ELECTRONIC COMMERCE Potential roles of e-commerce Obstacles to growth Legal issues Web site design and problems Consumer cyber behavior

Potential Roles of e-commerce Actual online sales (e.g., Amazon.com) Promotion/ advertising Banners, cross-references reference in print ads Customer service--info, support Market research

Obstacles to Growth of Electronic Commerce Limited reach U.S. Foreign (per minute access charges) Concerns about privacy security Reputational issues Slow entry of firms into actual order processing Transshipment across countries Technical Limitations and “glitches” Slow access Costs Efficiency Absolute margins Language Non-English U.S. vs. British English Government regulations Cultural

Cultural Obstacles Preference for face-to-face transactions Preference for secrecy Reluctance to use credit cards--80% of Chinese consumers completed the transaction off-line

Web Site Problems Getting traffic to your firm (and not to someone else) Ownership of domain name Indexing in search engines listing of site deliberate “false positives” for competitors (misleading meta tags) Incompatibility of browsers Managing the site Updating Response (it is much easier to complain online!) Implementing electronic shopping

Legal Issues Jurisdiction--applying local laws to a global medium Inter-country sales tax/duty collection Reach of the Internet: whose laws apply? Advertising messages Product assortment Privacy laws--restrictions on data that can be collected on customers Tax collection: is the sender or recipient liable? (High shipment volumes allow only for random customs searches)

Language Issues Increasing proportion of non-English speaking Net users “Drawing” of Asian pictorals--download time Language variations Taiwanese vs. mainland Chinese British vs. American English--is the word “color” an Americanization or misspelling? Regional variations in word meanings--less opportunity for tuning advertising to local meanings At least pronoun- ciation is not so much of an issue on the Web!

Optimal Web Site Design Speed vs. aesthetics (may be temporary problem) Keeping customers on your site--beware of links Cookies--advantages and disadvantages

Consumer Cyber Behavior Easy comparison shopping Between merchants Between countries Low willingness to pay--especially for information Premature departure from site

Search Engine Optimization “Cat and mouse game” between webmasters and search engines Some placement strategies Paid rankings Massive amounts of text Reciprocal or paid links