An Example Of An E-Commerce Failure And Its Causes

Nowadays, E-Commerce has been bringing us some success in our life such as improving our lifestyle after it implemented. Although that, it still got other some failure of E-Commerce. The Pets.com is one of an example of E-Commerce companies which plummeted in the Dot.com crash. Pets.com attempted to sell pets accessories and supplies directly to the customer over the web.

Pets.com was started by Greg Mclemore in November 1998. It was then purchased in early 1999 by a venture capitalist firm.Amazon.com-backed Pets.com raised $82.5 million in an IPO in February 2000 before collapsing nine months later.

Pets.com was never able to give pet owners a compelling reason to buy supplies online. After they ordered kitty litter, a customer had to wait a few days to actually get it. And let's face it, when you need kitty litter, you need kitty litter. Moreover, because the company had to undercharge for shipping costs to attract customers, it actually lost money on most of the items it sold.

The demand and needs of the consumers is important to identify as well as understand the market and the consumer's needs and wants. The Pets.com begins their e-commerce business without a survey in the market. The inability to define clearly the market demand and understand customer demand and buying behavior also cause the e-commerce failure.

Besides that, lack of experience in management and poorly constituted business plan led to the downfall of Pets.com. Company had raised more than $100 million in supporting only for the advertisement. The CEO and the managing body had little or no experience in running the company.

Furthermore, the idea of Pets.com was inadequate. The company was choosing a business that is not profitable. The customers just can view the picture of the pets but cannot touch the pets by themselves via the website. This makes the customers loss confident and reduces their trust on the quality of the pets and also the pets’ health condition. However if customers really want to order for the pets, they also have to wait for several days before the pets delivered to them. Purchasing online offered no real benefit whether it is regards to price or convenience.

Although Pets.com had shows the failure of e-commerce, but there are still have many success example of e-commerce. There are such as Amazon.com, Ebay.com and etc. Thus, many strategies are needed to develop before conduct the e-commerce business.

References :

- http://www.cnet.com/4520-11136_1-6278387-1.html?tag=feat.2
- http://www.witiger.com/ecommerce/dotcomfailures.htm
- http://www.itworld.com/nl/ecom_in_ent/11132001/pf_index.html
- http://ieeexplore.ieee.org/Xplore/login.jsp?url=/iel5/10826/34122/01625913.pdf?temp=x


Prepared By: Lee Boon Keat

An example of an E-Commerce success and its causes

eBay recognized as one of the most popular and successful e-commerce companies. eBay Inc. is an American internet company that manages eBay.com, an online auction and shopping web site in which people and businesses buy and sell goods and services worldwide. eBay also operates an online person-to-person exchange in an auction format, permitting trading of personal items such as antiques, coins, and other items.

E-Commerce will faces lots of problems like security and privacy concerns, legal and public policy, lack of trust and others. eBay can success because it has countered the problems and gain the trust of public. eBay typically turns over user information to law enforcement without a subpoena to well-publicized seller fraud. eBay claims that their data shows that less than .01% of all transactions result in a confirmed case of fraud. eBay builds trust among its clients by using safe online transaction intermediaries such as PayPal.

eBay success because it ability to transform many fragmented, primarily local markets into global ones at a relatively low cost to its users. Global markets have become bigger due to increase of online users as broadband internet connection becomes more affordable and widespread. eBay makes money by charging fees to list a product and fees when the product sells through the site. eBay can attract large number of buyers and sellers together. With high volume of buyer and seller, eBay can charge lower compare to that website that seldom people visit. Easy remember URL is one of the main things that needed for internet business. eBay has URL that can remember easily, http://www.ebay.com/
eBay offers several types of auctions also the reason for its success. Buyers and sellers can choose the selling methods that they interest.

• Auction-style listings allow the seller to offer one or more items for sale for a specified number of days. The seller can establish a reserve price.

• Fixed Price format allows the seller to offer one or more items for sale at a Buy It Now price. Buyers who agree to pay that price win the auction immediately without submitting a bid.

• Dutch Auctions allow the seller to offer two or more identical items in the same auction. Bidders can bid for any number from one item up to the total number offered.

References:

- http://en.wikipedia.org/wiki/Ebay
- http://pages.ebay.com/storefronts/success.html


Prepared By : Tang Chee Seng

The History and Evolution of E-commerce

The meaning of E-commerce or electronic commerce was founded late in the 1970’s. Basically, E-commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). Electronic Data Interchange such as company data transfers and bank document transfers. For Electronic Funds Transfer such as fund codes transfers, purchase orders, bill and invoices. E-commerce is a revolution for the online industry. The development of E-commerce was one of those things that happened slowly and then suddenly. The term refers simply to any commerce that takes place electronically. This includes credit cards, automated teller machines (ATM) and telephone banking in the 1980s was also forms of electronic commerce. It was during this time that people started to use credit cards on a regular basis and that set the foundation for electronic commerce to get a toehold in society. The earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computer launched in 1982.

A significant change for E-commerce occurred in 1991, when the Unites States government allowed public access to the internet. As a potential commercial system, the internet turned out to have several advantages over its competitors. It was a truly global network. This opened the possibility of accessing vast new markets for every business conceivable. The internet did not have compatibility problem. Even if there are virtually no information standards for the internet, the transfer control protocol/internet protocol (TCP/IP) is the generally accepted standard protocol. Once opened for commercial utilization, the internet was quickly accepted in business. Internet-related business thrived, the market itself expanded, followed soon by a boom of the operation infrastructure. The wed is a more affordable means of conducting E-commerce than the EDI had even been. It enables a wide range of commercial activities. Intuitive and trouble- free, online navigation makes the Wed a comfortable means of accessing information. The popular of the web has a major impact on other technologies of electronic commerce. Furthermore, the EDI standard groups are trying to simplify the transactions between business partners and to introduce real-time EDI. A common way of integrating EDI with the Web is the posting of a product catalogue on the Web, while the actual transaction is run by a back EDI system.

References:

- http://en.wikipedia.org/wiki/E-commercer
- http://www.jpservicez-searcharticles.com/article.detail
- http://www.normwilcox.com/18/the-history-of-ecommerce/
Php/236839/13/Internet/116/Ecommerce/The_History_of_E-commerce
http://ict.cdimm.org/man/engleza/ecomm03.pdf

prepared by : Koh Kah Wang