purchaline: Does e-commerce has a positive contribution on the economy?

Tuesday, April 7, 2009

Does e-commerce has a positive contribution on the economy?

Purhasing using the traditional system is like walking to your destination, whereas purchasing on-line is like flying to your destinaton; e-Commerce has sorted out the issue of " time is money".This means that people can get whatever they want, no matter how far they are from the stock without spending too much time. the time that people spend walking to the shops could be used in other profitable acvtivities.After my diggings, I found that e-Commerce has positive attributes in sustaining development; therefore, each country should integrate this system especially countries with low income, even though it might take quite awhile to ajust themeselves.According to the Weekly Corporate Report; ( 2009:3) " on-line sales totaled $ 10.9 billion in january. Among the categories that grew the most were sport and fitness".I wanted to find out exactly why these categories has grown more than others, and pointed out the following reasons:- Sport: people arround the world are excited with the sport and they can make sacrifices no matter what it will cost to them.Example: In my country ( Rwanda), some people pay their money in oder to get sport clothes from different soccer teams in Europe, especially from Manchester United and Chelsea in England.I have heard that the tickets for the World cup( soccer), which will take place in South Africa in 2010 are about to be finished;- Fitness: In oder to get in shape, some people buy in huge amount of instructional programs on-line, and most of these programs can not be found at the local market, other reason would be the new year resolutions, people tend to come up with new stuff at the beginning of the year ( gifts, new clothes, new choes, new sport equipments for their fitness).According to my point of view those are the reasons that have amplified the booming of sport and fitness categoriers compared to the other categories.

1 comment:

GregApril 8, 2009 at 3:09 PM
Are there other parts of the year in which different industries see a boom in their sales? For example, does the purchase of jackets go up when winter comes? That is just a simple example, but maybe you can find some more examples that are more unexpected or interesting.
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Does e-Commerce have a positve contribution on the economy?

Purhasing using the traditional system is like walking to your destination, whereas purchasing on-line is like flying to your destinaton; e-Commerce has sorted out the issue of " time is money".

This means that people can get whatever they want, no matter how far they are from the stock without spending too much time. the time that people spend walking to the shops could be used in other profitable acvtivities.

After my diggings, I found that e-Commerce has positive attributes in sustaining development; therefore, each country should integrate this system especially countries with low income, even though it might take quite awhile to ajust themeselves.

According to the Weekly Corporate Report; ( 2009:3) " on-line sales totaled $ 10.9 billion in january. Among the categories that grew the most were sport and fitness".

I wanted to find out exactly why these categories has grown more than others, and pointed out the following reasons:

- Sport: people arround the world are excited with the sport and they can make sacrifices no matter what it will cost to them.
Example: In my country ( Rwanda), some people pay their money in oder to get sport clothes from different soccer teams in Europe, especially from Manchester United and Chelsea in England.
I have heard that the tickets for the World cup( soccer), which will take place in South Africa in 2010 are about to be finished;

- Fitness: In oder to get in shape, some people buy in huge amount of instructional programs on-line, and most of these programs can not be found at the local market, other reason would be the new year resolutions, people tend to come up with new stuff at the beginning of the year ( gifts, new clothes, new choes, new sport equipments for their fitness).

According to my point of view those are the reasons that have amplified the booming of sport and fitness categoriers compared to the other categories.

GROWTH DOMESTIC PRODUCT AND E-COMMERCE

Growth Domestic Product is the key factor in generating financial independency.
Transaction can only be made if people are pontential buyers.
According to AYITTEY G;(2005:5) " The report noted that while most of the World's economies expanded in the 1990s people in 54 developping countries had become poorer; the majority of these countries were in Africa.

The number of poor in africa, defined as those making less than a dollar a day, has increased sharply in both relative and absolute terms. The absolute number of poor in africa has grown five times more than the figure for Latin America and twice that for South Asia. For example in 1995 the population of Africa was estimated to be 580 million. Of these, 291million people had average incomes of below one dollar a day in 1998"

From these passage we can confirme that apart E-commerce trade, half african population can not even trade using the traditional system. How can people with below one dollar a day purchase what they need ?

Purchasing on line in Africa is too far like the distance between the moon and the earth, there is still a long way to go.
A part the pauverty illiness, Africa's states face numerous desasters such as:

- HIV/AIDS
- Malaria
- High rate of infants mortality,...

It's clear understood that the money that people set aside for these kind of deseases ought do something else.

E- commerce in under developed Countries

The 20th century has been marked with high speed in perfoming various task, due to the implementation of technology, and that basically means, the introduction of Computer system in diferent sectors of life such as:

- Education
- Health sector
- Home and daily life
- Industry
- Agriculture
- Government
- Work place
- Business

For our case we are going to focus on the use of technology especially in business: '' E- commerce'' in under developed countries and " E- commerce" in developed countries, which
sounds like a comparative study.

First of all E-commerce goes along with:
- The quality of education:

People with TECHNO-PHOBIA ( afraid of technology) can not manage to use it, the users must have basic knowledges on how to use credit cards, visa cards, and debit cards.
- The Growth Domestic Product (GDP):

This is the main key which allows people to purhase.
- Culture or tradition:

People tend to embrace the obsolete things pretending to protect the pillars of their culture.

Be that as it may, E-commerce is a perfect way of trading especially in terms of time, it's not a time consuming despite some inconviniences it may host.

Psychological impact of E-commerce

E-commerce or on-line shopping is the process consumers go through to purchase products or service on the internet. The author mentioned various component of on-line shopping but what gave me food for thought most, about the content of the article is the repercussions of E-commerce on people, psychologically.
In one hand E-commerce is a good way of buying and selling stuff, in another hand E-commerce reduces cost by reducing the number of staff needed. In that perspective E-commerce doesn’t think about the future of laid workers whose livelihoods rely on their salaries even though they might have compassion.
The production process is a circle, companies produce in order to sell, when people are laid off from their work; it surely means that they have no possibility to present themselves on the market. According to the notes in Economics class;
the Great Depression in 1929 can serve here as an example:
“In this era most families were too poor to buy the goods being produced. Unable to sell all their goods stores owners eventually cut back their orders from factories. Factories in turn reduced production and laid off workers. A downward economic spiral began. As more workers lost their jobs, families bought even fewer goods. In turn factories made further cuts in production and laid off more workers." It was a vicious cycle.
The main purpose of this passage is to show the consequences of laying off workers on the business especially E-commerce.
During the Great Depression loosing job was reasonable, but loosing jobs because of high technology should have a psychological effect which may result in technology resentment. People may be reluctant to the technology because it’s the source their miserable life.

Purchased goods are delivered in various ways, namely :

- Downloading;
- Shipping;
- Drop shiping;
- In-store pick up.

The above ways of delivering stuff are made on-line, but the article did'nt mention the cases of lost goods. Defferently from E-commerce trade, face to face trade offer human atmosphere whereby traders exchange ideas, bargain on price there is no fear of loosing items as it's Pay and Pick up.

Reference: Cumming, Maeve, et at al. Management information systems. Third Canadian Edition.Canada: Mc Graw. Hill Ryerson, 2006

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