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

Lecture 6 Trends and Impacts of eBusiness

by Ron Newman

VDIS10047 Fashion Marketing

Trends and Impacts of eBusiness 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 Trends and Impacts of eBusiness

by Ron Newman

VDIS10047 Fashion Marketing

Education

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