ALL ABOUT E-COMMERCE

2. The trend of e-commerce over time and how it alters the way consumers, businesses, and the industry operate

In the earliest years of e-commerce, websites like Amazon and eBay already existed (BigCommerce, n.d.). Then, in recent years in the Philippines, buy and sell websites such as Sulit.com.ph became known to Filipinos (Phoebe, 2013). They also had TV commercials. Even Instagram shops and Facebook Marketplace are also already present.
And before the pandemic, Shopee was already making noise in the industry (The Manila Times, 2018). But before, these kinds of e-commerce websites didn't seem like a threat to business establishments like malls. However, the pandemic came, which made drastic changes in how customers avail products and services and even how businesses sell products because of the need for a new safe way of transactions without close contact with the people because of the COVID-19 Virus. And E-commerce provided that need at that time. Many businesses went online and built their online presence. This phenomenon was evident in the rising share of digital retail trade in the global market from 14 percent pre-pandemic (2019) to 17 percent during the onset of the pandemic (2020) (United Nations Conference on Trade and Development, 2021).

In the Philippines, e-commerce contributed 5.5 percent to the national economy. Thus, it paved the way for MSMEs to recover from the repercussions of the pandemic, where it can be remembered that they were forced to stop or pause their business operations (Humarang, 2022). With the help of online business platforms, local businesses were able to continue their operations, and it even created new opportunities for new firms to enter the market. Hani (2021) stated in their article that e-commerce and the digital economy took the spot of one of the key engines of economic growth in the country, whereas, from 599 billion pesos in 2020, the contribution of e-commerce in GDP grew to 1.2 trillion pesos in 2022.

Now because of its convenience, it is still popular, from buy-and-sell websites and online live selling to applications like Lazada, Zalora, and FoodPanda. As e-commerce expands and as the growth in its sales increases, it will continue to surpass its incumbent.

3. The emergence of new platforms for shopping apart from physical establishments changed the meaning of “shopping” (without completely replacing those physical establishments entirely)

Indeed, technology revolutionized the way we shop – whether this is online or in person. Technology especially in E-Commerce, is playing an essential role in managing the interaction between the shopper and seller. In E-Commerce, these business platforms exhibit a remarkable ‘interactivity’ experience that establishes sophistication, reliability and more saleable products or services.

As e-commerce continues to change consumer behavior and ultimately raise the expectations of purchasers, the very meaning of the term “shopping” gets redefined as brands continuously attempt to meet these expectations. Unlike before, when shoppers had to go to physical stores to browse through items and transact a purchase, e-commerce challenges the boundaries between physical stores and the online experience (ESW, 2022). Instead of there being two channels through which consumers can purchase products, most brands now offer a shopping experience that combines the old and the new to create an entirely redefined and far more convenient way of shopping (ESW, 2022).

Nowadays, many brands come up with mobile apps that not only give shoppers the ability to transact fully online but also integrated into the traditional shopping experience. These mobile apps may allow shoppers to make their payments online and pick up the purchased product at a physical store nearest to them to avoid paying the shipping fee. At the other end of it as well, even when people do opt to check out the store, those who have the mobile app often also have a membership to which they then can add points with every purchase. Through this, e-commerce offered a new meaning that does not eliminate our old understanding of the word "shopping". Instead, technology reimagined shopping into a digitalized version. Shopping now becomes a conjunction of what consumers had gotten used to. The online experience that they have recently grown fond of and the brands that have a better understanding created a seamless transition between the two.



‘Adidas Cyberfit’ is one of the most famous examples wherein you can try on clothes without needing to remove the shopper’s clothes. Moreover, ‘Topshop’ and ‘Timberland’ also introduced the “virtual fitting room” where shoppers can see an image of themselves projected onto a large screen, and they then can try on clothing without having to search for sizes and different colors within the actual shop.

E-commerce offers a wide variety of interactive experience among shoppers and retailers: grocery shopping can be completed without human interaction, likewise, we can purchase and check-in our flights without the need to be processed by an agent.

In this period of globalization, the power of machines aid in how the sellers can cope up on the effects of technological advancement in terms of businesses and how to sell directly to consumers.

Conventional shopping used to be the predominant choice of consumers to purchase products. The increase in the use of E-commerce made it convenient for consumers to shop, which led some physical stores to close down. Online shopping thus caused a reduction in the number of jobs in the conventional sector. This creates an opportunity for small businesses to open up and introduce products using e-commerce, increasing the competition between small businesses and traditional stores. E-commerce is continuously growing and expanded over the years. It helped a lot of businesses establish their name, affecting society and people as a whole.

The impacts of e-commerce as a disruptive technology can be boiled down to three individual components of the business system namely (1) Consumer, (2) Business, and (3) Industry, the following aims to elaborate and give specificity on how e-commerce was able to change the way they operate:

1. Altering How Consumers Operate

        The rise of e-commerce created a drastic change in consumer behavior. It is within the consumer’s control “where, when, and how to shop” (ESW, 2022) as they are no longer tied to concepts such as “shopping hours'' or “shop locations” of physical establishments that the consumers have to meet in order to create transactions. When people come to online platforms, they know that they also have access to specific products that they know are not available on physical establishments due to the wider options and scope that e-commerce provides. Especially when they are the “busy” type and have no time to wander around the mall, they can count on e-commerce without leaving the house (Meteor Space, 2022).

        With the consumer at the center of the system, the expectations of the consumers have also shifted. Similar to other online platforms, e-commerce is a learning system made to cater individuals by learning from their activity within the interface in order to create a mindset that the shopping experience should be a personalized one. Such subconscious influence to their mindset creates a greater expectation of consumers to companies and other shops to make their experience personalized (ESW, 2022).

        Lastly, e-commerce has altered shopping to be a social activity for the consumers packaged in a form similar to the social media experience. Rather than taking brands at face value or how the brand advertise themselves, consumers are more trusting of the reviews of products that strangers provide. Because of the social engagements that happen within e-commerce platforms, consumers are making more informed decisions on buying particular products from different brands and shops (ESW, 2022). On the other hand, impulse buying was recorded worldwide to spike due to the online platform, especially since there were discount or voucher strategies that were implemented (Dujardin, 2022)

2. Altered Business

2.1 Altered How Business Operates

        Due to e-commerce, business models are shifted to include or switch to e-commerce platforms apart from their physical store-front shops. Scaling up one’s business has never been easier and cheaper before, compared to up-keeping physical brick-and-mortar establishments. Additionally, the customers themselves act as the business’s advertiser through reviews and self-searching wherein e-commerce platform algorithms advertise the products to their users for “free”.

        E-commerce has allowed businesses to operate 24 hours a day and be accessible to wider range of consumers from distant places (Morris, 2021), giving the business more flexibility and a bigger customer population pool. One huge benefit of e-commerce was the ability of companies to penetrate the international market. Through online shopping platforms, local businesses can offer their products to international consumers and have them delivered (Kiran, 2020). Thus, instead of the traditional way of being a multinational company, firms today have a more convenient way in pursuit of growth.

        On the other hand, data collection features in e-commerce platforms provide business owners with statistical data about consumers that they can use to scout what products are the most or least popular in their shops. They can also use this data to improve their marketing strategy by including popular keywords related to their product to give them a boost in web searchability. Data collection is then improving the ability of businesses to listen to what the customers want (Liqui-Site 2020).

2.2 Altered How Business is Conducted

        Transactions are becoming more flexible because of e-commerce, consumers are much smarter because of ability to compare prices of similar products from different shops that are instantly available in one platform instead of canvassing them separately. Meanwhile, businesses are forced to open up several payment methods to accommodate the preferences of each consumer (Dey, 2022).

3. Altered How Industries Operate

        Business owners do not need a physical store to conduct business and those that switch to online platforms are leaving behind a lot of vacancies from their previous locations (e.g. shopping malls, renting spaces). These malls that used to house businesses are not exactly receiving regression, rather they are predicted to adapt to the changes brought up by e-commerce. According to Kodali (2022), these malls will shift to hosting more physical service-based businesses instead of product-based shops. Product-based shops either switch to e-commerce or exist in both e-commerce and physical stores, thus the establishment will cater these type of tenants. Malls will adapt by welcoming more occupants that will use the spaces for civic activity offices, hair salons, clinics (for people/pets), gyms, and other in person services to fill in the vacant spaces. In return, it will change how people envisioned malls and those of the similar operational industry.