Lecture 6 - VDIS10047 Fashion Marketing - Trends & Impacts of eBusiness

Lecture 6
Trends and Impacts of eBusiness
by Ron Newman
VDIS10047 Fashion Marketing

Global
trends

In
2010,
the
United
Kingdom
had
the
biggest
eCommerce
market

in
the
world
when
measured
by
the
amount
spent
per
capita.
The

Czech
Republic
is
the
European
country
where
ecommerce
delivers

the
biggest
contribuDon
to
the
enterprises´
total
revenue.
Almost

a
quarter
(24%)
of
the
country’s
total
turnover
is
generated
via
the

online
channel.
Among
emerging
economies,
China's
eCommerce

presence
conDnues
to
expand
every
year.
With
384
million

internet
users,
China's
online
shopping
sales
rose
to
$36.6
billion
in

2009
and
one
of
the
reasons
behind
the
huge
growth
has
been
the

improved
trust
level
for
shoppers.

Global
trends

The
Chinese
retailers
have
been
able
to
help
consumers
feel
more

comfortable
shopping
online.
China's
cross-‐border
eCommerce
is

also
growing
rapidly.
eCommerce
transacDons
between
China
and

other
countries
increased
32%
to
2.3
trillion
yuan
($375.8
billion)

in
2012
and
accounted
for
9.6%
of
China's
total
internaDonal
trade

Other
BRIC
countries
are
witnessing
the
accelerated
growth
of

eCommerce
as
well.
In
Russia,
the
total
eCommerce
market
is

projected
to
total
somewhere
between
690
billion
rubles
($23

billion)
and
900
billion
rubles
($30
billion)
in
2015,
at
2010
values.


Global
trends

eCommerce
will
equal
5%
of
total
retail
volume
in
Russia.
Longer-‐
term,
the
market
size
of
Russian
e-‐commerce
could
reach
$50

billion
by
2020.
Ecommerce
players
need
to
understand
unique

insights
about
trust
factor,
online
payments
and
language

peculiariDes
to
penetrate
the
Russian
market.

Brazil's
eCommerce
is
growing
quickly
with
retail
eCommerce
sales

expected
to
grow
at
a
healthy
double-‐digit
pace
through
2014.
By

2016,
eMarketer
expects
retail
ecommerce
sales
in
Brazil
to
reach

$17.3
billion.


Global
trends

India's
eCommerce
growth,
on
the
other
hand,
has
been
slower

although
the
country's
potenDal
remains
solid
considering
its

surging
economy,
the
rapid
growth
of
internet
penetraDon,
English

language
proﬁciency
and
a
vast
market
of
1.2
billion
consumers

(although
perhaps
only
50
million
access
the
internet
through
PCs

and
some
esDmate
the
most
acDve
group
of
eCommerce

customers
numbers
only
2-‐3
million).
eCommerce
traﬃc
grew

about
50%
from
2011
to
2012,
from
26.1
million
to
37.5
million,

according
to
a
report
released
by
Com
Score.
Much
of
the
14

billion
dollars
in
2012
eCommerce
was
generated
from
travel
sites.


Global
trends

eCommerce
is
also
expanding
across
the
Middle
East.
Having

recorded
the
world's
fastest
growth
in
internet
usage
between

2000
and
2009,
the
region
is
home
to
more
than
60
million

internet
users.
Retail,
travel
and
gaming
are
the
region's
top

eCommerce
segments,
in
spite
of
diﬃculDes
such
as
the
lack
of

region-‐wide
legal
frameworks
and
logisDcal
problems
in
cross-‐
border
transportaDon.
eCommerce
has
become
an
important
tool

for
small
and
large
businesses
worldwide,
not
only
to
sell
to

customers,
but
also
to
engage
them.
In
2012,
ecommerce
sales

topped
$1
trillion
for
the
ﬁrst
Dme
in
history.


Global
trends

Mobile
devices
are
playing
an
increasing
role
in
eCommerce.
Some

esDmates
show
that
purchases
made
on
mobile
devices
will
make

up
25%
of
the
market
by
2017.
According
to
Cisco
Visual

Networking
Index,
in
2014
the
amount
of
mobile
devices
will

outnumber
world
populaDon.
MulDchannel
Selling
is
also
worth

menDoning
though
it
is
relaDvely
young
it
has
already
managed
to

become
a
key
driver
for
promoDon
of
small
business
companies

unable
to
compete
with
media
giants
like
Google.
The
essence
of
it

lies
in
equipping
a
few
shopping
plaforms
like
Amazon
or
Nextag

for
goods
promoDon.


Governmental
regula1on

In
the
United
States,
some
electronic
commerce
acDviDes
are

regulated
by
the
Federal
Trade
Commission
(FTC).
These
acDviDes

include
the
use
of
commercial
e-‐mails,
online
adverDsing
&

consumer
privacy.
The
CAN-‐SPAM
Act
203
establishes
naDonal

standards
for
direct
markeDng
over
e-‐mail.
The
FTC
Act
regulates

all
forms
of
adverDsing,
including
online
adverDsing,
and
states

that
adverDsing
must
be
truthful
and
non-‐decepDve.
Using
its

authority
under
the
Act,
which
prohibits
unfair
or
decepDve

pracDces,
the
FTC
has
brought
cases
enforcing
promises
in

corporate
privacy
statements,
including
promises
about
the

security
of
consumers'
personal
informaDon.

Governmental
regula1on

As
result,
any
corporate
privacy
policy
related
to
e-‐commerce

acDvity
may
be
subject
to
enforcement
by
the
FTC.
In
the
USA
the

Ryan
Haight
Online
Pharmacy
Consumer
ProtecDon
Act
of
2008,

which
came
into
law
in
2008,
amends
the
Controlled
Substances

Act
to
address
online
pharmacies.

Interna1onally
the
InternaDonal
Consumer
ProtecDon
and

Enforcement
Network
(ICPEN),
was
formed
in
1991
from
an

informal
network
of
government
customer
fair
trade

organisaDons.


Governmental
regula1on

The
purpose
of
the
ICPEN
is
to
find
ways
of
co-‐operaDng
on

tackling
consumer
problems
from
cross-‐border
transacDons
in

both
goods
and
services,
ensuring
exchanges
of
informaDon

among
the
parDcipants
for
mutual
benefit
and
understanding.

From
this
came
Econsumer.gov,
an
ICPEN
iniDaDve
since
April

2001,
a
portal
to
report
complaints
about
online
and
related

transacDons
with
foreign
companies.
Also
Asia
Pacific
Economic

Coopera1on
(APEC)
was
established
in
1989
to
achieve
stability,

security
&
prosperity
for
the
region
through
free
and
open
trade
&

investment.
APEC
has
an
Electronic
Commerce
Steering
Group
&

works
on
common
privacy
regulaDons
in
the
APEC
region.


Governmental
regula1on

In
Australia,
Trade
is
covered
under
Australian
Treasury
Guidelines

for
electronic
commerce,
and
the
Australian
CompeDDon
&

Consumer
Commission
regulates
and
offers
advice
on
how
to
deal

with
businesses
online,
and
offers
specific
advice
on
what
happens

if
things
go
wrong.
Also
Australian
government
commerce
website

provides
informaDon
on
e-‐commerce
in
Australia.
In
the
United

Kingdom,
The
FSA
(Financial
Services
Authority)
is
the
competent

authority
for
most
aspects
of
the
Payment
Services
DirecDve
(PSD).

The
UK
implemented
the
PSD
through
the
Payment
Services

RegulaDons
2009
(PSRs),
which
came
into
effect
on
1
Nov
2009.


Governmental
regula1on

The
UK
PSR
affects
firms
providing
payment
services
and
their

customers.
These
firms
include
banks,
non-‐bank
credit
card
issuers

and
non-‐bank
merchant
acquirers,
e-‐money
issuers,
etc.
The
PSRs

created
a
new
class
of
regulated
firms
known
as
payment

insDtuDons
(PIs)
(such
as
Paypal),
who
are
subject
to
new
strict

prudenDal
requirements.

ArDcle
87
of
the
PSD
required
the
European
Commission
to
report

and
act
on
the
implementaDon
of
the
PSD
by
1
Nov
2012.


Forms
of
eCommerce
Ac1vity

Contemporary
electronic
commerce
involves
everything
from

ordering
"digital"
content
for
immediate
online
consumpDon,
to

ordering
convenDonal
goods
and
services,
to
"meta"
services
to

facilitate
other
types
of
electronic
commerce.
On
the
insDtuDonal

level,
big
corporaDons
and
ﬁnancial
insDtuDons
use
the
internet
to

exchange
ﬁnancial
data
to
facilitate
domesDc
and
internaDonal

business.
Data
integrity
and
security
are
very
hot
and
pressing

issues
for
electronic
commerce.
Other
nomenclature
aside
from

tradiDonal
e-‐Commerce,
m-‐Commerce
worth
researching
are
t-‐
Commerce
channels,
olen
seen
as
the
2013
poster
children
of

electronic
I-‐Commerce.


Impact
on
markets
and
retailers

Economists
have
theorised
that
eCommerce
ought
to
lead
to

intensified
price
compeDDon,
as
it
increases
consumers'
ability
to

gather
informaDon
about
products
and
prices.
Research
by
four

economists
at
the
University
of
Chicago
has
found
that
the
growth

of
online
shopping
has
also
affected
industry
structure
in
two

areas
that
have
seen
significant
growth
in
e-‐commerce;
bookshops

and
travel
agencies.
Generally,
larger
firms
are
able
to
use

economies
of
scale
and
offer
lower
prices.
One
of
a
few
excepDons

to
this
panern
has
been
the
very
smallest
category
of
retailers

such
as
the
bookseller
shops
with
between
one
and
four

employees,
which
appear
to
have
withstood
the
trend.


Impact
on
markets
and
retailers

Individual
or
business
involved
in
eCommerce
whether
buyers
or

sellers
rely
on
Internet-‐based
technology
in
order
to
accomplish

their
transacDons.
eCommerce
is
recognised
for
its
ability
to
allow

business
to
communicate
and
to
form
transacDon
anyDme
and

anyplace.
Wherever
an
individual
is
in
the
world,
business
can
be

conducted
through
the
internet.
The
power
of
eCommerce
allows

geophysical
barriers
to
disappear,
making
all
consumers
and

businesses
on
earth
potenDal
customers
and
suppliers.
E-‐bay
is
a

good
example
of
eCommerce
business
where
individuals
and

businesses
are
able
to
post
their
items
for
sale
around
the
globe.


eCommerce
Business
Types

eCommerce
has
grown
in
importance
as
companies
have
adopted

pure-‐click
and
brick-‐and-‐click
channel
systems.

Pure-‐click
or
pureplay
companies
are
those
that
have
launched
a

website
without
any
previous
existence
as
a
ﬁrm.
Bricks-‐and-‐clicks

companies
are
those
exisDng
companies
that
have
added
an
online

site
for
eCommerce.

Click-‐to-‐brick
online
retailers
are
those
that
later
open
physical

locaDons
to
supplement
their
online
eﬀorts.


Lecture 6 - VDIS10047 Fashion Marketing - Trends & Impacts of eBusiness

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Lecture 6 - VDIS10047 Fashion Marketing - Trends & Impacts of eBusiness