Introduction to eCommerce

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Questions and Answers

Which of the following best describes the role of electronic devices in facilitating e-commerce?

  • They are used exclusively for customer service interactions in online retail.
  • They function as digital equivalents of mail-order catalogs, enabling transactions. (correct)
  • They serve primarily as marketing tools for brick-and-mortar stores.
  • They mainly provide logistical support for physical delivery of goods.

How does e-commerce primarily benefit businesses in terms of market presence?

  • By limiting their market to local consumers only.
  • By establishing wider market reach through more efficient distribution channels. (correct)
  • By reducing the need for customer service interactions.
  • By increasing the physical inventory requirements for product sales.

What is a primary limitation of e-commerce related to customer interaction?

  • Customers always have access to in-person demonstrations.
  • Customers cannot physically interact with products before purchase. (correct)
  • Customers receive instant gratification with immediate product delivery.
  • Customers have unlimited, round-the-clock access to support.

Which of the following scenarios illustrates the 'lack of instant gratification' disadvantage in e-commerce?

<p>A customer must wait for a week for a purchased item to arrive. (B)</p>
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How did the global pandemic influence the e-commerce landscape in the Philippines?

<p>It accelerated the shift towards digital transactions due to social distancing. (D)</p>
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What is identified as a key area needing improvement to fully enable a digital economy in the Philippines?

<p>Upgrading the digital and logistics infrastructure. (A)</p>
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What area of online purchases accounted for the majority of e-commerce spending in the Philippines in 2018, according to Kemp and Moey's study?

<p>Online travel. (A)</p>
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How does the spending on digital media products by internet users in the Philippines compare to other e-commerce sectors?

<p>It represents a particularly small market segment. (B)</p>
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What can be inferred about the potential for e-commerce growth in the Philippines, given the data on social media usage?

<p>There is reason to be optimistic, given the high number of active social media users. (D)</p>
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In what way does the e-commerce sector provide opportunities for Filipino businesses to expand their market reach?

<p>By broadening their markets beyond Philippine borders. (A)</p>
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If a consumer in the Philippines spends USD 20 on an online purchase of electronics, how does this contribute to the average spending data?

<p>It increases the average spend on online consumer goods. (C)</p>
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What is the most accurate definition of e-commerce?

<p>The exchange of information or business transactions electronically. (B)</p>
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Which of the following represents a consumer-to-business (C2B) e-commerce transaction?

<p>A freelancer offering graphic design services to a company online. (C)</p>
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A small business owner is considering opening an online store. Which of the following is a key advantage they should expect?

<p>The ability to offer products and services 24/7. (B)</p>
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Which scenario best demonstrates the disadvantage of 'inability to touch the products' in e-commerce?

<p>A customer receives a sweater that is a different color than it appeared online. (D)</p>
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In the context of e-commerce in the Philippines, what does the need to upgrade bandwidth capacity primarily address?

<p>Servicing the growing online market and ensuring seamless transactions. (C)</p>
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A Filipino entrepreneur wants to start an e-commerce business. Based on the provided data, which product category might present a smaller market opportunity compared to others?

<p>Digital media products like streaming services. (B)</p>
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How can Filipino individuals easily engage in personal e-commerce, according to the information?

<p>Through various buy and sell sites available online. (B)</p>
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What is the potential implication if online images of a product in an e-commerce store do not accurately represent the actual item?

<p>Dissatisfaction when products received do not match consumer expectations. (B)</p>
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What is the best course of action for an e-commerce business in the Philippines looking to capitalize on the high social media usage in the country?

<p>Develop targeted social media campaigns to reach potential customers. (C)</p>
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Flashcards

E-commerce

Exchange of information or business transactions electronically.

Business to Business (B2B)

Business selling to other businesses.

Business to Consumer (B2C)

Businesses selling products directly to individual customers.

Consumer to Consumer (C2C)

Consumers selling products/services to other consumers.

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Consumer to Business (C2B)

Individual consumers offering products or services to businesses.

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E-commerce Convenience

Always available; never closes.

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Increased Product Selection

Wider variety of items available online.

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Limited Customer Service

The primary disadvantage of e-commerce, where direct interaction is limited.

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Lack of Instant Gratification

Waiting for delivery after an online purchase.

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Inability to Touch Products

A downside when products don't meet expectations after online purchase.

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Global Market Access

Broadening market reach beyond local areas.

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Digital Infrastructure Needs

Digital and logistics infrastructure to enable a digital economy.

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Social Media Users in the Philippines

The number of active social media users in the Philippines.

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Online Spending in the Philippines (2018)

Amount Filipinos spent on online purchases in 2018.

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Dominant Online Purchase Category

Largest category of online purchases in the Philippines in 2018.

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Consumer Goods Online Spending (Philippines)

Amount spent on online consumer goods purchases in the Philippines in 2018.

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Average E-commerce Spending per Filipino

Average amount a Filipino e-commerce shopper spent on online consumer goods in 2018.

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Study Notes

eCommerce Defined

  • Electronic Commerce (eCommerce) involves exchanging information or business transactions electronically.
  • Any form of electronic communication facilitates e-commerce.
  • E-commerce encompasses four major market segments: business to business, business to consumer, consumer to consumer, and consumer to business.
  • Electronic devices such as computers, tablets, and smartphones facilitate e-commerce.
  • E-commerce enables businesses to broaden their market presence by providing cheaper and more efficient distribution channels.

Advantages of eCommerce

  • Convenience: Operates 24/7.
  • Increased Selection: Many stores offer a wider product range online compared to physical stores.

Disadvantages of eCommerce

  • Limited Customer Service: Difficult to get in-person demonstrations of products.
  • Lack of Instant Gratification: Requires waiting for items to be shipped.
  • Inability to Touch Products: Online images may not accurately represent the item, leading to dissatisfaction.

eCommerce in the Philippines

  • E-commerce accounts for USD 1.3 trillion of the world's economy.
  • Businesses can expand beyond the Philippines using e-commerce.
  • Filipinos can engage in personal e-commerce through various buy and sell sites.
  • Setting up e-commerce facilities can be done using business websites.
  • The global pandemic increased the demand for e-commerce in the Philippines.
  • Social distancing has pushed the culture towards a more digital one, and this is expected to continue.
  • Upgrading digital and logistics infrastructure, including bandwidth capacity is needed to enable a digital economy.
  • There are 76 million active social media users in the Philippines.
  • 75 million Filipinos are on Facebook, 12 million on Twitter, and 4 million are on LinkedIn.
  • In 2018, Filipinos spent USD 4.7 billion on online purchases.
  • USD 3.5 billion was spent on online travel purchases in 2018.
  • USD 840 million was spent on online consumer goods in 2018.
  • Electronics and physical media accounted for the greatest share within online consumer goods.
  • Internet users in the Philippines spent USD 286 million on digital media products.
  • Digital media includes video games, video-on-demand services, digital music, and digital news subscriptions.
  • The average Filipino e-commerce shopper spent USD 18 on online consumer goods purchases in 2018.
  • The USD 18 spent does not include travel-related purchases or digital media.

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