Impact and Assessment of Electronic Commerce on Consumer Buying Behaviour

Introduction

Electronic commerce (E-com) is growing as a means of doing business and shows every sign of continuing to expand at a rapid rate. The rise of this new medium is attracting increasing attention in policy circles (Bandara et al., 2019). Nevertheless, a lack of adequate data on the magnitude and relevance of electronic supply has made policy-making decisions all the more difficult. E-com can be divided into three stages: first, the pre-purchase stage including advertising and information-seeking; second, the purchase stage, including purchase and payment; and third, the delivery stage (Bandara et al., 2019). In principle, all types of products can be advertised and purchased over electronic networks. The potential for electronic delivery, however, is more limited. It requires that a final product can be presented as digitalized information and transmitted electronically, typically over the Internet (Broome, 2016). Many services can be supplied as digitalized information, including financial transactions or legal advice. Some information and entertainment products typically characterized as goods, such as books, software, music and videos embody digitalized information that can also be supplied electronically over the Internet. Figure 1 shows the process of E-com working in the general scenario.

Figure 1.

The process of e-commerce working

Source: Naim (2021)

E-commerce will impinge upon some of the functions of wholesalers and retailers by connecting producers and consumers directly (Castaneda et al., 2009). Thus, they are likely to adopt new distribution methods to avoid being bypassed as a result of the information technology revolution. E-com is also likely to transform the way many financial and business services are provided, including accounting, computing and advertising. Figure 2 shows the E-Com development for any business.

Figure 2.

E-commerce development cycle

Source: Cetina et al. (2012)

Considering that E-com will play an important role in transforming large shares of the economy, it is worthwhile discussing how trade is likely to be affected by E-com. E-com will probably have most impact on two types of products (Naim & Khan, 2021). First, a number of products which traditionally have been delivered as “goods” can now be sent across networks in digital form. Second, E-com will strongly affect trade in services. The former category of products is basically software and media products, and includes film and various types of printed material. Trade over networks reduces transportation and administration costs considerably, and many products including films and music, software and its upgrading are soon likely to be or are already downloadable over the Internet (Choshin & Ghaffari, 2017). Currently, retailing costs account for a large share of the price of such products when sold in a shop.

Electronic delivery plays an important economic and trade role in many services sectors. It has been crucial for the development of cross-border trade in services (Chouhan, 2017).

Consumer behaviour encompasses all the steps that lead the consumer to purchase a product or service. Online, it starts the moment the user turns on their computer or phone, and ends the moment they validate their payment. Sometimes, consumer behaviour also includes repeat business. Figure 3 presents factors that affect consumer behaviour for any product, services and information (Dai, 2012).

Figure 3.

Factors influencing consumer behavior

Source: Dai (2012)