E-Commerce in Developing Economies: Impact and Success Factors in China

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Table of Contents

Introduction
E-Commerce
E-Commerce in developing Economies
E-Commerce in China
Impact factors
Success factors
Summary
Conclusion
Works Cited

Introduction

Businesses are increasingly turning to online transactions to spur growth in profits as well as savings on expenses. Online transactions allows for accessibility to goods that would otherwise be available only to locals of a particular region. The internet has brought about globalization, which has improved connectivity. Communication aids can now reach any part of the world and this is a massive boost for businesses. Several techniques have since been developed to assist in online trading.

This is mainly because of the high level of risks encountered in online transfers. Issues regarding hackers and impersonation have been rife as more people come online. This is largely attributed to the huge sums of money that are traded online. E-commerce started in the developed world; however, recent times have seen increased participation from developing world. For instance, e-commerce has helped improve economies of developing countries like China, Russia, and India, among others.

Recent results from Taobao, a consumer-to-consumer internet marketplace registered over 1.8 billion visitors, when it tossed a massive offer on electronics and other consumer goods. This alone shows how influential and successful e-commerce has been in the developing world. This paper will explore impact and success of e-commerce in china (The International Conference 2).

E-Commerce

E-commerce has improved most economies in the world. This is mainly because it enables accessibility to goods throughout the globe at any time. The term refers to trading over an electronic platform. These may include computer networks and internet, among others. In some cases, the term may draw deeper meaning than shown above.

In this case, e-commerce may refer to the overall online process. This constitutes servicing, delivering, marketing, paying for goods and services, among other processes. The transactions are usually conducted over secure platforms in order to protect both buyers and sellers from hackers and impersonators.

This involves use of highly secure software and programs. Increasing traffic in the internet called for introduction of online marketing and advertising. In the process, it was realized that some of the products seen online could not be accessed in everyone’s locality. In this regard, innovations from inventory management, (EDI) electronic data interchange, and internet marketing, among others were drawn to come up with e-commerce. This did not fail as its growth intensified throughout the world (Backaler 1).

Current e-commerce technologies have evolved over the years and improved with focus on upgrading its security and speed, among other aspects. The system commonly utilizes World Wide Web (www) at some stage or stages of its transaction circle. However, it also utilizes other technologies that include mobile and telephone devices, as well as electronic mail, among others. It is quite important to note that most of electronic commerce processes are usually done in virtual or electronic form.

However, physical activities are also involved in electronic commerce, these entails transportation of the goods and services to buyers, who may be offshore or inland. In this business, retailers that access goods and services through online means are usually known as electronic retailers or e-tailers. In addition, it is important to note that most online retailer use the World Wide Web (www).

Since its inception through online platform for business-to-business traders in 1998, e-commerce has been a revelation in China. Alibaba was among the first e-commerce business-to-business (B2B) trading platforms to be established in China. Electronic commerce that usually occurs between businesses or traders is referred to as B2B (business-to-business).

However, those that occur between consumers are referred to as C2C (consumer-to-consumer). Moreover, there is another form of e-commerce, which brings together the seller and consumer. This is known as business-to-consumer platforms. Furthermore, it is quite important to note that B2B platforms can be either for the public or in some cases, private market (Backaler 1).

E-Commerce in developing Economies

Developing economies are those classified as either middle or low-income countries. E-commerce started in the developed world; however, recent times have seen increased participation from developing world. For instance, e-commerce has helped improve economies of developing countries like China, Russia, and India, among others.

Recent results from Taobao, a consumer-to-consumer internet marketplace registered over 1.8 billion visitors, when it tossed a massive offer on electronics and other consumer goods. This alone shows how influential and successful e-commerce has been in the developing world. Developing world has been known to move up very slowly in most aspects of life.

However, this has changed especially regarding e-commerce. The change is mainly spurred by China and India as well as Russia, among other economies that are rapidly rising due to increased participation in e-commerce. These countries are constantly moving up the economic ladder, with China poised to overtake United States very soon. Such is the importance of e-commerce that almost every product can be purchased online from developing economies (Backaler 1).

E-commerce has been an agent of economic redressing in developing countries. This is quite evident in the sudden and continuous rise of china’s economy.

Most goods that were formally obtained from developed world can be purchased online at affordable rates. In fact, as opposed to former ways when online purchases were a preserve of the rich and majorly in developed world, this has changed with emergence of e-commerce in developing world. Currently, both middle and low-income countries can afford online products from China and other parts of the world.

This has increased the number of participants in this exciting business venture. In e-commerce, developing worlds have found a way to sell their finished products to countries at their level. In addition, it is quite important to note that the developed world have spurred e-commerce growth in developing world as they purchase goods such as consumer electronics at affordable rates (Backaler 1).

Even though middle-income countries can afford numerous purchases from e-commerce, this is quite different with low-income countries. Most of these people live below poverty lines and the mere access to internet seems like a blessing. Therefore, for individuals from such countries to participate actively in e-commerce then it must be a favorable option.

This is the case with e-commerce; it brings to them a new way of life. E-commerce has brought a new dimension to business. In fact, it allows for complete participation of both the buyer and seller. No wonder it is highly regarded and its system regularly upgraded to minimize on fiscal security risks.

The expansion of online banks and transactions through credit cards, PayPal, among other online merchants has also graced the occasion. In fact, the changes brought about by e-commerce are massive that their impacts are still seen and are yet to make full impact. Among these include, China’s resurgence, which makes it one of the fastest growing economies in the world. In addition, other countries such as India, and Russia, among others are expanding at a high rate, especially in this sector.

E-commerce is therefore a revelation in the developing world and it will keep expanding their economies as they continue to embrace its full impact. It should however be noted that more work ought to be done to ensure high level of security for buyers’ money as well as sellers’ products (Backaler 1).

E-Commerce in China

China is a host to about a third of the world’s population. This shows its potential for growth in this sector. Since its inception through online platform for business-to-business traders in 1998, e-commerce has been a revelation in China. Alibaba was among the first e-commerce business-to-business (B2B) trading platforms to be established in China.

The country has made several steps towards becoming world’s largest economy. This has been driven mainly by commerce. E-commerce forms an integral part of these developments and has since seen billions of dollars exchange hands in seconds or minutes of transaction. Even though middle-income countries can afford numerous purchases from e-commerce, this is quite different with low-income countries. Most of these people live below poverty lines and the mere access to internet seems difficult.

Therefore, for individuals from such countries to participate actively in e-commerce then it must be a favorable option. This is the case with e-commerce; it brings to them a new way of life. E-commerce has brought a new dimension to business. In fact, it allows for complete participation of both the buyer and seller. No wonder it is highly regarded and its system regularly upgraded to minimize on fiscal security risks (Olsen 1).

Impact factors

Several factors have led to the massive impacts observed in e-commerce in china. These include China’s population, industrialization, cheap labor, and globalization as well as reduced cost of access to internet, among others. E-commerce has had great impact in developing economies, especially in China and India, among other emerging economies. Workforce in these countries is massive and cheap to maintain.

As a result, the overall cost of production is highly reduced, leading to production of high quality but affordable products. This has opened markets for Chinese goods not only to the developed world, but also in the developing economies. In fact, similar products, produced in developed economies are much too expensive for consumers in the diaspora (Olsen 1).

Success factors

The success rates in e-commerce have been extensive. In fact, very few technological ideas have been as successful in China as e-commerce. However, this did not come easy; several factors have led to these experiences. They include increased accessibility, which is mainly attributed to increase in customers and potential customers.

It is important to note that in the past people saw technology as a reserve for the rich and majorly in developed world; this has changed with emergence of e-commerce in developing world. Currently, both middle and low-income countries can afford online products from China and other parts of the world.

Another factor that has led to China’s success in e-commerce is the relatively affordable products. As opposed to countries in the developed world, China and India, among other developing economies enjoy economies of scale. This is with regard to labor force. Workforce in these countries is massive and cheap to maintain. As a result, the overall cost of production is highly reduced, leading to production of high quality but affordable products.

This has opened markets for Chinese goods not only to the developed world, but also in the developing economies. In fact, similar products, produced in developed economies are much too expensive for consumers in the diaspora. This has greatly affected growth of companies in developed world, leading to a new trend of events. Most multinational companies have shifted their processing firms to China and India.

This has been aimed at reducing the cost of production to have an overall reduction on cost of finished products, which can then be sold to people in the diaspora. All these activities have the propensity to improve China’s economy as more investors take positions in the country (Olsen 1).

Summary

Online transactions allows for accessibility to goods that would otherwise be available only to locals of a particular region. The internet has brought about globalization, which has improved connectivity. Communication aids can now reach any part of the world and this is a massive boost for businesses. Several techniques have since been developed to assist in online trading.

China’s resurgence, which makes it one of the fastest growing economies in the world, has been largely attributed to e-commerce. In addition, other countries such as India, and Russia, among others are expanding at a high rate, especially in this sector. E-commerce is therefore a revelation in the developing world and it will keep expanding their economies as they continue to embrace its full impact (Olsen 1).

E-commerce has made great impacts in developing countries; this is evident in the sudden resurgence of China and Indian economies, which are already challenging the developed world. For instance, China has made several steps towards becoming world’s largest economy. This has been driven mainly by commerce. E-commerce forms an integral part of these developments and has since seen billions of dollars exchange hands in seconds or minutes of transaction.

Success factors for China’s growth in e-commerce have been witnessed everywhere; they include increased accessibility, which is mainly attributed to increase in customers and potential customers. It is important to note that in the past people saw technology as a reserve for the rich and majorly in developed world; this has changed with emergence of e-commerce in developing world. Currently, both middle and low-income countries can afford online products from China and other parts of the world.

This has increased the number of participants in this exciting business venture. In e-commerce, developing worlds have found a way to sell their finished products to countries at their level. Others include the relatively affordable products, which can hence be accessed by a wider range of customers (from high, middle, and low-income economies). Moreover, several factors have led to the massive impacts observed in e-commerce in china.

These include China’s population, industrialization, cheap labor, and globalization as well as reduce cost of access to internet, among others. E-commerce has had great impact in developing economies, especially in China and India, among other emerging economies. Workforce in these countries is massive and cheap to maintain. As a result, the overall cost of production is highly reduced, leading to production of high quality but affordable products (Global Trade Negotiations 1).

Conclusion

E-commerce has been an agent of economic redressing in developing countries. This is quite evident in the sudden and continuous rise of china’s economy. Most goods that were formally obtained from developed world can be purchased online at affordable rates. The internet has brought about globalization, which has improved connectivity.

Communication aids can now reach any part of the world and this is a massive boost for businesses. Several techniques have since been developed to assist in online trading. This is mainly because of the high level of risks encountered in online transfers. Issues regarding hackers and impersonation have been rife as more people come online. This is largely attributed to the huge sums of money that are traded online.

This has opened markets for Chinese goods not only to the developed world, but also to developing economies. In fact, similar products, produced in developed economies are much too expensive for consumers in the diaspora. E-commerce has therefore contributed greatly to china’s economic growth and its stride towards becoming the largest economy in the world (Rouibah, Khalil, and Ellal 1).

Works Cited

Backaler, J. “Chinese E-Commerce Tops $38.5 Billion; What Comes Next?”. Web.

Global Trade Negotiations. “E-Commerce Summary”. Web.

Olsen, R. “China’s Migration To E-Commerce”. Web.

Rouibah, K.; Khalil, O. and Ella, A. “Emerging Markets and E-Commerce in Developing Economies”. Web.

The International Conference. “6th International Conference on e-Commerce in Developing Countries: with focus on e-Banking & e-Insurance”. Web.

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