Sigma Capital

16-09-2024

E-commerce transactions value to increase to $25 trillion in 2020:Ministers Information

Source: MIST

Youm7-


The Information and Decision Support Center of the Cabinet issued a new analysis that addressed the concept of e-commerce, its types, its most important advantages, and the challenges that threaten its growth, noting that e-commerce has witnessed a remarkable spread in recent years; and has become one of the most prominent components of the digital economy, especially after the Covid-19 pandemic; which contributed to facilitating buying and selling operations around the world around the clock; which led to an increase in the value of e-commerce transactions to reach about (25) trillion US dollars in 2020, according to statistics from the United Nations Conference on Trade and Development.

Within the framework of this remarkable growth, the level of e-commerce spread varies between developed and developing countries; while developed countries have witnessed a significant increase in e-shopping, many developing countries still face obstacles that prevent them from fully benefiting from the opportunities offered by e-commerce, due to the lack of technical infrastructure necessary to facilitate digital communication, in addition to the high costs of accessing high-speed Internet, which is an essential element for increasing productivity and competitiveness.

Despite the large numbers reflecting e-commerce activities globally, Arab countries still represent a small percentage of the total sector, which calls for intensifying efforts to exploit available growth opportunities; which enables Arab institutions to participate effectively in global value chains and enhance their role in the digital economy.

The analysis indicated that the Organization for Economic Co-operation and Development (OECD) defines e-commerce as the buying and selling of goods and services that take place via digital means of communication. These operations are carried out through platforms specifically designed to receive and send purchase and sale requests, and are supported by digital payment mechanisms. E-commerce also includes commercial transactions in which individuals and institutions participate, and rely on the processing and transfer of digital data over open networks such as the Internet or closed networks.

In addition, online buying and selling contribute to enhancing companies' income and profits, and represent a huge market that allows all market parties to communicate instantly. Through these electronic platforms, products and services can be provided in a digital environment; which facilitates access to customers and enhances the effectiveness of business operations.

The analysis indicated the multiple classifications of e-commerce; It can be classified based on the nature of the business activity, or according to products and services, or according to payment methods. Among these classifications, the classification based on the parties involved in the transaction is the most common, and includes: consumers, business units, institutions, companies, and governments. The analysis highlighted the following types of e-commerce:

- Business-to-consumer (B2C): This type focuses on direct sales between companies and consumers; where companies sell goods and services directly to consumers, and consumers browse the website and choose what they want to buy, paying fees added to shipping costs, then the company ships the order to the consumer's address.

- Business-to-business (B2B): This type relates to commercial operations that take place between producers, wholesalers, and retailers, without the participation of consumers.

- Consumer-to-consumer (C2C): These activities usually take place between consumers; where one of them displays his products for sale online, and the buyer can communicate directly with the seller, such as selling a car, computer, or furniture.

- Consumer-to-business (C2B) commerce: This type of commerce involves individuals offering services or products to companies; companies use these offers to complete their business operations.

- Consumer-to-government (C2G) commerce: These activities include transactions between consumers and government agencies, such as paying water and electricity bills through ministry websites.

- Business-to-government (B2G) commerce: This pattern includes all commercial transactions that companies provide to the government regarding their purchases of goods and services.

The analysis added that e-commerce has a set of advantages that make it an attractive option for many companies; as it allows entry into global markets; which enhances the chances of achieving a higher return compared to traditional activities. In addition, thanks to the global nature of e-commerce, consumers can access products and services regardless of their geographical location; which opens new doors for businesses without time or space restrictions. Having a website also facilitates access to millions of customers in different countries of the world; which enhances opportunities for growth and expansion.

E-commerce also contributes significantly to reducing costs; The cost of creating a website is much less than opening several points of sale or implementing traditional advertising campaigns. In addition to the above, this platform allows customers to exchange experiences about products and services through electronic communities, which enhances the shopping experience. Thanks to this flexibility, companies can better understand their customers' needs and meet their choices easily and conveniently, which increases customer satisfaction and enhances their loyalty to the brand. The analysis added that e-commerce is facing remarkable growth, but it suffers from major challenges, especially in developing countries; as these countries face difficulties in accessing affordable communications technologies; which hinders the ability of many individuals to enter the world of digital commerce. According to the World Bank, only about (15%) of the world's population were able to afford high-speed Internet access in 2020. In addition, about (1.7) billion people are deprived of access to financial services; which prevents them from benefiting from commercial transactions that depend on Electronic payment capabilities and bank accounts.

In addition, e-commerce users face additional challenges related to security and product quality; there are growing concerns about exposure to commercial fraud; as many goods sold online may be counterfeit or non-original, and this situation is exacerbated by weak oversight of e-commerce activities in some countries; which makes consumers vulnerable to deception and loss of confidence in the digital market.

In a related context, countries around the world face increasing challenges in measuring the volume of e-commerce; as a result of the continuous growth in sectors that rely on the Internet in their commercial transactions, and with the diversity of goods and services that enter the field of e-commerce, it becomes necessary to unify international standards for measuring statistics on information and communications technologies. In this context, the United Nations stressed the importance of adopting a unified methodology for measuring e-commerce; in order to ensure an accurate and comprehensive understanding of this growing sector.

The analysis showed that in order for companies to benefit from the opportunities provided by the rapid growth in e-commerce activities, they must continue to improve their competitive capabilities in this area, and implement effective strategies to increase e-sales, which include:

- Identifying the appropriate product; Small businesses face a challenge in competing with larger entities such as Amazon, which capture a large share of the market, so companies must look for high-quality products or provide distinctive services that meet customer needs.

- Attracting target customers; Many companies lack experience in online shopping; therefore, retailers must understand the needs and preferences of their target customers well.

- Enhancing marketing capabilities; Reaching customers requires using effective online marketing strategies, including: email, promotional materials, and search engines; to accurately target advertising campaigns.

- Choosing the right applications; Companies must adopt appropriate technological solutions such as: marketing applications, inventory management, and customer relationship management systems to achieve efficiency.

- Hiring the right competencies; This comes by attracting the right talents; This is an essential factor for achieving sustainable growth in e-commerce.

- Participating in specialized events; This is done by attending seminars and conferences related to e-commerce; This can provide solutions to the challenges facing companies in this field.

- Exploiting the growth of mobile shopping; Companies must develop their applications and improve their websites to meet the needs of shoppers who prefer to use mobile devices.