1. Understanding E-commerce

Have you ever wondered what e -commerce? In the present day, when the technology equipment is too familiar to everyone and e -commerce is also with and developed. However, not everyone notices and knows the concept of e -commerce. This article let’s find out the concept of e -commerce,the role of  e -commerce and what’s the reason we need e-commerce and things to know around e -commerce through the following article. Before you jump in, here’s what you need to know about e-commerce. 

2. What is Ecommerce?

• Electronic commerce (e-commerce) refers to companies and individuals that buy and sell goods and services over the internet. E-commerce operates in different types of market segments and can be conducted over computers, tablets, smartphones, and other smart devices.
• E-commerce is the process of buying and selling goods or services online, through e-commerce websites or shopping applications on smartphones. E-commerce is rapidly developing and becoming an important part of the global economy.
• In recent years, the Vietnamese e-commerce market has been expanding and has become a popular business model for enterprises and individuals. The diversity in operating models, participants, processes, and supply chains of goods and services, with the support of internet infrastructure and modern technology applications, has made e-commerce an important pillar in the country’s digital economic development process.
• E-commerce in 2022 continues to be one of the bright spots in the development of the digital economy at a rapid pace with high growth (20%) and retail e-commerce (B2C) revenue reaching USD 16.4 billion, up 20% year-on-year for total retail sales of consumer goods and services nationwide according to the Ministry of Industry and Trade.

Source: eMarketer, Jan 2022

3. Role of Ecommerce

• The prosperity of an economy is no longer dependent solely on natural and labor resources, but rather on the level of information technology and creative knowledge. 
• This has led to the emergence of e-commerce, which has significantly impacted the global economy by changing its nature. 
• Knowledge has become the most important factor and resource of production, and is considered the biggest asset of a business. 
• E-commerce has also created opportunities for developing countries to catch up and even surpass developed countries, rebuild their national economic strength, and change the balance of global potential. 
• Additionally, it has narrowed the knowledge gap between developed and developing countries.

4. Benefits to participating in e-commerce

1. Make it easier for customers to choose when shopping

• • Provide customers with accurate information about the nearest store that holds the product, when and how the store operates, and even suggests how to review the product. If the customer does not want to see the item in person, first purchases, orders can be placed and paid for electronically
  • Customers can compare productions for utilize the characteristics and evaluations review, rating of the product from individuals who have previously utilized it, and competitive price between stores
  • E-commerce creates many new opportunities for both individual consumers and businesses. As e-commerce matures and more and more businesses organize online businesses, customers can compare purchases more easily.
  • E-commerce also helps customers to access products more easily and enjoy more services 

2. Reduce operating cost 

• • E-commerce stores offer the advantage of lower operating costs compared to physical brick-and-mortar stores. By setting up an online store, you can save on expenses such as rent, furnishings, signs, and other related costs.
  • E-commerce reduces sales and marketing costs. 
  • Office costs are part of product costs, reducing office costs in the sense of minimizing internet printing steps, reducing the number of office staff… also means reducing product costs. 
  • It is these factors that will facilitate the emergence of giant companies and the emergence of small businesses that can provide services at a lower cost. 
  • Exporting SMEs can set up virtual stores cheaper than physical stores in foreign countries. Thereby consumers can buy goods at lower prices, manufacturers in developing countries can buy components, parts at cheaper prices.

3. Obtain comprehensive information that could lead to wealth.

• The abundance of information available on the Internet, coupled with various accessible and costless means of obtaining it, has presented businesses with a highly advantageous prospect of gathering information. This is particularly noteworthy for small and medium-sized enterprises, which are currently regarded as the primary propellers of economic growth.

4. Facilitating early access to the digital economy

• For a country, e-commerce is considered a driving force to stimulate the development of the information technology industry, a spearhead industry and is considered a major contributor to the image of the country. The basis of the new world economy. This is an opportunity for global economic integration

5. For Businesses

• Small and medium enterprises can create more business by going into e-commerce.
• Extended opening hours and global reach: An e-commerce store never closes its doors to customers. Customers can purchase products at nearly any time of day, from anywhere in the world. Because they’re not limitedby opening hours or proximity, your business could exponentially increase sales.
• Increased sales conversions: Within the online marketplace, there are many ways to enhance the customer experience and reach consumers with digital marketing. Social media and SEO allow you to connect with customers actively searching for goods and services like yours. Track your customers’ behaviors and habits, such as monitoring their shopping carts and improving your checkout processes.
• Streamline the supply of materials, products, and warranty. 
• Automate all business and cooperation processes. to improve efficiency.
• Improve the relationship in the company with colleagues, partners, and customers.
• Reduce marketing business costsIncrease customer service capacity
• Increase the competitiveness of the business. Expand business scope , capacity and cross borders 

5. E-commerce challenges

1. Technology infrastructure

• E-commerce is both the culmination of the process of automating the commerce process and an inevitable consequence of digital in general and information technology (IT) in particular.
• Therefore, to be able to deploy e-commerce and successfully deploy it. public, it is necessary to have a solid IT infrastructure. To ensure these requirements, the IT infrastructure must ensure the following conditions: 
  • Standards compliance: The system of necessary standards must be established. considered as a module in the IT system and achieves the common goal that all participants in e-IT, including individual consumers, must follow.
  •  Reaching a high stability: whether IT products ( Hard and soft) are produced domestically or purchased from abroad, factors that must be taken into account are stability in accordance with the process of upgrading and developing products, stability in cost levels suitable for consumers..

• IT infrastructure is closely related to information security, a technology issue that is both the core and insurmountable challenge of the rest of the world from developed countries

2. Human infrastructure

• E-commerce concerns everyone because of its commercial characteristics and technological background characteristics. In order to deploy and implement e-commerce, because this is a new form with a high-tech foundation, it is required that everyone involved in commerce must have a sense of gradually forming the habit of using it, which also means the role of education and training. The first requirement is that people must have the habit of using the Internet and buying goods online. Next, it is necessary to have a team of informatics capable of operating and grasping and developing common service technologies.

3. Confidentiality and safety

• Commercial transactions on electronic means pose very high requirements for security and safety, especially on the Internet. The nature of e-commerce transactions is indirect, the buyer and seller know little, even unaware of each other, transacting entirely through unknown channels. This leads to separate concerns for both buyers and sellers:
  • Buyers: fear that their credit card numbers, when transmitted online, may be misused and illegally used by bad guys or sellers. ..
  • Seller: concerned about the buyer’s solvency and payment process..
• All those transactions involve information in the form of data that exists and is transmitted on the network.In terms of publicity Technology, encryption techniques are the basic foundation to solve this problem. The encryption technique basically consists of an encryption-decryption algorithm and a key used for encryption-decryption. The challenge is that this technique is only valid for a certain time, detection and decoding is possible if the time factor is removed. Moreover, for undeveloped countries, the IT capacity and the ability to create their own products are not available, so they are completely dependent on technology in developed countries, which is undesirable.

4. Automatic payment

• For e-commerce to work, it is necessary to have an automatic payment system. When there is no e-commerce system, e-commerce can only use information exchange, advertising and marketing… commercial activities still only end in the form of direct payment. 
• There is a characteristic feature of the system. Payment systems, whether traditional or electronic, require a high level of security. That’s why studies and research results. More and more research is focused on this area. In addition, the e-commerce system is always accompanied by the product coding system on a global scale

5. Protecting intellectual property

• The greater the quality of a product, the more gray matter it contains. In e-commerce, information is a valuable asset and protecting it is crucial. This includes safeguarding intellectual property and copyright for all web-based materials such as advertisements, trademarks, databases, and data transmitted over the internet. However, the issue of binary digitization presents a challenge as copying and translating text, images, and sound data requires the author’s consent, but it is impossible to know how many internet copies exist. This makes agreement and handling extremely difficult. At a higher level, the division of intellectual property purchased and sold online becomes more complex, requiring legal concepts such as “micropayment” and a reevaluation of what constitutes an author. These technical tools necessitate modifications to intellectual property legislation.

6. Protect consumers.

• Based on the principles of commerce and information theory, a market collapse always stems from a deep-rooted cause of inadequate information (meaning that the seller knows something different from the buyer). In e-commerce, information about goods is all numerical data (buyers do not have the opportunity to “see” or “taste” the product before purchasing, and there is a high risk of buying low-quality products that only the seller knows about, and even the possibility of errors in databases or being deceived by illegal organizations present on the internet. Therefore, there is a growing need for an effective and cost-effective intermediary to ensure quality. Quality assurance mechanisms are particularly important for developing countries where people still have the habit of direct contact with goods to check and try before buying.

7. Economic and legal infrastructure

• Nowadays, the Internet has the potential to be a thriving business market. However, whether this market can flourish or not depends on the policies of individual countries. The government of each country must make a decision on whether they view the information society and the Internet as a threat or an opportunity. Based on this strategic decision, the economic, legal, and social environment, including education and culture, will be established for the digital economy and e-commerce. This includes the implementation of online services such as administrative and tax collection/payment services, as well as integrating digital economy content into education and culture at all levels.
• There are various legal matters that require attention, such as: recognizing the validity of electronic signatures and establishing appropriate legal institutions and authorities for authentication and certification of such signatures; ensuring legal protection for electronic payments (including the legalization of payment card issuers); and regulating the use of data from government agencies, local governments, and state-owned enterprises. This includes determining whether the state owns digital information, whether it has the right to make such data public, and whether revenue generated from the dissemination of such data will contribute to the budget.
• The safeguarding of intellectual property (including copyright) in relation to electronic transactions is legally ensured.
• Protect privacy appropriately (need to prevent spreading false information that harms others or secrets of private life…)
• Legal protection for information networks, preventing criminals from entering with illegal purposes such as collecting confidential information, changing information on Websites, infiltrating data, copying software , spreading destructive viruses… So far, each country is likely to have single-sector laws against crimes. For this crime, the problem is to include it in the penal code, once the digital economy is recognized on a national level.
• All of the above can only be done on the basis that each country must first establish a source code system forall digital information, starting from the letter of the language of that country onward. The state will then have to shape a general strategy for the formation and development of a digital economy, followed by corresponding specific policies, laws, and regulations, which are reflected in the entire regulation. body of the domestic legal system
• The international environment: The economic, legal and social environment of the country is the same as the economic, legal and social issues of the international community, in addition to other complex economic issues. : cross-border trade, in which the most important aspect is that e-commerce has no border, thereby losing the geographical boundaries that are inherent features of traditional foreign trade, leading to great difficulties in applicable laws to regulate contracts, payment and especially tax collection. In addition, there are difficulties in auditing companies dealing in e-commerce, intellectual property protection, and political protection. … In the communication between countries with different legal and political systems, the issue of international law on the use of space is related to the launch and operation of telecommunications satellites..

Solution: Collective efforts are needed to reach international agreements as the basis for the development of e-commerce globally, and first of all to ensure that the interests of developing countries are still at a low level. information technology, on the tax regime, and on security and safety.

8.  The issue of being overly reliant on technology.

• E-commerce is being considered strategically by countries, its introduction is inevitable, moreover it is an opportunity, but if only because of compulsion to participate or only participate for economic benefits, It is not enough to have a specific physical business, but also to have an appropriate strategy to avoid becoming a technological secondary nation.