M.com part 1 semester 2 e- commerce question bank mumbai university

  M.com Part 1 (Semester 2)


Most Important Question Bank for Current Exam

Q.4. Explain the benefits of e-commerce.


A) Benefits to E-Commerce Firms

1. Global Reach:

 With e-commerce, a company can reach out to the customers worldwide. Unlike physical stores where only a limited number of customers can be served, e-commerce allows firms to deliver products online to customers in any corner of the world.

2. Small Investment:

E-commerce firms do not have to make investment to purchase land or rent or lease space for physical stores. E-commerce is operated online through websites. There are many domains which allow firms to create websites, which is less costly and far more convenient. The marketer has to only create a website to target their customers. Logistic functions can be outsourced by them. It reduces the need to make heavy investments and also provides quick return on investment (ROI) to marketers.

3. Less Operating Costs:

In e-commerce business, there is no need to hire a large number of employees unlike physical stores. It reduces training cost, salaries etc. that have to be paid to employees. Due to opening an online store there is no need of payment of rent, utility bills and other miscellaneous expenses which can be incurred in physical stores. This results into less operating cost of e-commerce firms.

4. Higher profit margin:

E-commerce offers benefit of global reach, so the marketer can reach to customers located all over the world. There is also large demand for the products from all over the world. There are no intermediaries like agents, wholesaler or retailer. Mostly the transactions are done directly between trader and customers. So the commission of intermediaries is eliminated. So all this contributes to higher profit margin.

5. Reviews of Customers:

The customer can leave their reviews about their experience with product. It can give more values to e-commerce website and help customers to build more trust about the firm.


B) Benefits to Customers

1. Variety of goods:

E-commerce makes a variety of products easily available to customers. They can select products straightforwardly as per their budget and requirements. Details of all the products are available the websites, which makes it easy for customers to select the right product.

2. Right Purchase Decision:

E-commerce applications and websites provide options to compare and select the best product. Customers can also read reviews and comments posted by other customers on the website before making a final purchase.

3. 24 x 7 services:

E-commerce is not limited to running on schedules as they function 24X7, unlike physical stores. Customers and clients can buy whatever they want anytime on websites, which they cannot in any physical store.

4. Increased Competition:

Due to lack of entry barrier, less investment, etc. the number of e-commerce firms entering the business is increasing. It has resulted in increase in competition in the ecommerce industry. The competition may benefit customers in the sense that they get better quality products at discounted prices due to competition between the e-commerce firms.

5. Convenient Shopping:

Due to busy schedule, many people are unable to go to physical stores for shopping. As a result, they prefer to shop from e-commerce websites now. Online shopping saves their time and also brings the products ordered at their doorstep which also saves their money and energy.

6. Discounts and offers: Every e-commerce company offers discounts as well as offers such as free gifts, extra quantity, warranty etc. on every purchase.

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