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E-Commerce involves the application of Web-based information technologies toward automating business processes, transactions, and work flows, and buying and selling information, products, and services using computer networks�? (MacGregor and Vrazalic, 2005, p1). The biggest advantage(and sometimes disadvantage) is that electronic commerce provides an immediate global marketplace. Business transactions can occur seamlessly and very quickly from opposite sides of the world. As a global marketplace, movement is increasing. Electronic commerce within one specific area however is interesting to watch.
The United States has long been seen as the global leader in using the Internet as a business tool (Kraemer et al, 2002). While this is true, it is important to look at the factors that have made this possible. Kraemer et al argue that a higher presence of globalized establishments, a strong manufacturing market that is buying and selling over the internet, high usage and readiness for technology, a strong drive to expand and to meet customer demand has generally put the U.S at the front of the e-commerce advance.
While e-commerce still represents a very small part of the United States marketplace, it is the fastest growing sector in the U.S. marketplace (Willis, 2004, p53). The fastest growing sector in the U.S e-commerce marketplace is Business-to-Business, or B2B, which comprised 93 per cent of e-commerce sales in the U.S. in 2002 (Willis, 2004, p55).
Osheroff (2005, p19) argues that now in the United States having an e-commerce element to a business is no longer optional, but an essential feature of any business. During the 2003 holiday season in the U.S, consumers spent US$18.5 billion online (Van Slyke et al, 2005, p24).
However just like in most other e-commerce situations, there are some significant barriers. The biggest barriers according to Kraemer et al are privacy and security concerns, the need for face-to-face customer interaction and the cost of implementing an e-commerce site (2002, p10).
Despite the barriers, e-commerce is still quite successful within the United States. The advantages, as discovered by Kraemer et al, found that the single biggest impact of e-commerce in the U.S. was the improvement of customer service (2002, p15). Other major benefits include a massive expansion of sales area, an improvement on the competitive position, increase in staff productivity and an increase in sales.
Kraemer, K., Dedrick, J and Dunkle, D (2002) “E-Commerce in the United States: Leader or one of the pack?�? The Center for Research on Information Technology and Organizations, http://www.crito.uci.edu/publications/pdf/GIT/GEC/USsnapshot.pdf, accessed 25/10/05.
Osheroff, M., (2005) “Developing E-Commerce�?, Strategic Finance, Vol.86, Iss. 11; pg. 19-21.
Van Slyke, C., Bélanger, F., and Varadharajan, S., (2005) “A Comparison of American and Indian Consumers Perceptions of Electronic Commerce�?, Information Resources Management Journal, Vol.18, Iss. 2; pg. 24-41.
Willis, J., (2004) “What Impact Will E-Commerce Have on the U.S. Economy?�?, Economic Review – Federal Reserve Bank of Kansas City, Vol.89, Iss. 2, pg 53-72.
--SophieUhlhorn 11:28, 25 Oct 2005 (EST)
