Advantages and Disadvantages of E-Commerce

E-Commerce is the buying and selling of goods and services over the internet. It is also a term for the entire online commercial world, including auctions, online banking, and digital music downloads.

What are the different types of E-commerce?

There are three general types of e-commerce: business-to-business (BtoB), business-to-consumer (BtoC), and consumer-to-consumer (CtoC).

BtoB is the buying and selling of goods and services between businesses.

BtoC is the buying and selling of goods and services between a business and a consumer.

CtoC is the buying and selling of goods and services between consumers.

Advantages of E-commerce

There are many advantages to e-commerce, including:

• Increases Sales and Revenue

E-commerce always helps to increase sales and revenue as it widens the market by reaching out to new customers. It also allows businesses to offer discounts and incentives that are not possible in a physical store. There are also many opportunities for cross-selling and up-selling.

• Reduces Costs

E-commerce also helps reduce business costs as it eliminates the need for a physical store and sales staff. It also reduces inventory costs and transportation costs. There are also many opportunities for cost-saving through online auctions and supply chains.

• Eliminates Geographic Barriers

E-commerce also eliminates geographic barriers, as customers can buy goods and services from anywhere in the world. This allows businesses to sell to new markets and expand their customer base. It may also help to reduce the cost of doing business.

• Improves Customer services

This is because e-commerce allows businesses to offer 24/11 customer service, which is not possible in a physical store. It also allows customers to compare prices and products from different retailers easily. Sometimes there are also additional services, such as customer reviews and ratings, that are not available in a physical store.

• Increases Efficiency

Efficiency is increased as orders can be placed and processed quickly and easily through an e-commerce website. This eliminates the need for paperwork and reduces the chances of human error. It also allows businesses to track inventory levels and sales trends in real-time.

Disadvantages of E-commerce

However, there are also some disadvantages to e-commerce, including:

• Lack of Social Interaction

One disadvantage is that there is a lack of social interaction, as people cannot see or touch the product before they buy it. This may lead to dissatisfaction with the purchase if the product is not what was expected.

• Security Risks

Another disadvantage is that there are security risks, as sensitive financial information can be stolen by hackers. This can result in loss of money and identity theft. There may also be risks involved with buying and selling products online, as there is no guarantee of product quality or authenticity.

• Difficulties with Returns

Another disadvantage is that it can be difficult to return products that have been bought online. This is because businesses often require the product to be returned in its original packaging, which may not be possible if the product has been used. There may also be shipping costs involved in returning the product.

• Lack of Trust

There may be a lack of trust among consumers when it comes to buying goods and services online. This is because they may be afraid of being scammed or not receiving the product that they ordered.

E-commerce Trends

There are several current trends in e-commerce, including:

• The Rise of Mobile Commerce

One trend is the rise of mobile commerce, as more people are shopping on their smartphones and tablets. This is because it is convenient and easy to use, and there are many apps that make shopping online easier.

• The Emergence of Social Commerce

Another trend is the emergence of social commerce, which involves buying and selling products through social media platforms such as Facebook and Twitter. This allows businesses to reach a large number of potential customers.

• The Growth of E-commerce in Developing Countries

A third trend is the growth of e-commerce in developing countries, as more people have access to the internet and are becoming comfortable with buying goods and services online. This provides opportunities for businesses to expand their customer base.

Companies Act of 2013

Companies Act of 2013 is an important piece of legislation that deals with various aspects of company law in India. It has been amended a few times and the latest amendment was in June 2017. The act came into force on April 01, 2014.

This act replaces the Companies Act, of 1956. The main objective of this act is to make it easier for companies to do business in India and to improve corporate governance. This act also aims to reduce corruption and ensure transparency in the functioning of companies.

The key features of this act are as follows:

• Minimum paid-up capital for companies has been reduced from Rs. five lakhs to Rs. one lakh
• Companies can now be incorporated within 24 hours
• Directors can now be appointed without prior approval of the Central Government
• The role of auditors has been strengthened
• There is a new provision for class action suits

This act is important for companies as it lays down the rules and regulations that they need to follow. It also ensures transparency and good corporate governance. This act can be amended as needed to keep up with the changing times.

There are many amending Acts to this principal Act, the latest being in June 2017.  

Conclusion

Companies Act 2013 and eCommerce are two important aspects of doing business in India. The Act prescribes certain requirements for companies engaged in e-commerce activities, while the latter helps in reaching out to a larger customer base at a lower cost. It is important for companies to understand both these aspects and comply with the applicable provisions.