HISTORY OF INTERNET, CHALLENGES,

ADVANTAGES AND DISADVANTAGES

OF
E-COMMERCE

Vinayak Chavan
MBA-
1st Sem

Roll No-59

Phone: +91 9036515294

Email:Vinuuu7@gmail.com

History of Internet
The concept of communication - transmitting data between two
different places, connected via some kind of electromagnetic medium,
such as radio or an electrical wire - actually predates the introduction
of the first computers. Such communication systems were typically
limited to point to point communication between two end devices.
Telegraph systems and telex machines can be considered early
precursors of this kind of communication. The earlier computers used
the technology available at the time to allow communication between
the central processing unit and remote terminals. As the technology
evolved new systems were devised to allow communication over
longer distances (for terminals) or with higher speed (for
interconnection of local devices) that were necessary for the
mainframe computer model. Using these technologies it was possible
to exchange data (such as files) between remote computers. However,
the point to point communication model was limited, as it did not allow
for direct communication between any two arbitrary systems; a
physical link was necessary. The technology was also deemed as
inherently unsafe for strategic and military use, because there were no
alternative paths for the communication in case of an enemy attack.
 As a response, several research programs started to explore and
articulate principles of communications between physically separate
systems, leading to the development of the packet switching model of
digital networking. These research efforts included those of the
laboratories of Vinton G. Cerf at Stanford University, Donald Davies
(NPL), Paul Baran (RAND Corporation), and Leonard Kleinrock at MIT
and at UCLA. The research led to the development of several packet-
switched networking solutions in the late 1960s and 1970s, including
ARPANET, Telnet, and the X.25 protocols. Additionally, public access
and hobbyist networking systems grew in popularity, including Unix-to-
Unix copy (UUCP) and FidoNet. They were however still disjointed
separate networks, served only by limited gateways between
networks. This led to the application of packet switching to develop a
protocol for internetworking, where multiple different networks could
be joined together into a super-framework of networks. By defining a
simple common network system, the Internet Protocol Suite, the
concept of the network could be separated from its physical
implementation. This spread of internetworking began to form into the
idea of a global network that would be called the Internet, based on
standardized protocols officially implemented in 1982. Adoption and
interconnection occurred quickly across the advanced
telecommunication networks of the western world, and then began to
penetrate into the rest of the world as it became the de-facto
international standard for the global network. However, the disparity of
growth between advanced nations and the third-world countries led to
a digital divide that is still a concern today.

Challenges of Ecommerce
1. Lack of online culture

Electronic way of doing business is a new concept for the societies of the
developing nations. People usually buy and sell on face-to-face basis. They
see and touch (physically) what they want, negotiate on best deals, and buy.
This is the type of business activity they are familiar with, which is entirely
different from online way of doing it. The idea of buying goods and services
that cannot be seen and touched physically is not the type of risk they can
afford. They are not confident also whether online merchants are trust
worthy enough to deliver products and services as promised.

Merchants as well are afraid to sell their products over the Internet.
Considering the lack of online buying habits of the society, and because of
the reason that electronic way of doing business is not well-known, they
think it is a high business risk to take. They usually are not willing to invest
on online ventures. Thus, this extremely damages the growth of Ecommerce
in these nations.

2. Lack of Trust

Basically, trust is a major issue in online business environment. As I

mentioned earlier, people in the developing nations are not confident with
online way of doing business, by which one of the major reasons is trust.
Because Ecommerce is not a practice in these countries, and business is
usually done on face-to-face bases, people usually raise trust issues. They
are obliged to think how could they trust people they do not see and may be
found thousands of kilometers away? Besides, because there are no
Ecommerce policies and laws in most of developing countries, they are afraid
where to go in case of disputes.

Infrastructural issues

1. Limited access of Telecommunication infrastructure and high cost

of Internet

Ecommerce requires technological foundations. One of the major ones is

access to the Internet. To run an online business one needs an Internet
connection with stable and high connection speed. However, mostly the
Internet connection type in the developing nations is a dial up connection,
which is very limited and slow. Besides, the cost of possessing it is high. This
is another challenge Ecommerce faces in the developing nations.

2. Limited access to Personal Computers

Another major technological facility Ecommerce needs is Personal

computers. Possessing computers is expensive in the developing nations
because they usually are imported products from the developed nations;
which is another major challenge for the growth of Ecommerce in these
countries.

3. Lack of Electronic payment facilities for enabling transfer of

funds

Banking is another major facility needed to do Ecommerce. And in most

cases, the developing nations lack this major facility. Online merchants in
these countries are obliged to use banking facilities offshore if they are going
to do business over the net.

4. Imperfect legal system and policy barriers

To do Ecommerce, perfect legal system and policy is required. Without them
it is impossible to do business online. However, these nations usually lack
these major systems which in turn could make doing Ecommerce difficult.

However, even though doing business online in the developing nations is

difficult, it is not impossible at all. It can be done given the circumstances. It
could take more effort to be successful though. In addition, the industry
needs time to utilize its potentials.

Thus, realizing the potential of Ecommerce in the developing nations, there

are concerned bodies by which their co-operation can make a big difference.
They are government, professionals, online merchants, banks and
customers. If they can work together and collaborate, they can fully avoid all
the above mentioned obstacles and can benefit their nations from the
outputs of Ecommerce.

Advantages and Disadvantages of

Electronic Commerce (e-commerce)

Electronic commerce or in short e-commerce, refers to business activities

like selling and purchasing of products and services carried out over
electronic systems like the Internet and computer networks. The history of e-
commerce dates back to 1970, when for the first time, electronic data
interchange (EDI) and electronic fund transfer were introduced. Since then, a
rapid growth of e-commerce has pervaded almost every other aspects of
business such as supply chain management, transaction processing, Internet
marketing and inventory management.

Advantages of Electronic Commerce

The greatest and the most important advantage of e-commerce, is that it

enables a business concern or individual to reach the global market. It caters
to the demands of both the national and the international market, as your
business activities are no longer restricted by geographical boundaries. With
the help of electronic commerce, even small enterprises can access the
global market for selling and purchasing products and services. Even time
restrictions are nonexistent while conducting businesses, as e-commerce
empowers one to execute business transactions 24 hours a day and even on
holidays and weekends. This in turn significantly increases sales and profit.

Electronic commerce gives the customers the opportunity to look for cheaper
and quality products. With the help of e-commerce, consumers can easily
research on a specific product and sometimes even find out the original
manufacturer to purchase a product at a much cheaper price than that
charged by the wholesaler. Shopping online is usually more convenient and
time saving than conventional shopping. Besides these, people also come
across reviews posted by other customers, about the products purchased
from a particular e-commerce site, which can help make purchasing
decisions.

For business concerns, e-commerce significantly cuts down the cost

associated with marketing, customer care, processing, information storage
and inventory management. It reduces the time period involved with
business process re-engineering, customization of products to meet the
demand of particular customers, increasing productivity and customer care
services. Electronic commerce reduces the burden of infrastructure to
conduct businesses and thereby raises the amount of funds available for
profitable investment. It also enables efficient .

Disadvantages of Electronic Commerce

Electronic commerce is also characterized by some technological and

inherent limitations which has restricted the number of people using this
revolutionary system. One important disadvantage of e-commerce is that the
Internet has still not touched the lives of a great number of people, either
due to the lack of knowledge or trust. A large number of people do not use
the Internet for any kind of financial transaction. Some people simply refuse
to trust the authenticity of completely impersonal business transactions, as
in the case of e-commerce. Many people have reservations regarding the
requirement to disclose personal and private information for security
concerns. Many times, the legitimacy and authenticity of different e-
commerce sites have also been questioned.

Another limitation of e-commerce is that it is not suitable for perishable

commodities like food items. People prefer to shop in the conventional way
than to use e-commerce for purchasing food products. So e-commerce is not
suitable for such business sectors. The time period required for delivering
physical products can also be quite significant in case of e-commerce. A lot
of phone calls and e-mails may be required till you get your desired
products. However, returning the product and getting a refund can be even
more troublesome and time consuming than purchasing, in case if you are
not satisfied with a particular product.

Thus, on evaluating the various pros and cons of electronic commerce, we

can say that the advantages of e-commerce have the potential to outweigh
the disadvantages. A proper strategy to address the technical issues and to
build up customers trust in the system, can change the present scenario and
help e-commerce adapt to the changing needs of the world.

THANK YOU