasing physical goods in actual shops and have difficulties in changing from a real to a virtual store.
Another drawback is that there are some products that people will not buy online. For some high-cost and unique item businesses such as those involved with jewelry or antiques which have difficulties in offering the items in the e-commerce mode in the same way as online books and CD sales. Another example is furniture companies: many of them have websites that allow customers to browse, but most customers still want to feel and touch the item before they make a decision. Different expectations of goods and services from customers are typical of the online purchasing environment. An example is in the perception of colour. Due to different monitor settings, inaccurate information about colour makes it difficult for customers to make an accurate decision when purchasing online. Because customers are unable to trial or access the actual goods before purchasing and delivery, many customers will not take the risk of purchasing via the Internet.
Turban, E., King, D., Lee, J., and Viehland, D. (2004) Electronic Commerce: A Managerial Perspective, New Jersey: Pearson Prentice Hall, ISBN 0130094935
Awad, E. M. (2003) Electronic Commerce: from vision to fulfillment, New Jersey: Prentice Hall, ISBN 013140265X
Yun Tze Pien 15:25, 30 Sep 2005 (EST)
