EFFECTS OF GLOBALIZATION

TO E-COMMERCE

by: ELMER CAPADOSA BUENAVIDES

LEARNING OBJECTIVES:1. Define globalization

2. Describe and discuss activities involved in globalization

3. Discuss the three important drivers of globalization including its good and bad sides

4. Define E-commerce and describe its various classification by the nature of transaction.

5. Describe the E-Commerce Facts for current trends and future prospects

6. Discuss the pros and cons of E-Commerce

7. Describe and discuss the effects of globalization to E-Commerce.

OUTLINE:1. What is Globalization?

2. Activities involved in Globalization

3. The drivers of Globalization

4. Good sides and bad sides of Globalization

5. What is E-Commerce?

6. Classification of E-Commerce by the nature of the transactions

7. E-Commerce Facts: Current trends and future prospects

8. Pros and Cons of E-Commerce

9. Effects of Globalization to E-Commerce

10. Synthesis (Insights)

What is GLOBALIZATION?GLOBALIZATION

-is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Activities involved in GlobalizationTravel Abroad

Shoes made in Korea

Big Mac from Moscow

Internet

US Brand

US –China Business Partners

Cellphones

Satellite TV

Online Bus.

CD Player-Made in Japan

T-Shirt Made in Mexico

The Drivers of Globalization1.The Rapid spread of IT and communications across the world

2. The massive investment in broadband technologies or enablers like fiber optic cables and undersea cables in the wake of the dotcom bubble

3.The adoption of English as the medium of instruction in many countries across the world.

Good sides and Bad sides of globalization

GOOD SIDES

1. Easier to communicate throughout the boundaries

2. Easier to travel 3. Cultural interchange4. International Trade5. Better and cheaper products6. Improvement of new

technologies7. The cheaper products

increases the purchase power 8. The transport of the products

is easier and faster9. Globalization creates a political

and an economical union, which facilitates the agreement between the countries

BAD SIDES

1. Delocalization creates unemployment in developed countries

2. Non-controlled circulation of money (free market) – no ethics

3. The businessmen and the big companies are the only winners in globalization

4. Exploitation of the workers in the developing countries – incl. children

5. Money problems can easily be spread6. The mix of cultures can lead to

racism, xenophobia, intolerance and loss of national identity

7. Small companies have to go out of business because they cant compete with the multinationals

8. As a result the gap between the poor and the rich people increases

What is E-Commerce?

E-Commerce

-is defined as the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals.

Classification of EC by the Nature of the Transaction

• Business-to-business (B2B) : EC model in which all of the participants are businesses or other organizations

• Business-to-consumer (B2C): EC model in which businesses sell to individual shoppers

• Business-to-business-to-consumer (B2B2C): EC model in which a business provides some product or service to a client business; the client business maintains its own customers, to whom the product or service is provided

• Consumer-to-business(C2B): individuals who use the Internet to sell products or services to organizations and /or seek sellers to bid on products or services they need

• Consumer-to-consumer (C2C) : consumers sell directly to other consumers

• Mobile commerce (m-commerce)—EC transactions and activities conducted in a wireless environment

• Location-commerce—(l-commerce)

m-commerce transactions targeted to individuals in specific locations, at specific times

Intrabusiness (organizational) EC: EC category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization

• Exchange (electronic): a public e-market with many buyers and sellers

• Exchange-to-exchange (E2E): EC model in which electronic exchanges formally connect to one another for the purpose of exchanging information

E-COMMERCE FACTS: CURRENT TRENDS AND FUTURE PROSPECTS

INVENTION ON ONLINE SHOPPING

E-Commerce Facts

SHOPPERS BY AGE GROUP

E-COMMERCE IN AMERICA

TOP E-COMMERCE STORE IN USA

CONSUMER ONLINE SHOPPING BEHAVIORS

PAYMENT MODES USED IN E-COMMERCE

GLOBAL ECOMMERCE SALES

E-COMMERCE SALES BY 2015

E-COMMERCE TO M-COMMERCE

PROS AND CONS OF E-COMMERCEPROS

• No Standing in Queues or Being Placed on Hold Forever

• Easier to Compare Prices• Access to Stores Located

Remotely• No Need for a Physical

Store• Common Availability of

Coupons and Deals

CONS

• Lack of Personal Touch• Easier to Compare

Prices• Inability to Experience

the Product Before Purchase

• Need for an Internet Access Device

• Need for an Internet Connection

• Lots of Choices• Stores Are Open All the

Time• Ability to Buy and Sell to

Other Consumers• Instantaneous Purchase

of Digital Goods• Ability to Have Vendors

Bid for Your Business• Not About "Location

Location Location“• Ability to Scale Up

Rapidly

• Common Availability of Coupons and Deals

• Credit Card Fraud• Security Issues• Delay in Receiving

Goods• Inability to Identify

Scams• Extraordinarily High

Reliance on the Website• Multiplicity of

Regulations and Taxation

• Unlimited Shelf Space• Ease of Communication• Superior Customization• No Need to Handle Currency

Notes• Efficient Procurement•  Delivery of Each Individual Item• Superior Inventory Management• Reduced Employee Costs• Gain Search Engine Traffic• Ability to Sell Low Volume Goods

Too• Ability to Track Logistics

• Chargebacks•  Delivery of Each

Individual Item• Expense and Expertise

Needed for Ecommerce Infrastructure

• Need for Expanded Reverse Logistics

EFFECTS OF GLOBALIZATION TO E-COMMERCE

E-COMMERCE

GLOBALIZATION

Life’s standard increased: Education Social Industrial Financial Economic Political Informational Competition Ecological Cultural Technical Legal/Ethical

SYNTHESIS(INSIGHTS)

• Globalization and E-Commerce which is part of the evolution of Information Technology had great impact in all aspects of the society that brought a lot of changes and affect human life either good or bad.

• This refers also to Digital Revolution because the economy is based on digital technologies including:– Digital communication networks, Computers, Software,

Other related information technologies• Also called:

– Internet economy, New economy, Web economy

• Through this new economy, where e-commerce is greatly involved, it actually expands the marketplace to national and international markets because of the challenges in the globalization.

• It enables people to shop or do other transactions 24 hours a day, all year round from almost any location

• Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons.

• Provides consumers with more choices and enables them to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution.

• Thus, these few activities mentioned, simply change the way how people live and to make the country progressive and the world a better place to live with.

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