What is ecommerce?  

ecommerce is enabling or achieving your business objectives by using information technology to enhance or transform your business processes. 

Ecommerce includes business to business  (B2B); cutting costs in transactions between businesses and, business to consumer (B2C); sales of goods and services. Ecommerce is carried out on the Internet and has become the vehicle driving the phenomenal growth of the Internet industry.

It is important to keep in mind that the Internet is a medium for communications with your customer. It does NOT exempt or exclude the need for good business strategy. A good business medium whether it be the Internet, television or printed media must communicate value to your customer.

This is not an attempt to cover all areas of ecommerce but to provide a generic guide for Pacific SMEs towards establishing an effective ecommerce online presence.

1.       Business Plan

Do not start without a business plan. Understand your product, your market, competition, obstacles, cost of effective delivery and a time frame for implementation.

·         Determine Your Objectives

What do you wish to achieve with a web site? Is it to enhance awareness of your company brand/s, sell goods online, provide customer support or develop and sell an electronic product. Your objectives will determine your approach to ecommerce

·         Understand your Market

Local access is currently limited to less the 2% of the population in Pacific Island countries. This limits the effectiveness of the Internet for local usage. The overseas market is the immediate opportunity. It is important to understand the intricacies of your market. A category such as handicrafts / gifts can appeal to expatriate Pacific Islanders, collectors, bargain hunters or upper exotic art collectors. Identify your key markets and tailor your web strategy to reach them effectively

·         Product

Your product could be services (tourism), electronic (software) or  selling artifacts or gifts via a web store. Understanding the market determines how you package, present and price your product. Distance and isolation of the Pacific islands means ideal products should be portable and relatively inexpensive to deliver. Consider the value instant communications and global reach adds to your product. For some the Internet may not offer added value for your product.

VALUE  to the customer is still bottom line, so avoid false expectations that the Internet is an opportunity to deliver at inflated prices or the illusion that there is a pot of gold on the end of your Internet connection. 

2.      Domain Name

Your domain name (www.yoursite.com) is your calling card on the web. Choose a domain name that is easy to remember.  Generic domain names (.com .net .org .edu .info .biz) can be registered for US$35 / year at  numerous other sites such as www.enom. If you find that your preferred domain has been taken, check other domain services such as .nu (Niue), .tv (Tuvalu),  .to (Tonga) at tonic.to. Your web hosting service will register your domain name as part of their services if you decide to look for a hosting service at the same time.

3.      Hosting Your Web site

Once you have decided on your domain name, you need to host your web pages on the Internet. There are thousands of Internet Service Providers (ISPs) that offer hosting. Host your service where your clientele or target audience will have the fastest access and you can guarantee the “up time” (reliability of service). It is usually practical to host your site on an overseas server.

Hosting costs vary with the amount of space (megabytes), traffic (how busy your site is measured in Gigabytes per month) and extra services (number of email addresses, ecommerce tools, site management tools, etc.). 30-250mb of space on a US based server (computer) will cost approximately $25 – 100 per month depending on your choice services. Ecommerce services such as shopping cart, secure transaction form and credit card processing will cost more.

With a credit card one can usually register a host account within 15 minutes and have your domain name and host working within 3 days.

Beware:  All ISPs claim to provide great support but few deliver satisfactory support services.

4.      Design and Development

Design and content of your web site must be aimed at communicating with your customers. Speed of access, logical navigation and attractive look and feel are key objectives. Often fancy graphics will result in slow download times and result in impatient customers moving away. Your website is the only impression the customer has of your company or organization. Make sure they can see professionalism immediately. Your web site should be designed according to your customer expectations. While a travel / tourism site is expected to have lots of flashy pictures this may not be necessary for a academic web site or a web directory. A website with too much graphics will frustrate those looking for quick information by increasing download time of the web pages.

Outsourcing your web design may be the choice if you desire a professional look right from the start. For small companies, if you choose to out source your web design, insist on full access to the web site once it is launched and training on how to make basic changes. Eg. Announcements on the front page or changing product prices.

5.      Managing Content

Many SMEs (Small businesses) rush to implement an online presence without considering the work involved with keeping content fresh and useful. Too often a website is literally “tacked on” as an additional task without considering the effort needed to update and maintain content. Unless a website is seen as essential for the future of your business it is probably not worth doing. An effective strategy includes the costs and process of integrating your web presence with your everyday business processes. This will ensure that information remains fresh and relevant and enables your organization to adapt to meet the demands of your online customer.

As the site gets busier, interaction with customers and order processing can take some serious staffing time.  For some this is a good problem to have but be realistic and budget for employee time at all levels of your web site development.

6.      Electronic Transactions

The key objective of selling is to deliver a product and receive payment. The challenge for many small companies is being able to make online transactions for credit cards. Usually this can be done by capturing necessary credit card details via a secure web then manually inputting to your local merchant account in daily batches. The process can be automated with credit cards verified online and payment immediately  credited to your account.

For small businesses without merchant accounts there are online sites that provide merchant account services as well as credit card processing for a monthly fee and individual transaction charge.

New services have developed that now enable transactions via email. By opening an account with these services you are able to arrange for them to receive funds on your behalf and then they pay it directly into your own account. A great example of this is found at www.paypal.com. There are several other services so find the one that suits your needs. 

7.      Delivery

Distance is the key obstacle with selling online from the Pacific Islands. Delivery of electronic products (software) can be transferred instantly and certain services can be provided to distant customers. However with physical goods there are several issues to be considered. Expectations of many consumers have been formed around the overnight delivery services available in developed country markets. Customers must be made aware that delivery of your product will take 1- 7 days. Costs are also higher then normal and will affect your final price. Guarantees of quality and delivery times are important to overcome initial misgivings of service from new customers. 

Delivery of a Tourism “product” is more difficult. Ensure your product is as good as your online marketing spin. With careful marketing you can attract the right kind of visitor to a eco tourism resort without running water or electricity who will enjoy and appreciate the facilities. Just make sure they expect it or you will have  a crisis situation.

8.      Marketing your website– Online and Off-line

The key to a successful ecommerce website is effectively reaching your target market with services that they perceive offer value. Getting online users to visit your website will depend on your ability to raise awareness amongst potential customers. This can be done with a good online AND off-line strategy.

Online:

·         List your link with key sites relevant to your target market. Online linkages from other web sites are the most effective means of bringing people to your site. A regional travel site will want to be linked from all key Pacific Island sites. .

·         Pay for advertising on sections of popular websites visited by your target clientele.

·         Place your site on search engines and portal sites such as Yahoo.com, Google.com, altavista.com and others – NOTE: Remember that search engines have people who are constantly developing methods to prevent others like you from “cheating” by biasing there ranking criteria to place your site. Criteria constantly changes. The best bet is to ensure you have a good set of key words in your meta data and you are linked and recognized by as many other sites as possible. Recognition will come the better your site is.

Off-line:

·         Include your URL (web address) on ALL stationary of the firm

·         Utilize conventional media through targeted press releases

·         Place print advertisements in appropriate media.

·         Utilize trade shows, travel agents and other means to publicize your URL overseas

The recent demise or fall of the “dot com” e commerce companies in the USA and Europe is not an indicator of the lack of potential of e commerce in the Pacific Islands. The e commerce bubble burst because basic business principles were not applied to the new ideas and investors provided funding speculating profits without considering the real value of the product to the consumer. The immediate potential in the Pacific for e commerce is the ability to communicate with overseas consumers or businesses and develop this communications into a transaction.

Pacific Island tourism has seen the immediate benefits of the Internet with a large percentage of travelers using the Internet to find island destinations and make their bookings. The challenge is how to tailor the Pacific experience into products which we know may have niche markets around the globe and then develop a strategy to reach the market. The Internet provides opportunities here that were not available to the small operator in the past. Eco tourism in the most remote parts of the Pacific now has access to a more cost effective marketing medium.

The potential for ecommerce to open new opportunities for overseas markets is unlimited. The challenge is for our Governments to recognize telecommunications infrastructure as an essential service. Affordable Internet access is necessary to build local human capacity and enable small businesses to participate effectively on the web. Local businesses need to understand the potential of having 400 million users on the Internet and what that could mean for selling their product.

Finally, It’s early days in terms of ecommerce in the Pacific islands region. This provides opportunities for SMEs to test and establish a competitive ecommerce presence. Be creative and have fun in the process - starting today begins the learning process.

Examples of Ecommerce

• Online Shopping
  Buying and selling goods on the Internet is one of the most popular examples of ecommerce. Sellers create storefronts that are the online equivalents of retail outlets. Buyers browse and purchase products with mouse clicks. Though Amazon.com is not the pioneer of online shopping, it is arguably the most famous online shopping destination.
  
  
• Electronic Payments
  When you are buying goods online, there needs to be a mechanism to pay online too. That is where payment processors and payment gateways come into the picture.
  
  Electronic payments reduce the inefficiency associated with writing and mailing checks. It also does away with many of the safety issues that arise due to payment made in currency notes.
  
  
• Online Auctions
  When you think online auction, you think eBay. Physical auctions predate online auctions, but the Internet made auctions accessible to a large number of buyers and sellers. Online auctions are an efficient mechanism for price discovery. Many buyers find the auction shopping mechanism much interesting than regular storefront shopping.
  
  
• Internet Banking
  Today it is possible for you to perform the entire gamut of banking operations without visiting a physical bank branch. Interfacing of websites with bank accounts, and by extension credit cards, was the biggest driver of ecommerce.
  
  
• Online Ticketing
  Air tickets, movie tickets, train tickets, play tickets, tickets to sporting events, and just about any kind of tickets can be booked online. Online ticketing does away with the need to queue up at ticket counters.

Types of Ecommerce
Ecommerce can be classified based on the type of participants in the transaction:

• Business to Business (B2B)
  B2B ecommerce transactions are those where both the transacting parties are businesses, e.g., manufacturers, traders, retailers and the like.
  
  
• Business to Consumer (B2C)
  When businesses sell electronically to end-consumers, it is called B2C ecommerce.
  
  
• Consumer to Consumer (C2C)
  Some of the earliest transactions in the global economic system involved barter -- a type of C2C transaction. But C2C transactions were virtually non-existent in recent times until the advent of ecommerce. Auction sites are a good example of C2C ecommerce.

Benefits of Ecommerce
The primary benefits of ecommerce revolve around the fact that it eliminates limitations of time and geographical distance. In the process, ecommerce usually streamlines operations and lowers costs.

Specialized Forms of Ecommerce
On some platforms, ecommerce has shown the promise of explosive growth. Two such examples are:

• Mcommerce
  Mcommerce is short for "mobile commerce." The rapid penetration of mobile devices with Internet access has opened new avenues of ecommerce for retailers.
  
  
• Fcommerce
  Fcommerce is short for "Facebook commerce." The immense popularity of Facebook provides a captive audience to transact business.

What is E-Commerce?
Electronic commerce or ecommerce is a term for any type of business, or commercial transaction, that involves the transfer of information across the Internet. It covers a range of different types of businesses, from consumer based retail sites, through auction or music sites, to business exchanges trading goods and services between corporations. It is currently one of the most important aspects of the Internet to emerge.
Ecommerce allows consumers to electronically exchange goods and services with no barriers of time or distance. Electronic commerce has expanded rapidly over the past five years and is predicted to continue at this rate, or even accelerate. In the near future the boundaries between "conventional" and "electronic" commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet.
Business to Business or B2B refers to electronic commerce between businesses rather than between a business and a consumer. B2B businesses often deal with hundreds or even thousands of other businesses, either as customers or suppliers. Carrying out these transactions electronically provides vast competitive advantages over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.
Electronic transactions have been around for quite some time in the form of Electronic Data Interchange or EDI. EDI requires each supplier and customer to set up a dedicated data link (between them), where ecommerce provides a cost-effective method for companies to set up multiple, ad-hoc links. Electronic commerce has also led to the development of electronic marketplaces where suppliers and potential customers are brought together to conduct mutually beneficial trade.
The road to creating a successful online store can be a difficult if unaware of ecommerce principles and what ecommerce is supposed to do for your online business. Researching and understanding the guidelines required to properly implement an e-business plan is a crucial part to becoming successful with online store building.
What do you need to have an online store and what exactly is a shopping cart?
Shopping cart software is an operating system used to allow consumers to purchase goods and or services, track customers, and tie together all aspects of ecommerce into one cohesive whole.
While there are many types of software that you can use, customizable, turnkey solutions are proven to be a cost effective method to build, edit and maintain an online store. How do online shopping carts differ from those found in a grocery store? The image is one of an invisible shopping cart. You enter an online store, see a product that fulfills your demand and you place it into your virtual shopping basket. When you are through browsing, you click checkout and complete the transaction by providing payment information.
To start an online business it is best to find a niche product that consumers have difficulty finding in malls or department stores. Also take shipping into consideration. I found out the hard way: dog food is expensive to ship FedEx! Then you need an ecommerce enabled website. This can either be a new site developed from scratch, or an existing site to which you can add ecommerce shopping cart capabilities.
The next step, you need a means of accepting online payments. This usually entails obtaining a merchant account and accepting credit cards through an online payment gateway (some smaller sites stick with simpler methods of accepting payments such as PayPal).
Lastly, you need a marketing strategy for driving targeted traffic to your site and a means of enticing repeat customers. If you are new to ecommerce keep things simple- know your limitations.
Ecommerce can be a very rewarding venture, but you cannot make money overnight. It is important to do a lot of research, ask questions, work hard and make on business decisions on facts learned from researching ecommerce. Don't rely on "gut" feelings. We hope our online ecommerce tutorial has helped your business make a better decision in choosing an online shopping cart for your ecommerce store.


The online retail segment is expected to report strong growth in the coming years owing to growing Internet consumer base thanks to increasing use of smartphones, laptops/PCs and availability of internet in the remotest part of the country.

"e-commerce space is a booming space as internet audience are likely to double in the next two-three years and this industry will require talent from various sectors like technology, product, analytics, sourcing, general management talent, merchandising and marketing,"

 Sahil(SE) said compared to 35 per cent internet transactor penetration out of all internet users in China, the number is just 5 per cent in India. Also, in spite of accounting for 17 per cent of the world population, only 4 per cent of the internet users account from India.