What is the role of analytics in E-Commerce

industry?
Big data Business Analytics
SHARE
Tavish Srivastava , August 7, 2015 / 1

If you are preparing for an interview into role of analytics, you need to do your ground work to
get a basic understanding of domain. Also, you should know what is the role of analytics to do
smarter business in this domain. But such information is not available in public neither is it
available on Job Descriptions. Mostly one of your interview round will be to assess your
capability to analyse a problem in their domain. If you know domain before hand, it will be a
jackpot. In this article, I will introduce you to a few roles analytics plays in E-Commerce
industry.

Lets talk about the industry first!

E-Commerce is a very dynamically evolving industry and this is primarily because of its
underlying ever-changing technology. Companies like Amazon, E-bay are capable of building
predictive algorithms being executed in real time on big data environment.

I just spoke 3 big words, which when combined delivers something unmatchable and uniquely
executed by E-Commerce industry:

1. First, e-commerce players have evolved significantly in their decision making over time.
In early days simple basket analysis was used to make recommendation, today we have
customer specific predictive algorithms being executed.

2. Second, recommendation systems and other technology which used to take days to
execute is now executed in seconds, which make them even more effective.

3. Third, every thing has now moved to a big data environment. We no more see tabular
format data stored in CSV formats. To churn millions of activities of billions of
customers, we need parallelization of processes. Everything is done seamlessly by E-
Commerce industry and customer doesnt even notice.

Role of Analytics in E-Commerce

If you have worked in financial industry, you will probably be aware of analytics playing a
crucial role into risk and marketing strategy. However, E-Commerce industry goes beyond these
two pillars. The primary job of E-Commerce industry is to make user experience on their website
is delightful. Other than that they are simply a platform between sellers and buyers. With such
focus on user experience, analytics itself becomes a product instead of just being business
enabler. For instance, Recommender Engines you see on Amazon sidebar is a classic product.
Now, you can appreciate the much broader role of analytics in E-Commerce industry. In the
following section, we will talk more about broad functions where analytics is being actively
used.

Functions supported by Analytics in E-Commerce Industry

This list is no way exhaustive but will cover broad roles in E-Commerce industry

1. Supply Chain Management : This includes managing data for products right from warehouse
to the customer. E-Commerce industries use analytics extensively to manage Inventory. Also a
significant portion of work is into optimising transportation and pricing of delivery
 2. Merchant/Customer

Fraud Detection : I recently read a post on Facebook that someone found a show in the delivery
box when he ordered a MAC for INR 90,000. This is what is known as Fraud. Even though the
E-Commerce company might have nothing to do with this fraud, they are the one who pay for it.
However, frauds are not always from the merchant side. Even though it is rare, customers also
make false claims in frauds. Initially all these frauds were handled manually, but with time E-
Commerce is moving towards developing predictive algorithm to detect frauds and avoid them if
possible.

3. Merchant Analytics : Merchants form the core of E-Commerce industry. If the merchant
grows, E-commerce provider also grows. So E-Commerce players do extensive analysis for
Merchants to get into new markets or set the right price for their goods. For instance, Amazon
can recommend a Cricket Bat vendor to keep Hockey sticks because of a growing demand in his
locality. Such decisions would have been much more expensive for the vendor, had they not
partnered with E-Commerce players.
4. Recommender Systems : As soon as I hear Recommender engines, I imagine YouTube.
Recommender systems in E-Commerce industry is not very different from YouTube. These
engines serve as blueprint for customer to navigate through the store of this virtual environment.
Recommender engines have been the strongest contribution of analytics to technology.

Credit : TIME Magazine

5. Product specific analytics : These teams generally work on product specific details for
example Satisfaction rate of customers for a product, forecast of sales for a product etc. Their
work cut across verticals and are specific for a family of product or a single product.

6. Online Marketing Analytics : As E-Commerce provides you a virtual environment to buy

stuff, they have to market on the virtual environment extensively. The online marketing team
generally works on bidding for ads on Google or other websites. They analyse the funnel of new
prospect customers and maximize the likelihood of a customer clicking an ad .
7. User Experience Analytics : This probably is the biggest task for analytics in E-Commerce
industry. Its all about customer centricity because of the ease to shift from Amazon to Flipkart.
This team primarily works on creating the right architecture of the website. This will include
how is product searched across portfolio, what decides the rank ordering of products for a
particular search, what is the best landing page of a customer coming from Facebook etc. They
also test what type of layout is better for what type of customers.

Image Source : Elliance

This list is not exhaustive as I can imagine a number of other areas where analytics can play a
role. However, this list of 7 roles cover majority of analytics resources in E-Commerce industry.

What is the role of analytics in E-Commerce

industry?
Big data Business Analytics
SHARE
Tavish Srivastava , August 7, 2015 / 1
If you are preparing for an interview into role of analytics, you need to do your ground work to
get a basic understanding of domain. Also, you should know what is the role of analytics to do
smarter business in this domain. But such information is not available in public neither is it
available on Job Descriptions. Mostly one of your interview round will be to assess your
capability to analyse a problem in their domain. If you know domain before hand, it will be a
jackpot. In this article, I will introduce you to a few roles analytics plays in E-Commerce
industry.

Lets talk about the industry first!

E-Commerce is a very dynamically evolving industry and this is primarily because of its
underlying ever-changing technology. Companies like Amazon, E-bay are capable of building
predictive algorithms being executed in real time on big data environment.

I just spoke 3 big words, which when combined delivers something unmatchable and uniquely
executed by E-Commerce industry:

1. First, e-commerce players have evolved significantly in their decision making over time.
In early days simple basket analysis was used to make recommendation, today we have
customer specific predictive algorithms being executed.
 2. Second, recommendation systems and other technology which used to take days to
execute is now executed in seconds, which make them even more effective.

3. Third, every thing has now moved to a big data environment. We no more see tabular
format data stored in CSV formats. To churn millions of activities of billions of
customers, we need parallelization of processes. Everything is done seamlessly by E-
Commerce industry and customer doesnt even notice.

Role of Analytics in E-Commerce

If you have worked in financial industry, you will probably be aware of analytics playing a
crucial role into risk and marketing strategy. However, E-Commerce industry goes beyond these
two pillars. The primary job of E-Commerce industry is to make user experience on their website
is delightful. Other than that they are simply a platform between sellers and buyers. With such
focus on user experience, analytics itself becomes a product instead of just being business
enabler. For instance, Recommender Engines you see on Amazon sidebar is a classic product.
Now, you can appreciate the much broader role of analytics in E-Commerce industry. In the
following section, we will talk more about broad functions where analytics is being actively
used.

Functions supported by Analytics in E-Commerce Industry

This list is no way exhaustive but will cover broad roles in E-Commerce industry

1. Supply Chain Management : This includes managing data for products right from warehouse
to the customer. E-Commerce industries use analytics extensively to manage Inventory. Also a
significant portion of work is into optimising transportation and pricing of delivery.
2. Merchant/Customer Fraud Detection : I recently read a post on Facebook that someone
found a show in the delivery box when he ordered a MAC for INR 90,000. This is what is known
as Fraud. Even though the E-Commerce company might have nothing to do with this fraud, they
are the one who pay for it. However, frauds are not always from the merchant side. Even though
it is rare, customers also make false claims in frauds. Initially all these frauds were handled
manually, but with time E-Commerce is moving towards developing predictive algorithm to
detect frauds and avoid them if possible.

3. Merchant Analytics : Merchants form the core of E-Commerce industry. If the merchant
grows, E-commerce provider also grows. So E-Commerce players do extensive analysis for
Merchants to get into new markets or set the right price for their goods. For instance, Amazon
can recommend a Cricket Bat vendor to keep Hockey sticks because of a growing demand in his
locality. Such decisions would have been much more expensive for the vendor, had they not
partnered with E-Commerce players.

4. Recommender Systems : As soon as I hear Recommender engines, I imagine YouTube.

Recommender systems in E-Commerce industry is not very different from YouTube. These
engines serve as blueprint for customer to navigate through the store of this virtual environment.
Recommender engines have been the strongest contribution of analytics to technology.

Credit : TIME Magazine

5. Product specific analytics : These teams generally work on product specific details for
example Satisfaction rate of customers for a product, forecast of sales for a product etc. Their
work cut across verticals and are specific for a family of product or a single product.

6. Online Marketing Analytics : As E-Commerce provides you a virtual environment to buy

stuff, they have to market on the virtual environment extensively. The online marketing team
generally works on bidding for ads on Google or other websites. They analyse the funnel of new
prospect customers and maximize the likelihood of a customer clicking an ad .
7. User Experience Analytics : This probably is the biggest task for analytics in E-Commerce
industry. Its all about customer centricity because of the ease to shift from Amazon to Flipkart.
This team primarily works on creating the right architecture of the website. This will include
how is product searched across portfolio, what decides the rank ordering of products for a
particular search, what is the best landing page of a customer coming from Facebook etc. They
also test what type of layout is better for what type of customers.

Image Source : Elliance

This list is not exhaustive as I can imagine a number of other areas where analytics can play a
role. However, this list of 7 roles cover majority of analytics resources in E-Commerce industry.

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Role Of E-Commerce In Economic Growth

By Dr. Mohammad Talha and Mr. Ramaiyer Subramaniam,

Multimedia University, Melaka, Malaysia

Web: www.mmu.edu.my
Email: mohammad.talha@mmu.edu.my,
ramaiyer.subramaniam@mmu.edu.my

Dr. Mohammad Talha presently working as an Accounting Lecturer in the

Faculty of Business and Law, Multimedia University, Melaka, Malaysia.
Prior to join here he was a senior lecturer in the Department of Commerce
Aligarh Muslim University Aligarh, India since 1990. Dr. Talha have about
14 year of teaching experience and about 20 year of research experience. He
has published about 36 research papers, articles and 2 monographs at
national and international level. He has also written 4 books in accounting
and international trade. Dr. Talha has undertaken many project and presently
he is guiding many M. Phil. and Ph.D. students.

Abstract

E-Commerce is a business issue rather than a technology issue. It

involves a number of forms, varying level of cost and complexity,
depending on business need. It can also improve the operations through
greater use of electronic book-keeping and records management.
Supplies received through internet placement reduces the storage cost,
space and serves its customers faster and more effectively. On line
banking services such as electronic bill payment, funds transfer and
payroll management improves the efficiency of the business. These
services are offered by most of the financial institutions. E-Commerce is
not confined to business alone but also includes media sector also such as
telephone, television and electronic payments. The greatest feature of the
internet is the absence of intermediaries, the manufacturers are able to
sell their products relatively easily to buyers via the internet. With this
background, the present paper discusses the ways in which e-commerce
give information to the consumers. The paper further highlights some
suggestions and future strategies for e-commerce in years to come

Keywords

Internet marketing, E-Purchase, E-Sales and E-banking.

Introduction

E-Commerce is the most important application of the new communication

technology. Producers, traders and consumers can now reach the market
more quickly and get more information than they could ever before. The
electronic commerce has penetrated the businesses in many ways. The
importance of electronic commerce depends on the evaluation. To evaluate
related data on e-commerce is necessary, because it is not readily available.
The available data are collected by different agencies using various
definitions and methodologies used by the collecting entity. Without reliable
data, policy makers, decision makers and business people are unable to take
decisions that reflect the changes brought about by the e-commerce. The use
of web site enlarges the potential global market and sales revenue, products,
potential new customers, services and geographical area. E-commerce has
also reduced the transaction costs, allied with purchase, sales, operating,
holding inventory and financial costs. The non-financial benefits such as
performances of non financial assets like human resource and timeliness,
quality of service, customers satisfaction are some of the indirect effects. By
using the relevant and accurate data on e-commerce the policy makers and
researchers to analyze the impact of e-commerce on labor market, market
structures and functioning, changes in distribution of goods and services and
changes in global competition. It enables them to take well framed decisions
about the policies and investments in e-commerce related sectors.

The main difficulty now faced by the policy makers and others is lack of
comprehensive indicators about the electronic commerce and clear guidelines
and consensus on what is meant by electronic commerce. Therefore there has
been considerable effort at the international level like Asia-Pacific Economic
Cooperation and European Union members, to work towards an international
agreement on the definitions to be adopted. There is a growing need towards
internationally accepted guidelines and methodologies for measuring the
electronic commerce. Now the developing countries have started to become
actively involved in electronic commerce. They have realized the potential
social and economic benefits that could result from e-commerce as well as
the importance of having readily available data which would highlight the
role of e-commerce in their economies. With this background the present
paper discusses the ways in e-commerce by which information about
consumers can be assessed and understood. The paper further highlights
some suggestions and future strategies of e-commerce in years to come.

What is E-Commerce

National Office for the Information Economy uses the following word to
define e-commerce, it classifies e-commerce as every type of business
transaction or interaction in which the participants prepare or conduct
business electronically. This covers a wide range of activities, ranging from
use of electronic mail, through to Internet based sales and transactions and
web based marketing. Dr. Roger Clarke, Principal, Xamas Consultancy Pt
Ltd., Canberra said that Electronic business is a useful general term for" the
conduct of business with the assistance of telecommunications and
telecommunications-based tools" and defines Electronic commerce as "the
conduct of commerce in goods and services, with the assistance of
telecommunications and telecommunications-based tools" . Different people
use different terminology such as 'electronic trading' 'electronic procurement'
electronic purchasing', ' electronic marketing'. >From the above definition we
can say that electronic commerce is often used in a much broader sense, to
mean essentially the same as 'electronic business'. In other words e-
commerce includes purchases of goods, services and other financial
transactions in which the interactive process is mediated by information or
digital technology at both, locationally separate, ends of the interchange.
Here 'transactions' includes both specification of goods or service required
and commitment to buy.

E-commerce is a business issue rather than a technology issue. It further says

that e-commerce improves the way business is undertaken with customers,
other businesses and government. It involves number of forms, varying level
of cost and complexity, depending on business need. Businesses can use e-
mail as a rapid and reliable way to communicate with suppliers or to receive
and respond to customer queries like quotations, product information, accept
orders, execute deliveries, and collect dues from the customers. E-commerce
can also improve the operations through greater use of electronic
bookkeeping and records management. Supplies received through internet
placement reduces the storage cost, space and serves its customers faster and
more effectively. On line banking services such as electronic bill payment,
funds transfer and payroll management improves the efficiency of the
business. These services are offered by most of the financial institutions. E-
commerce need not confine to business alone but also includes media sector
such as telephone, television and electronic payments. The greatest feature of
the internet is the absence of intermediaries. The manufacturers are able to
sell their products relatively easily to buyers via the internet. In addition,
software and digital content such as music not only can be sold but ca be
"shipped" via the internet, such transactions bypass all intermediaries in
conventional distribution channels. But in the place of intermediaries a new
type of intermediary business that is distinctive of the internet is emerging.
What Is Internet Marketing

A recent report by the Department of Commerce (USA) acknowledged the

increased use of the internet for commercial activity. By September 2001 21
percent of the U.S. population was using the internet to make purchases and
eight percent was using it for online banking as against 13 percent of either
activity in the previous year. The Commerce Department found that 36
percent of the population used the internet to search for product or service
information in September 2001 an increase of 10 percent the year before. But
the consumers concerns are about the potential abuse of the personal
information they provide in the course of conducting transactions online.
Most of the user of such facilities never read privacy notices. Indeed a recent
Harrisinteractive Poll found that only three percent of consumers read
policies most of the time, and two thirds spent little or any time looking at
privacy policies. Efforts are made through advertisement and radio campaign
to educate them and protect their information. Industry is also supporting
efforts to improve the effectiveness of privacy notices.

When consumer knows what exactly his needs and what to buy it is very
easy for him to go about- for example if the consumer needs steel he can visit
vertical buying hub such as e-steel. On the specific web site the suppliers are
listed and the offer to sell in future. The specified various qualitative supplies
can be had by the buyer. Buyers can approach by search suppliers, product
offers and bid on products that match their requirements or create an inquiry
for suppliers to bid on, which involves outlining the type of product they are
looking for defining their specifications and contract sales terms, selecting
the audience for the inquiry and tracking responses to the inquiry through a
self service console. This buying process is sophisticated and highly specific
to steel buying; e-steel literally serves as an outsource steel buyer.

Buyers need differ from business to business. Some need specific

commodity, others look for a more general product, or make one time
purchase or online bartering or e-auction. One time purchasers buy at a time
the entire requirements. The company places order with supplier for a bulk
order by which they get better price bargain, in turn they offer online the
maximum price per piece to the customers. They collect individually huge
order by which better price fall is obtained from supplier. This type of hub
provides a true win-win situation. The buyer receives a lower price for the
product and the supplier receives a larger order, with minimal effort on both
sides. The service company provides e-mail order and encourages the buyer
to join a buying cycle and drive down the price of the product Another type
wherein companies find liquidity short, find a way to age old system of
bartering. The first hubs designed to facilitate business-to-business swapping
of goods and services are just coming online. One such site, for example,
Ubarter.com, lets sellers advertise items for a certain number of Ubarter
Dollars - a virtual currency that can be used to buy other goods and services
on Ubarter.com. Buyers must have enough Ubarter Dollars on account, or
else have an established line of credit, to participate in a sale. However, other
than the fee that Ubarter.com charges, bitween the buyer and seller of a
completed transaction, cash never changes hands. It is an advantage for small
and growing businesses. The other option for bulk procurement is the e-
auction. The organizations bid online for goods and services. Business-to-
Business e-auction sites are fast becoming a significant sector of the overall
buying-hub universe. Let us examine the e-purchase, e-sales, e-inventory and
e-banking the main activities of any organization.

E-Purchase

The business organization place orders with suppliers on the Web site
whereby obtain the goods. E-marketplace where multiple number of vendors
and buyers meet at one site for dealing in goods and materials. Earlier these
market places attracted the attention of the world. A number of Web sites
have been set up in various industries, but they are under going a process
akin to that of natural selection in the world of biology, with some businesses
withdrawing from e-marketplace operation or merging with other business.
Virtually all types of products, including books, music CDs, toys, household
appliances, clothing, foods and other groceries, jewelry are available for sale
on the internet. The internet sales of books, which had been regarded as
being well-suited to cyberspace business, perhaps account for only 7 percent
to 8 percent of the total sales volume of books. Founder and CEO of
Amazon.com estimated that the books sold on the internet account for around
15 percent of the total book market. The president of Borders, Americas
number two book seller chain, believes that the share is not more than 10
percent. Therefore the level of sales of most other products are faring less
well on the internet. The best suited products for sale in internet are travel
tickets and program and entertainment tickets, which can be marketed by
internet easily than other goods. The reasons for such success may be due to
easily marketable than merchandise wherein products, photos and other
information are to be required. Secondly the merchandise need the personal
inspection to satisfy before buying rather than the tickets. The buyer of the
tickets does not want to see the ticket before he buys it. Thirdly he even does
not like to have possession of the ticket before they are purchased. Fourthly it
can be easily dispatched, delivered by registered post or otherwise or directly
booked and delivered at the venue itself.

Majority feel that e-purchase is the sort of process that can only benefit very
large organizations and multinational companies with very huge investments
that can afford to meet such expenses. That is not true. It can be applied any
size of businesses or industries. According to technology research firm AMR
Research among businesses with more than 10,000 employees, 40 percent
already participate in some form of public business-to-business exchange;
among companies with 1000 to 2500 employees more than 80 percent expect
to be doing so within a year or more. From consumer packed goods, it is a
worthwhile effort taking place in the medical supply and pharmaceutical
industries. But it is not free from usual difficulties which a business can
encounter when trying to implement an e-purchase system. The money saved
by e-purchase should not be spent elsewhere which defeats the very purpose
of the entire efforts. The saving some time results in hard decisions to take
some people out of it, brings dissatisfaction in labor force. According to
Aqua Porter, Commodity team manager of Xerox, the entire organization is
now changing to a huge purchase migration. She says that Xerox expects to
realize 15 percent to 20 percent in process savings on its $ 20 million in
annual spending on domestic offset printing. She further says that it gives
them a lot more comparative data and a better way to track the decisions that
they are making, getting better value for money. The cost of employees
responsible for purchasing supplies can be reduced by 20 percent, by using
discounted prices from electronic catalogues, purchasing cost, streamline its
service staff , and by eliminating maverick purchases or decentralized
purchases. The Canadian National Railway Co once having more than
75,000 items in catalogs saved or cut 10 million dollars in procurement costs.
The modus operandi is as follows. The railroads former purchasing system
was labor intensive and requests for proposals for large purchases to four or
five suppliers were either faxed in and voted on by a multidisciplinary
committees. This process was time consuming. For smaller purchases staff
used to search catalog which did not have the required information and the
other processes were done through phone, fax and mail services. The initial
teething problems such as issuing multiple requisition orders were to be
resolved by the time the system went live for all suppliers. E-procurement
encourages getting better prices from suppliers. After a trial of six months the
railroad company has reduced the cost of processing from an average of $ 50
per order to $ 4 electronically, nearly about ninety two percent, and some
companies have reduced their workforce by 10%, getting larger discount for
bulk buying and other purchases. The usage of online catalog can help the
employees to check the items which are purchased often.

E-purchase cut labor cost and improves the efficiency by reducing human
errors involved. But the person who uses the purchasing authority has
enormous power may be one of obstacle to be considered and should
overcome with control means. Purchasing from single person every time may
be a challenge. The benefits obtained by this system should not be vanished
with maverick purchasing. Since in e-purchase the visibility is transparent
both within organization and with suppliers, and some of the supplier are not
very well equipped for it, the question of displaying the catalog and other
information such as inventory and suppliers mark up, are shared with others
and suppliers are reluctant to do so. The benefits should not be only to buyer.
It should be balanced with the buyer and the supplier. The purchasing
strategy cant be changed from old to new supplier. Reliability and the level
of service are involved .The relationship and trust that has been developed
over a period of time cant be ignored. Mr. Bobby Clay, Vice President of
Marketing for Clarus rightly said Just because we have new technology
doesnt mean that tried-and true business practices go out the window,
Technology can make faster the process, but still requires human touch.

E-Sales

One of the ways to measure the companies performance is by comparing the

total revenue with that of previous periods, with same industry, with
competitors and with other economic resources which produces the cash
flows. Sale is important component of any trading. Performance is always
measured with what you put in and what you get back. According to a survey
of executives, conducted in USA, 46 percent of retailers cite sales as the
primary metric they use to measure a Web sites performance and about one
in four said they focus on profit. To e-business, the entity should always
monitor the customer demand and changes in the market, and global
developments. Internet as an avenue for tracking customer demand and
customers inventories as well as for sourcing materials. Knowing the
customers demand for inventory on a real time basis is very difficult.
Integrating online and offline systems will become increasingly important for
retailers who are focused on driving consumers into their stores with
purchase intent. The above survey revealed that while only 31 percent of
retailers already provide visibility of store inventory on their Web sites,
another 23 percent expect to offer this capability within the next two years. A
well developed and integrated Web sites connected to their back offices is a
requirement to improve the revenue. A lot of companies still dont have their
web sites connected to their back offices says Hollis Bischoff, senior
program director for electronic business strategies for Meta Group Inc., an IT
advisory firm. Because the web site has not been properly linked, an order
placed by customer could not be attended to and after a considerable delay
sold out information was passed on to the customer. Certainly this affects the
customer relations. But this system involves some cost, but the benefit is
more than the cost spent. An order management and fulfillment software
suited for business to business as well as business to customer transactions.
The software can do allocation of inventory as an order is being taken online,
or inform a customer about an item much be back-ordered and give the
customer an estimated shipping date for the back-order. It also confirms the
order placed and shipping details to the customer. The web customers are
increasing year after year in spite of economy slow down. Recent trend
reports say that internet sales were up in USA by 18 percent for the quarter
ending in July. Some stores improved its internet sales but stores sale
however down by 14 percent. Even 1-800 flowers.com reported an increase
of 33 percent in revenues compared to the immediate previous period. The
results say even though there is an increase in internet business, it is certainly
to some extent at the cost of orders placed through other sources such as
telephone, stores and by mail.

E-Banking

When border less business is developed, increase in cross border transactions

are inevitable. Various countries currencies are involved. Foreign currency
which is the back bone of any countrys economy is moving from one place to
another within a fraction of seconds. Millions of dollars of transaction in
shares are traded every minute on the internet with matching money
transfers. This raises important issues, for traders how secure are their
transactions and security thereof. Already credit card, with so many benefits,
have some negative impact such as hassle of foreign exchange conversion
and control etc. This is going to be big challenge to the central bank of any
country, since serious implications of nation wealth, flight of capital, export
earnings and balance of payment are involved. The future is challenged by
digital money which is making a headway in commercial transactions and
ultimately one day replace currency money. Tracking the route, how it is
generated, wherefrom it is coming and where it finally reaches is a challenge
to all governments which may land in money laundering, frauds, financing
terrorism and illegal activities both across the border and locally.

Conclusion
While it is still early in the development of electronic commerce indicators,
the experience to date has been very positive. In many countries, the
collected indicators have highlighted a number of barriers to the wide
implementation of electronic commerce, providing Governments with key to
future policy development. Some indicators have demonstrated digital divide
issues, highlighted areas of the population and business community that have
been disadvantaged. They have also pointed to areas of commerce such as
age and training and to security, a key aspect when related to the actual
conduct of commercial transactions, especially for small and medium sized
enterprises and private householders. The third general area of use measuring
the impacts of electronic commerce has not yet been subject to statistical
measurement to any substantial degree.

The rapid growth in electronic commerce around world has prompted many
to look for better ways of measuring the phenomenon. As more and more
countries and international agencies become involved, it is important to
develop plans to ensure that there is no unnecessary duplication of effort and
that users have the data necessary for informed decision making at the
earliest possible opportunity. From the above discussion, it appears that there
are a number of actions that could be taken by national statistical agencies in
both developed and developing countries: - Assuming leadership for the
development of international standards, concepts, definitions and model
surveys by associating with the relevant international agencies. -
Collaborating with other national statistical agencies (particularly national
statistical agencies in developed countries collaborating with those in
developing countries), to improve the quality of statistical indicators that can
be made available; - Participating in seminars and workshop organized by
international agencies aimed at improving statistical standards in the
measurement of electronic commerce.

Recommendations

Technology and software applications play a central role in supporting e-

logistics services in handling the complex and demanding business models
that are emerging. Logistics and transport service providers, supported by
technology companies, are making concerted efforts to automate logistics
functions in order to cope with the ever-increasing demands of e-commerce.
The development of differing applications meet the requirements of specific
users and functions is a source of incompatibility between applications, even
within the same company. There is critical demand for the integration of
systems to ensure that instructions can be efficiently exchanged between
different types of logistics applications.

To achieve more efficient e-logistics and e-fulfillment, it is desirable to have

a trading environment in which there is perfect information about goods as
regards their description, origins and destinations, and costs for different
origins and destinations. Sellers and buyers should be able to monitor and
track goods at every point along the way from the supplier to the consumer.
All stakeholders should be able to check on the Internet the availability and
status of orders. All this can be achieved if trade information is simplified,
automated and fully harmonized in all countries, and all restrictive
government export/import regulations and practices are eliminated. It is also
requires sophisticated supply chain management systems for compelling and
enabling global end-to-end monitoring of trade information.

To achieve these broad objectives and also to take into account the special
problems of developing countries, it is recommended that Governments, the
international community and the private sector cooperate in promoting the
following specific measures:

1. Taking advantage of the great potential provided by Internet

technology in order to capture, transfer and monitor trade information
over network of supply chains in an open fashion;

2. Automating customs declaration systems in order to develop

customs-to customs information exchange and thereby provide a
basis for the elimination of unnecessary export / import requirements,
which can instead be replaced by fully integrated international
transactions;

3. Harmonizing and improving the classification of commodity tariffs,

and facilitating the identification of individual consignment;

4. Providing investment resources especially for customers

administrations in order to upgrade their efficiency;

5. Harmonizing and simplifying trade facilitation regulations and

procedures, and in particular encouraging greater harmonization of
customs procedures through the wide adoption and implementation of
the revised Kyoto Convention on the Simplification and
Harmonization of Customs Procedures;
6. Promoting cooperation between authorities of exporting and
importing countries in order to provide verification and compatibility
in trade information. In this context, the International Trade Prototype
(ITP) project developed by the United Kingdom and the United States
customs administrations could provide a model to be developed at the
international level. The international community should give support
to further development of the project;

7. Encouraging greater transparency in trade processing activities and

taking measures to reduce corruption and other forms of malpractice
in customs administration;

8. Promoting partnership between developing country logistics service

providers and developed country logistics service providers that are
applying e-logistics systems;

9. Providing technical cooperation program to developing countries that

support e-logistics, for example in customs, transportation services,
cargo terminals and related services