E-commerce and its impact on international trade

1. E-commerce and its
impact on
International Trade
By: Himani Soni

2. INTRODUCTION
• E-commerce can be defined as the use of the Internet to conduct business
transactions nationally or internationally
• E-commerce has come to take on two important roles; first as a more
effective and efficient conduit and aggregator of information, and second,
as a potential mechanism for the replacement of many economic activities
once performed within a business enterprise by those that can be done by
outside suppliers that compete with each other to execute these activities
• The Internet is dramatically expanding opportunities for business-to-
business and business-to consumer e-commerce transactions across
borders.
• E-Commerce today plays a major role in the world`s economy.

3. INTRODUCTION
• It gives consumers the ability to conduct a transaction directly with a
foreign seller without traveling to the seller’s country.
• The Internet allows sellers to put their storefronts, in the form of Web
pages, in front of consumers all over the world. Technology has expanded
the consumer marketplace to an unprecedented degree.
• E-commerce means transaction between buyers and sellers on Electronic
platform explained in other words as online. E-Commerce is based on
multiple technologies such as online platforms, Smartphone/Mobile
technologies, Supply chain and logistics and Digital Marketing. Online
draws support on technologies such as electronic funds transfer, electronic
data interchange (EDI), Warehouse Management Systems and E Banking.

4. FACTORS
Drivers of
global
e-commerce
Global
Production
Networks
Increasing
Global
Competition

5. Global Production Networks
• The growth of global production networks in industries such as
automobiles, electronics and textiles are the primary drivers of e-
commerce as these networks rely heavily on IT and e-commerce for
coordination.
• Some countries have domestic firms who participate in these global
networks as suppliers or sub-contractors(i.e. Taiwan) or as bases for
subsidiaries of multinational corporations(i.e. Singapore), while others are
coordinators of such networks(i.e. United states and Japan).
• Although the roles differ the integration of countries into global
production networks often involves the adoption of B2B e-commerce by
firms in these countries as a condition for participating in such networks.

6. Increasing Global Competition
• Global competition is perhaps the most significant force driving
e-commerce development across countries.
• A country`s integration in global production networks, the
presence of TNCs(Trade negotiations committee) and the extent of
trade liberalisation are all factors that increase the level of global
competition and by extension the pressure for countries to adopt e-
commerce as a means of reducing costs or/and expanding markets.

7. Impact if E-commerce on International Trade.
1. Positive impact of global e-commerce on trade
2. Negative impact of global e-commerce on trade

8. 1. Positive impact of global e-commerce on trade
Advantages
a. Access to the global marketplace
b. Speed
c. Increase market space
d. Opportunity to reduce costs
e. Computer platform-independent
f. Efficient applications development environment
g. Allowing customers self-service and ‘customer outsourcing’

9. 2. Negative impact of global e-commerce on trade
Disadvantages:
a. Return/Receipt burden and cost of delivery
b. Costs of site construction, maintenance, upgrades
c. Channel conflicts
d. Easily copied models
e. Cultural differences
f. Traditional cross-border transaction complexities
g. Standard or local websites
h. Customer trust and satisfaction